Navient (NASDAQ: JSM) reports Q2 2026 EPS of $0.26 and stronger profit

Q: How did Navient (JSM) perform financially in the second quarter of 2026?

Navient reported GAAP net income of $25 million , or $0.26 diluted EPS, for second-quarter 2026, up from $14 million , or $0.13 , a year earlier. Core Earnings net income was $27 million with diluted EPS of $0.29 .

Q: What were Navient (JSM)’s key Consumer Lending results for Q2 2026?

The Consumer Lending segment generated $27 million of net income with a net interest margin of 2.26% . Navient originated $815 million of Private Education Loans, a 63% increase from $500 million , including $735 million of refinance originations versus $443 million a year earlier.

Q: How did Navient (JSM)’s Federal Education Loans segment perform in Q2 2026?

The Federal Education Loans segment reported $26 million of net income in second-quarter 2026, compared with $30 million a year earlier. Segment net interest margin was 0.68% , and net charge‑offs were $10 million versus $8 million in the prior‑year quarter.

Q: What was Navient (JSM)’s expense trend in second-quarter 2026?

Operating expenses were $82 million in second-quarter 2026, down from $100 million in the prior-year quarter. The decrease mainly reflected lower transition service costs and cost‑saving initiatives, partially offset by higher marketing and other expenses for consumer lending growth.

Q: How strong was Navient (JSM)’s liquidity and capital position at June 30, 2026?

As of June 30, 2026, Navient had $770 million of unrestricted cash and total primary liquidity sources of $1.126 billion . The GAAP equity‑to‑asset ratio was 5.1% , and the adjusted tangible equity ratio was 9.0% , with total assets of $47.3 billion .

Q: What shareholder returns did Navient (JSM) provide in Q2 2026?

Navient paid $15 million in common stock dividends and repurchased 0.3 million shares of common stock for $2 million during second-quarter 2026. For the first six months of 2026, share repurchases totaled 2.6 million shares.

Filing Impact

(High)

Filing Sentiment

(Neutral)

Form Type

8-K

Rhea-AI Filing Summary

Navient Corporation reported second-quarter 2026 GAAP net income of $25 million, or $0.26 diluted earnings per share, compared with $14 million, or $0.13, a year earlier. For the first six months of 2026, GAAP net income was $42 million versus $11 million in the prior-year period. On a Core Earnings basis, net income was $27 million and diluted EPS was $0.29 for the quarter.

In the Consumer Lending segment, net income was $27 million with a net interest margin of 2.26%. Navient originated $815 million of Private Education Loans, a 63% increase from $500 million, including $735 million of refinance originations versus $443 million. Consumer Lending provision for loan losses fell to $18 million from $29 million, while net charge-offs declined and 90‑day delinquencies decreased to $349 million from $459 million, though management notes delinquency and default levels remain elevated. The Federal Education Loans segment generated net income of $26 million versus $30 million a year ago, with a net interest margin of 0.68%.

Operating expenses were $82 million, down from $100 million in the prior-year quarter, reflecting lower transition and restructuring costs partly offset by higher marketing spend. Navient reported a GAAP equity‑to‑asset ratio of 5.1% and an adjusted tangible equity ratio of 9.0%, with total assets of $47.3 billion and total equity of $2.4 billion as of June 30, 2026. Liquidity included $770 million of unrestricted cash and total primary liquidity sources of $1.1 billion. During the quarter, Navient issued $500 million of unsecured debt and $1.3 billion of asset‑backed securities, paid $15 million in common dividends, and repurchased $2 million of common shares. The CEO stated that Navient is “moving forward in a position of strength,” citing benefits from its strategic transformation.

Positive

GAAP profitability improved sharply: second-quarter 2026 net income rose to $25 million from $14 million, and six‑month net income increased to $42 million from $11 million, with diluted EPS up from $0.13 to $0.26 for the quarter.
Consumer lending growth and credit improvement: Private Education Loan originations reached $815 million, a 63% increase from $500 million, while Private Education Loan net charge‑offs and 90‑day delinquencies declined, and the provision for loan losses fell from $29 million to $18 million.
Meaningful expense reduction: operating expenses declined to $82 million in second-quarter 2026 from $100 million a year earlier, aided by lower transition service costs and cost‑saving initiatives, supporting higher net income despite modestly lower net interest income.

Negative

Federal Education Loans segment earnings declined: segment net income fell to $26 million in second-quarter 2026 from $30 million a year earlier, with net interest income down $7 million as the FFELP portfolio continued to pay down.
Private Education Loan credit metrics remain elevated: although delinquencies and net charge‑offs improved sequentially and year over year, management notes that delinquency and default levels in the Private Education Loan portfolio "remain elevated," indicating ongoing credit risk.

Insights

Analyzing...

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

GAAP net income (Q2 2026): $25 million Diluted EPS (Q2 2026, GAAP): $0.26 Private Education Loan originations: $815 million +5 more

8 metrics

GAAP net income (Q2 2026) $25 million Quarter ended June 30, 2026; up from $14 million in Q2 2025

Diluted EPS (Q2 2026, GAAP) $0.26 Quarter ended June 30, 2026; compared with $0.13 in Q2 2025

Private Education Loan originations $815 million Consumer Lending segment, Q2 2026; 63% increase from $500 million a year ago

Operating expenses (Q2 2026) $82 million Consolidated operating expenses; down from $100 million in Q2 2025

GAAP equity-to-asset ratio 5.1% Capital and funding metrics as of June 30, 2026

Adjusted tangible equity ratio 9.0% Non-GAAP capital measure as of June 30, 2026

Unrestricted cash $770 million Primary liquidity source as of June 30, 2026

Total assets $47,297 million Consolidated balance sheet total as of June 30, 2026

Key Terms

FFELP Loans, asset-backed securities, net interest margin, asset-backed commercial paper, +2 more

6 terms

FFELP Loans financial

"In this segment, Navient owns and manages a portfolio of FFELP federally guaranteed student loans."

asset-backed securities financial

"Issued $500 million of unsecured debt and $1.3 billion of asset-backed securities."

A type of investment created by pooling many similar cash‑flowing assets — like mortgages, car loans, or credit card receivables — and selling slices of that bundle to investors who then receive the payments those assets generate. Think of it as a fruit basket where buyers earn the fruit sales: investors get steady income but also take on the risk that the underlying loans stop performing or are paid off early. Investors care because these securities can provide predictable yield, portfolio diversification, and varying levels of credit and liquidity risk depending on the quality of the underlying assets.

net interest margin financial

"Segment net interest margin .68 % .65 % .70 %."

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

asset-backed commercial paper financial

"Maximum borrowing capacity under the FFELP Loan and Private Education Loan ABCP facilities will vary."

Core Earnings financial

"We refer to this different basis of presentation as Core Earnings."

Core earnings are the profit a business generates from its normal, ongoing operations after removing one-time gains or losses and unusual accounting adjustments; think of it as the recurring paycheck a household can expect each month rather than a one-off inheritance or sale. Investors care because it highlights the company’s sustainable cash-making ability and makes performance easier to compare across periods and with other firms.

overcollateralization financial

"the distribution of overcollateralization from our securitization trusts."

Overcollateralization is the practice of pledging assets worth more than the amount of debt they secure, creating a built-in safety cushion for lenders or bond investors if the underlying assets lose value. Think of it like leaving a larger-than-required security deposit: it lowers the chance investors suffer losses, can improve credit ratings, and usually means lower yields or stricter terms for borrowers because the investment is safer.

Earnings Snapshot

GAAP net income: $25 million

quarter ended June 30, 2026

GAAP net income $25 million Increased by $11 million from $14 million in Q2 2025 (79%).

GAAP diluted EPS $0.26 Increased from $0.13 in Q2 2025 (100% increase shown).

Core Earnings net income $27 million Compared with $21 million in Q2 2025 on a Core Earnings basis.

Consumer Lending Private Education Loan originations $815 million Up 63% from $500 million in the year-ago quarter.

Operating expenses $82 million Decreased from $100 million in Q2 2025 (18% reduction shown).

Six-month GAAP net income $42 million Increased from $11 million for the six months ended June 30, 2025 (282%).

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google

Understanding 8-K Material Events →

Available on EDGAR 08/06/2026 - 04:14 PM Accepted by SEC EDGAR 08/06/2026 - 04:13 PM

FAQ

How did Navient (JSM) perform financially in the second quarter of 2026?

Navient reported GAAP net income of $25 million, or $0.26 diluted EPS, for second-quarter 2026, up from $14 million, or $0.13, a year earlier. Core Earnings net income was $27 million with diluted EPS of $0.29.

What were Navient (JSM)’s key Consumer Lending results for Q2 2026?

The Consumer Lending segment generated $27 million of net income with a net interest margin of 2.26%. Navient originated $815 million of Private Education Loans, a 63% increase from $500 million, including $735 million of refinance originations versus $443 million a year earlier.

How did Navient (JSM)’s Federal Education Loans segment perform in Q2 2026?

The Federal Education Loans segment reported $26 million of net income in second-quarter 2026, compared with $30 million a year earlier. Segment net interest margin was 0.68%, and net charge‑offs were $10 million versus $8 million in the prior‑year quarter.

What changes occurred in Navient (JSM)’s credit quality metrics in Q2 2026?

For Private Education Loans, the 90‑day delinquency balance declined to $349 million from $459 million, and net charge‑offs fell to $71 million from $80 million. Management notes that, despite improvements, delinquency and default levels remain elevated.

What was Navient (JSM)’s expense trend in second-quarter 2026?

Operating expenses were $82 million in second-quarter 2026, down from $100 million in the prior-year quarter. The decrease mainly reflected lower transition service costs and cost‑saving initiatives, partially offset by higher marketing and other expenses for consumer lending growth.

How strong was Navient (JSM)’s liquidity and capital position at June 30, 2026?

As of June 30, 2026, Navient had $770 million of unrestricted cash and total primary liquidity sources of $1.126 billion. The GAAP equity‑to‑asset ratio was 5.1%, and the adjusted tangible equity ratio was 9.0%, with total assets of $47.3 billion.

What shareholder returns did Navient (JSM) provide in Q2 2026?

Navient paid $15 million in common stock dividends and repurchased 0.3 million shares of common stock for $2 million during second-quarter 2026. For the first six months of 2026, share repurchases totaled 2.6 million shares.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

      Date of Report (Date of earliest event reported): August 06, 2026

     

Navient Corporation

(Exact name of Registrant as Specified in Its Charter)


Delaware	001-36228	46-4054283
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

13865 Sunrise Valley Drive
Herndon, Virginia		20171
(Address of Principal Executive Offices)		(Zip Code)

      Registrant’s Telephone Number, Including Area Code: 302 283-8000

     

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $.01 per share	NAVI	The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 6, 2026, Navient Corporation (the “Company”) issued an informational press release announcing its financial results for the quarter ended June 30, 2026 were available on the “Investor” page of its website located at https://www.Navient.com/investors. Additionally, on August 6, 2026, the Company posted its financial results for the quarter ended June 30, 2026 to its above-referenced web location. A copy of each press release is furnished as Exhibit 99.1 and Exhibit 99.2 hereto.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits



Exhibit Number	Description

99.1*	Press Release, dated August 6, 2026.

99.2*	Financial Press Release, dated August 6, 2026.


104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

* Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	NAVIENT CORPORATION

Date: August 6, 2026	By:	/s/ STEVE HAUBER
		Steve Hauber
		Chief Financial Officer

Exhibit 99.1

NEWS RELEASE

For immediate release

Navient posts second quarter 2026 financial results

HERNDON, Va., August 6, 2026— Navient (Nasdaq: NAVI) today posted its 2026 second quarter financial results. Complete financial results are available on the company’s website at Navient.com/investors. The materials will also be available on a Form 8-K on the SEC’s website at www.sec.gov.

Navient will hold a live audio webcast today, August 6, 2026, at 5 p.m. ET, hosted by Edward Bramson, CEO and chair of the board, and Steve Hauber, CFO.

The webcast will be available on Navient.com/investors. Supplemental financial information and presentation slides used during the call will be available no later than the start time. A replay of the webcast will be available shortly after the event's conclusion.

* * *

About Navient

Navient (Nasdaq: NAVI) creates long-term value for customers and investors with responsible lending, flexible refinancing, trusted servicing oversight, and decades of education finance and portfolio management expertise. Through our Earnest business, we help customers confidently achieve financial success through digital financial services. Our employees thrive in a culture of belonging, where they are supported and proud to deliver meaningful outcomes. Learn more on Navient.com.

Contact:

Media: Cate Fitzgerald, 703-831-6347, catherine.fitzgerald@navient.com

Investors: Micah Andrews, 571-415-5413, micah.andrews@navient.com

Roger Yankoupe, 571-592-8569, roger.yankoupe@navient.com

# # #

Exhibit 99.2

      
      	     NAVIENT REPORTS SECOND-QUARTER
	2026 FINANCIAL RESULTS

HERNDON, Va., August 6, 2026 — Navient (Nasdaq: NAVI) today released its second-quarter 2026 financial results.

        OVERALL 
  RESULTS

      •GAAP net income of $25 million ($0.26 diluted earnings per share). 
•Core Earnings(1) net income of $27 million ($0.29 diluted earnings per share).

CEO COMMENTARY – "Navient is moving forward in a position of strength, with the benefits of our strategic transformation evident in our second-quarter results," said Edward Bramson, Navient’s CEO and chair of the board. "Originations grew more than 60% and operating expenses declined 18% from a year ago, reflecting the progress we made to strengthen the company and sharpen our focus."

       SECOND-QUARTER HIGHLIGHTS


CONSUMER LENDING SEGMENT	• Net income of $27 million. • Net interest margin of 2.26%. • Originated $815 million of Private Education Loans, a 63% increase from a year ago.
FEDERAL EDUCATION LOANS SEGMENT	• Net income of $26 million. • Net interest margin of 0.68%.
CAPITAL & FUNDING	• GAAP equity-to-asset ratio of 5.1% and adjusted tangible equity ratio(1) of 9.0%. • Repurchased $2 million of common shares. • Paid $15 million in common stock dividends. • Issued $500 million of unsecured debt and $1.3 billion of asset-backed securities.
OPERATING EXPENSES	• Incurred operating expenses of $82 million.

(1) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures” on pages 17 – 27.

       
SEGMENT RESULTS — CORE EARNINGS

      CONSUMER LENDING 

     

      In this segment, Navient owns and manages a portfolio of Private Education Loans. Through our Earnest brand, we also refinance and originate Private Education Loans. 

     

FINANCIAL RESULTS AND KEY PERFORMANCE METRICS


(Dollars in millions)	2Q26			1Q26			2Q25
Net interest income	$	93		$	100		$	95
Provision for loan losses		18			18			29
Other revenue		2			3			3
Total revenue		77			85			69
Expenses		42			39			36
Pre-tax income		35			46			33
Net income	$	27		$	35		$	26

Segment net interest margin		2.26	%		2.48	%		2.32	%
Private Education Loans (including Refinance Loans):
Private Education Loan spread		2.38	%		2.60	%		2.42	%
Provision for loan losses	$	17		$	18		$	29
Net charge-offs	$	71		$	72		$	80
Net charge-off rate (1)		1.84	%		1.91	%		2.08	%
Greater than 30-days delinquency rate (1)		5.4	%		5.5	%		6.4	%
Greater than 90-days delinquency rate (1)		2.4	%		2.5	%		3.0	%
Forbearance rate (1)		1.8	%		1.5	%		1.6	%
Average Private Education Loans	$	15,985		$	15,958		$	15,992
Ending Private Education Loans, net	$	15,674		$	15,649		$	15,530
Private Education Refinance Loans:
Net charge-offs	$	18		$	16		$	18
Greater than 90-day delinquency rate		.8	%		.8	%		.8	%
Average Private Education Refinance Loans	$	9,271		$	9,017		$	8,531
Ending Private Education Refinance Loans, net	$	9,258		$	9,029		$	8,469
Private Education Refinance Loan originations	$	735		$	778		$	443

(1) Second-quarter 2026 excludes $528 million of loans, and the corresponding delinquencies, forbearances and charge-offs, that were

classified as held for sale as of June 30, 2026.

DISCUSSION OF RESULTS — 2Q26 vs. 2Q25

•

Originated $815 million of Private Education Loans, a 63% increase compared to $500 million.

Refinance Loan originations were $735 million compared to $443 million.

In-school loan originations were $80 million compared to $57 million.

•

Net income was $27 million compared to $26 million.

•

Net interest income decreased $2 million, primarily due to the changing product mix with Refinance Loans increasing as a percentage of the portfolio. The Refinance Loan portfolio earns a lower net interest margin compared to the non-refinance portfolio, due to lower expected credit losses, which reduces the overall net interest margin.

•

Provision for loan losses decreased $11 million. The provision for loan losses of $18 million in the current quarter included $14 million associated with loan originations and $23 million related to a general reserve build primarily as a result of portfolio performance trends. While credit performance improved on a sequential basis during the quarter, delinquency and default levels in the Private Education Loan portfolio remain elevated. This was partially offset by a $19 million decrease as a result of classifying $528 million of loans as held for sale as of June 30, 2026. When loans are classified as held for sale the corresponding allowance for loan losses is reversed and such loans are carried at the lower of fair value or cost basis. These loans are carried at their cost basis as of June 30, 2026. The provision for loan losses of $29 million in the year-ago quarter included $7 million associated with loan originations and $22 million related to a general reserve build primarily as a result of an increase in delinquency balances as well as a weakening in the forecasted macroeconomic metrics used to estimate expected losses.

Net charge-offs were $71 million, down $9 million compared to $80 million in the year-ago quarter.

Private Education Loan delinquencies greater than 90 days: $349 million, down $110 million from $459 million.

Private Education Loan forbearances: $271 million, up $21 million from $250 million.

•

Expenses increased $6 million primarily reflecting marketing and other expenses associated with the growth of our consumer lending businesses.

       
 FEDERAL EDUCATION LOANS

       
In this segment, Navient owns and manages a portfolio of FFELP federally guaranteed student loans.

FINANCIAL RESULTS AND KEY PERFORMANCE METRICS


(Dollars in millions)	2Q26			1Q26			2Q25
Net interest income	$	48		$	46		$	55
Provision for loan losses		8			9			8
Other revenue		8			8			10
Total revenue		48			45			57
Expenses		15			16			17
Pre-tax income		33			29			40
Net income	$	26		$	22		$	30

Segment net interest margin		.68	%		.65	%		.70	%
FFELP Loans:
FFELP Loan spread		.76	%		.72	%		.75	%
Provision for loan losses	$	8		$	9		$	8
Net charge-offs	$	10		$	17		$	8
Net charge-off rate		.18	%		.29	%		.14	%
Greater than 30-days delinquency rate		14.7	%		15.2	%		19.0	%
Greater than 90-days delinquency rate		8.0	%		8.5	%		10.1	%
Forbearance rate		12.8	%		13.0	%		12.8	%
Average FFELP Loans	$	27,045		$	27,898		$	30,327
Ending FFELP Loans, net	$	26,575		$	27,237		$	29,618

DISCUSSION OF RESULTS — 2Q26 vs. 2Q25

•

Net income was $26 million compared to $30 million.

•

Net interest income decreased $7 million primarily due to the paydown of the loan portfolio.

•

Provision for loan losses remained unchanged at $8 million. The provision for loan losses of $8 million in the current period was primarily the result of increased charge-offs due to prior disaster forbearance volume, as well as the continued extension of the portfolio. The $8 million of provision for loan losses in the year-ago quarter was primarily the result of an increase in delinquency balances.

Net charge-offs were $10 million compared to $8 million.

Delinquencies greater than 90 days were $1.8 billion compared to $2.5 billion.

Forbearances were $3.3 billion compared to $3.7 billion.

•

Expenses were $2 million lower primarily as a result of the outsourcing of the loan servicing of our portfolio to a third party in 2024. This created a variable cost structure resulting in a reduction in expenses as the portfolio paid down.

Definitions for capitalized terms in this release can be found in Navient’s Annual Report on Form 10-K for the year ended December 31, 2025 (filed with the SEC on February 26, 2026).

Navient will hold a live audio webcast today, August 6, 2026, at 5 p.m. ET, hosted by Edward Bramson, CEO and chair of the board, and Steve Hauber, CFO.

This news release contains “forward-looking statements,” within the meaning of the federal securities law, about our business and prospectus and other information that is based on management’s current expectations as of the date of this release. Statements that are not historical facts, including statements about our beliefs, opinions, or expectations and statements that assume or are dependent upon future events, are forward-looking statements and often contain words such as “expect,” “assume,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “may,” “could,” “should,” “goals,” or “target.” Such statements are based on management’s expectations as of the date of this release and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. For Navient, these factors include, among other things: general economic conditions, including the potential impact of artificial intelligence, inflation and interest rates on Navient and its clients and customers and on the creditworthiness of third parties; increased defaults on education loans held by us; unanticipated repayment trends on education loans including prepayments or deferrals resulting from new interpretations or the timing of the execution and implementation of current laws, rules or regulations or future laws, executive orders or other policy initiatives that operate to encourage or require consolidation, abolish existing or create additional income-based repayment or debt forgiveness programs or establish other policies and programs which may increase or decrease the prepayment rates on education loans and accelerate or slow down the repayment of the bonds in our securitization trusts; a reduction in our credit ratings; changes to applicable laws, rules, regulations and government policies, as well as changing regulatory and governmental oversight; changes in the general interest rate environment, including the availability of any relevant money-market index rate or the relationship between the relevant money-market index rate and the rate at which our assets are priced; the interest rate characteristics of our assets do not always match those of our funding arrangements; adverse market conditions or an inability to effectively manage our liquidity risk or access liquidity could negatively impact us; the cost and availability of funding in the capital markets; our ability to earn Floor Income and our ability to enter into hedges relative to that Floor Income are dependent on the future interest rate environment and therefore are variable; our use of derivatives exposes us to credit and market risk; our ability to continually and effectively align our cost structure with our business operations; a failure or breach of our operating systems, infrastructure or information technology systems; failure by any third party providing us material services or products or a breach or violation of law by one of these third parties; acquisitions, new products, strategic initiatives and investments or divestitures that we pursue; shareholder activism; reputational risk and social factors; and the other factors that are described in the “Risk Factors” section of Navient’s Annual Report on Form 10-K for the year ended December 31, 2025, and in our other reports filed with the Securities and Exchange Commission. The preparation of our consolidated financial statements also requires management to make certain estimates and assumptions including estimates and assumptions about future events. These estimates or assumptions may prove to be incorrect and actual results could differ materially. All forward-looking statements contained in this release are qualified by these cautionary statements and are made only as of the date of this release. The company does not undertake any obligation to update or revise these forward-looking statements except as required by law.

* * *

About Navient

Contact:



Media:	Cate Fitzgerald, 703-831-6347, catherine.fitzgerald@navient.com

Investors:	Micah Andrews, 571-415-5413, micah.andrews@navient.com Roger Yankoupe, 571-592-8569, roger.yankoupe@navient.com

# # #

       
 SELECTED HISTORICAL FINANCIAL INFORMATION AND RATIOS


	QUARTERS ENDED									SIX MONTHS ENDED
(In millions, except per share data)	June 30, 2026			March 31, 2026			June 30, 2025			June 30, 2026			June 30, 2025
GAAP Basis
Net income	$	25		$	17		$	14		$	42		$	11
Diluted earnings per common share	$	.26		$	.17		$	.13		$	.44		$	.11
Weighted average shares used to compute diluted earnings per share		95			96			101			95			102
Return on assets		.22	%		.15	%		.11	%		.18	%		.05	%

Core Earnings Basis(1)
Net income(1)	$	27		$	19		$	21		$	47		$	47
Diluted earnings per common share(1)	$	.29		$	.20		$	.20		$	.49		$	.46
Weighted average shares used to compute diluted earnings per share		95			96			101			95			102
Net interest margin, Consumer Lending segment		2.26	%		2.48	%		2.32	%		2.37	%		2.54	%
Net interest margin, Federal Education Loans segment		.68	%		.65	%		.70	%		.67	%		.66	%
Return on assets		.24	%		.17	%		.17	%		.21	%		.19	%
				.
Education Loan Portfolios
Ending Private Education Loans, net	$	15,674		$	15,649		$	15,530			15,674			15,530
Ending FFELP Loans, net		26,575			27,237			29,618		$	26,575		$	29,618
Ending total education loans, net	$	42,249		$	42,886		$	45,148		$	42,249		$	45,148
Average Private Education Loans	$	15,985		$	15,958		$	15,992			15,971			16,075
Average FFELP Loans		27,045			27,898			30,327		$	27,469		$	30,619
Average total education loans	$	43,030		$	43,856		$	46,319		$	43,440		$	46,694

(1) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures” on pages 17 – 27.

       
  RESULTS OF OPERATIONS

We present the results of operations below first in accordance with GAAP. Following our discussion of earnings results on a GAAP basis, we present our results on a segment basis. We have three reportable operating segments as of June 30, 2026: Consumer Lending, Federal Education Loans and Other. Prior to the divestiture of our healthcare business in third-quarter 2024 and our government services business in first-quarter 2025, we had a fourth reportable operating segment, Business Processing. Our segments operate in distinct business environments and we manage and evaluate the financial performance of our segments using non-GAAP financial measures we call Core Earnings (see “Non-GAAP Financial Measures — Core Earnings” for further discussion).

       
  GAAP INCOME STATEMENTS (UNAUDITED)


								June 30, 2026 vs. March 31, 2026						June 30, 2026 vs. June 30, 2025
	QUARTERS ENDED							Increase (Decrease)						Increase (Decrease)
(In millions, except per share data)	June 30, 2026		March 31, 2026		June 30, 2025			$			%			$			%
Interest income
Private Education Loans	$	273	$	277	$	273		$	(4	)		(1	)%	$	—			—	%
FFELP Loans		391		401		483			(10	)		(2	)		(92	)		(19	)
Cash and investments		18		17		22			1			6			(4	)		(18	)
Total interest income		682		695		778			(13	)		(2	)		(96	)		(12	)
Total interest expense		560		564		650			(4	)		(1	)		(90	)		(14	)
Net interest income		122		131		128			(9	)		(7	)		(6	)		(5	)
Less: provisions for loan losses		26		27		37			(1	)		(4	)		(11	)		(30	)
Net interest income after provisions for loan losses		96		104		91			(8	)		(8	)		5			5
Other income (loss):
Servicing revenue		10		11		14			(1	)		(9	)		(4	)		(29	)
Other income		17		5		19			12			240			(2	)		(11	)
Gains (losses) on derivative and hedging activities, net		1		5		(5	)		(4	)		(80	)		6			120
Total other income		28		21		28			7			33			—			—
Expenses:
Operating expenses		82		89		100			(7	)		(8	)		(18	)		(18	)
Goodwill and acquired intangible asset impairment and amortization expense		—		4		1			(4	)		(100	)		(1	)		(100	)
Restructuring/other reorganization expenses		3		—		—			3			100			3			100
Total expenses		85		93		101			(8	)		(9	)		(16	)		(16	)
Income before income tax expense		39		32		18			7			22			21			117
Income tax expense		14		15		4			(1	)		(7	)		10			250
Net income	$	25	$	17	$	14		$	8			47	%	$	11			79	%
Basic earnings per common share	$	.27	$	.18	$	.14		$	.09			50	%	$	.13			93	%
Diluted earnings per common share	$	.26	$	.17	$	.13		$	.09			53	%	$	.13			100	%
Dividends per common share	$	.16	$	.16	$	.16		$	—			—	%	$	—			—	%


	SIX MONTHS ENDED June 30,					Increase (Decrease)
(In millions, except per share data)	2026		2025			$			%
Interest income
Private Education Loans	$	550	$	562		$	(12	)		(2	)%
FFELP Loans		791		975			(184	)		(19	)
Cash and investments		35		43			(8	)		(19	)
Total interest income		1,376		1,580			(204	)		(13	)
Total interest expense		1,123		1,322			(199	)		(15	)
Net interest income		253		258			(5	)		(2	)
Less: provisions for loan losses		54		67			(13	)		(19	)
Net interest income after provisions for loan losses		199		191			8			4
Other income (loss):
Servicing revenue		21		27			(6	)		(22	)
Asset recovery and business processing revenue		—		23			(23	)		(100	)
Other income		22		33			(11	)		(33	)
Gains (losses) on derivative and hedging activities, net		6		(30	)		36			120
Total other income		49		53			(4	)		(8	)
Expenses:
Operating expenses		171		227			(56	)		(25	)
Goodwill and acquired intangible assets impairment and amortization expense		4		2			2			100
Restructuring/other reorganization expenses		2		3			(1	)		(33	)
Total expenses		177		232			(55	)		(24	)
Income before income tax expense		71		12			59			492
Income tax expense		29		1			28			2,800
Net income	$	42	$	11		$	31			282	%
Basic earnings per common share	$	.44	$	.11		$	.33			300	%
Diluted earnings per common share	$	.44	$	.11		$	.33			300	%
Dividends per common share	$	.32	$	.32		$	—			—	%

       
  GAAP BALANCE SHEETS (UNAUDITED)


(In millions, except per share data)	June 30, 2026			March 31, 2026			June 30, 2025
Assets
Private Education Loans held for investment, at amortized cost (net of allowance for loan losses of $263, $314 and $348, respectively)	$	15,146		$	15,649		$	15,530
Private Education Loans held for sale		528			—			—
FFELP Loans held for investment, at amortized cost (net of allowance for loan losses of $163, $165 and $182, respectively)		26,575			27,237			29,618
Investments		116			148			135
Cash and cash equivalents		770			621			712
Restricted cash and cash equivalents		1,369			1,510			1,365
Goodwill and acquired intangible assets, net		430			430			436
Other assets		2,363			2,409			2,426
Total assets	$	47,297		$	48,004		$	50,222
Liabilities
Short-term borrowings	$	4,214		$	5,870		$	4,752
Long-term borrowings		40,123			39,240			42,345
Other liabilities		562			515			561
Total liabilities		44,899			45,625			47,658
Commitments and contingencies
Equity
Series A Junior Participating Preferred Stock, par value $0.20 per share; 2 million shares authorized at December 31, 2021; no shares issued or outstanding		—			—			—
Common stock, par value $0.01 per share; 1.125 billion shares authorized: 468 million, 468 million and 467 million shares, respectively, issued		4			4			4
Additional paid-in capital		3,410			3,407			3,394
Accumulated other comprehensive income, net of tax		14			5			—
Retained earnings		4,562			4,552			4,674
Total stockholders’ equity before treasury stock		7,990			7,968			8,072
Less: Common stock held in treasury at cost: 374 million, 374 million and 367 million shares, respectively		(5,592	)		(5,589	)		(5,508	)
Total equity		2,398			2,379			2,564
Total liabilities and equity	$	47,297		$	48,004		$	50,222

        GAAP COMPARISON OF 2026 RESULTS WITH 2025 

     

Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025

For the three months ended June 30, 2026, net income was $25 million, or $0.26 diluted earnings per common share, compared with net income of $14 million, or $0.13 diluted earnings per common share, for the year-ago period.

The primary contributors to the change in net income are as follows:

• Net interest income decreased by $6 million primarily due to the paydown of the FFELP portfolio and the Private Education Loan portfolio's changing product mix with Refinance Loans increasing as a percentage of the portfolio. The Refinance Loan portfolio earns a lower net interest margin compared to the non-refinance portfolio, due to lower expected credit losses, which reduces the overall net interest margin.

• Provisions for loan losses decreased $11 million from $37 million to $26 million.

○ The provision for Private Loan losses decreased $11 million from $29 million to $18 million.

○ The provision for FFELP Loan losses remained unchanged at $8 million.

The provision for Private Loan losses of $18 million in the current period included $14 million associated with loan originations and $23 million related to a general reserve build primarily as a result of portfolio performance trends. While credit performance improved on a sequential basis during the quarter, delinquency and default levels in the Private Education Loan portfolio remain elevated. This was partially offset by a $19 million decrease as a result of classifying $528 million of loans as held for sale as of June 30, 2026. When loans are classified as held for sale the corresponding allowance for loan losses is reversed through provision for loan losses and such loans are carried at the lower of fair value or cost basis. These loans are carried at their cost basis as of June 30, 2026. The provision of $29 million in the year-ago quarter included $7 million associated with loan originations and $22 million related to a general reserve build primarily as a result of an increase in delinquency balances as well as a weakening in the forecasted macroeconomic metrics used to estimate expected losses.

The provision for FFELP Loan losses of $8 million in the current period was primarily the result of increased charge-offs due to prior disaster forbearance volume, as well as the continued extension of the portfolio. The provision of $8 million in the year-ago quarter was primarily the result of an increase in delinquency balances.

• Other income decreased $2 million primarily related to a $13 million decrease in transition services revenue we had earned related to our various strategic initiatives. The transition services related to the outsourcing of loan servicing and the sale of our healthcare services business ended in May 2025. The transition services related to the sale of our government services business ended in October 2025. This $13 million decrease was partially offset by a $12 million gain on an investment in the current period.

• Net gains on derivative and hedging activities increased $6 million due primarily to interest rate fluctuations. Valuations of derivative instruments fluctuate based upon many factors including changes in interest rates and other market factors. As a result, net gains and losses on derivative and hedging activities may vary significantly in future periods.

• Operating expenses decreased $18 million, $13 million of which was due to a decline in expenses in connection with providing transition services related to our various strategic initiatives. As of October 2025 we had no further obligations to provide these transition services. There was a $5 million increase in marketing and other expenses associated with the growth of our consumer lending businesses. The remaining $10 million decrease primarily relates to cost saving initiatives implemented, which have reduced our operating costs mostly in connection with our shared service functions and corporate footprint.

• Restructuring and other reorganization expenses increased $3 million primarily due to an increase in severance-related costs incurred in connection with the various strategic initiatives that have been and continue to be implemented to simplify the company, continue to reduce our expense base and enhance our flexibility.

We repurchased 0.3 million and 1.9 million shares of our common stock during the second quarters of 2026 and 2025,
respectively. As a result of repurchases, our average outstanding diluted shares decreased by 6 million common shares
(or 6%) from the year-ago period.

Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025

For the six months ended June 30, 2026, net income was $42 million, or $0.44 diluted earnings per common share, compared with net income of $11 million, or $0.11 diluted earnings per common share, for the year-ago period.

The primary contributors to the change in net income are as follows:

• Net interest income decreased by $5 million primarily due to the paydown of the FFELP portfolio and the Private Education Loan portfolio's changing product mix with Refinance Loans increasing as a percentage of the portfolio. The Refinance Loan portfolio earns a lower net interest margin compared to the non-refinance portfolio, due to lower expected credit losses, which reduces the overall net interest margin. This was partially offset by a $14 million increase in mark-to-market gains on fair value hedges recorded in interest expense.

• Provisions for loan losses decreased $13 million from $67 million to $54 million.

○ The provision for Private Loan losses decreased $14 million from $51 million to $37 million.

○ The provision for FFELP Loan losses increased $1 million from $16 million to $17 million.

The provision for Private Loan losses of $37 million in the current period included $26 million associated with loan originations and $30 million related to a general reserve build primarily as a result of portfolio performance trends. While credit performance improved on a sequential basis during the period, delinquency and default levels in the Private Education Loan portfolio remain elevated. This was partially offset by a $19 million decrease as a result of classifying $528 million of loans as held for sale as of June 30, 2026. When loans are classified as held for sale the corresponding allowance for loan losses is reversed through provision for loan losses and such loans are carried at the lower of fair value or cost basis. These loans are carried at their cost basis as of June 30, 2026. The provision of $51 million in the year-ago quarter included $14 million associated with loan originations and $37 million related to a general reserve build primarily as a result of an increase in delinquency balances as well as a weakening in the forecasted macroeconomic metrics used to estimate expected losses.

The provision for FFELP Loan losses of $17 million in the current period was primarily the result of increased charge-offs due to prior disaster forbearance volume, as well as the continued extension of the portfolio. The provision of $16 million in the year-ago quarter was primarily the result of an increase in delinquency balances.

• Asset recovery and business processing revenue decreased $23 million as a result of the sale of our government services business in February 2025. With the sale of our government services business, Navient no longer provides business processing segment services.

• Other income decreased $11 million primarily related to a $24 million decrease in transition services revenue we had earned related to our various strategic initiatives. The transition services related to the outsourcing of loan servicing and the sale of our healthcare services business ended in May 2025. The transition services related to the sale of our government services business ended in October 2025. This $24 million decrease was partially offset by a $12 million gain on an investment in the current period.

• Net gains on derivative and hedging activities increased $36 million due primarily to interest rate fluctuations. Valuations of derivative instruments fluctuate based upon many factors including changes in interest rates and other market factors. As a result, net gains and losses on derivative and hedging activities may vary significantly in future periods.

• Operating expenses decreased $56 million, $23 million of which was due to a decline in business processing expenses as a result of the sale of our government services business in February 2025 ($20 million of the reduction is in the Business Processing segment and $3 million of the reduction is in the Other segment). In addition, there was a $23 million decline in expenses in connection with providing transition services related to our various strategic initiatives. As of October 2025, we had no further obligations to provide these transition services. There was an $11 million increase in marketing and other expenses associated with the growth of our consumer lending businesses. The remaining $21 million decrease primarily relates to cost saving initiatives implemented, which have reduced our operating costs mostly in connection with our shared service functions and corporate footprint.

• Restructuring and other reorganization expenses decreased $1 million primarily due to a decrease in severance-related costs incurred in connection with the various strategic initiatives that have been and continue to be implemented to simplify the company, continue to reduce our expense base and enhance our flexibility.

• The effective income tax rates for the current year and year-ago periods were 41% and 9%, respectively. The movement in the effective income tax rate was primarily driven by state tax expense in connection with uncertain tax positions as well as changes in the valuation allowance attributed to disallowed interest expense carryovers.

We repurchased 2.6 million and 4.5 million shares of our common stock during the six months ended June 30, 2026 and June 30, 2025, respectively. As a result of repurchases, our average outstanding diluted shares decreased by 7 million common shares
(or 7%) from the year-ago period.

       
PRIVATE EDUCATION LOANS PORTFOLIO PERFORMANCE

Private Education Loan Delinquencies and Forbearance


	June 30,						March 31,						June 30,
	2026						2026						2025
(Dollars in millions)	Balance			%			Balance			%			Balance			%
Loans in-school/grace/deferment(1)	$	357					$	393					$	361
Loans in forbearance(2)		271						235						250
Loans in repayment and percentage of each status:
Loans current		13,985			94.6	%		14,489			94.5	%		14,296			93.6	%
Loans delinquent 31-60 days(3)		279			1.9			294			1.9			335			2.2
Loans delinquent 61-90 days(3)		168			1.1			166			1.1			177			1.2
Loans delinquent greater than 90 days(3)		349			2.4			386			2.5			459			3.0
Total Private Education Loans in repayment		14,781			100	%		15,335			100	%		15,267			100	%
Total Private Education Loans, gross (5)		15,409						15,963						15,878
Private Education Loan allowance for loan losses		(263	)					(314	)					(348	)
Private Education Loans, net	$	15,146					$	15,649					$	15,530
Percentage of Private Education Loans in repayment					95.9	%					96.1	%					96.2	%
Delinquencies as a percentage of Private Education Loans in repayment					5.4	%					5.5	%					6.4	%
Loans in forbearance as a percentage of loans in repayment and forbearance					1.8	%					1.5	%					1.6	%
Percentage of Private Education Loans with a cosigner(4)					29	%					31	%					32	%

(1) Loans for customers who are attending school or are in other permitted educational activities and are not yet required to make payments on their
loans, e.g., loans for customers who have requested and qualify for other permitted program deferments such as various military eligible deferments.

(2) Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making
full payments due to hardship or other factors such as disaster relief consistent with established loan program servicing policies and procedures.

(3) The period of delinquency is based on the number of days scheduled payments are contractually past due.

(4) Excluding Private Education Refinance Loans, the cosigner rate was 66%, 67% and 66% for second-quarter 2026, first-quarter 2026 and second-quarter 2025, respectively.

(5) June 30, 2026 excludes $528 million of loans classified as held for sale as of June 30, 2026.

       
ALLOWANCE FOR LOAN LOSSES – EDUCATION LOANS


	QUARTER ENDED
	June 30, 2026
(Dollars in millions)	Private Education Loans			FFELP Loans			Total
Allowance at beginning of period	$	314		$	165		$	479
Total provision		17			8			25
Charge-offs:
Gross charge-offs		(82	)		(10	)		(92	)
Expected future recoveries on current period gross charge-offs		11			—			11
Net charge-offs(1)		(71	)		(10	)		(81	)
Decrease in expected future recoveries on previously fully charged-off loans(2)		3			—			3
Allowance at end of period (GAAP)		263			163			426
Plus: expected future recoveries on previously fully charged-off loans(2)		163			—			163
Allowance at end of period excluding expected future recoveries on previously fully charged-off loans (Non-GAAP Financial Measure)(3)	$	426		$	163		$	589
Net charge-offs as a percentage of average loans in repayment (annualized) (4)		1.84	%		.18	%
Allowance coverage of charge-offs (annualized)(3) (4)		1.6			4.0		(Non-GAAP)
Allowance as a percentage of the ending total loan balance(3) (4)		2.8	%		.6	%	(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(3) (4)		2.9	%		.7	%	(Non-GAAP)
Ending total loans(4)	$	15,409		$	26,738
Average loans in repayment(4)	$	14,803		$	22,478
Ending loans in repayment(4)	$	14,781		$	22,324


	QUARTER ENDED
	March 31, 2026
(Dollars in millions)	Private Education Loans			FFELP Loans			Total
Allowance at beginning of period	$	364		$	173		$	537
Total provision		18			9			27
Charge-offs:
Gross charge-offs		(83	)		(17	)		(100	)
Expected future recoveries on current period gross charge-offs		11			—			11
Net charge-offs(1)		(72	)		(17	)		(89	)
Decrease in expected future recoveries on previously fully charged-off loans(2)		4			—			4
Allowance at end of period (GAAP)		314			165			479
Plus: expected future recoveries on previously fully charged-off loans(2)		166			—			166
Allowance at end of period excluding expected future recoveries on previously fully charged-off loans (Non-GAAP Financial Measure)(3)	$	480		$	165		$	645
Net charge-offs as a percentage of average loans in repayment (annualized)		1.91	%		.29	%
Allowance coverage of charge-offs (annualized)(3)		1.7			2.4		(Non-GAAP)
Allowance as a percentage of the ending total loan balance(3)		3.0	%		.6	%	(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(3)		3.1	%		.7	%	(Non-GAAP)
Ending total loans	$	15,963		$	27,402
Average loans in repayment	$	15,326		$	23,226
Ending loans in repayment	$	15,335		$	22,786


	QUARTER ENDED
	June 30, 2025
(Dollars in millions)	Private Education Loans			FFELP Loans			Total
Allowance at beginning of period	$	397		$	182		$	579
Total provision		29			8			37
Charge-offs:
Gross charge-offs		(93	)		(8	)		(101	)
Expected future recoveries on current period gross charge-offs		13			—			13
Net charge-offs(1)		(80	)		(8	)		(88	)
Decrease in expected future recoveries on previously fully charged-off loans(2)		2			—			2
Allowance at end of period (GAAP)		348			182			530
Plus: expected future recoveries on previously fully charged-off loans(2)		172			—			172
Allowance at end of period excluding expected future recoveries on previously fully charged-off loans (Non-GAAP Financial Measure)(3)	$	520		$	182		$	702
Net charge-offs as a percentage of average loans in repayment (annualized)		2.08	%		.14	%
Allowance coverage of charge-offs (annualized)(3)		1.6			5.2		(Non-GAAP)
Allowance as a percentage of the ending total loan balance(3)		3.3	%		.6	%	(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(3)		3.4	%		.7	%	(Non-GAAP)
Ending total loans	$	15,878		$	29,800
Average loans in repayment	$	15,375		$	25,133
Ending loans in repayment	$	15,267		$	24,867


	SIX MONTHS ENDED
	June 30, 2026
(Dollars in millions)	Private Education Loans			FFELP Loans			Total
Allowance at beginning of period	$	364		$	173		$	537
Total provision		35			17			52
Charge-offs:
Gross charge-offs		(165	)		(27	)		(192	)
Expected future recoveries on current period gross charge-offs		22			—			22
Net charge-offs(1)		(143	)		(27	)		(170	)
Decrease in expected future recoveries on previously fully charged-off loans(2)		7			—			7
Allowance at end of period (GAAP)		263			163			426
Plus: expected future recoveries on previously fully charged-off loans(2)		163			—			163
Allowance at end of period excluding expected future recoveries on previously fully charged-off loans (Non-GAAP Financial Measure)(3)	$	426		$	163		$	589
Net charge-offs as a percentage of average loans in repayment (annualized) (4)		1.87	%		.24	%
Allowance coverage of charge-offs (annualized)(3) (4)		1.5			3.0		(Non-GAAP)
Allowance as a percentage of the ending total loan balance(3) (4)		2.8	%		.6	%	(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(3) (4)		2.9	%		.7	%	(Non-GAAP)
Ending total loans(4)	$	15,409		$	26,738
Average loans in repayment(4)	$	14,792		$	22,850
Ending loans in repayment(4)	$	14,781		$	22,324


	SIX MONTHS ENDED
	June 30, 2025
(Dollars in millions)	Private Education Loans			FFELP Loans			Total
Allowance at beginning of period	$	441		$	180		$	621
Total provision		51			16			67
Charge-offs:
Gross charge-offs		(175	)		(14	)		(189	)
Expected future recoveries on current period gross charge-offs		23			—			23
Net charge-offs(1)		(152	)		(14	)		(166	)
Decrease in expected future recoveries on previously fully charged-off loans(2)		8			—			8
Allowance at end of period (GAAP)		348			182			530
Plus: expected future recoveries on previously fully charged-off loans(2)		172			—			172
Allowance at end of period excluding expected future recoveries on previously fully charged-off loans (Non-GAAP Financial Measure)(3)	$	520		$	182		$	702
Net charge-offs as a percentage of average loans in repayment (annualized)		1.98	%		.12	%
Allowance coverage of charge-offs(3)		1.7			6.1		(Non-GAAP)
Allowance as a percentage of the ending total loan balance(3)		3.3	%		.6	%	(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(3)		3.4	%		.7	%	(Non-GAAP)
Ending total loans	$	15,878		$	29,800
Average loans in repayment	$	15,423		$	25,295
Ending loans in repayment	$	15,267		$	24,867

(1) Charge-offs are reported net of expected recoveries. For Private Education Loans, we charge off the estimated loss of a defaulted loan balance by charging off the entire defaulted loan balance and estimating recoveries on a pool basis. These estimated recoveries are referred to as “expected future recoveries on previously fully charged-off loans.” For FFELP Loans, the recovery is received at the time of charge-off.

(2) At the end of each month, for Private Education Loans that are 212 or more days past due, we charge off the estimated loss of a defaulted loan balance by charging off the entire loan balance and estimating recoveries on a pool basis. These estimated recoveries are referred to as “expected future recoveries on previously fully charged-off loans.” If actual periodic recoveries are less than expected, the difference is immediately reflected as a reduction to expected future recoveries on previously fully charged-off loans. If actual periodic recoveries are greater than expected, they will be reflected as a recovery through the allowance for Private Education Loan losses once the cumulative recovery amount exceeds the cumulative amount originally expected to be recovered. The following table summarizes the activity in the expected future recoveries on previously fully charged-off loans:


	QUARTERS ENDED									SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026			March 31, 2026			June 30, 2025			June 30, 2026			June 30, 2025
Beginning of period expected future recoveries on previously fully charged-off loans	$	166		$	170		$	174		$	170		$	179
Expected future recoveries of current period defaults		11			11			13			22			23
Recoveries (cash collected)		(10	)		(11	)		(11	)		(20	)		(21	)
Charge-offs (as a result of lower recovery expectations)		(4	)		(4	)		(4	)		(9	)		(10	)
End of period expected future recoveries on previously fully charged-off loans	$	163		$	166		$	172		$	163		$	172
Change in balance during period	$	(3	)	$	(4	)	$	(2	)	$	(7	)	$	(8	)

(3) For Private Education Loans, the item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures.”

(4) Quarter and six months ended June 30, 2026 excludes $528 million of loans, and the corresponding charge-offs, that were classified as held for sale as of June 30, 2026.

       
LIQUIDITY AND CAPITAL RESOURCES

We expect to fund our ongoing liquidity needs, including the repayment of $0.7 billion of senior unsecured notes that mature in the short term (i.e., over the next 12 months) and the remaining $4.6 billion of senior unsecured notes that mature in the long term (from 2027 to 2043 with 79% maturing by 2032), through a number of sources. These sources include our cash on hand, unencumbered FFELP Loan and Private Education Refinance Loan portfolios (see “Sources of Primary Liquidity” below), the predictable operating cash flows provided by operating activities, the repayment of principal on unencumbered education loan assets, and the distribution of overcollateralization from our securitization trusts. We may also, depending on market conditions and availability, draw down on our secured FFELP Loan and Private Education Loan asset-backed commercial paper (ABCP) facilities, issue term asset-backed securities (ABS), enter into additional Private Education Loan and FFELP Loan ABS repurchase facilities, or issue additional unsecured debt.

We originate Private Education Loans (a portion of which is obtained through a forward purchase agreement). We also have purchased and may purchase, in future periods, Private Education Loan portfolios from third parties. Those originations and purchases are part of our ongoing liquidity needs. We repurchased 0.3 million shares of common stock for $2 million in the second quarter of 2026.

       
SOURCES OF LIQUIDITY

Sources of Primary Liquidity



(Dollars in millions)	June 30, 2026		March 31, 2026		June 30, 2025
Ending Balances:
Unrestricted cash	$	770	$	621	$	712
Unencumbered Private Education Refinance Loans		314		442		510
Unencumbered FFELP Loans		42		44		51
Total	$	1,126	$	1,107	$	1,273


	QUARTERS ENDED						SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026		March 31, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Average Balances:
Unrestricted cash	$	686	$	553	$	743	$	620	$	658
Unencumbered Private Education Refinance Loans		665		689		629		677		517
Unencumbered FFELP Loans		56		55		73		55		123
Total	$	1,407	$	1,297	$	1,445	$	1,352	$	1,298

Sources of Additional Liquidity

Liquidity may also be available under our secured credit facilities. Maximum borrowing capacity under the FFELP Loan and Private Education Loan ABCP facilities will vary and be subject to each agreement’s borrowing conditions, including, among others, facility size, current usage and availability of qualifying collateral from unencumbered loans. The following tables detail the additional borrowing capacity of these facilities with maturity dates ranging from October 2026 to April 2029.


(Dollars in millions)	June 30, 2026		March 31, 2026		June 30, 2025
Ending Balances:
Private Education Loan ABCP facilities	$	1,841	$	1,461	$	1,754
FFELP Loan ABCP facilities		—		143		190
Total	$	1,841	$	1,604	$	1,944


	QUARTERS ENDED						SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026		March 31, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Average Balances:
Private Education Loan ABCP facilities	$	1,678	$	1,661	$	1,613	$	1,669	$	1,530
FFELP Loan ABCP facilities		134		163		219		149		284
Total	$	1,812	$	1,824	$	1,832	$	1,818	$	1,814

At June 30, 2026, we had a total of $2.7 billion of unencumbered tangible assets inclusive of those listed in the table above as sources of primary liquidity. Total unencumbered education loans comprised $1.0 billion of our unencumbered tangible assets of which $1.0 billion and $42 million related to Private Education Loans and FFELP Loans, respectively. In addition, as of June 30, 2026, we had $4.9 billion of encumbered net assets (i.e., overcollateralization) in our various financing facilities (consolidated variable interest entities). We enter into repurchase facilities at times to borrow against the encumbered net assets of these financing vehicles. As of June 30, 2026, $0.5 billion of repurchase facility borrowings were outstanding.

The following table reconciles encumbered and unencumbered assets and their net impact on total Tangible Equity.


(Dollars in billions)	June 30, 2026			March 31, 2026			June 30, 2025
Net assets of consolidated variable interest entities (encumbered assets) — Private Education Loans	$	2.3		$	2.2		$	2.0
Net assets of consolidated variable interest entities (encumbered assets) — FFELP Loans		2.6			2.6			2.8
Tangible unencumbered assets(1)		2.7			2.8			2.9
Senior unsecured debt		(5.3	)		(5.3	)		(5.3	)
Mark-to-market on unsecured hedged debt(2)		—			—			—
Other liabilities, net		(.3	)		(.4	)		(.3	)
Total Tangible Equity (3)	$	2.0		$	1.9		$	2.1

(1) Excludes goodwill and acquired intangible assets.

(2) At June 30, 2026, March 31, 2026, and June 30, 2025, there were $(78) million, $(60) million and $(72) million, respectively, of net gains (losses) on derivatives hedging this debt in unencumbered assets, which partially offset these gains (losses).

(3) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures.”

       
  NON-GAAP FINANCIAL MEASURES

In addition to financial results reported on a GAAP basis, Navient also provides certain performance measures which are non-GAAP financial measures. We present the following non-GAAP financial measures: (1) Core Earnings, (2) Tangible Equity (as well as the Adjusted Tangible Equity Ratio) and (3) Allowance for Loan Losses Excluding Expected Future Recoveries on Previously Fully Charged-off Loans. Definitions for the non-GAAP financial measures and reconciliations are provided below, except that reconciliations of forward-looking non-GAAP financial measures are not provided because the Company is unable to provide such reconciliations without unreasonable effort due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of certain items, including, but not limited to, the impact of any mark-to-market gains/losses resulting from our use of derivative instruments to hedge our economic risks.

1. Core Earnings

We prepare financial statements and present financial results in accordance with GAAP. However, we also evaluate our business segments and present financial results on a basis that differs from GAAP. We refer to this different basis of presentation as Core Earnings. We provide this Core Earnings basis of presentation on a consolidated basis and for each business segment because this is what we review internally when making management decisions regarding our performance and how we allocate resources. We also refer to this information in our presentations with credit rating agencies, lenders and investors. Because our Core Earnings basis of presentation corresponds to our segment financial presentations, we are required by GAAP to provide certain Core Earnings disclosures in the notes to our consolidated financial statements for our business segments.

Core Earnings are not a substitute for reported results under GAAP. We use Core Earnings to manage our business segments because Core Earnings reflect adjustments to GAAP financial results for two items, discussed below, that can create significant volatility mostly due to timing factors generally beyond the control of management. Accordingly, we believe that Core Earnings provide management with a useful basis from which to better evaluate results from ongoing operations against the business plan or against results from prior periods. Consequently, we disclose this information because we believe it provides investors with additional information regarding the operational and performance indicators that are most closely assessed by management. When compared to GAAP results, the two items we remove to result in our Core Earnings presentations are:

(1) Mark-to-market gains/losses resulting from our use of derivative instruments to hedge our economic risks that do not qualify for hedge accounting treatment or do qualify for hedge accounting treatment but result in ineffectiveness; and

(2) The accounting for goodwill and acquired intangible assets.

While GAAP provides a uniform, comprehensive basis of accounting, for the reasons described above, our Core Earnings basis of presentation does not. Core Earnings are subject to certain general and specific limitations that investors should carefully consider. For example, there is no comprehensive, authoritative guidance for management reporting. Our Core Earnings are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. Accordingly, our Core Earnings presentation does not represent a comprehensive basis of accounting. Investors, therefore, may not be able to compare our performance with that of other financial services companies based upon Core Earnings. Core Earnings results are only meant to supplement GAAP results by providing additional information regarding the operational and performance indicators that are most closely used by management, our Board of Directors, credit rating agencies, lenders and investors to assess performance.

The following tables show our consolidated GAAP results, Core Earnings results (including for each reportable segment) along with the adjustments made to the income/expense items to reconcile the consolidated GAAP results to the Core Earnings results as required by GAAP.


	QUARTER ENDED JUNE 30, 2026
			Adjustments											Reportable Segments
(Dollars in millions)	Total GAAP		Reclassi- fications			Additions/ (Subtractions)			Total Adjustments (1)			Total Core Earnings		Consumer Lending		Federal Education Loans		Business Processing		Other
Interest income:
Education loans	$	664												$	273	$	391	$	—	$	—
Cash and investments		18													5		8		—		5
Total interest income		682													278		399		—		5
Total interest expense		560													185		351		—		26
Net interest income (loss)		122	$	1		$	(3	)	$	(2	)	$	120		93		48		—		(21	)
Less: provisions for loan losses		26											26		18		8		—		—
Net interest income (loss) after provisions for loan losses		96													75		40		—		(21	)
Other income (loss):
Servicing revenue		10													2		8		—		—
Asset recovery and business processing revenue		—													—		—		—		—
Other revenue		18													—		—		—		17
Total other income		28		(1	)		—			(1	)		27		2		8		—		17
Expenses:
Direct operating expenses		57													42		15		—		—
Unallocated shared services expenses		25													—		—		—		25
Operating expenses		82		—			—			—			82		42		15		—		25
Goodwill and acquired intangible asset impairment and amortization		—		—			—			—			—		—		—		—		—
Restructuring/other reorganization expenses		3		—			—			—			3		—		—		—		3
Total expenses		85		—			—			—			85		42		15		—		28
Income (loss) before income tax expense (benefit)		39		—			(3	)		(3	)		36		35		33		—		(32	)
Income tax expense (benefit)(2)		14		—			(5	)		(5	)		9		8		7		—		(6	)
Net income (loss)	$	25	$	—		$	2		$	2		$	27	$	27	$	26	$	—	$	(26	)

(1) Core Earnings adjustments to GAAP:


	QUARTER ENDED JUNE 30, 2026
(Dollars in millions)	Net Impact of Derivative Accounting			Net Impact of Goodwill and Acquired Intangibles		Total
Net interest income (loss) after provisions for loan losses	$	(2	)	$	—	$	(2	)
Total other income		(1	)		—		(1	)
Goodwill and acquired intangible asset impairment and amortization		—			—		—
Total Core Earnings adjustments to GAAP	$	(3	)	$	—		(3	)
Income tax expense (benefit)							(5	)
Net income (loss)						$	2

(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.


	QUARTER ENDED MARCH 31, 2026
			Adjustments											Reportable Segments
(Dollars in millions)	Total GAAP		Reclassi- fications			Additions/ (Subtractions)			Total Adjustments(1)			Total Core Earnings		Consumer Lending		Federal Education Loans		Business Processing		Other
Interest income:
Education loans	$	678												$	277	$	401	$	—	$	—
Cash and investments		17													4		8		—		5
Total interest income		695													281		409		—		5
Total interest expense		564													181		363		—		25
Net interest income (loss)		131	$	2		$	(7	)	$	(5	)	$	126		100		46		—		(20	)
Less: provisions for loan losses		27											27		18		9		—		—
Net interest income (loss) after provisions for loan losses		104													82		37		—		(20	)
Other income (loss):
Servicing revenue		11													3		8		—		—
Asset recovery and business processing revenue		—													—		—		—		—
Other revenue		10													—		—		—		5
Total other income		21		(2	)		(3	)		(5	)		16		3		8		—		5
Expenses:
Direct operating expenses		55													39		16		—		—
Unallocated shared services expenses		34													—		—		—		34
Operating expenses		89		—			—			—			89		39		16		—		34
Goodwill and acquired intangible asset impairment and amortization		4		—			(4	)		(4	)		—		—		—		—		—
Restructuring/other reorganization expenses		—		—			—			—			—		—		—		—		—
Total expenses		93		—			(4	)		(4	)		89		39		16		—		34
Income (loss) before income tax expense (benefit)		32		—			(6	)		(6	)		26		46		29		—		(49	)
Income tax expense (benefit)(2)		15		—			(8	)		(8	)		7		11		7		—		(11	)
Net income (loss)	$	17	$	—		$	2		$	2		$	19	$	35	$	22	$	—	$	(38	)

(1) Core Earnings adjustments to GAAP:


	QUARTER ENDED MARCH 31, 2026
(Dollars in millions)	Net Impact of Derivative Accounting			Net Impact of Goodwill and Acquired Intangibles			Total
Net interest income (loss) after provisions for loan losses	$	(5	)	$	—		$	(5	)
Total other income		(5	)		—			(5	)
Goodwill and acquired intangible asset impairment and amortization		—			(4	)		(4	)
Total Core Earnings adjustments to GAAP	$	(10	)	$	4			(6	)
Income tax expense (benefit)								(8	)
Net income (loss)							$	2

(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.


	QUARTER ENDED JUNE 30, 2025
			Adjustments											Reportable Segments
(Dollars in millions)	Total GAAP		Reclassi- fications			Additions/ (Subtractions)			Total Adjustments (1)			Total Core Earnings		Consumer Lending		Federal Education Loans			Business Processing		Other
Interest income:
Education loans	$	756												$	273	$	483		$	—	$	—
Cash and investments		22													5		10			—		7
Total interest income		778													278		493			—		7
Total interest expense		650													183		438			—		26
Net interest income (loss)		128	$	5		$	(2	)	$	3		$	131		95		55			—		(19	)
Less: provisions for loan losses		37											37		29		8			—		—
Net interest income (loss) after provisions for loan losses		91													66		47			—		(19	)
Other income (loss):
Servicing revenue		14													3		11			—		—
Asset recovery and business processing revenue		—													—		—			—		—
Other revenue (loss)		14													—		(1	)		—		20
Total other income		28		(5	)		10			5			33		3		10			—		20
Expenses:
Direct operating expenses		53													36		17			—		—
Unallocated shared services expenses		47													—		—			—		47
Operating expenses		100		—			—			—			100		36		17			—		47
Goodwill and acquired intangible asset impairment and amortization		1		—			(1	)		(1	)		—		—		—			—		—
Restructuring/other reorganization expenses		—		—			—			—			—		—		—			—		—
Total expenses		101		—			(1	)		(1	)		100		36		17			—		47
Income (loss) before income tax expense (benefit)		18		—			9			9			27		33		40			—		(46	)
Income tax expense (benefit)(2)		4		—			2			2			6		7		10			—		(11	)
Net income (loss)	$	14	$	—		$	7		$	7		$	21	$	26	$	30		$	—	$	(35	)

(1) Core Earnings adjustments to GAAP:


	QUARTER ENDED JUNE 30, 2025
(Dollars in millions)	Net Impact of Derivative Accounting		Net Impact of Goodwill and Acquired Intangibles			Total
Net interest income (loss) after provisions for loan losses	$	3	$	—		$	3
Total other income		5		—			5
Goodwill and acquired intangible asset impairment and amortization		—		(1	)		(1	)
Total Core Earnings adjustments to GAAP	$	8	$	1			9
Income tax expense (benefit)							2
Net income (loss)						$	7

(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.


	SIX MONTHS ENDED JUNE 30, 2026
			Adjustments											Reportable Segments
(Dollars in millions)	Total GAAP		Reclassi- fications			Additions/ (Subtractions)			Total Adjustments(1)			Total Core Earnings		Consumer Lending		Federal Education Loans		Business Processing		Other
Interest income:
Education loans	$	1,341												$	550	$	791	$	—	$	—
Cash and investments		35													9		17		—		9
Total interest income		1,376													559		808		—		9
Total interest expense		1,123													365		714		—		51
Net interest income (loss)		253	$	3		$	(10	)	$	(7	)	$	246		194		94		—		(42	)
Less: provisions for loan losses		54											54		37		17		—		—
Net interest income (loss) after provisions for loan losses		199													157		77		—		(42	)
Other income (loss):
Servicing revenue		21													4		17		—		—
Asset recovery and business processing revenue		—													—		—		—		—
Other revenue		28													—		—		—		22
Total other income		49		(3	)		(3	)		(6	)		43		4		17		—		22
Expenses:
Direct operating expenses		112													81		31		—		—
Unallocated shared services expenses		59													—		—		—		59
Operating expenses		171		—			—			—			171		81		31		—		59
Goodwill and acquired intangible asset impairment and amortization		4		—			(4	)		(4	)		—		—		—		—		—
Restructuring/other reorganization expenses		2		—			—			—			2		—		—		—		2
Total expenses		177		—			(4	)		(4	)		173		81		31		—		61
Income (loss) before income tax expense (benefit)		71					(9	)		(9	)		62		80		63		—		(81	)
Income tax expense (benefit)(2)		29		—			(14	)		(14	)		15		18		15		—		(18	)
Net income (loss)	$	42	$	—		$	5		$	5		$	47	$	62	$	48	$	—	$	(63	)

(1) Core Earnings adjustments to GAAP:


	SIX MONTHS ENDED JUNE 30, 2026
(Dollars in millions)	Net Impact of Derivative Accounting			Net Impact of Goodwill and Acquired Intangibles			Total
Net interest income (loss) after provisions for loan losses	$	(7	)	$	—		$	(7	)
Total other income		(6	)		—			(6	)
Goodwill and acquired intangible asset impairment and amortization		—			(4	)		(4	)
Total Core Earnings adjustments to GAAP	$	(13	)	$	4			(9	)
Income tax expense (benefit)								(14	)
Net income (loss)							$	5

(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.


	SIX MONTHS ENDED JUNE 30, 2025
			Adjustments											Reportable Segments
(Dollars in millions)	Total GAAP		Reclassi- fications			Additions/ (Subtractions)			Total Adjustments (1)			Total Core Earnings		Consumer Lending		Federal Education Loans			Business Processing		Other
Interest income:
Education loans	$	1,537												$	562	$	975		$	—	$	—
Cash and investments		43													10		20			—		13
Total interest income		1,580													572		995			—		13
Total interest expense		1,322													364		892			—		49
Net interest income (loss)		258	$	11		$	6		$	17		$	275		208		103			—		(36	)
Less: provisions for loan losses		67											67		51		16			—		—
Net interest income (loss) after provisions for loan losses		191													157		87			—		(36	)
Other income (loss):
Servicing revenue		27													6		21			—		—
Asset recovery and business processing revenue		23													—		—			23		—
Other revenue (loss)		3													—		(1	)		—		34
Total other income		53		(11	)		41			30			83		6		20			23		34
Expenses:
Direct operating expenses		127													70		37			20		—
Unallocated shared services expenses		100													—		—			—		100
Operating expenses		227		—			—			—			227		70		37			20		100
Goodwill and acquired intangible asset impairment and amortization		2		—			(2	)		(2	)		—		—		—			—		—
Restructuring/other reorganization expenses		3		—			—			—			3		—		—			—		3
Total expenses		232		—			(2	)		(2	)		230		70		37			20		103
Income (loss) before income tax expense (benefit)		12		—			49			49			61		93		70			3		(105	)
Income tax expense (benefit)(2)		1		—			13			13			14		21		16			1		(24	)
Net income (loss)	$	11	$	—		$	36		$	36		$	47	$	72	$	54		$	2	$	(81	)

(1) Core Earnings adjustments to GAAP:


	SIX MONTHS ENDED JUNE 30, 2025
(Dollars in millions)	Net Impact of Derivative Accounting		Net Impact of Goodwill and Acquired Intangibles			Total
Net interest income (loss) after provisions for loan losses	$	17	$	—		$	17
Total other income		30		—			30
Goodwill and acquired intangible asset impairment and amortization		—		(2	)		(2	)
Total Core Earnings adjustments to GAAP	$	47	$	2			49
Income tax expense (benefit)							13
Net income (loss)						$	36

(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.

The following discussion summarizes the differences between GAAP and Core Earnings net income and details each specific adjustment required to reconcile our GAAP earnings to our Core Earnings segment presentation.


	QUARTERS ENDED									SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026			March 31, 2026			June 30, 2025			June 30, 2026			June 30, 2025
GAAP net income	$	25		$	17		$	14		$	42		$	11
Core Earnings adjustments to GAAP:
Net impact of derivative accounting		(3	)		(10	)		8			(13	)		47
Net impact of goodwill and acquired intangible assets		—			4			1			4			2
Net tax effect		5			8			(2	)		14			(13	)
Total Core Earnings adjustments to GAAP		2			2			7			5			36
Core Earnings net income	$	27		$	19		$	21		$	47		$	47

(1) Derivative Accounting: Core Earnings exclude periodic gains and losses that are caused by the mark-to-market valuations on derivatives that do not qualify for hedge accounting treatment under GAAP, as well as the periodic mark-to-market gains and losses that are a result of ineffectiveness recognized related to effective hedges under GAAP. Under GAAP, for our derivatives that are held to maturity, the mark-to-market gain or loss over the life of the contract will equal $0. In our Core Earnings presentation, we recognize the economic effect of these hedges, which generally results in any net settlement cash paid or received being recognized ratably as an interest expense or revenue over the hedged item’s life.

The table below quantifies the adjustments for derivative accounting between GAAP and Core Earnings net income.


	QUARTERS ENDED									SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026			March 31, 2026			June 30, 2025			June 30, 2026			June 30, 2025
Core Earnings derivative adjustments:
(Gains) losses on derivative and hedging activities, net, included in other income	$	(1	)	$	(5	)	$	5		$	(6	)	$	30
Plus: (Gains) losses on fair value hedging activity included in interest expense		(4	)		(8	)		(4	)		(12	)		2
Total (gains) losses in GAAP net income		(5	)		(13	)		1			(18	)		32
Plus: Reclassification of settlement income (expense) on derivative and hedging activities, net(1)		1			2			5			3			11
Mark-to-market (gains) losses on derivative and hedging activities, net(2)		(4	)		(11	)		6			(15	)		43
Other derivative accounting adjustments(3)		1			1			2			2			4
Total net impact of derivative accounting	$	(3	)	$	(10	)	$	8		$	(13	)	$	47

(1)

Derivative accounting requires net settlement income/expense on derivatives that do not qualify as hedges to be recorded in a separate income
statement line item below net interest income. Under our Core Earnings presentation, these settlements are reclassified to the income statement line item of the economically hedged item. For our Core Earnings net interest income, this would primarily include reclassifying the net settlement
amounts related to certain of our interest rate swaps to debt interest expense. The table below summarizes these net settlements on derivative and
hedging activities and the associated reclassification on a Core Earnings basis.


	QUARTERS ENDED						SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026		March 31, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Reclassification of settlements on derivative and hedging activities:
Net settlement income (expense) on interest rate swaps reclassified to net interest income	$	1	$	2	$	5	$	3	$	11
Total reclassifications of settlement income (expense) on derivative and hedging activities	$	1	$	2	$	5	$	3	$	11

(2) “Mark-to-market (gains) on derivative and hedging activities, net” is comprised of the following:


	QUARTERS ENDED									SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026			March 31, 2026			June 30, 2025			June 30, 2026			June 30, 2025
Fair value hedges	$	(1	)	$	(2	)	$	4		$	(3	)	$	7
Foreign currency hedges		(3	)		(6	)		(8	)		(9	)		(5	)
Other (a)		—			(3	)		10			(3	)		41
Total mark-to-market (gains) losses on derivative and hedging activities, net	$	(4	)	$	(11	)	$	6		$	(15	)	$	43

(a) Primarily derivatives that are used to economically hedge the origination of fixed rate Private Education Loans that don’t qualify for hedge accounting. We believe that these derivatives are effective economic hedges,and as such, are a critical element of our interest rate risk management strategy.

(3) Other derivative accounting adjustments consist of adjustments related to certain terminated derivatives that did not receive hedge accounting treatment under GAAP but were economic hedges under Core Earnings and, as a result, such gains or losses are amortized into Core Earnings over the life of the hedged item:

Cumulative Impact of Derivative Accounting under GAAP compared to Core Earnings

As of June 30, 2026, derivative accounting has decreased GAAP equity by approximately $17 million as a result of cumulative net mark-to-market losses (after tax) recognized under GAAP, but not in Core Earnings. The following table rolls forward the cumulative impact to GAAP equity due to these after-tax mark-to-market net gains and losses related to derivative accounting.


	QUARTERS ENDED									SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026			March 31, 2026			June 30, 2025			June 30, 2026			June 30, 2025
Beginning impact of derivative accounting on GAAP equity	$	(28	)	$	(39	)	$	(22	)	$	(39	)	$	8
Net impact of net mark-to-market gains (losses) under derivative accounting(1)		11			11			(8	)		22			(38	)
Ending impact of derivative accounting on GAAP equity	$	(17	)	$	(28	)	$	(30	)	$	(17	)	$	(30	)

(1)

Net impact of net mark-to-market gains (losses) under derivative accounting is composed of the following:


	QUARTERS ENDED									SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026			March 31, 2026			June 30, 2025			June 30, 2026			June 30, 2025
Total pre-tax net impact of derivative accounting recognized in net income(2)	$	3		$	10		$	(8	)	$	13		$	(47	)
Tax and other impacts of derivative accounting adjustments		(1	)		(2	)		2			(3	)		12
Change in mark-to-market gains (losses) on derivatives, net of tax recognized in other comprehensive income		9			3			(2	)		12			(3	)
Net impact of net mark-to-market gains (losses) under derivative accounting	$	11		$	11		$	(8	)	$	22		$	(38	)

(a) See “Core Earnings derivative adjustments” table above.

Hedging Embedded Floor Income

We use pay-fixed swaps and fixed rate debt to economically hedge embedded Floor Income in our FFELP loans. Historically, we have used these instruments on a periodic basis and depending upon market conditions and pricing, we may enter into additional hedges in the future. Under GAAP, the pay-fixed swaps are accounted for as cash flow hedges. The table below shows the amount of Hedged Floor Income that will be recognized in Core Earnings in future periods based on these hedge strategies.


	June 30,		March 31,		June 30,
(Dollars in millions)	2026		2026		2025
Total hedged Floor Income, net of tax(1)(2)	$	20	$	23	$	35

(1) $26 million, $31 million and $46 million on a pre-tax basis as of June 30, 2026, March 31, 2026, and June 30, 2025, respectively.

(2) Of the $20 million as of June 30, 2026, approximately $7 million, $7 million and $6 million will be recognized as part of Core
Earnings net income in the remainder of 2026, 2027 and 2028, respectively.

(2) Goodwill and Acquired Intangible Assets: Our Core Earnings exclude goodwill and intangible asset impairment and the amortization of acquired intangible assets. The following table summarizes the goodwill and acquired intangible asset adjustments.


	QUARTERS ENDED						SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026		March 31, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Core Earnings goodwill and acquired intangible asset adjustments	$	—	$	4	$	1	$	4	$	2

2. Tangible Equity and Adjusted Tangible Equity Ratio

Adjusted Tangible Equity measures the ratio of Navient’s Tangible Equity to its tangible assets. We adjust this ratio to exclude the assets and equity associated with our FFELP Loan portfolio because FFELP Loans are no longer originated and the FFELP Loan portfolio bears a 3% maximum loss exposure under the terms of the federal guaranty. Management believes that excluding this portfolio from the ratio enhances its usefulness to investors. Management uses this ratio, in addition to other metrics, for analysis and decision making related to capital allocation decisions. The Adjusted Tangible Equity Ratio is calculated as:


(Dollars in millions)	June 30, 2026			March 31, 2026			June 30, 2025
Navient Corporation's stockholders' equity	$	2,398		$	2,379		$	2,564
Less: Goodwill and acquired intangible assets		430			430			436
Tangible Equity		1,968			1,949			2,128
Less: Equity held for FFELP Loans		133			136			148
Adjusted Tangible Equity	$	1,835		$	1,813		$	1,980
Divided by:
Total assets	$	47,297		$	48,004		$	50,222
Less:
Goodwill and acquired intangible assets		430			430			436
FFELP Loans		26,575			27,237			29,618
Adjusted tangible assets	$	20,292		$	20,337		$	20,168
Adjusted Tangible Equity Ratio		9.0	%		8.9	%		9.8	%

3. Allowance for Loan Losses Excluding Expected Future Recoveries on Previously Fully Charged-off Loans

The allowance for loan losses on the Private Education Loan portfolio used for the three credit metrics below excludes the expected future recoveries on previously fully charged-off loans to better reflect the current expected credit losses remaining in connection with the loans on balance sheet that have not charged off. As of June 30, 2026, the $426 million Private Education Loan allowance for loan losses excluding expected future recoveries on previously fully charged-off loans represents the current expected credit losses that remain in connection with the $15,409 million Private Education Loan portfolio. The $163 million of expected future recoveries on previously fully charged-off loans, which is collected over an average 15-year period, mechanically is a reduction to the overall allowance for loan losses. However, it is not related to the $15,409 million Private Education Loan portfolio on our balance sheet and, as a result, management excludes this impact to the allowance to better evaluate and assess our overall credit loss coverage on the Private Education Loan portfolio. We believe this provides a more meaningful and holistic view of the available credit loss coverage on our non-charged-off Private Education Loan portfolio. We believe this information is useful to our investors, lenders and rating agencies.

Allowance for Loan Losses Metrics – Private Education Loans


	QUARTERS ENDED									SIX MONTHS ENDED
(Dollars in millions)	June 30, 2026			March 31, 2026			June 30, 2025			June 30, 2026			June 30, 2025
Allowance at end of period (GAAP)	$	263		$	314		$	348		$	263		$	348
Plus: expected future recoveries on previously fully charged-off loans		163			166			172			163			172
Allowance at end of period excluding expected future recoveries on previously fully charged-off loans (Non-GAAP Financial Measure)	$	426		$	480		$	520		$	426		$	520
Ending total loans(1)	$	15,409		$	15,963		$	15,878		$	15,409		$	15,878
Ending loans in repayment(1)	$	14,781		$	15,335		$	15,267		$	14,781		$	15,267
Net charge-offs	$	71		$	72		$	80		$	143		$	152

Allowance coverage of charge-offs (annualized)(1):
GAAP		1.0			1.1			1.1			.9			1.1
Adjustment(2)		.6			.6			.5			.6			.6
Non-GAAP Financial Measure(2)		1.6			1.7			1.6			1.5			1.7

Allowance as a percentage of the ending total loan balance(1):
GAAP		1.7	%		2.0	%		2.2	%		1.7	%		2.2	%
Adjustment(2)		1.1			1.0			1.1			1.1			1.1
Non-GAAP Financial Measure(2)		2.8	%		3.0	%		3.3	%		2.8	%		3.3	%

Allowance as a percentage of the ending loans in repayment(1):
GAAP		1.8	%		2.0	%		2.3	%		1.8	%		2.3	%
Adjustment(2)		1.1			1.1			1.1			1.1			1.1
Non-GAAP Financial Measure(2)		2.9	%		3.1	%		3.4	%		2.9	%		3.4	%

(1) Second-quarter 2026 excludes $528 million of loans, and the corresponding charge-offs, that were classified as held for sale as of June 30, 2026.

(2) The allowance used for these credit metrics excludes the expected future recoveries on previously fully charged-off loans. See discussion above.

Source: View Original Filing on SEC EDGAR

Filing Exhibits & Attachments

3 documents

Navient (NASDAQ: JSM) reports Q2 2026 EPS of $0.26 and stronger profit

Rhea-AI Filing Summary

Positive

Negative

Insights

8-K Event Classification

Key Figures

Key Terms

Earnings Snapshot

FAQ

How did Navient (JSM) perform financially in the second quarter of 2026?

What were Navient (JSM)’s key Consumer Lending results for Q2 2026?

How did Navient (JSM)’s Federal Education Loans segment perform in Q2 2026?

What changes occurred in Navient (JSM)’s credit quality metrics in Q2 2026?

What was Navient (JSM)’s expense trend in second-quarter 2026?

How strong was Navient (JSM)’s liquidity and capital position at June 30, 2026?

What shareholder returns did Navient (JSM) provide in Q2 2026?

FORM 8-K

Filing Exhibits & Attachments

Press Releases

Other Documents