Sallie Mae: New Credit Issue from Debt Collectors Emerges, Other Trends Look Positve

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Sallie Mae: New Credit Issue from Debt Collectors Emerges, Other Trends Look Positve

Deutsche Bank

Research

Rating Company Date

Buy Sallie Mae 10 June 2026

North America Reuters Bloomberg Rating Buy

United States SLM.OQ SLM US Price target (USD) 32.00 Price at 9 Jun 26 23.05

52-week range 34.40 – 18.74

Financial

Consumer Finance Valuation & Risks

New Credit Issue from Debt Collectors

Emerges, Other Trends Look Positve MarkResearchDeVriesAnalyst

+1-212-250-4081

In a conference presentation this morning, SLM discussed a new issue from

Michael Dunlevy, CFA “isolated pressure in a small, high-ability-to-pay segment we believe is primarily Research Associate

driven by misaligned third-party debt resolution practices.” Apparently, these +1-212-250-9888

players are marketing a private loan refinance that requires the borrower, many

of whom have an ability to repay, to default so the collector can then settle with

SLM at a discount and offer the loan at more favorable terms, though in the

process damaging that borrower’s credit. SLM has taken steps to address this

issue, including pausing recovery loan sales & settlements, and proactive early

outreach. The impacted segment represents a very small percentage of the

overall portfolio (less than 0.1%) but an outsized share of NCOs. . Management

estimates that if they don't restart the normal recovery practices before the end

of this year, it will result in a ~$25MM impact to recoveries in the year.

Excluding the impact of this segment, management indicated that credit from the

latest payment wave has been stable, but modestly above expectations.

Management also highlighted improving roll-rates from the evolving loss

mitigation efforts, and strong performance from loan modifications, with payment