Earnings release
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NAVIENT 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 • Net income of $ 27 million . LENDING • SEGMENT Net interest margin of 2.26 % . • Originated $ 815 million of Private Education Loans , a 63 % increase from a year ago . FEDERAL • Net income of $ 26 million . EDUCATION • LOANS SEGMENT Net interest margin of 0.68 % . CAPITAL & • GAAP equity - to - asset ratio of 5.1 % and adjusted tangible equity ratio ( 1 ) of 9.0 % . FUNDING • Repurchased $ 2 million of common shares . • Paid $ 15 million in common stock dividends . OPERATING EXPENSES • Issued $ 500 million of unsecured debt and $ 1.3 billion of asset - backed securities . 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 .
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2 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. o Refinance Loan originations were $735 million compared to $443 million. o 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. o Net charge-offs were $71 million, down $9 million compared to $80 million in the year-ago quarter. o Private Education Loan delinquencies greater than 90 days: $349 million, down $110 million from $459 million. o 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.
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3 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. o Net charge-offs were $10 million compared to $8 million. o Delinquencies greater than 90 days were $1.8 billion compared to $2.5 billion. o 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.
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4 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. 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. 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 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 # # #
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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.
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6 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 $ — — % $ — — %
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7 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 $ — — %
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8 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
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9 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.
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10 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.
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11 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.
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12 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
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13 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
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14 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 lo an balance by charging off the entire defaulted loan balance and estimating recoveries on a pool basis. These estimated r ecoveries 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 recove ries 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 e xpected 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 allowanc e 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.
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15 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
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16 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.”
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17 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.
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18 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.
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19 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.
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20 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.
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21 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.
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22 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.
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23 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.
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24 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:
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25 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
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26 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 %
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27 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.