Caroline Latta

Caroline Latta asked about the specific macroeconomic assumptions underpinning the 2026 guidance, particularly concerning the unemployment rate and interest rates, and their potential impact on refi volumes.

Answer

CFO Steve Hauber stated that the macroeconomic assumptions for unemployment and interest rates align with Blue Chip consensus, and Jen Earyes (Head of Investor Relations) could provide specific details offline.

Caroline Latta from Bank of America asked about the specific macroeconomic assumptions, including unemployment and interest rates, that underpin Navient's 2026 guidance, particularly concerning their impact on refi volumes.

Answer

CFO Steve Hauber explained that the macroeconomic assumptions for 2026 guidance align with 'blue chip consensus' for unemployment and interest rates, as Navient relies on external providers for these scenarios. He offered to have Investor Relations provide specific details offline.

Caroline Latta inquired about the potential impact of the postponement of wage garnishment and Treasury offset on the performance of Sallie Mae's in-school and private student loans, and how to model 1H versus 2H growth given the $5 billion Grad PLUS opportunity.

Answer

CEO Jon Witter clarified that the postponement would have a minimal impact on Sallie Mae's business due to the distinct customer bases. CFO Pete Graham explained that the Grad PLUS impact would be modest in 2026, primarily affecting new freshmen and graduate students in the fall academic period, with growth stepping up measurably over the next two to three years.

Caroline Latta inquired about potential further investments in generative AI and the expected cadence of that spending over the coming year.

Answer

CFO Don McGuire stated there are no specific call-outs for major new investments, as the company is continuing its modest investment course. He highlighted that ADP is already seeing good results from deployed tools like call summarization, sales coaching, and coding copilots, and the focus is on realizing more returns from investments already made.