Earnings Guidance and Reserve Rate
Q: How will you meet full-year guidance after a weaker quarter?
A: We anticipate continued improvement in our overall reserve rate due to improvements in net charge-offs and higher credit quality of new originations, which will help us meet our full-year earnings guidance. "

Loan Sale Considerations
Q: Will you do a loan sale to manage earnings and growth?
A: While we are trending towards the high end of our balance sheet growth guidance of 2% to 3%, we consider loan sales as an option to meet earnings guidance if necessary, but it's not our first priority. We prefer predictable, stable balance sheet growth and would discuss any need to disappoint on earnings with investors. " "

Market Share Post-Discover Exit
Q: Did your originations reflect a new market share after Discover's exit?
A: Yes, with 13% originations growth, we believe we captured our share of the market left by Discover's exit, which had a 14% to 15% market share. We feel good about sustaining this momentum going forward. "

Net Interest Margin Outlook
Q: Could NIM dip below 5%, and when will it recover?
A: NIM may experience pressure and could dip below 5% in the short term due to borrowers choosing fixed-rate loans and funding costs repricing. We expect normalization as lower-rate deposits reprice, returning to our longer-term NIM target of low to mid-5% range later next year. "

Loan Loss Provisions and Delinquencies
Q: What explains increased early-stage delinquencies this quarter?
A: The uptick is due to normal seasonality; we focus on later-stage delinquencies, which are improving thanks to our loss mitigation programs. We see continued positive trends and are not concerned with early-stage movements. "

FFELP Loan Sale Impact
Q: What is the impact of selling the FFELP loan portfolio?
A: We decided to sell our remaining $0.5 billion in FFELP loans, as they are non-core and create operational complexity. We expect to close the transaction in the fourth quarter, with no significant gain or loss. "

Potential for Loan Consolidation
Q: Will lower rates increase loan consolidation activity?
A: Yes, a rate decline of 100 basis points or more could lead to meaningful uptick in consolidation. However, we don't expect a return to peak levels from previous years. "

Deposit Rates and NIM Compression
Q: How do new deposit rates compare to existing ones?
A: New deposit rates vary by tenor but have moved 25 to 50 basis points recently. We price competitively, and while some deposits will reprice higher, others will reprice lower, leading to NIM compression in the near term. "

Customer Acquisition Efficiency
Q: How have you improved customer acquisition costs?
A: We've enhanced efficiencies through organic search and content-driven marketing strategies, acquiring customers without heavy reliance on paid search. Our strong school relationships and digital capabilities further support this. "

Impact of Federal Payment Resumption
Q: Are you seeing issues from federal loan repayments resuming?
A: No, we haven't observed any negative impact on our borrowers from the resumption of federal loan payments. Our customers continue to perform well without material concern. "

Loan Modification Process Change
Q: What drove the procedural change in loan modifications?
A: We refined when a loan mod is considered effective to reduce operational complexity and borrower confusion. Now, borrowers are considered in a modification upon acceptance, causing a reported increase in mods but no significant impact on delinquency metrics. "