Sallie Mae is the largest private student lender in the U.S., originating loans directly to students and families to bridge the gap between college costs and what federal aid, savings, and scholarships cover. Its flagship product, the Smart Option Student Loan, offers deferred, interest-only, and fixed repayment structures. Sallie Mae also offers specialized loans for graduate and professional students. The company sells primarily through relationships with financial aid offices at over 2,100 colleges and universities. Sallie Mae makes money through net interest income — the spread between yield on its loan portfolio and its funding costs. It funds loans through deposits at Sallie Mae Bank and through asset-backed securities. Sallie Mae also periodically sells loan pools to third-party investors, generating gain-on-sale income. In 2025, Sallie Mae launched a capital-light partnership with KKR, selling newly originated loans while retaining servicing fees — a model management views as a third funding channel alongside the bank balance sheet and traditional loan sales. The most significant near-term growth driver is federal legislation passed in July 2025 that caps or eliminates certain federal graduate and parent loan programs starting in 2026, which Sallie Mae estimates will generate an additional $4.5B–$5B in annual private loan originations once fully phased in. Credit quality is managed through cosigner requirements — roughly 93% of originations are cosigned — and by targeting higher-credit borrowers.