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    How Alleged Misstatements On Loan Delinquencies And Loss Mitigation At SLM (SLM) Have Changed Its Investment Story

    Simply Wall St·01/08/2026 07:22:25
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    • In recent months, multiple law firms have launched securities class action lawsuits against SLM Corporation, alleging the company misled investors about rising early stage loan delinquencies and the effectiveness of its loss mitigation and loan modification programs.
    • The cases center on whether SLM’s public statements accurately reflected the underlying credit performance of its private education loan portfolio during the July 25 to August 14, 2025 period, raising fresh questions about the transparency of its risk management practices.
    • We’ll now examine how these allegations about early stage delinquencies and loss mitigation effectiveness could reshape SLM’s previously supportive investment narrative.

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    SLM Investment Narrative Recap

    To own SLM today, you need to be comfortable with a story built around private student lending, disciplined credit management and active capital returns. The new class action lawsuits go right to the heart of that thesis, because they challenge SLM’s disclosures on early stage delinquencies and loss mitigation, making short term credit quality and transparency the key catalyst and the primary risk to watch.

    The most relevant recent development, in my view, is SLM’s ongoing share repurchase program, with about US$517.25 million spent to buy back roughly 9.64% of shares since early 2024. Those sizable buybacks, alongside steady dividends, had been reinforcing a shareholder friendly capital return story, which now sits uncomfortably next to allegations that investors may not have had a full picture of rising delinquencies.

    But behind the buybacks and dividends, there is a credit risk story that investors should be aware of, especially if borrower delinquencies...

    Read the full narrative on SLM (it's free!)

    SLM's narrative projects $2.0 billion revenue and $918.9 million earnings by 2028. This requires 17.4% yearly revenue growth and about a $493.6 million earnings increase from $425.3 million today.

    Uncover how SLM's forecasts yield a $31.91 fair value, a 15% upside to its current price.

    Exploring Other Perspectives

    SLM 1-Year Stock Price Chart
    SLM 1-Year Stock Price Chart

    Three members of the Simply Wall St Community currently see SLM’s fair value between about US$24.17 and US$39.11, highlighting how far opinions can differ. Against that backdrop, the emerging focus on early stage delinquencies and loss mitigation effectiveness could have important implications for how you think about the company’s future earnings resilience and risk profile.

    Explore 3 other fair value estimates on SLM - why the stock might be worth 13% less than the current price!

    Build Your Own SLM Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

    • A great starting point for your SLM research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
    • Our free SLM research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SLM's overall financial health at a glance.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.