Student loan ABS

Student loan servicing giants, Sallie Mae Bank and its offshoot Navient Solutions, are each approaching the market with deals securitizing students loans, providing investors with exposure to different types of loans and deal risks.

The student-loan servicer is marketing bonds secured by refinance originations of its Earnest subsidiary targeting borrowers in advanced-degree professions.

The fixed-rate loans from Earnest involve refinancings to advanced degree professionals who have greater financial means to make payments despite the economic disruption caused by the COVID-19 pandemic.

A new CommonBond private student-loan securitization is expected to generate slightly higher losses than the Goldman Sachs-owned lender’s previous transaction of refinanced loans of professional-degreed borrowers.

Unlike other asset-backed issuers in the auto or mortgage sector, SoFi was able to market SoFi Professional Loan Program 2020-C Trust without additional investor protections above what it offered in deals closed before the COVID-19 outbreak.

Nelnet Student Loan Trust 2020-2, arranged by Bank of Montreal, is made up of nearly 50% of formerly delinquent loans that have been cured to current status.

SoFi Professional Loan Program 2020-B Trust is a $1.06 billion asset-backed offering of bonds secured by a pool of loans made to advanced-degree graduates of medical, dental or legal universities, or MBA recipients.

Upstart is disputing an analysis accusing it of discriminating against prospective borrowers based on the college they attended, saying it contains “inaccuracies and misunderstandings.”

Sallie's first student-loan securitization of the year comes a week after SLM Corp. announced plans to sell more loans from its portfolio to fund a share buyback program.

Macro factors point to a solid year in the securitization market but wild cards abound, many of them political.

SoFi Professional Loan Program 2020-A Trust is a $482.3 million bond offering, backed by a pool of approximately $500 million in loans taken out by post-graduate professionals from high-income fields.

Along with an Aaa from Moody's, Nelnet's latest FFELP securitization received an infrequent AAA rating from S&P after providing additional cushion against collateral losses for the senior-most notes.

CommonBond is coming to the securitization market again with another trust that uses the highly selective prefunding period feature to issue notes backed by private, refinanced student loans.

The idea of forgiving student debt has gained traction in the Democratic presidential debates. Undiscussed so far: the significant impact any program could have on the roughly $175 billion of securities backed by student loans.

Of the roughly $250 billion severely derogatory outstanding balance, defaulted student loans make up 35%, a New York Fed report found. That’s a new phenomenon.

Navient’s next securitization of private student-loan refinancing will involve only loans primarily issued to advanced-degree professionals by online lender Earnest, which Navient acquired in 2017.

The collateral will include $147.3 million in well-seasoned loans that were part of HESAA’s 2009 issuance, as well as up to $155 million in new loans that the trust will originate through an Oct. 31, 2020 prefunding and recycling period for the next academic calendar year.

Navient Corp. is returning to all fixed-rate collateral for its next securitization of refinanced private student loans issued via its Earnest affiliate to high-earning college graduate professionals.

Nelnet's second ABS of federally insured private student loans consists entirely of formerly delinquent FFELP loans that are back in current status.

SLM Corp. wants to "target the people our competitors are targeting and bring on their federal balances" CFO Steven McGarry said during an earnings call.