Student lender Sallie Mae reported a loss in the second quarter.
The loss per share totaled 23 cents, driven by a $243 Million increase to the provision for credit losses, due to future impacts from coronavirus.
Sallie Mae is based near Newark.
The company’s CEO Jonathan Witter expressed confidence in the company’s ability to navigate the Covid-19 environment that has some families postponing borrowing for college.
Witter noted that more borrowing is needed since public universities get lower subsidies from states.
Some existing borrowers are now out of work, a reason for the higher loan loss estimates.
Witter stated that the company is managing expenses and building substantial reserves.
“Our customers are demonstrating their ability to weather it, too, as about half of those who took advantage of our disaster relief have already resumed making payments. This has allowed us to direct our resources and assistance to those customers with ongoing financial distress. This is important work, and our team’s passion for customer care leads them to excel at it,” Witter stated.
He added that the value of education has been proven by the lower rate of unemployment among those with college degrees.
Sallie Mae earlier announced$4.5 million commitment to advancing diversity in higher education and supporting programs that foster inclusion, equality, and social justice following the police-involved death of George Floyd.