Bloomberg Tax
Aug. 12, 2019, 4:08 PM

Sallie Mae Warns It May Triple Loan Loss Reserves in 2020

Nicola M. White
Nicola M. White

Student loan giant Sallie Mae Corp. is bracing investors for a big hit to its balance sheet when new loan loss accounting rules go live.

The company, with a 55% market share in private education lending in 2018, expects to have to boost by as much as 313% the reserves it sets aside to cover losses on loans under the major new accounting standard taking effect in 2020. This significant boost will lower earnings, the company said.

The standard will require companies to look to the future, assess current conditions, and consider past experience to calculate losses and set aside ...

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