SLM Plunges 2.62% to 2025 Low as Credit Risks, Delinquency Surge Weigh

SLM Corporation (NASDAQ: SLM) fell 0.29% on Monday, marking its second consecutive day of declines, with the stock down 1.85% over two sessions. The share price reached its lowest level since April 2025, with an intraday drop of 2.62%, signaling renewed investor caution.

Recent stock volatility has been driven by a mix of financial performance and credit risk concerns. In July 2025, SLM reported mixed second-quarter results. While revenue exceeded estimates at $657 million, earnings per share (EPS) of $0.32 missed expectations, prompting a downward revision of full-year guidance to $3.00–$3.10. Analysts highlighted the tension between revenue resilience and profit shortfalls, with Jefferies and JPMorgan upgrading the stock despite the earnings miss.

A sharper decline emerged in late July as delinquency rates spiked. A 49-basis-point monthly increase in loan defaults, including 45 bps from early-stage defaults, raised alarms about credit quality. The data triggered a 9.3% single-day selloff, underscoring vulnerabilities in SLM’s student loan portfolio amid macroeconomic headwinds. Analysts like TD Cowen acknowledged the delinquency surge as a short-term correction but emphasized the sector’s sensitivity to unemployment and graduate employment trends.

By October 2025, a wave of downgrades further pressured the stock. JPMorgan cut its price target by 23.7% to $29.00, while Barclays and KBW also reduced targets, reflecting a more cautious outlook. Despite these adjustments, 10 analysts maintained an average price target of $37.30, implying a 37.5% upside from recent levels. The “Outperform” consensus suggests lingering confidence in SLM’s long-term potential, particularly its fee-based revenue model and strategic partnerships in education financing.

Looking ahead, SLM’s ability to navigate credit risk and stabilize delinquency trends will remain critical. While short-term challenges persist, its focus on high-quality loan origination and policy-driven opportunities—such as the 2026–27 FAFSA application process—position it for eventual recovery. Investors are advised to monitor guidance updates and delinquency metrics as key indicators of the stock’s trajectory.