How SLM’s (SLM) Pivot Toward Healthcare Student Loans May Influence Its Investment Outlook

• Adtalem Global Education Inc. and Sallie Mae recently announced they have signed a Letter of Intent to explore alternative financing solutions for healthcare students as the federal Grad PLUS loan program phases out beginning July 1, 2026.
• This collaboration aims to help fill the resulting financing gap for students pursuing healthcare degrees, leveraging strong projected growth and persistent shortages in the US healthcare workforce.
• We'll examine how SLM's move to offer alternative healthcare student financing in response to federal loan reforms could influence its investment outlook.

Find companies with promising cash flow potential yet trading below their fair value.

SLM Investment Narrative Recap

To consider owning SLM shares, you need to believe in a meaningful private student lending opportunity emerging from federal loan reforms, alongside SLM’s ability to capture and profit from it. The recent Sallie Mae and Adtalem partnership to pursue alternative healthcare student financing is directly connected to this outlook, since it targets the gap left by the phaseout of the federal Grad PLUS program, arguably the single biggest near-term growth catalyst for the company. The main counterbalance is that increased competition from banks and fintechs, drawn by the same opportunity, could constrain SLM’s market share and pricing.

Among the company’s recent announcements, SLM’s addition to several key growth-focused indices at the end of June stands out. This inclusion may draw more institutional investor attention, potentially supporting the stock around these anticipated policy-driven catalysts, like the Adtalem alliance.

Yet, despite these tailwinds, investors should not overlook the possibility that, when more industry players enter the private student lending market, SLM’s pricing power and future profit margins could be at risk if...

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 a $493.6 million earnings increase from $425.3 million today.

Uncover how SLM's forecasts yield a $39.00 fair value, a 18% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members set SLM’s fair value between US$39 and US$53.35, across just two estimates. In light of growing competition for the post-reform lending market, your own outlook on SLM’s ability to defend its margins may differ, explore other perspectives for a fuller view.

Explore 2 other fair value estimates on SLM - why the stock might be worth as much as 61% more 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.

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