So I think those are the three buckets. It’s largely reducing the corporate footprint in the business profile that is slimmer and leaner. That includes a corporate expense reduction. It’s the moving to a variable cost model and then reducing our cost of financing as well. Those are the three levers that we have.
Sanjay Sakhrani: Okay. That’s very helpful. And then maybe just a follow-up question on BPS. I know some questions were asked already. But when you’re thinking about like preliminary indications of interest, any dimensionalization of what kind of valuation that business can get? Because it seems, as you go — as Joe sort of alluded to, that it is a higher valuation business and what sort of suggested in the valuation of your stock? Or are there some nuances there that we should be aware of?
Joe Fisher: Thank you, Sanjay. I think it’s just too early to comment on that, but I would just point to public companies in that space and look at the multiples, both on the health care RCM side as well as government services, BPS and then just more diversified BPO businesses, all receiving a higher multiple than what we received today.
Sanjay Sakhrani: Could I just ask one more question on in-school originations. Is that no longer going to happen? Or because I don’t think I heard anything about that, but maybe you could just clarify on that. Thank you.
Joe Fisher: And I think as Dave reiterated in my comments, we are looking to grow 10% on the in-school side and overall, just from an origination perspective, north of 40% when you combine refi and in-school. So we’re certainly very committed to growing this business.
Sanjay Sakhrani: All right. Thank you.
Operator: Thank you. [Operator Instructions] One moment for our next question. Our next question comes from the line of John Hecht with Jefferies. Your line is now open.
John Hecht: Good morning, guys. Thanks for the update and thanks for taking my question. One point of clarification David, you mentioned, I think it’s $400 million of kind of identified potential cost saves that would come with $325 million that’s, I guess, the BPS revenues. I just want to clarify, is that net of the outsourced servicing? Or does that include the total concept of the outsourced servicing?
David Yowan: So thanks for the question. When we say net, it means it considers the fact that we would need to pay an outsourced provider for servicing our loans. So that’s what — so it is included and the expense reduction is net of what we would pay to that provider. So those are — that’s how we would think about it. And I would just remind you that those numbers that we’re using are based on 2023 actuals. So if you had that scenario and that was in place for 2023, that’s where we got the volumes and the amounts that we’ve shared with you.
John Hecht: Okay. And second question, I think Joe said the originations in Earnest, the refi originations would be more back weighted just because of interest rate reductions. I mean maybe a little bit more kind of information on the cadence there and how sensitive our originations to rate cuts in that segment?
Joe Fisher: I think certainly, as rate cuts can — if that does happen, I think there’s a tremendous opportunity, certainly, especially if it’s beyond four rate cuts. So the way I think about it is that if I’m looking at the first quarter, fairly similar to what we’ve seen in this fourth quarter and then starting to pick up in the back half of the year. I just think about the scenario that I’m referring to, as you get 50 basis points, 75 basis point cuts overall, that should be more of an impact than what you’re seeing today. So that growth should occur and be more backloaded and then more backloaded to, obviously, the fourth quarter versus the first quarter just depending on where rates are.
John Hecht: Okay. And then a final question is, Earn, if I can. I know this is out there, but Earnest, you talked about incremental products and services. Is this going to be event-centric business? Or is there going to be other fee-oriented products? And if so, could you just give us some maybe examples of what those might look like?
David Yowan: Yes. I think both things are on the table. Obviously, from a number of — a good mix, I mean, Earnest is a consumer-centric enterprise. So the first thing to do will be to try to find and identify unmet needs or needs that customers have that we can serve. I think they’ve done a nice job of demonstrating that, particularly in the refi space. And then if you think about product line extensions, that would encompass potentially both additional lending products, but also potential fee-generating products rather than lending products as well. Again, that could include third-party referrals based on our cost of acquisition of a customer, it could involve other kind of products. That work is underway. We have as we’ve asked for some time to come back to you later in the year with where we came out on that, give some initial thought.
John Hecht: Okay. Thanks. Appreciate that. Thank you.
Operator: Thank you. One moment for our next question, please. Our next question comes from the line of Rick Shane with JPMorgan. Your line is now open.
