Jeff Adelson: And just if I could follow up on the expense color you discussed earlier. A couple of moving parts there. I know you talked about 40% from FDIC growth this year, not repeating, 20% from other. So it seems like 40% will potentially repeat next year. Is it fair to say that, that kind of looks more like a mid-single-digit growth rate of expenses next year. And then I just want to confirm your view on longer-term expense growth rate. You said in line with historical, is that something more like a low double or high-single-digit growth rate? Or what do you think about that?
Jonathan Witter: Yes. Great question. And again, I want to be really specific. I think it’s too early, Jeff, for us to offer any kind of specific guidance here, but we tried to dimension that so that folks could get a sense of it. And I think what that says is, but for the FDIC expense and but for the other 20%, I think our expense growth this year would have been in the mid-single digits. And I think that’s really sort of the result of the direct inflationary expenses that we experienced and I think the whole economy experienced over the last 18 months and some of the sort of more permanent changes that we have elected to make in staffing for a variety of reasons. I think we were pretty clear in saying those inflationary effects have somewhat abated.
We’re not back to a normal level of inflation yet, but we’re certainly in a very different ZIP code than we were at this time last year. So I would say sort of low to mid-single-digit expense growth is what I would consider to be a more historic norm. And again, I think we’ll be a little bit paying attention to how does the inflationary environment continue to evolve over the next couple of months before we set guidance. But I think we would certainly hope to have a very different growth rate next year than we did this last year.
Operator: And it comes from Arren Cyganovich with Citi.
Arren Cyganovich: Congratulations, Steve. It’s been a fun 18 years working with you. The stronger originations that you had, was that — you mentioned the applications up, is that something demographically that has happened? Or maybe you talk a little bit about whether or not you’re taking additional share in the marketplace?
Jonathan Witter: Yes, Arren, we don’t have the latest quarter share data yet. So it’s so hard for me to comment on that. But I don’t think it is a demographic issue. I think it is at least in large part, the continued maturation and sort of a demonstration of the strategy we’ve been employing. So if you go back a couple of years, I think we’ve talked at great length about a couple of things. We’ve made, I think, some really important investments in our marketing and technology stacks. But I think the biggest change that we’ve made recently is really doubling down on what we think of internally as our content-based strategies. And at the end of the day, if we can help customers with questions, answers, services, insights for things that are beyond student loans still related to their student journey, but beyond student loans, we start to form that relationship, and I think that allows us to sort of open up the top of the funnel to a lot more customers.
And so I think what we have seen is, as opposed to relying strictly on really the old days, direct mail, sort of the old days, paid search what we are really trying to do here is to borrow a page out of what some of the very best marketers are doing and saying, we want to attract customers to our brand through more organic and content-based channels. That’s obviously a wide open strategy, and we get lots of customers who come in. And so it’s not surprising that we’re seeing really great growth in applications. And then what I’m also pleased about is I think we’re continuing to show real discipline in our underwriting by only selecting those customers that we really think hit our buy box and can generate the kind of high ROEs, loss adjusted ROEs that we would be looking for in our business.
So it is absolutely, I’m sure, somewhat a function of the broader competitive set, but it is also, I’m sure, in large part due to the changes in strategy we’ve made. And we feel great about those results.
Arren Cyganovich: And maybe we could talk a little bit about the consolidations away from Sallie, maybe still remain pretty low. It sounds like you didn’t have too much in terms of prepay. Is there an expectation that you’ll start to see a bit of an increase in that now that we have loans on the government side starting to require payment?
Steven McGarry: I’ll take that. So look, consolidations is very much a rate gain. And given the structure of interest rates right now, it’s very, very difficult to undercut the rates that are outstanding on the federal loan program. And federal loan program, the benefits of that program in terms of income-based repayment and forms of forgiveness just get richer over time. So we think that people will think twice about consolidating their federal loans even at beneficial interest rates. So we are not anticipating a ramp-up in consolidations or an increase in prepayment speeds. And we note they’re down very sharply year-to-date, but we will see what the future brings.
Jonathan Witter: Yes, Arren, if I just sort of add on to what Steve said. I think we’ve sort of thought about there being 2 segments of people who might refinance. There are people out there, who are looking to lower their total cost of debt, pay off their loans quicker and move on to the next chapter of their financial life. The rate environment makes refinancing of loans problematic for that group for a period of time. 3, 4, 5 years from now, we’re in a hire for longer phase and then see lower rates, maybe that changes. But I think that’s a long-term path back to consolidation volume. The other, as Steve said, are people who are looking to lower payments. They might have high balances and are looking to squeeze a little bit of extra space out of their budget.
