We’re seeing pretty steady unemployment rate. So no major changes, for example, from Q3 to Q4. Although that being said, as a result of the probability of default model and the economic outlook, there was a component of the reserve build that was attributable to — in change in the — negative change in the economic outlook.
Arren Cyganovich: Thank you.
Operator: Thank you. Our next question comes from Giuliano Bologna with Compass Point. Your line is open.
Giuliano Bologna : God morning. I realize a lot of these — the questions around the subjects have been asked. One thing I’m curious about, when you think about your reserve forecasting and your expectation around sales. You were highlighting that a higher contribution from kind of less seasoned or early in the life cycle borrowers with higher payments being a larger source of weakness at the moment. I’m curious how you think about student loan forbearance. I realize that it’s never ending . It’s been the way it’s been playing out. But I’m curious how you think about the restart of a payment on federal loans because that obviously had an additional payment on top of a lot of those borrowers we are seeing weakness with higher payments.
Jonathan Witter: Yes. Giuliano, it’s Jon. Happy to take that question. First of all, again, just to make sure there’s no misunderstanding, the example I gave you is a true and indicative example. There are other small pockets as well, but I think that’s one that’s pretty easy for folks to get their head around. But to your specific question of forbearance, I think our analysis and our perspective for a while has been that student loans — federal student loan forbearance when it is no longer an active when it’s — when payments come back will be a slight negative to our sort of kind of a loss forecast. And I think we believe should it happen that debt forgiveness is probably a small positive to that forecast. So you can pick from column A or column B of various federal proposals and it’s probably a marginal benefit, a marginal cost or maybe even just sort of neutral down the middle of both happen.
I think the thing that’s really important to note on this is, our customers, we rarely very actively move back into repayment and Steve remind me of August or so of 2020, September of 2020. So we really feel like keeping people in good financial habit is the most important thing that we can do. And so, I think part of why we believe the impact is probably more muted is, if you’re in the habit of making your regular payments to Sallie Mae, you’re probably going to continue to do that. And by the way, if you do feel stressed because of your federal programs, I think what we see pretty clearly is, there’s a lot of options for federal borrowers to get forbearance and other forms of income-based repayment and the like. And so my guess is, for the ones that are really in trouble and really sort of struggling with that added federal payment, they will have other options that are available to them through the federal program.
So you sort of put all of that in the proverbial mix master. And I think we believe it’s sort of probably a small negative, but nothing that I think we believe will kind of meaningfully move our results. So hopefully, that gives you some perspective.
Giuliano Bologna: That’s very helpful and I appreciate it. I will jump back in the queue.
Operator: Thank you. There are no further questions. I’d like to turn the call back over to Jon Witter for closing remarks.
