Shares of student lender Navient Corp. NAVI, +2.25% fell 7.1% in after-market trading as the company reported its second-quarter net income dropped 26% to $83 million as net interest income shrunk and it set aside more money to cover loan losses. A 13% decline in operating expenses somewhat the top line drop. The higher credit costs included a $40 million provision in the company's federal education loans business, which was four times higher than the first quarter and a year earlier. Navient said core earnings in the quarter were 49 cents a share, up from 43 cents a share in the prior-year period. (robert.barba@wsj.com; @barbawire)