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Document and Company Information - USD ($) $ in Billions	6 Months Ended
Document and Company Information - USD ($) $ in Billions	Jun. 30, 2009	Jun. 30, 2008
Document And Company Information [Abstract]
Entity Registrant Name	SLM Corporation
Entity Central Index Key	0001032033
Document Type	10-Q
Document Period End Date	Jun. 30, 2009
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$ 0
Entity Common Stock, Shares Outstanding (actual number)	467,607,602

Consolidated Balance Sheets - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2009	Dec. 31, 2008
Assets
FFELP Stafford and Other Student Loans (net of allowance for losses of $102,857 and $90,906, respectively)	$ 44,044,636	$ 44,025,361
FFELP Stafford Loans Held-for-Sale	18,159,232	8,450,976
FFELP Consolidation Loans (net of allowance for losses of $50,181 and $46,637, respectively)	70,102,304	71,743,435
Private Education Loans (net of allowance for losses of $1,396,707 and $1,308,043, respectively)	21,850,688	20,582,298
Other loans (net of allowance for losses of $68,282 and $58,395, respectively)	489,180	729,380
Investments:
Available-for-sale	1,186,971	861,008
Other	885,511	180,397
Total investments	2,072,482	1,041,405
Cash and cash equivalents	6,139,957	4,070,002
Restricted cash and investments	5,245,702	3,535,286
Retained Interest in off-balance sheet securitized loans	1,820,614	2,200,298
Goodwill and acquired intangible assets, net	1,233,871	1,249,219
Other assets	10,025,129	11,140,777
Total assets	181,183,795	168,768,437
Liabilities
Short-term borrowings	47,331,576	41,933,043
Long-term borrowings	125,880,044	118,224,794
Other liabilities	3,120,636	3,604,260
Total liabilities	$ 176,332,256	$ 163,762,097
Commitments and contingencies
Preferred stock, par value $.20 per share, 20,000 shares authorized:
Common stock, par value $.20 per share, 1,125,000 shares authorized: 534,842 and 534,411 shares issued, respectively	$ 106,969	$ 106,883
Additional paid-in capital	4,709,053	4,684,112
Accumulated other comprehensive loss (net of tax benefit of $27,750 and $43,202, respectively)	(48,683)	(76,476)
Retained earnings	229,865	426,175
Total SLM Corporation stockholders' equity before treasury stock	6,711,974	6,855,464
Common stock held in treasury at cost: 67,128 and 66,958 shares, respectively	1,860,440	1,856,394
Total SLM Corporation stockholders' equity	4,851,534	4,999,070
Noncontrolling interest	5	7,270
Total equity	4,851,539	5,006,340
Total liabilities and equity	181,183,795	168,768,437
Preferred stock, series A
Preferred stock, par value $.20 per share, 20,000 shares authorized:
Preferred stock	165,000	165,000
Preferred stock, series B
Preferred stock, par value $.20 per share, 20,000 shares authorized:
Preferred stock	400,000	400,000
Preferred stock, series C
Preferred stock, par value $.20 per share, 20,000 shares authorized:
Preferred stock	$ 1,149,770	$ 1,149,770

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands	Jun. 30, 2009	Dec. 31, 2008
Statement [Line Items]
Allowance for other student loan losses	$ 102,857,000	$ 90,906,000
Allowance for consolidation loans losses	50,181,000	46,637,000
Allowance for private education loans losses	1,396,707,000	1,308,043,000
Allowance for other loans losses	68,282,000	58,395,000
Tax effect for accumulated other comprehensive income	$ 27,750,000	$ 43,202,000
Common stock held in treasury	67,128	66,958
Preferred stock, par value	$ 0.2	$ 0.2
Preferred stock, shares authorized	20,000	20,000
Common stock, par value	$ 0.2	$ 0.2
Common stock, shares authorized	1,125,000	1,125,000
Common stock, shares issued	534,842	534,411
Preferred stock, series A
Statement [Line Items]
Preferred stock, par value	$ 50	$ 50
Preferred stock, shares issued	3,300	3,300
Preferred stock, series B
Statement [Line Items]
Preferred stock, par value	$ 100	$ 100
Preferred stock, shares issued	4,000	4,000
Preferred stock, series C
Statement [Line Items]
Preferred stock Series C, par value	$ 1,000	$ 1,000
Preferred stock, shares issued	1,150	1,150

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008	Jun. 30, 2009	Jun. 30, 2008
Interest income:
FFELP Stafford and Other Student Loans	$ 323,939	$ 497,598	$ 666,755	$ 962,074
FFELP Consolidation Loans	460,690	769,664	950,052	1,606,320
Private Education Loans	393,019	409,323	780,060	852,845
Other loans	18,468	21,355	34,888	44,699
Cash and investments	7,044	70,521	13,015	194,337
Total interest income	1,203,160	1,768,461	2,444,770	3,660,275
Total interest expense	819,459	1,365,918	1,846,006	2,981,363
Net interest income	383,701	402,543	598,764	678,912
Less: provisions for loan losses	278,112	143,015	528,391	280,326
Net interest income after provisions for loan losses	105,589	259,528	70,373	398,586
Other income:
Servicing and securitization revenue (loss)	87,488	1,630	(7,817)	109,272
Losses on sales of loans and securities, net	0	(43,583)	0	(78,249)
Gains (losses) on derivative and hedging activities, net	(561,795)	362,043	(457,770)	89,247
Contingency fee revenue	73,368	83,790	148,183	169,096
Collections revenue	22,068	26,365	738	83,604
Guarantor servicing fees	24,772	23,663	58,780	58,316
Other	399,065	108,728	591,523	202,261
Total other income	44,966	562,636	333,637	633,547
Expenses:
Salaries and benefits	139,419	167,788	276,340	347,517
Other operating expenses	175,766	185,900	340,328	361,819
Restructuring expenses	4,430	46,740	9,203	67,418
Total expenses	319,615	400,428	625,871	776,754
Net income (loss) before income tax benefit	(169,060)	421,736	(221,861)	255,379
Income tax expense (benefit)	(46,551)	153,074	(78,247)	90,586
Net income (loss)	(122,509)	268,662	(143,614)	164,793
Less: net income attributable to noncontrolling interest	211	2,926	492	2,861
Net income (loss) attributable to SLM Corporation	(122,720)	265,736	(144,106)	161,932
Preferred stock dividends	25,800	27,391	52,195	56,416
Net income (loss) attributable to SLM Corporation common stock	$ (148,520)	$ 238,345	$ (196,301)	$ 105,516
Basic earnings (loss) per common share attributable to SLM Corporation common shareholders	$ (0.32)	$ 0.51	$ (0.42)	$ 0.23
Average common shares outstanding	466,799	466,649	466,780	466,615
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders	$ (0.32)	$ 0.5	$ (0.42)	$ 0.23
Average common and common equivalent shares outstanding	466,799	517,954	466,780	467,316
Dividends per common share attributable to SLM Corporation common shareholders	$ 0	$ 0	$ 0	$ 0

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008	Jun. 30, 2009	Jun. 30, 2008
Statement [Line Items]
Beginning Balance	$ 4,963,859	$ 5,214,775	$ 5,006,340	$ 5,234,895
Comprehensive income:
Net income (loss)	(122,509)	268,662	(143,614)	164,793
Noncontrolling interest - other	(218)	(54)	(500)	(386)
Acquisition of noncontrolling interest in Purchased Paper business				(4,355)
Sale of international Purchased Paper - Non-Mortgage business			(7,257)
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on investments, net of tax	1,319	(8,984)	2,269	(21,513)
Change in unrealized gains (losses) on derivatives, net of tax	20,606	73,844	26,015	42,270
Defined benefit pension plans adjustment	(158)	(472)	(491)	(472)
Comprehensive income	(100,960)	332,996	(123,578)	180,337
Cash dividends:
Preferred stock	(25,638)	(27,230)	(51,873)	(56,093)
Restricted stock dividend	(2)	(2)	(9)	(1,848)
Issuance of common shares	210	6,897	2,317	19,077
Issuance of preferred shares	0	0		145,345
Tax benefit related to employee stock option and purchase plans	(1,324)	(3,866)	(5,819)	(10,016)
Stock-based compensation cost	15,879	24,397	28,212	43,201
Repurchase of common shares:
Benefit plans	(485)	(3,483)	(4,051)	(10,414)
Ending Balance	4,851,539	5,544,484	4,851,539	5,544,484
Preferred stock, series A
Cash dividends:
Preferred stock	(2,875)	(2,875)	(5,750)	(5,750)
Preferred stock, series B
Cash dividends:
Preferred stock	(1,923)	(3,511)	(4,443)	(8,897)
Preferred stock, series C
Cash dividends:
Preferred stock	$ (20,840)	$ (20,844)	$ (41,680)	$ (41,446)
Common Stock Outstanding
Statement [Line Items]
Beginning Balance, Shares	467,592,757	467,376,827	467,452,871	466,541,687
Cash dividends:
Issuance of common shares, shares	143,762	335,292	430,706	1,520,239
Repurchase of common shares:
Benefit plans, shares	(22,839)	(146,726)	(169,897)	(496,533)
Ending Balance, Shares	467,713,680	467,565,393	467,713,680	467,565,393
Total Stockholders Equity
Statement [Line Items]
Beginning Balance	$ 4,963,847	$ 5,208,167	$ 4,999,070	$ 5,223,535
Comprehensive income:
Net income (loss)	(122,720)	265,736	(144,106)	161,932
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on investments, net of tax	1,319	(8,984)	2,269	(21,513)
Change in unrealized gains (losses) on derivatives, net of tax	20,606	73,844	26,015	42,270
Defined benefit pension plans adjustment	(158)	(472)	(491)	(472)
Comprehensive income	(100,953)	330,124	(116,313)	182,217
Cash dividends:
Preferred stock	(25,638)	(27,230)	(51,873)	(56,093)
Restricted stock dividend	(2)	(2)	(9)	(1,848)
Issuance of common shares	210	6,897	2,317	19,077
Issuance of preferred shares		0		145,345
Tax benefit related to employee stock option and purchase plans	(1,324)	(3,866)	(5,819)	(10,016)
Stock-based compensation cost	15,879	24,397	28,212	43,201
Repurchase of common shares:
Benefit plans	(485)	(3,483)	(4,051)	(10,414)
Ending Balance	4,851,534	5,535,004	4,851,534	5,535,004
Total Stockholders Equity \| Preferred stock, series A
Cash dividends:
Preferred stock	(2,875)	(2,875)	(5,750)	(5,750)
Total Stockholders Equity \| Preferred stock, series B
Cash dividends:
Preferred stock	(1,923)	(3,511)	(4,443)	(8,897)
Total Stockholders Equity \| Preferred stock, series C
Cash dividends:
Preferred stock	(20,840)	(20,844)	(41,680)	(41,446)
Common Stock
Statement [Line Items]
Beginning Balance	$ 106,940	$ 106,736	$ 106,883	$ 106,499
Beginning Balance, Shares	534,698,117	533,678,028	534,411,271	532,493,081
Cash dividends:
Issuance of common shares	$ 29	$ 66	$ 86	$ 303
Issuance of common shares, shares	143,762	332,150	430,608	1,517,097
Repurchase of common shares:
Ending Balance	$ 106,969	$ 106,802	$ 106,969	$ 106,802
Ending Balance, Shares	534,841,879	534,010,178	534,841,879	534,010,178
Preferred Stock
Statement [Line Items]
Beginning Balance	$ 1,714,770	$ 1,715,000	$ 1,714,770	$ 1,565,000
Beginning Balance, Shares	8,449,770	8,450,000	8,449,770	8,300,000
Cash dividends:
Issuance of preferred shares				$ 150,000
Issuance of preferred shares, shares				150,000
Repurchase of common shares:
Ending Balance	$ 1,714,770	$ 1,715,000	$ 1,714,770	$ 1,715,000
Ending Balance, Shares	8,449,770	8,450,000	8,449,770	8,450,000
Additional Paid-In Capital
Statement [Line Items]
Beginning Balance	$ 4,694,155	$ 4,610,278	$ 4,684,112	$ 4,590,174
Cash dividends:
Issuance of common shares	181	6,761	2,226	18,704
Issuance of preferred shares	162	161	322	(4,332)
Tax benefit related to employee stock option and purchase plans	(1,324)	(3,866)	(5,819)	(10,016)
Stock-based compensation cost	15,879	24,397	28,212	43,201
Repurchase of common shares:
Ending Balance	4,709,053	4,637,731	4,709,053	4,637,731
Treasury Stock
Statement [Line Items]
Beginning Balance	$ (1,859,955)	$ (1,838,637)	$ (1,856,394)	$ (1,831,706)
Beginning Balance, Shares	(67,105,360)	(66,301,201)	(66,958,400)	(65,951,394)
Cash dividends:
Issuance of common shares		$ 70	$ 5	$ 70
Issuance of common shares, shares	0	3,142	98	3,142
Repurchase of common shares:
Benefit plans	$ (485)	$ (3,483)	$ (4,051)	$ (10,414)
Benefit plans, shares	(22,839)	(146,726)	(169,897)	(496,533)
Ending Balance	$ (1,860,440)	$ (1,842,050)	$ (1,860,440)	$ (1,842,050)
Ending Balance, Shares	(67,128,199)	(66,444,785)	(67,128,199)	(66,444,785)
Retained Earnings
Statement [Line Items]
Beginning Balance	$ 378,387	$ 617,184	$ 426,175	$ 557,204
Comprehensive income:
Net income (loss)	(122,720)	265,736	(144,106)	161,932
Cash dividends:
Preferred stock	(25,638)	(27,230)	(51,873)	(56,093)
Restricted stock dividend	(2)	(2)	(9)	(1,848)
Issuance of preferred shares	(162)	(161)	(322)	(323)
Cumulative effect of accounting change				194,655
Repurchase of common shares:
Ending Balance	229,865	855,527	229,865	855,527
Retained Earnings \| Preferred stock, series A
Cash dividends:
Preferred stock	(2,875)	(2,875)	(5,750)	(5,750)
Retained Earnings \| Preferred stock, series B
Cash dividends:
Preferred stock	(1,923)	(3,511)	(4,443)	(8,897)
Retained Earnings \| Preferred stock, series C
Cash dividends:
Preferred stock	(20,840)	(20,844)	(41,680)	(41,446)
Accumulated Other Comprehensive Income (Loss)
Statement [Line Items]
Beginning Balance	(70,450)	(2,394)	(76,476)	236,364
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on investments, net of tax	1,319	(8,984)	2,269	(21,513)
Change in unrealized gains (losses) on derivatives, net of tax	20,606	73,844	26,015	42,270
Defined benefit pension plans adjustment	(158)	(472)	(491)	(472)
Cash dividends:
Cumulative effect of accounting change				(194,655)
Repurchase of common shares:
Ending Balance	(48,683)	61,994	(48,683)	61,994
Noncontrolling Interest
Statement [Line Items]
Beginning Balance	12	6,608	7,270	11,360
Comprehensive income:
Net income (loss)	211	2,926	492	2,861
Noncontrolling interest - other	(218)	(54)	(500)	(386)
Acquisition of noncontrolling interest in Purchased Paper business				(4,355)
Sale of international Purchased Paper - Non-Mortgage business			(7,257)
Other comprehensive income, net of tax:
Comprehensive income	(7)	2,872	(7,265)	(1,880)
Repurchase of common shares:
Ending Balance	$ 5	$ 9,480	$ 5	$ 9,480

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008
Operating activities
Net income (loss)	$ (143,614)	$ 164,793
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Losses on sales of loans and securities, net	0	78,249
Stock-based compensation cost	30,144	48,080
Unrealized (gains)/losses on derivative and hedging activities	497,361	(64,418)
Provisions for loan losses	528,391	280,326
Decrease in purchased paper mortgages, net	174,701	109,720
Student loans originated for sale	(10,171,363)	0
Decrease in restricted cash - other	52,552	1,050
Decrease in accrued interest receivable	481,791	52,020
(Decrease) in accrued interest payable	(409,109)	(166,484)
Adjustment for non-cash loss related to Retained Interest	351,331	279,900
(Increase) in other assets, goodwill and acquired intangible assets, net	(120,788)	(55,712)
(Decrease) in other liabilities	(150,321)	(346,220)
Total adjustments	(8,735,310)	216,511
Net cash (used in) provided by operating activities	(8,878,924)	381,304
Investing activities
Student loans acquired	(4,944,270)	(15,340,698)
Loans purchased from securitized trusts (primarily loan consolidations)	(3,698)	(555,024)
Reduction of student loans:
Installment payments, claims and other	5,148,780	5,268,996
Proceeds from sales of student loans	462,311	27,239
Other loans - originated	(2,817)	(931,752)
Other loans - repaid	217,557	1,183,672
Other investing activities, net	(736,002)	(58,287)
Purchases of available-for-sale securities	(66,062,442)	(72,071,580)
Proceeds from sales of available-for-sale securities	100,056	0
Proceeds from maturities of available-for-sale securities	65,615,526	72,279,652
Purchase of held-to-maturity and other securities	0	(400)
Proceeds from maturities of held-to-maturity securities and other securities	68,928	12,502
(Increase) decrease in restricted cash - on-balance sheet trusts	(663,658)	874,029
Return of investment from Retained Interest	16,361	217,391
Purchase of subsidiaries, net of cash acquired	0	(37,868)
Net cash used in investing activities	(783,368)	(9,132,128)
Financing activities
Borrowings collateralized by loans in trust - issued	9,040,986	11,590,919
Borrowings collateralized by loans in trust - repaid	(2,932,288)	(3,535,266)
Asset-backed commercial paper conduits - net activity	(12,454,223)	(161,576)
ED Participation Program	9,871,053	0
ED Conduit Program facility	11,094,745	0
Other short-term borrowings issued	298,294	1,304,509
Other short-term borrowings repaid	(990,720)	(333,397)
Other long-term borrowings issued	4,333,168	2,437,226
Other long-term borrowings repaid	(4,935,047)	(5,942,937)
Other financing activities, net	(1,533,226)	842,957
Excess tax benefit from the exercise of stock-based awards	0	282
Common stock issued	5	4,403
Preferred stock issued	0	145,345
Preferred dividends paid	(51,873)	(56,093)
Noncontrolling interest, net	(8,627)	(4,378)
Net cash provided by financing activities	11,732,247	6,291,994
Net increase (decrease) in cash and cash equivalents	2,069,955	(2,458,830)
Cash and cash equivalents at beginning of period	4,070,002	7,582,031
Cash and cash equivalents at end of period	6,139,957	5,123,201
Cash disbursement made for:
Interest	2,303,145	3,557,181
Income taxes	$ 177,478	$ 564,269

Significant Accounting Policies

6 Months Ended

Jun. 30, 2009

Significant Accounting Policies [Abstract]

Significant Accounting Policies


1.	Significant Accounting Policies

Basis of Presentation

The accompanying unaudited, consolidated financial statements of SLM Corporation (the “Company” or “Sallie Mae”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the interim periods have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three months ended June 30, 2009 are not necessarily indicative of the results for the year ending December 31, 2009. These unaudited financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s 2008 Annual Report on Form 10-K. Management has evaluated subsequent events, and the impact on the reported results and disclosures, through August 5, 2009, which is the date these financial statements were issued.

Reclassifications

Certain reclassifications have been made to the balances as of and for the three and six months ended June 30, 2008 to be consistent with classifications adopted for 2009, and had no effect on net income, total assets, or total liabilities.

Recently Issued Accounting Pronouncements

Transfers of Financial Assets and the Variable Interest Entity (“VIE”) Consolidation Model

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 166, “Accounting for Transfers of Financial Assets, an amendment to SFAS No. 140,” and SFAS No. 167, “Amendments to FASB Interpretation No. 46(R).”

SFAS No. 166, among other things, (1) eliminates the concept of a Qualifying Special Purpose Entity (“QSPE”), (2) changes the requirements for derecognizing financial assets, (3) changes the amount of the recognized gain/loss on a transfer accounted for as a sale when beneficial interests are received by the transferor, and (4) requires additional disclosure. SFAS No. 166 is effective for fiscal years beginning after November 15, 2009.

SFAS No. 167 significantly changes the consolidation model for Variable Interest Entities (“VIEs”). SFAS No. 167 amends FIN No. 46(R) and, among other things, (1) eliminates the exemption for QSPEs, (2) provides a new approach for determining who should consolidate a VIE which is more focused on control rather than economic interest, (3) changes when it is necessary to reassess who should consolidate a VIE and (4) requires additional disclosure. SFAS No. 167 is effective for the first annual reporting period beginning after November 15, 2009.

The Company is currently evaluating the impact of these statements to its consolidated financial statements. Based on the Company’s preliminary review, management expects these changes will lead to the consolidation of QSPEs that are currently not consolidated by the Company. Assuming no changes to the Company’s current business model, the Company will consolidate its securitization trusts that are currently off-balance sheet on January 1, 2010 at their historical cost basis. The historical cost basis is the basis that would exist if these securitization trusts had remained on balance sheet since they settled. These proposed new accounting rules would also be applied to new transactions entered into from January 1, 2010 forward. If these statements had been adopted as of June 30, 2009, the Company would have removed the $1.8 billion of Residual Interests associated with these trusts from the consolidated balance sheet and the Company would have consolidated $36.7 billion of assets and $35.9 billion of liabilities, which would have resulted in an approximate $0.6 billion reduction of stockholders’ equity as of June 30, 2009. Management allocates capital on a Managed Basis. This change will not impact management’s view of capital adequacy.

FASB Accounting Standards Codification

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles,” which replaces SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles,” and establishes the FASB Accounting Standards Codification (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. SFAS No. 168 is effective for interim and annual periods ending after September 15, 2009. The Company will begin to use the new Codification when referring to GAAP in its Form 10-Q for the quarter ending September 30, 2009. The Codification does not change authoritative guidance. Accordingly, implementing the Codification will not change any of the Company’s accounting, and therefore, will not have an impact on the consolidated results of the Company.

Subsequent Events

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events.” This standard is intended to establish general standards of accounting for, and disclosure of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, this standard sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS No. 165 is effective for fiscal years and interim periods ending after June 15, 2009. The Company adopted this standard effective June 15, 2009 and has evaluated any events subsequent to June 30, 2009, and their impact on the reported results and disclosures, through the date of this filing. The Company does not believe there are any material subsequent events that would require further disclosure.

Fair Value Measurements

On April 9, 2009, the FASB issued three staff positions regarding fair value measurements and recognition of impairment. Under FASB Staff Position (“FSP”) Financial Accounting Standards (“FAS”) No. 115-2 and FAS No. 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” impairment must be recorded within the consolidated statements of income for debt securities if there exists a fair value loss and the entity intends to sell the security or it is more likely than not the entity will be required to sell the security before recovery of the loss. Additionally, expected credit losses must be recorded through income regardless of the impairment determination above. Remaining fair value losses are recorded to other comprehensive income. FSP FAS No. 107-1 and APB No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments,” requires interim disclosures of the fair value of financial instruments that were previously only required annually. Finally, FSP FAS No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” provides guidance for determining when a significant decrease in market activity has occurred and when a transaction is not orderly. It further reiterates that prices from inactive markets or disorderly transactions should carry less weight, if any, to the determination of fair value. These standards were effective for the Company beginning April 1, 2009. The adoption of these standards was not material to the Company.

On February 12, 2008, the FASB issued FSP FAS No. 157-2, “Effective Date of Statement of Financial Accounting Standards (“SFAS”) No. 157,” which defers the effective date of SFAS No. 157 for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. FSP FAS No. 157-2 delayed the implementation of SFAS No. 157 for the Company’s accounting of goodwill, acquired intangibles, and other nonfinancial assets and liabilities that are measured at the lower of cost or market until January 1, 2009. Adoption of this standard was not material to the Company.

Business Combinations

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations.” SFAS No. 141(R) requires the acquiring entity in a business combination to recognize the entire acquisition-date fair value of assets acquired and liabilities assumed in both full and partial acquisitions; changes the recognition of assets acquired and liabilities assumed related to contingencies; changes the recognition and measurement of contingent consideration; requires expensing of most transaction and restructuring costs; and requires additional disclosures to enable the users of the financial statements to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141(R) applies to all transactions or other events in which the Company obtains control of one or more businesses. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the reporting period beginning on or after December 15, 2008, which for the Company was January 1, 2009. The adoption of this standard on January 1, 2009, did not have a material effect on the Company’s results of operations or financial position.

In February 2009, the FASB issued FSP FAS No. 141(R), “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies.” FSP FAS No. 141(R) amends the provisions related to the initial recognition and measurement, subsequent measurement and disclosure of assets and liabilities arising from contingencies in a business combination under SFAS No. 141(R), “Business Combinations.” FSP FAS No. 141(R) had the same effective date as SFAS No. 141(R). The adoption of this standard did not have a material effect on the Company’s results of operations or financial position.

Noncontrolling Interests in Consolidated Financial Statements — an Amendment of Accounting Research Bulletin No. 51

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an Amendment of Accounting Research Bulletin No. 51.” SFAS No. 160 requires reporting entities to present noncontrolling (minority) interests as equity (as opposed to a presentation as a liability or mezzanine equity) and provides guidance on the accounting for transactions between an entity and noncontrolling interests. On January 1, 2009, the Company adopted SFAS No. 160, the provisions of which, among other things, require that minority interests be renamed “noncontrolling interests” and that a company present a consolidated net income (loss) measure that includes the amount attributable to such “noncontrolling interests” for all periods presented. SFAS No. 160 applies prospectively for reporting periods beginning on or after December 15, 2008, except for the presentation and disclosure requirements which are applied retrospectively for all periods presented. The Company has reclassified financial statement line items within its consolidated balance sheets, statements of income, statements of changes in stockholders’ equity and statements of cash flows for the prior period to conform to this standard. Other than the change in presentation of noncontrolling interests, the adoption of SFAS No. 160 had no impact on the consolidated financial statements.

Disclosures about Derivative Investments and Hedging Activities — an Amendment of FASB Statement No. 133

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Investments and Hedging Activities — an Amendment of FASB Statement No. 133.” SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activities, including (1) how and why an entity uses derivative instruments, (2) how derivative instruments and related hedged items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and its related interpretations, and (3) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. To meet those objectives, SFAS No. 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company adopted this standard on January 1, 2009.

Accounting for Hedging Activities — An Amendment of FASB Statement No. 133

In June 2008, the FASB issued an exposure draft to amend the accounting for hedging activities in SFAS No. 133. This proposed statement is intended to simplify accounting for hedging activities, improve the financial reporting of hedging activities, resolve major practice issues related to hedge accounting that have arisen under SFAS No. 133, and address differences resulting from recognition and measurement anomalies between the accounting for derivative instruments and the accounting for hedged items or transactions. While the amendment as currently drafted may simplify the Company’s accounting model for hedging activities under SFAS No. 133, the Company does not expect it to significantly impact its results of operations. The full impact of this amendment, effective January 1, 2010, as currently proposed, cannot be evaluated until the final statement is issued. The exposure draft is currently in redeliberations at the FASB.

Allowance for Loan Losses

6 Months Ended

Jun. 30, 2009

Allowance for Loan Losses [Abstract]

Allowance for Loan Losses


2.	Allowance for Loan Losses

The Company’s provisions for loan losses represent the periodic expense of maintaining an allowance sufficient to absorb incurred losses, net of recoveries, in the held-for-investment loan portfolios. The evaluation of the provisions for loan losses is inherently subjective as it requires material estimates that may be susceptible to significant changes. The Company believes that the allowance for loan losses is appropriate to cover probable losses incurred in the loan portfolios.

The following table summarizes the total loan provisions for the three and six months ended June 30, 2009 and 2008.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2009		2008		2009		2008

Private Education Loans	$	241,759	$	119,838	$	445,304	$	238,449
FFELP Stafford and Other Student Loans		25,595		19,295		59,993		35,398
Mortgage and consumer loans		10,758		3,882		23,094		6,479

Total provisions for loan losses	$	278,112	$	143,015	$	528,391	$	280,326

Allowance for Private Education Loan Losses

The following table summarizes changes in the allowance for loan losses for Private Education Loans for the three and six months ended June 30, 2009 and 2008.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008

Allowance at beginning of period	$	1,384,454		$	1,073,317		$	1,308,043		$	1,003,964
Provision for Private Education Loan losses		241,759			119,838			445,304			238,449
Charge-offs		(238,943	)		(72,249	)		(377,758	)		(129,601	)
Reclassification of interest reserve⁽¹⁾		9,437			8,094			21,118			16,188

Allowance at end of period	$	1,396,707		$	1,129,000		$	1,396,707		$	1,129,000

Charge-offs as a percentage of average loans in repayment (annualized)		8.2	%		3.6	%		6.7	%		3.5	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		7.6	%		3.2	%		6.2	%		3.0	%
Allowance as a percentage of the ending total loan balance		5.9	%		5.8	%		5.9	%		5.8	%
Allowance as a percentage of ending loans in repayment		11.5	%		13.1	%		11.5	%		13.1	%
Allowance coverage of charge-offs (annualized)		1.5			3.9			1.8			4.3
Ending total loans⁽²⁾	$	23,784,039		$	19,607,553		$	23,784,039		$	19,607,553
Average loans in repayment	$	11,700,129		$	7,991,624		$	11,405,253		$	7,543,605
Ending loans in repayment	$	12,145,736		$	8,608,651		$	12,145,736		$	8,608,651


⁽¹⁾		Represents the additional allowance related to the amount of uncollectible interest reserved within interest income that is transferred in the period to the allowance for loan losses when interest is capitalized to a loan’s principal balance.

⁽²⁾		Ending total loans represents gross Private Education Loans, plus the receivable for partially charged-off loans.

Private Education Loan Delinquencies

The table below presents the Company’s Private Education Loan delinquency trends as of June 30, 2009, December 31, 2008, and June 30, 2008.


	Private Education Loan Delinquencies
	June 30, 2009						December 31, 2008						June 30, 2008
(Dollars in millions)	Balance			%			Balance			%			Balance			%

Loans in-school/grace/deferment⁽¹⁾	$	10,355					$	10,159					$	9,662
Loans in forbearance⁽²⁾		945						862						1,178
Loans in repayment and percentage of each status:
Loans current		10,294			84.8	%		9,748			87.2	%		7,720			89.7	%
Loans delinquent 31-60 days⁽³⁾		504			4.2			551			4.9			326			3.8
Loans delinquent 61-90 days⁽³⁾		335			2.7			296			2.6			210			2.4
Loans delinquent greater than 90 days⁽³⁾		1,013			8.3			587			5.3			353			4.1

Total Private Education Loans in repayment		12,146			100	%		11,182			100	%		8,609			100	%

Total Private Education Loans, gross		23,446						22,203						19,449
Private Education Loan unamortized discount		(537	)					(535	)					(508	)

Total Private Education Loans		22,909						21,668						18,941
Private Education Loan receivable for partially charged-off loans		338						222						159
Private Education Loan allowance for losses		(1,396	)					(1,308	)					(1,129	)

Private Education Loans, net	$	21,851					$	20,582					$	17,971

Percentage of Private Education Loans in repayment					51.8	%					50.4	%					44.3	%

Delinquencies as a percentage of Private Education Loans in repayment					15.2	%					12.8	%					10.3	%

Loans in forbearance as a percentage of loans in repayment and forbearance					7.2	%					7.2	%					12.0	%


⁽¹⁾		Loans for borrowers who may be attending school or engaging in other permitted educational activities and are not yet required to make payments on their loans, e.g., residency periods for medical students or a grace period for bar exam preparation.

⁽²⁾		Loans for borrowers who have used their allowable deferment time or do not qualify for deferment and need additional time to obtain employment or who have temporarily ceased making full payments due to hardship or other factors consistent with the established loan program servicing procedures and policies.

⁽³⁾		The period of delinquency is based on the number of days scheduled payments are contractually past due.

Allowance for FFELP Loan Losses

The following table summarizes changes in the allowance for loan losses for the FFELP loan portfolio for the three and six months ended June 30, 2009 and 2008.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008

Allowance at beginning of period	$	152,294		$	93,997		$	137,543		$	88,729
Provision for FFELP loan losses		25,595			19,295			59,993			35,398
Charge-offs		(24,851	)		(15,876	)		(43,731	)		(26,711	)
Increase (decrease) for student loan sales		—			277			(767	)		277

Allowance at end of period	$	153,038		$	97,693		$	153,038		$	97,693

Charge-offs as a percentage of average loans in repayment (annualized)		.1	%		.1	%		.1	%		.1	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		.1	%		.1	%		.1	%		.1	%
Allowance as a percentage of the ending total loan balance		.1	%		.1	%		.1	%		.1	%
Allowance as a percentage of ending loans in repayment		.2	%		.1	%		.2	%		.1	%
Allowance coverage of charge-offs (annualized)		1.5			1.5			1.7			1.8
Ending total loans	$	130,084,026		$	114,067,540		$	130,084,026		$	114,067,540
Average loans in repayment	$	68,657,756		$	65,967,183		$	68,949,585		$	65,101,991
Ending loans in repayment	$	70,011,495		$	66,687,513		$	70,011,495		$	66,687,513

The Company maintains an allowance for Risk Sharing loan losses on its FFELP loan portfolio. The level of Risk Sharing has varied over the past few years with legislative changes. As of June 30, 2009, 53 percent of the on-balance sheet FFELP loan portfolio was subject to three-percent Risk Sharing, 46 percent was subject to two-percent Risk Sharing and the remaining 1 percent was not subject to any Risk Sharing.

FFELP Loan Delinquencies

The table below shows the Company’s FFELP loan delinquency trends as of June 30, 2009, December 31, 2008 and June 30, 2008.


	FFELP Loan Delinquencies
	June 30, 2009						December 31, 2008						June 30, 2008
(Dollars in millions)	Balance			%			Balance			%			Balance			%

Loans in-school/grace/deferment⁽¹⁾	$	46,644					$	39,270					$	35,136
Loans in forbearance⁽²⁾		13,428						12,483						12,245
Loans in repayment and percentage of each status:
Loans current		58,746			83.9	%		58,811			83.8	%		57,046			85.5	%
Loans delinquent 31-60 days⁽³⁾		3,996			5.7			4,044			5.8			3,573			5.4
Loans delinquent 61-90 days⁽³⁾		1,959			2.8			2,064			2.9			1,662			2.5
Loans delinquent greater than 90 days⁽³⁾		5,311			7.6			5,255			7.5			4,406			6.6

Total FFELP loans in repayment		70,012			100	%		70,174			100	%		66,687			100	%

Total FFELP loans, gross		130,084						121,927						114,068
FFELP loan unamortized premium		2,375						2,431						2,347

Total FFELP loans		132,459						124,358						116,415
FFELP loan allowance for losses		(153	)					(138	)					(97	)

FFELP loans, net	$	132,306					$	124,220					$	116,318

Percentage of FFELP loans in repayment					53.8	%					57.6	%					58.5	%

Delinquencies as a percentage of FFELP loans in repayment					16.1	%					16.2	%					14.5	%

FFELP loans in forbearance as a percentage of loans in repayment and forbearance					16.1	%					15.1	%					15.5	%


⁽¹⁾		Loans for borrowers who may be attending school or engaging in other permitted educational activities and are not yet required to make payments on the loans, e.g., residency periods for medical students or a grace period for bar exam preparation, as well as, loans for borrowers who have requested extension of grace period during employment transition or who have temporarily ceased making full payments due to hardship or other factors.

⁽²⁾		Loans for borrowers who have used their allowable deferment time or do not qualify for deferment, and need additional time to obtain employment or who have temporarily ceased making full payments due to hardship or other factors, consistent with the established loan program servicing policies and procedures.

⁽³⁾		The period of delinquency is based on the number of days scheduled payments are contractually past due.

Investment

6 Months Ended

Jun. 30, 2009

Investment [Abstract]

Investment


3.	Investments

A summary of investments and restricted investments as of June 30, 2009 and December 31, 2008 follows:


	June 30, 2009
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value

Investments
Available-for-sale
U.S. Treasury securities and other U.S. government agency obligations	$	9,061	$	73	$	—		$	9,134
Other securities:
Asset-backed securities		115,114		—		(843	)		114,271
Commercial paper and asset-backed commercial paper		1,049,988		—		—			1,049,988
Municipal bonds		10,298		2,048		—			12,346
Other		1,530		—		(298	)		1,232

Total investment securities available-for-sale	$	1,185,991	$	2,121	$	(1,141	)	$	1,186,971

Restricted Investments
Available-for sale
U.S. Treasury securities and other U.S. government agency obligations	$	32,750	$	—	$	—		$	32,750
Guaranteed investment contracts		25,189		—		—			25,189

Total restricted investments available-for-sale	$	57,939	$	—	$	—		$	57,939

Held-to-maturity
Guaranteed investment contracts	$	3,963	$	—	$	—		$	3,963
Other		215		—		—			215

Total restricted investments held-to-maturity	$	4,178	$	—	$	—		$	4,178


	December 31, 2008
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value

Investments
Available-for-sale
U.S. Treasury securities and other U.S. government agency obligations	$	8,908	$	195	$	—		$	9,103
Other securities:
Asset-backed securities		40,907		13		(4,299	)		36,621
Commercial paper and asset-backed commercial paper		801,169		—		—			801,169
Municipal bonds		10,883		1,924		—			12,807
Other		1,673		—		(365	)		1,308

Total investment securities available-for-sale	$	863,540	$	2,132	$	(4,664	)	$	861,008

Restricted Investments
Available-for sale
Guaranteed investment contracts	$	31,914	$	—	$	—		$	31,914

Total restricted investments available-for-sale	$	31,914	$	—	$	—		$	31,914

Held-to-maturity
Guaranteed investment contracts	$	5,500	$	—	$	—		$	5,500
Other		215		—		—			215

Total restricted investments held-to-maturity	$	5,715	$	—	$	—		$	5,715

In addition to the restricted investments detailed above, at June 30, 2009 and December 31, 2008, the Company had restricted cash of $5.2 billion and $3.5 billion, respectively.

As of June 30, 2009 and December 31, 2008, $1 million and $(2) million, respectively, of the net unrealized gain (loss) (after tax) related to available-for-sale investments was included in accumulated other comprehensive income. As of June 30, 2009 and December 31, 2008, $60 million ($33 million of this is in restricted cash and investments on the balance sheet) and $26 million (none of which is in restricted cash and investments on the balance sheet), respectively, of available-for-sale investment securities were pledged as collateral.

There were no sales of investments during the three-months ended June 30, 2009. In the six months ended June 30, 2009, the Company sold available-for-sale securities with a fair value of $100 million, resulting in no realized gain or loss. There were no sales of securities in the three and six months ended June 30, 2008. The cost basis for these securities was determined through specific identification of the securities sold.

As of June 30, 2009, the stated maturities for the investments (including restricted investments) are shown in the following table:


	June 30, 2009
	Held-to-		Available-for-
	Maturity		Sale⁽¹⁾		Other

Year of Maturity
2009	$	—	$	1,093,104	$	814,316
2010		215		—		6,833
2011		—		—		5,092
2012		—		—		—
2013		—		936		—
2014-2018		—		12,346		31,044
After 2018		3,963		138,524		28,226

Total	$	4,178	$	1,244,910	$	885,511


⁽¹⁾		Available-for-sale securities are stated at fair value.

At June 30, 2009 and December 31, 2008, the Company also had other investments of $886 million and $180 million, respectively. At June 30, 2009, other investments included a $772 million receivable for cash collateral posted to derivative counterparties. Other investments also included leveraged leases which at June 30, 2009 and December 31, 2008, totaled $65 million and $76 million, respectively, that are general obligations of American Airlines and Federal Express Corporation. At June 30, 2009 and December 31, 2008, other investments also included the Company’s remaining investment in The Reserve Primary Fund totaling $42 million and $97 million, respectively.

Borrowings

6 Months Ended

Jun. 30, 2009

Borrowings [Abstract]

Borrowings


5.	Borrowings

The following table summarizes the Company’s borrowings as of June 30, 2009 and December 31, 2008.


	June 30, 2009						December 31, 2008
	Short		Long				Short		Long
(Dollars in millions)	Term		Term		Total		Term		Term		Total

Unsecured borrowings	$	4,249	$	28,416	$	32,665	$	6,794	$	31,182	$	37,976
Term bank deposits		901		5,199		6,100		1,148		1,108		2,256
Indentured trusts		8		1,761		1,769		31		1,972		2,003
2008 Asset-Backed Financing Facilities		12,476		—		12,476		24,768		—		24,768
ED Participation Program facility		17,236		—		17,236		7,365		—		7,365
ED Conduit Program facility		11,095		—		11,095		—		—		—
On-balance sheet securitizations		—		87,386		87,386		—		80,601		80,601
Other		1,358		—		1,358		1,827		—		1,827

Total before fair value adjustments		47,323		122,762		170,085		41,933		114,863		156,796
SFAS No. 133 fair value adjustments		9		3,118		3,127		—		3,362		3,362

Total	$	47,332	$	125,880	$	173,212	$	41,933	$	118,225	$	160,158

As of June 30, 2009, the Company had $3.5 billion in unsecured revolving credit facilities which provide liquidity support for general corporate purposes. The Company has never drawn on these facilities. The facilities include a $1.9 billion revolving credit facility maturing in October 2010 and $1.6 billion maturing in October 2011. These figures do not include a $215 million commitment from a subsidiary of Lehman Brothers Holding, Inc. On April 24, 2009, in conjunction with the extension of the 2008 ABCP Facilities, a $1.4 billion revolving credit facility maturing in October 2009 was retired and a $1.9 billion revolving credit facility maturing in October 2011 was reduced to $1.6 billion. In connection with the early termination of the unsecured revolving credit facilities, interest on these facilities, if drawn, increases to LIBOR plus 450 basis points. The principal financial covenants in the unsecured revolving credit facilities require the Company to maintain tangible net worth of at least $1.38 billion at all times. Consolidated tangible net worth as calculated for purposes of this covenant was $2.9 billion as of June 30, 2009. The covenants also require the Company to meet either a minimum interest coverage ratio or a minimum net adjusted revenue test based on the four preceding quarters’ adjusted “Core Earnings” financial performance. The Company was compliant with both the minimum interest coverage ratio and the minimum net adjusted revenue tests as of the quarter ended June 30, 2009. Failure to meet these covenants would result in the facilities being withdrawn. In the past, the Company has not relied upon its unsecured revolving credit facilities as a primary source of liquidity. Although the Company has never borrowed under these facilities, they are available to be drawn upon for general corporate purposes.

Lehman Brothers Bank, FSB, a subsidiary of Lehman Brothers Holdings Inc., is a party to the Company’s unsecured revolving credit facilities under which they provide the Company with a $215 million commitment. Lehman Brothers Holdings Inc. declared bankruptcy on September 15, 2008. The Company is operating under the assumption that the lending commitment of Lehman Brothers Bank, FSB, will not be honored if drawn upon. While the Company continues to explore various options, it does not anticipate replacing its commitment from Lehman Brothers Bank, FSB.

Secured Borrowings

FIN No. 46(R), “Consolidation of Variable Interest Entities,” requires VIEs to be consolidated by their primary beneficiaries. A VIE exists when either the total equity investment at risk is not sufficient to permit the entity to finance its activities by itself, or the equity investors lack one of three characteristics associated with owning a controlling financial interest. Those characteristics are the direct or indirect ability to make decisions about an entity’s activities that have a significant impact on the success of the entity, the obligation to absorb the expected losses of an entity, and the rights to receive the expected residual returns of the entity.

The Company currently consolidates a number of financing entities that are VIEs as a result of being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings. The process of identifying the primary beneficiary involves identifying all other parties that hold variable interests in the entity and determining which of the parties, including the Company, has the responsibility to absorb the majority of the entity’s expected losses or the rights to its expected residual returns. The Company is the primary beneficiary of and currently consolidates the following financing VIEs as of June 30, 2009 and December 31, 2008:


	June 30, 2009
	Debt Outstanding
	Short		Long				Carrying Amount of Assets Securing Debt Outstanding
(Dollars in millions)	Term		Term		Total		Loans		Cash		Other Assets		Total

Secured Borrowings:
ED Participation Program facility	$	17,236	$	—	$	17,236	$	17,472	$	127	$	243	$	17,842
ED Conduit Program facility		11,095		—		11,095		11,390		204		353		11,947
2008 Asset-Backed Financing Facilities⁽¹⁾		12,476		—		12,476		13,707		346		126		14,179
On-balance sheet securitizations		—		87,386		87,386		90,161		3,523		2,816		96,500
Indentured trusts		8		1,761		1,769		2,253		189		31		2,473

		40,815		89,147		129,962		134,983		4,389		3,569		142,941
SFAS No. 133 fair value adjustment		—		1,307		1,307		—		—		—		—

Total	$	40,815	$	90,454	$	131,269	$	134,983	$	4,389	$	3,569	$	142,941


⁽¹⁾		Includes $95 million of assets within the facility that can be released to the Company.


	December 31, 2008
	Debt Outstanding
	Short		Long				Carrying Amount of Assets Securing Debt Outstanding
(Dollars in millions)	Term		Term		Total		Loans		Cash		Other Assets		Total

Secured Borrowings:
ED Participation Program facility	$	7,365	$	—	$	7,365	$	7,733	$	88	$	85	$	7,906
2008 Asset-Backed Financing Facilities		24,768		—		24,768		31,953		462		816		33,231
On-balance sheet securitizations		—		80,601		80,601		81,547		2,632		999		85,178
Indentured trusts		31		1,972		2,003		2,199		236		40		2,475

		32,164		82,573		114,737		123,432		3,418		1,940		128,790
SFAS No. 133 fair value adjustment		—		872		872		—		—		—		—

Total	$	32,164	$	83,445	$	115,609	$	123,432	$	3,418	$	1,940	$	128,790

Asset-Backed Financing Facilities

During the first quarter of 2008, the Company entered into three new asset-backed financing facilities (the “2008 Asset-Backed Financing Facilities”): (i) a $26.0 billion FFELP student loan ABCP conduit facility (the “2008 FFELP ABCP Facility”); (ii) a $5.9 billion Private Education Loan ABCP conduit facility (the “2008 Private Education Loan ABCP Facility”) (collectively, the “2008 ABCP Facilities”); and (iii) a $2.0 billion secured FFELP loan facility (the “2008 Asset-Backed Loan Facility”). The initial term of the 2008 Asset-Backed Financing Facilities was 364 days. The underlying cost of borrowing under the 2008 ABCP Facilities was approximately LIBOR plus 0.68 percent for the FFELP loan facilities and LIBOR plus 1.55 percent for the Private Education Loan facility, excluding up-front and unused commitment fees. All-in pricing on the 2008 ABCP Facilities varies based on usage. For the full year 2008, the combined, all-in cost of borrowings related to the 2008 Asset-Backed Financing Facilities, including amortized up-front fees and unused commitment fees, was three-month LIBOR plus 2.47 percent. The primary use of the 2008 Asset-Backed Financing Facilities was to refinance comparable ABCP facilities incurred in connection with the Proposed Merger, with the expectation that outstanding balances under the 2008 Asset-Backed Financing Facilities would be reduced through securitization of the underlying student loan collateral in the term asset-backed securities (“ABS”) market.

On February 2, 2009, the Company extended the maturity date of the 2008 ABCP Facilities from February 28, 2009 to April 28, 2009 for a $61 million upfront fee. The other terms of the facilities remained materially unchanged.

On February 27, 2009, the Company extended the maturity date of the 2008 Asset-Backed Loan Facility from February 28, 2009 to April 28, 2009 for a $4 million upfront fee. The other terms of this facility remained materially unchanged.

On April 24, 2009, the Company extended the maturity of $21.8 billion of the 2008 FFELP ABCP Facility for one year to April, 23, 2010. The Company also extended its 2008 Asset-Backed Loan Facility in the amount of $1.5 billion. The 2008 Asset-Backed Loan Facility matured on June 26, 2009 and was paid in full. A total of $86 million in fees were paid related to these extensions. The 2008 Private Education Loan ABCP Facility was paid off and terminated on April 24, 2009. The stated borrowing rate of the 2008 FFELP ABCP Facility is the applicable funding rate plus 130 basis points excluding upfront fees. The applicable funding rate generally will be either a LIBOR or commercial paper rate. The terms of the 2008 FFELP ABCP Facility call for an increase in the applicable funding spread to 300 basis points if the outstanding borrowing amount is not reduced to $15.2 billion and $10.9 billion as of June 30, 2009 and September 30, 2009, respectively. If the Company does not negotiate an extension or pay off all outstanding amounts of the 2008 FFELP ABCP Facility at maturity, the facility will extend by 90 days with the interest rate generally increasing to LIBOR plus 250 basis points to 550 basis points over the 90 day period. The other terms of the facilities remained materially unchanged.

The maximum amount the Company may borrow under the 2008 FFELP ABCP Facility is limited based on certain factors, including market conditions and the fair value of student loans in the facility. As of June 30, 2009, the maximum borrowing amount was approximately $14.8 billion under the 2008 FFELP ABCP Facility. Funding under the 2008 FFELP ABCP Facility is subject to usual and customary conditions. The 2008 FFELP ABCP Facility is subject to termination under certain circumstances, including the Company’s failure to comply with the principal financial covenants in its unsecured revolving credit facilities.

Borrowings under the 2008 FFELP ABCP Facility are nonrecourse to the Company. As of June 30, 2009, the Company had $12.5 billion outstanding in connection with the 2008 FFELP ABCP Facility. The book basis of the assets securing this facility as of June 30, 2009 was $14.2 billion.

ED Conduit Program

Pursuant to the Ensuring Continued Access to Student Loans Act of 2008 (“ECASLA”), on January 15, 2009, ED published summary terms under which it will purchase eligible FFELP Stafford and PLUS loans from a conduit vehicle established to provide funding for eligible student lenders (the “ED Conduit Program”). Loans eligible for the ED Conduit Program must be first disbursed on or after October 1, 2003, but not later than July 1, 2009, and fully disbursed before September 30, 2009, and meet certain other requirements including with respect to borrower benefits. The ED Conduit was launched on May 11, 2009. Funding for the ED Conduit Program is provided by the capital markets at a cost based on market rates, with the Company being advanced 97 percent of the student loan face amount. The ED Conduit Program has a term of five years and will expire on January 19, 2014. The Student Loan Short-Term Notes (“SLST Notes”), issued by the ED Conduit, are supported by a combination of i) Funding Notes backed by FFELP student loans, ii) the Liquidity Agreement with the Federal Financing Bank (“FFB”) and iii) the Put Agreement provided by ED. If the conduit does not have sufficient funds to pay all SLST Notes then those SLST Notes will be repaid with funds from the FFB. The FFB will hold the notes for a short period of time and if at the end of that time the SLST Notes still cannot be paid off, the underlying FFELP loans that serve as collateral to the ED Conduit will be sold to ED through the Put Agreement at a price of 97 percent of the face amount of the loans. Approximately $15.5 billion of the Company’s Stafford and PLUS loans (excluding loans currently in the Participation Program) are eligible for funding under the ED Conduit Program. As of June 30, 2009, $11.4 billion of these assets have been funded through this program with a weighted average issuance cost of approximately .74 percent.

Term Asset-Backed Securities Loan Facility (“TALF”)

On February 6, 2009, the Federal Reserve Bank of New York published proposed terms for a program designed to facilitate renewed issuance of consumer and small business ABS at lower interest rate spreads. TALF was initiated on March 17, 2009 and currently provides investors with funding of up to five years for eligible ABS rated by two or more rating agencies in the highest investment-grade rating category. Eligible ABS include ‘AAA’ rated student loan ABS backed by FFELP and private student loans first disbursed since May 1, 2007. As of June 30, 2009, the Company had approximately $12.7 billion book basis ($13.4 billion face amount) of student loans eligible to serve as collateral for ABS funded under TALF; this amount does not include loans eligible for ECASLA financing programs. The Federal Reserve Bank launched the TALF program on March 3, 2009.

On May 5, 2009, the Company priced a $2.6 billion Private Education Loan securitization which closed on May 12, 2009. The issue bears a coupon of 1-month LIBOR plus 6.0 percent and is callable at the Company’s option at 93 percent of the outstanding balance of the ABS between November 15, 2011 and April 15, 2012. If the issue is called on November 15, 2011, which the Company believes is probable, the effective cost of the bond financing will be approximately 1-month LIBOR plus 3.7 percent. This transaction was TALF-eligible.

This securitization is accounted for as a secured borrowing. The Company has concluded that it is probable it will call these bonds at the call date at the 7 percent discount. Probability is based on the Company’s assessment on whether these bonds can be refinanced at the call date at or lower than a breakeven cost of funds based on the call discount. As a result, the Company is accreting this call discount as a reduction to interest expense through the call date under APB No. 21, “Interest on Receivables and Payables,” and SFAS No. 91, “Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases.” If it becomes less than probable the Company will call these bonds at a future date it will result in the Company reversing this prior accretion as a cumulative catch up under SFAS No. 91 and the effective interest rate method. The Company has accreted approximately $9 million as a reduction of interest expense through June 30, 2009.

Consolidation of Off-Balance Sheet Securitizations

In the second quarter of 2009, three of the Company’s off-balance sheet securitization trusts were re-evaluated under SFAS No. 140 and it was determined that they no longer met the criteria to be considered QSPEs. These trusts were then evaluated as VIEs using the guidance in FIN No. 46(R) and it was determined that they should be consolidated and accounted for as secured borrowings as the Company is the primary beneficiary. These trusts had reached their 10 percent clean-up call levels but the call was not exercised by the Company. Under SFAS No. 140, because the Company can now exercise that option at their discretion going forward, the Company effectively controls the assets of the trusts. This resulted in the Company consolidating at fair value $454 million in assets and $432 million in liabilities related to these trusts. This resulted in an $11 million gain being recognized during the second quarter of 2009.

Student Loan Securitization

6 Months Ended

Jun. 30, 2009

Student Loan Securitization [Abstract]

Student Loan Securitization


6.	Student Loan Securitization

The Company securitizes its FFELP Stafford loans, FFELP Consolidation Loans and Private Education Loan assets and, for transactions qualifying as sales, retains a Residual Interest and servicing rights (as the Company retains the servicing responsibilities), all of which are referred to as the Company’s Retained Interest in off-balance sheet securitized loans. The Residual Interest is the right to receive cash flows from the student loans and reserve accounts in excess of the amounts needed to pay servicing, derivative costs (if any), other fees, and the principal and interest on the bonds backed by the student loans.

Securitization Activity

The following table summarizes the Company’s securitization activity for the three and six months ended June 30, 2009 and 2008. Those securitizations listed as sales are off-balance sheet transactions and those listed as financings remain on-balance sheet.


	Three Months Ended June 30,
	2009									2008
			Loan		Pre-							Loan		Pre-
	No. of		Amount		Tax					No. of		Amount		Tax
(Dollars in millions)	Transactions		Securitized		Gain		Gain%			Transactions		Securitized		Gain		Gain%

Securitizations — sales:
FFELP Stafford/PLUS loans		—	$	—	$	—		—	%		—	$	—	$	—		—	%
FFELP Consolidation Loans		—		—		—		—			—		—		—		—
Private Education Loans		—		—		—		—			—		—		—		—

Total securitizations — sales		—		—	$	—		—	%		—		—	$	—		—	%

Securitizations — financings:
FFELP Stafford/PLUS Loans⁽¹⁾		—		—							3		7,125
FFELP Consolidation Loans⁽¹⁾		2		4,524							—		—
Private Education Loans⁽¹⁾		1		3,527							—		—

Total securitizations — financings		3		8,051							3		7,125

Total securitizations		3	$	8,051							3	$	7,125


	Six Months Ended June 30,
	2009									2008
			Loan		Pre-							Loan		Pre-
	No. of		Amount		Tax					No. of		Amount		Tax
(Dollars in millions)	Transactions		Securitized		Gain		Gain%			Transactions		Securitized		Gain		Gain%

Securitizations — sales:
FFELP Stafford/PLUS loans		—	$	—	$	—		—	%		—	$	—	$	—		—	%
FFELP Consolidation Loans		—		—		—		—			—		—		—		—
Private Education Loans		—		—		—		—			—		—		—		—

Total securitizations — sales		—		—	$	—		—	%		—		—	$	—		—	%

Securitizations — financings:
FFELP Stafford/PLUS Loans⁽¹⁾		—		—							6		11,825
FFELP Consolidation Loans⁽¹⁾		2		4,524							—		—
Private Education Loans⁽¹⁾		2		6,419							—		—

Total securitizations — financings		4		10,943							6		11,825

Total securitizations		4	$	10,943							6	$	11,825


⁽¹⁾		In certain securitizations there are terms within the deal structure that result in such securitizations not qualifying for sale treatment and accordingly, they are accounted for on-balance sheet as VIEs. Terms that prevent sale treatment include: (1) allowing the Company to hold certain rights that can affect the remarketing of certain bonds, (2) allowing the trust to enter into interest rate cap agreements after the initial settlement of the securitization, which do not relate to the reissuance of third party beneficial interests or (3) allowing the Company to hold an unconditional call option related to a certain percentage of the securitized assets.

The following table summarizes cash flows received from or paid to the off-balance sheet securitization trusts during the three and six months ended June 30, 2009 and 2008.


	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in millions)	2009			2008			2009			2008

Net proceeds from new securitizations completed during the period	$	—		$	—		$	—		$	—
Cash distributions from trusts related to Residual Interests		154			285			268			515
Servicing fees received⁽¹⁾		57			62			115			125
Purchases of previously transferred financial assets for representation and warranty violations		(2	)		(10	)		(5	)		(13	)
Reimbursements of borrower benefits⁽²⁾		(8	)		(7	)		(16	)		(14	)
Purchases of delinquent Private Education Loans from securitization trusts using delinquent loan call option		—			(52	)		—			(100	)
Purchases of loans using clean-up call option		—			112			—			112


⁽¹⁾		The Company receives annual servicing fees of 90 basis points, 50 basis points and 70 basis points of the outstanding securitized loan balance related to its FFELP Stafford, FFELP Consolidation Loan and Private Education Loan securitizations, respectively.

⁽²⁾		Under the terms of the securitizations, the transaction documents require that the Company reimburse the trusts for any borrower benefits afforded the borrowers of the underlying securitized loans.

Retained Interest in Securitized Receivables

The following tables summarize the fair value of the Company’s Residual Interests, included in the Company’s Retained Interest (and the assumptions used to value such Residual Interests), along with the underlying off-balance sheet student loans that relate to those securitizations in transactions that were treated as sales as of June 30, 2009 and December 31, 2008.


	As of June 30, 2009
	FFELP			Consolidation			Private
	Stafford and			Loan			Education
(Dollars in millions)	PLUS			Trusts⁽¹⁾			Loan Trusts			Total

Fair value of Residual Interests⁽²⁾	$	272		$	721		$	827		$	1,820
Underlying securitized loan balance		6,046			14,736			13,372			34,154
Weighted average life		3.1 yrs.			8.0 yrs.			6.4 yrs.
Prepayment speed (annual rate)⁽³⁾
Interim status		0	%		N/A			0	%
Repayment status		2-19	%		1-6	%		2-15	%
Life of loan — repayment status		12	%		4	%		6	%
Expected remaining credit losses (% of outstanding student loan principal)⁽⁴⁾		.10	%		.22	%		5.76	%
Residual cash flows discount rate		11.5	%		13.0	%		32.4	%


	As of December 31, 2008
	FFELP			Consolidation			Private
	Stafford and			Loan			Education
(Dollars in millions)	PLUS			Trusts⁽¹⁾			Loan Trusts			Total

Fair value of Residual Interests⁽²⁾	$	250		$	918		$	1,032		$	2,200
Underlying securitized loan balance		7,057			15,077			13,690			35,824
Weighted average life		3.0 yrs.			8.1 yrs.			6.4 yrs.
Prepayment speed (annual rate)⁽³⁾
Interim status		0	%		N/A			0	%
Repayment status		2-19	%		1-6	%		2-15	%
Life of loan — repayment status		12	%		4	%		6	%
Expected remaining credit losses (% of outstanding student loan principal)⁽⁴⁾		.11	%		.23	%		5.22	%
Residual cash flows discount rate		13.1	%		11.9	%		26.3	%


⁽¹⁾		Includes $529 million and $762 million related to the fair value of the Embedded Floor Income as of June 30, 2009 and December 31, 2008, respectively. Changes in the fair value of the Embedded Floor Income are primarily due to changes in the interest rates and the paydown of the underlying loans.

⁽²⁾		The Company had no unrealized gains (pre-tax) in accumulated other comprehensive income that related to the Retained Interests for any of the periods presented.

⁽³⁾		The Company uses CPR curves for Residual Interest valuations that are based on seasoning (the number of months since entering repayment). Under this methodology, a different CPR is applied to each year of a loan’s seasoning. Repayment status CPR used is based on the number of months since first entering repayment (seasoning). Life of loan CPR is related to repayment status only and does not include the impact of the loan while in interim status. The CPR assumption used for all periods includes the impact of projected defaults.

⁽⁴⁾		Remaining expected credit losses as of the respective balance sheet date.

The Company recorded net unrealized mark-to-market losses in “servicing and securitization revenue (loss)” of $90 million and $192 million in the three months ended June 30, 2009 and 2008, respectively, and $351 million and $280 million in the six months ended June 30, 2009 and 2008, respectively, related to the Residual Interest.

As of June 30, 2009, the Company did not change any significant assumptions compared to those used as of March 31, 2009, to determine the fair value of the Residual Interests. The $90 million unrealized mark-to-market loss in the second quarter of 2009 was primarily a result of an increase in forward interest rates which resulted in a higher discount rate used to value the Residual Interests as well as a reduction in the fair value of the Embedded Fixed Rate Floor Income. The $192 million unrealized mark-to-market loss in the second quarter of 2008 was primarily related to increases in forward interest rates during the quarter reducing the value of Embedded Fixed Rate Floor Income ($137 million decrease) and increasing the discount rate used to value the Residual Interests ($57 million decrease). Additionally, the Company increased the spread to LIBOR component of the Private Education discount rate formula to better reflect current market conditions which resulted in a $113 million Residual Interest mark-to-market loss. Actual quarterly experience, including improved forward curve spreads used in the valuation of the Residual Interests, partially mitigated these mark-to-market losses.

The following table reflects the sensitivity of the current fair value of the Residual Interests to adverse changes in the key economic assumptions used in the valuation of the Residual Interest at June 30, 2009, discussed in detail in the preceding table. The effect of a variation in a particular assumption on the fair value of the Residual Interest is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments and increased credit losses), which might magnify or counteract the sensitivities. These sensitivities are hypothetical, as the actual results could be materially different than these estimates.


	As of June 30, 2009
	FFELP			FFELP
	Stafford/PLUS			Consolidation			Private Education
(Dollars in millions)	Loan Trusts⁽⁵⁾			Loan Trusts⁽⁵⁾			Loan Trusts⁽⁵⁾

Fair value of Residual Interest	$	272		$	721	⁽¹⁾	$	827
Weighted-average life		3.1 yrs.			8.0 yrs.			6.4 yrs.
Prepayment speed assumptions⁽²⁾
Interim status		0	%		N/A			0	%
Repayment status		2-19	%		1-6	%		2-15	%
Life of loan — repayment status		12	%		4	%		6	%
Impact on fair value of 5% absolute increase	$	(24	)	$	(82	)	$	(108	)
Impact on fair value of 10% absolute increase	$	(43	)	$	(143	)	$	(195	)
Expected credit losses (as a% of student loan principal)		.10	%		.22	%		5.76	%⁽³⁾
Impact on fair value of 5% absolute increase in default rate	$	(6	)	$	(8	)	$	(170	)
Impact on fair value of 10% absolute increase in default rate	$	(10	)	$	(16	)	$	(339	)
Residual cash flows discount rate		11.5	%		13.0	%		32.4	%
Impact on fair value of 5% absolute increase	$	(25	)	$	(115	)	$	(94	)
Impact on fair value of 10% absolute increase	$	(46	)	$	(198	)	$	(169	)


	3 month LIBOR forward curve at June 30, 2009 plus contracted spreads
Difference between Asset and Funding underlying indices⁽⁴⁾
Impact on fair value of 0.25% absolute increase in funding index compared to asset index	$	(42	)	$	(161	)	$	(2	)
Impact on fair value of 0.50% absolute increase in funding index compared to asset index	$	(85	)	$	(322	)	$	(4	)


⁽¹⁾		Certain consolidation trusts have $3.3 billion of non-U.S. dollar (Euro denominated) bonds outstanding. To convert these non-U.S. dollar denominated bonds into U.S. dollar liabilities, the trusts have entered into foreign-currency swaps with certain counterparties. Additionally, certain Private Education Loan trusts contain interest rate swaps that hedge the basis and reset risk between the Prime indexed assets and LIBOR index notes. As of June 30, 2009, these swaps are in an $833 million gain position (in the aggregate) and the trusts had $600 million of exposure to counterparties (gain position less collateral posted) primarily as a result of the decline in the exchange rates between the U.S. dollar and the Euro. This unrealized market value gain is not part of the fair value of the Residual Interest in the table above. Not all derivatives within the trusts require the swap counterparties to post collateral to the respective trust for changes in market value, unless the trust’s swap counterparty’s credit rating has been withdrawn or has been downgraded below a certain level. If the swap counterparty does not post the required collateral or is downgraded further, the counterparty must find a suitable replacement counterparty or provide the trust with a letter of credit or a guaranty from an entity that has the required credit ratings. Ultimately, the Company’s exposure related to a swap counterparty failing to make its payments is limited to the fair value of the related trust’s Residual Interest which was $1.3 billion as of June 30, 2009.

⁽²⁾		See previous table for details on CPR. Impact on fair value due to increase in prepayment speeds only increases the repayment status speeds. Interim status CPR remains 0%.

⁽³⁾		Expected credit losses are used to project future cash flows related to the Private Education Loan securitization’s Residual Interest. However, until the fourth quarter of 2008 when it ceased this activity for all trusts settling prior to September 30, 2005, the Company purchased loans at par when the loans reached 180 days delinquent prior to default under a contingent call option, resulting in no credit losses at the trust nor related to the Company’s Residual Interest. When the Company exercised its contingent call option and purchased the loans from the trust at par, the Company recorded a loss related to these loans that are now on the Company’s balance sheet. The Company recorded losses of $43 million and $80 million, respectively, for the three and six months ended June 30, 2008, and did not record any losses for the three and six months ended June 30, 2009, related to this activity. For all trusts settling after October 1, 2005, the Company does not hold this contingent call option.

⁽⁴⁾		Student loan assets are primarily indexed to a Treasury bill, commercial paper or a prime index. Funding within the trust is primarily indexed to a LIBOR index. Sensitivity analysis increases funding indices as indicated while keeping assets underlying indices fixed.

⁽⁵⁾		In addition to the assumptions in the table above, the Company also projects the reduction in distributions that will result from the various benefit programs that exist related to consecutive on-time payments by borrowers. Related to the entire $1.8 billion Residual Interest, there are $205 million (present value) of benefits projected which reduce the fair value.

The table below shows the Company’s off-balance sheet Private Education Loan delinquency trends as of June 30, 2009 and 2008.


	Off-Balance Sheet Private Education Loan Delinquencies
	June 30, 2009					June 30, 2008
(Dollars in millions)	Balance		%			Balance		%

Loans in-school/grace/deferment⁽¹⁾	$	2,974				$	4,159
Loans in forbearance⁽²⁾		583					1,339
Loans in repayment and percentage of each status:
Loans current		8,874		90.4	%		7,871		95.1	%
Loans delinquent 31-60 days⁽³⁾		261		2.7			178		2.2
Loans delinquent 61-90 days⁽³⁾		174		1.8			102		1.2
Loans delinquent greater than 90 days⁽³⁾		505		5.1			124		1.5

Total off-balance sheet Private Education Loans in repayment		9,814		100	%		8,275		100	%

Total off-balance sheet Private Education Loans, gross	$	13,371				$	13,773


⁽¹⁾		Loans for borrowers who may be attending school or engaging in other permitted educational activities and are not yet required to make payments on their loans, e.g., residency periods for medical students or a grace period for bar exam preparation.

⁽²⁾		Loans for borrowers who have used their allowable deferment time or do not qualify for deferment, and need additional time to obtain employment or who have temporarily ceased making full payments due to hardship or other factors consistent with the established loan program servicing procedures and programs.

⁽³⁾		The period of delinquency is based on the number of days scheduled payments are contractually past due.

The following table summarizes charge-off activity for Private Education Loans in the off-balance sheet trusts for the three and six months ended June 30, 2009 and 2008.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in millions)	2009			2008			2009			2008

Charge-offs	$	116		$	40		$	179		$	73
Charge-offs as a percentage of average loans in repayment (annualized)		4.8	%		2.1	%		3.8	%		1.9	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		4.6	%		1.8	%		3.6	%		1.6	%
Ending off-balance sheet total Private Education Loans⁽¹⁾	$	13,520		$	13,831		$	13,520		$	13,831
Average off-balance sheet Private Education Loans in repayment	$	9,630		$	7,811		$	9,522		$	7,638
Ending off-balance sheet Private Education Loans in repayment	$	9,814		$	8,275		$	9,814		$	8,275


⁽¹⁾		Ending total loans represents gross Private Education Loans, plus the receivable for partially charged-off loans (see Note 2, “Allowance for Loan Losses”).

Derivative Financial Instruments

6 Months Ended

Jun. 30, 2009

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments


7.	Derivative Financial Instruments

Derivative instruments that are used as part of the Company’s interest rate and foreign currency risk management strategy include interest rate swaps, basis swaps, cross-currency interest rate swaps, interest rate futures contracts, and interest rate floor and cap contracts with indices that relate to the pricing of specific balance sheet assets and liabilities including the Residual Interests from off-balance sheet securitizations. (For a full discussion of the Company’s risk management strategy and use of derivatives, please see the Company’s 2008 Form 10-K, Note 9, “Derivative Financial Instruments,” to the consolidated financial statements.) The Company accounts for its derivatives under SFAS No. 133 which requires that every derivative instrument, including certain derivative instruments embedded in other contracts, be recorded in the balance sheet as either an asset or liability measured at its fair value. The Company’s derivative instruments are classified and accounted for by the Company as fair value hedges, cash flow hedges or trading activities.

Fair Value Hedges

Fair value hedges are generally used by the Company to hedge the exposure to changes in fair value of a recognized fixed rate asset or liability. The Company enters into interest rate swaps to convert fixed rate assets into variable rate assets and fixed rate debt into variable rate debt. The Company also enters into cross-currency interest rate swaps to convert foreign currency denominated fixed and floating debt to U.S. dollar denominated variable debt. Changes in value for both the hedge and the hedged item are recorded to earnings. These amounts offset each other with the net amount representing the ineffectiveness of the relationship.

Cash Flow Hedges

Cash flow hedges are used by the Company to hedge the exposure to variability in cash flows for a forecasted debt issuance and for exposure to variability in cash flows of floating rate debt. This strategy is used primarily to minimize the exposure to volatility from future changes in interest rates. Gains and losses on the effective portion of a qualifying hedge are accumulated in other comprehensive income and ineffectiveness is recorded immediately to earnings.

Trading Activities

When instruments do not qualify as hedges under SFAS No. 133, they are accounted for as trading where all changes in fair value of the derivatives are recorded through earnings. In general, derivative instruments included in trading activities include Floor Income Contracts, basis swaps and various other derivatives that do not qualify for hedge accounting under SFAS No. 133.

Summary of Derivative Financial Statement Impact

The following tables summarize the fair values and notional amounts of all derivative instruments at June 30, 2009 and December 31, 2008, and their impact on other comprehensive income and earnings for the three and six months ended June 30, 2009 and 2008.

Impact of Derivatives on Consolidated Balance Sheet


		Cash Flow						Fair Value						Trading						Total
	Hedged Risk	Jun. 30,			Dec. 31,			Jun. 30,			Dec. 31,			Jun. 30,			Dec. 31,			Jun. 30,			Dec. 31,
(Dollars in millions)	Exposure	2009			2008			2009			2008			2009			2008			2009			2008

Fair Values⁽¹⁾
Derivative Assets
Interest rate swaps	Interest rate	$	—		$	—		$	810		$	1,529		$	82		$	323		$	892		$	1,852
Cross currency interest rate swaps	Foreign currency and interest rate		—			—			2,498			2,743			36			13			2,534			2,756

Total derivative assets⁽³⁾			—			—			3,308			4,272			118			336			3,426			4,608
Derivative Liabilities
Interest rate swaps	Interest rate		(106	)		(146	)		—			—			(635	)		(332	)		(741	)		(478	)
Floor/Cap contracts	Interest rate		—			—			—			—			(1,143	)		(1,466	)		(1,143	)		(1,466	)
Futures	Interest rate		—			—			—			—			(2	)		(3	)		(2	)		(3	)
Cross currency interest rate swaps	Foreign currency and interest rate		—			—			(210	)		(640	)		(1	)		—			(211	)		(640	)
Other⁽²⁾	Interest rate		—			—			—			—			(22	)		—			(22	)		—

Total derivative liabilities⁽³⁾			(106	)		(146	)		(210	)		(640	)		(1,803	)		(1,801	)		(2,119	)		(2,587	)

Net total derivatives		$	(106	)	$	(146	)	$	3,098		$	3,632		$	(1,685	)	$	(1,465	)	$	1,307		$	2,021


⁽¹⁾		Fair values reported are exclusive of collateral held and pledged and accrued interest. Assets and liabilities are presented without consideration of master netting agreements. Derivatives are carried on the balance sheet based on net position by counterparty under master netting agreements, and classified in other assets or other liabilities depending on whether in a net positive or negative position.

⁽²⁾		“Other” includes the fair value of the embedded derivatives in the total return swap related to the $1.5 billion asset-backed securities based facility which closed in January 2009. The embedded derivatives are required to be accounted for as derivatives under SFAS No. 133.


⁽³⁾	The following table reconciles gross positions without the impact of master netting agreements to the balance sheet classification:


	Other Assets						Other Liabilities
	June 30,			December 31,			June 30,			December 31,
	2009			2008			2009			2008

Gross position	$	3,426		$	4,608		$	(2,119	)	$	(2,587	)
Impact of master netting agreements		(1,052	)		(1,594	)		1,052			1,594

Derivative values with impact of master netting agreements	$	2,374		$	3,014		$	(1,067	)	$	(993	)


	Cash Flow				Fair Value				Trading				Total
	Jun. 30,		Dec. 31,		Jun. 30,		Dec. 31,		Jun. 30,		Dec. 31,		Jun. 30,		Dec. 31,
(Dollars in billions)	2009		2008		2009		2008		2009		2008		2009		2008

Notional Values
Interest rate swaps	$	3.9	$	4.8	$	10.9	$	13.4	$	154.8	$	159.3	$	169.6	$	177.5
Floor/Cap contracts		—		—		—		—		38.7		32.4		38.7		32.4
Futures		—		—		—		—		.2		.2		.2		.2
Cross currency interest rate swaps		—		—		20.9		23.1		.3		.1		21.2		23.2
Other⁽¹⁾		—		—		—		—		5.1		.7		5.1		.7

Total derivatives	$	3.9	$	4.8	$	31.8	$	36.5	$	199.1	$	192.7	$	234.8	$	234.0


⁽¹⁾	“Other” includes embedded derivatives bifurcated from newly issued on-balance sheet securitization debt, as a result of adopting SFAS No. 155 as well as embedded derivatives in the total return swap discussed in footnote 2 to the table above.

Impact of Derivatives on Consolidated Statements of Income


	Three Months Ended June 30,
							Realized Gain
	Unrealized Gain						(Loss)						Unrealized Gain
	(Loss) on						on						(Loss)					Total Gain
	Derivatives⁽¹⁾⁽²⁾						Derivatives⁽³⁾						on Hedged Item⁽¹⁾					(Loss)
(Dollars in millions)	2009			2008			2009			2008			2009			2008		2009			2008

Fair Value Hedges
Interest rate swaps	$	(487	)	$	(364	)	$	97		$	42		$	521		$	358	$	131		$	36
Cross currency interest rate swaps		1,163			(396	)		120			(3	)		(1,524	)		439		(241	)		40

Total fair value derivatives		676			(760	)		217			39			(1,003	)		797		(110	)		76
Cash Flow Hedges
Interest rate swaps		(5	)		—			(21	)		(11	)		—			—		(26	)		(11	)

Total cash flow derivatives		(5	)		—			(21	)		(11	)		—			—		(26	)		(11	)
Trading
Interest rate swaps		(301	)		(170	)		119			105			—			—		(182	)		(65	)
Floor/Cap contracts		236			569			(171	)		(174	)		—			—		65			395
Futures		—			(3	)		—			3			—			—		—			—
Cross currency interest rate swaps		(1	)		(4	)		1			(1	)		—			—		—			(5	)
Other		(115	)		—			2			—			—			—		(113	)		—

Total trading derivatives		(181	)		392			(49	)		(67	)		—			—		(230	)		325

Total		490			(368	)		147			(39	)		(1,003	)		797		(366	)		390
Less: realized gains (losses) recorded in interest expense		—			—			196			28			—			—		196			28

Gains (losses) on derivative and hedging activities, net	$	490		$	(368	)	$	(49	)	$	(67	)	$	(1,003	)	$	797	$	(562	)	$	362


⁽¹⁾		Recorded in “Gains (losses) on derivative and hedging activities, net” in the consolidated statements of income.

⁽²⁾		Represents ineffectiveness related to cash flow hedges.

⁽³⁾		For fair value and cash flow hedges, recorded in interest expense. For trading derivatives, recorded in “Gains (losses) on derivative and hedging activities, net.”


	Six Months Ended June 30,
							Realized Gain
	Unrealized Gain						(Loss)						Unrealized Gain
	(Loss) on						on						(Loss)						Total Gain
	Derivatives⁽¹⁾⁽²⁾						Derivatives⁽³⁾						on Hedged Item⁽¹⁾						(Loss)
(Dollars in millions)	2009			2008			2009			2008			2009			2008			2009			2008

Fair Value Hedges
Interest rate swaps	$	(670	)	$	40		$	176		$	46		$	715		$	(44	)	$	221		$	42
Cross currency interest rate swaps		241			1,497			196			76			(501	)		(1,394	)		(64	)		179

Total fair value derivatives		(429	)		1,537			372			122			214			(1,438	)		157			221
Cash Flow Hedges
Interest rate swaps		—			—			(39	)		(20	)		—			—			(39	)		(20	)

Total cash flow derivatives		—			—			(39	)		(20	)		—			—			(39	)		(20	)
Trading
Interest rate swaps		(601	)		(302	)		348			338			—			—			(253	)		36
Floor/Cap contracts		402			274			(311	)		(315	)		—			—			91			(41	)
Futures		1			(2	)		—			3			—			—			1			1
Cross currency interest rate swaps		(34	)		(5	)		1			(1	)		—			—			(33	)		(6	)
Other		(51	)		—			2			—			—			—			(49	)

Total trading derivatives		(283	)		(35	)		40			25			—			—			(243	)		(10	)

Total		(712	)		1,502			373			127			214			(1,438	)		(125	)		191
Less: realized gains (losses) recorded in interest expense		—			—			333			102			—			—			333			102

Gains (losses) on derivative and hedging activities, net	$	(712	)	$	1,502		$	40		$	25		$	214		$	(1,438	)	$	(458	)	$	89


⁽¹⁾		Recorded in “Gains (losses) on derivative and hedging activities, net” in the consolidated statements of income.

⁽²⁾		Represents ineffectiveness related to cash flow hedges.

⁽³⁾		For fair value and cash flow hedges, recorded in interest expense. For trading derivatives, recorded in “Gains (losses) on derivative and hedging activities, net.”

Impact of Derivatives on Consolidated Statements of Changes in Stockholders’ Equity (net of tax)


	Interest Rate Swaps				Interest Rate Swaps
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in millions)	2009		2008		2009		2008

Total gains (losses) on cash flow hedges	$	5	$	67	$	1	$	30
Realized (gains) losses reclassified to interest expense^(1)(2)(3)		13		7		25		12
Hedge ineffectiveness reclassified to earnings⁽¹⁾⁽⁴⁾		3		—		—		—

Total change in stockholders’ equity for unrealized gains (losses) on derivatives	$	21	$	74	$	26	$	42


⁽¹⁾		Amounts included in “Impact of Derivatives on Consolidated Statements of Income” table above.

⁽²⁾		Includes net settlement income/expense.

⁽³⁾		The Company expects to reclassify $.1 million of after-tax net losses from accumulated other comprehensive income to earnings during the next 12 months related to net settlement accruals on interest rate swaps.

⁽⁴⁾		Recorded in “Gains (losses) derivatives and hedging activities, net” in the consolidated statements of income.

Collateral

Collateral held and pledged at June 30, 2009 and December 31, 2008 related to derivative exposures between the Company and its derivative counterparties are detailed in the following table:


(Dollars in millions)	June 30, 2009		December 31, 2008

Collateral held:⁽¹⁾
Cash (obligation to return cash collateral is recorded in short-term borrowings)⁽²⁾	$	1,055	$	1,624
Securities at fair value — corporate derivatives (not recorded in financial statements)⁽³⁾		185		689
Securities at fair value — on-balance sheet securitization derivatives (not recorded in financial statements)⁽⁴⁾		610		688

Total collateral held	$	1,850	$	3,001

Derivative asset at fair value including accrued interest	$	2,809	$	3,741

Collateral pledged to others:
Cash (right to receive return of cash collateral is recorded in investments)	$	772	$	—
Securities at fair value (recorded in investments)⁽⁵⁾		27		26
Securities at fair value (recorded in restricted investments)⁽⁶⁾		33		—
Securities at fair value re-pledged (not recorded in financial statements)⁽⁶⁾⁽⁷⁾		—		191

Total collateral pledged	$	832	$	217

Derivative liability at fair value including accrued interest and premium receivable	$	856	$	677


⁽¹⁾		In addition to collateral held for derivative exposures, the Company held $779 million (fair value) of mortgage-backed securities as collateral in a reverse repurchase transaction. The securities are not reflected in the consolidated financial statements; however, the reverse repurchase transaction is reflected in the Company’s “cash and cash equivalents” line of the consolidated balance sheets.

⁽²⁾		Effective with the downgrade in the Company’s unsecured credit ratings on May 13, 2009, cash collateral is held in restricted cash accounts.

⁽³⁾		Effective with the downgrade in the Company’s unsecured credit ratings on May 13, 2009, the Company does not have the ability to sell or re-pledge securities it holds as collateral.

⁽⁴⁾		The trusts do not have the ability to sell or re-pledge securities they hold as collateral.

⁽⁵⁾		Counterparty does not have the right to sell or re-pledge securities.

⁽⁶⁾		Counterparty has the right to sell or re-pledge securities.

⁽⁷⁾		Represents securities the Company holds as collateral that have been pledged to other counterparties.

Additionally, as of June 30, 2009 and December 31, 2008, $259 million and $340 million, respectively, in collateral related to off-balance sheet trust derivatives were held by these off-balance sheet trusts. Collateral posted by third parties to the off-balance sheet trusts cannot be sold or re-pledged by the trusts.

Fair Value Measurements

6 Months Ended

Jun. 30, 2009

Fair Value Measurements [Abstract]

Fair Value Measurements


13.	Fair Value Measurements

The Company uses estimates of fair value as defined by SFAS No. 157 in applying various accounting standards for its financial statements. Under GAAP, fair value measurements are used in one of four ways:


	•	In the consolidated balance sheet with changes in fair value recorded in the consolidated statement of income;


	•	In the consolidated balance sheet with changes in fair value recorded in the accumulated other comprehensive income section of the consolidated statement of changes in stockholders’ equity;

	•	In the consolidated balance sheet for instruments carried at lower of cost or fair value with impairment charges recorded in the consolidated statement of income; and

	•	In the notes to the financial statements as required by SFAS No. 107, “Disclosures about Fair Value of Financial Instruments.”

Fair value under SFAS No. 157 is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads (including for the Company’s liabilities), relying first on observable data from active markets. Additional adjustments may be made for factors including liquidity, credit, bid/offer spreads, etc., depending on current market conditions. Transaction costs are not included in the determination of fair value. When possible, the Company seeks to validate the model’s output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable.

Under SFAS No. 157, the Company categorizes its fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring financial instruments at fair value. Classification is based on the lowest level of input that is significant to the fair value of the instrument. The three levels are as follows:


	•	Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. The types of financial instruments included in level 1 are highly liquid instruments with quoted prices;

	•	Level 2 — Inputs from active markets, other than quoted prices for identical instruments, are used to model fair value. Significant inputs are directly observable from active markets for substantially the full term of the asset or liability being valued; and

	•	Level 3 — Pricing inputs significant to the valuation are unobservable. Inputs are developed based on the best information available; however, significant judgment is required by management in developing the inputs.

Student Loans

The Company’s FFELP loans and Private Education Loans are accounted for at cost or at the lower of cost or market if the loan is held-for-sale (see Note 2, “Significant Accounting Policies — Loans,” to the consolidated financial statements in the Company’s 2008 Annual Report on Form 10-K, for a discussion of the accounting treatment); however, the fair value is disclosed in compliance with SFAS No. 107. FFELP loans classified as held-for-sale are those which the Company has the ability and intent to sell under various ED loan purchase programs. In these instances, the FFELP loans are valued using the committed sales price under the programs. For all other FFELP loans and Private Education Loans, fair value was determined by modeling loan level cash flows using stated terms of the assets and internally-developed assumptions to determine aggregate portfolio yield, net present value and average life. The significant assumptions used to project cash flows are prepayment speeds, default rates, cost of funds, required return on equity, and expected Repayment Borrower Benefits to be earned. In addition, the Floor Income component of the Company’s FFELP loan portfolio is valued through discounted cash flow and option models using both observable market inputs and internally developed inputs. A number of significant inputs into the models are not observable.

Other Loans

Warehousing, facilities financings, and mortgage and consumer loans held for investment are accounted for at cost with fair values being disclosed as required by SFAS No. 107. Mortgage loans held for sale are accounted for at lower of cost or market. Fair value was determined with discounted cash flow models using the stated terms of the loans and observable market yield curves. In addition, adjustments and assumptions were made for credit spreads, liquidity, prepayment speeds and defaults. A number of significant inputs into the models are not observable.

Cash and Investments (Including “Restricted”)

Cash and cash equivalents are carried at cost. Carrying value approximated fair value for disclosure purposes. Investments accounted for under SFAS No. 115 and classified as trading or available-for-sale are carried at fair value in the financial statements. Investments in U.S. Treasury securities and securities issued by U.S. government agencies that are traded in active markets were valued using observable market prices. Other investments for which observable prices from active markets are not available were valued through standard bond pricing models using observable market yield curves adjusted for credit and liquidity spreads. The fair value of investments in Commercial Paper, Asset Backed Commercial Paper, or Demand Deposits that have a remaining term of less than 90 days when purchased are estimated at cost and when needed, adjustments for liquidity and credit spreads are made depending on market conditions and counterparty credit risks. These investments consist of mostly overnight/weekly maturity instruments with highly-rated counterparties.

Borrowings

Borrowings are accounted for at cost in the financial statements except when denominated in a foreign currency or when designated as the hedged item in a fair value hedge relationship under SFAS No. 133. When the hedged risk is the benchmark interest rate and not full fair value, the cost basis is adjusted for changes in value due to benchmark interest rates only. Additionally, foreign currency denominated borrowings are re-measured at current spot rates in the financial statements. The full fair value of all borrowings is disclosed as required by SFAS No. 107. Fair value was determined through standard bond pricing models and option models (when applicable) using the stated terms of the borrowings, and observable yield curves, foreign currency exchange rates and volatilities from active markets; or from quotes from broker-dealers. Credit adjustments for unsecured corporate debt are made based on indicative quotes from observable trades and spreads on credit default swaps specific to the Company. Credit adjustments for secured borrowings are based on indicative quotes from broker-dealers. These adjustments for both secured and unsecured borrowings are material to the overall valuation of these items and, currently, are based on inputs from inactive markets.

Derivative Financial Instruments

All derivatives are accounted for at fair value in the financial statements. The fair values of a majority of derivative financial instruments, including swaps and floors, were determined by standard derivative pricing and option models using the stated terms of the contracts and observable yield curves, forward foreign currency exchange rates and volatilities from active markets. In some cases, management utilized internally developed amortization streams to model the fair value for swaps whose notional amounts contractually amortizes with securitized asset balances. Complex structured derivatives or derivatives that trade in less liquid markets require significant adjustments and judgment in determining fair value that cannot be corroborated with market transactions. When determining the fair value of derivatives, the Company takes into account counterparty credit risk for positions where it is exposed to the counterparty on a net basis by assessing exposure net of collateral held. The net exposures for each counterparty are adjusted based on market information available for the specific counterparty including spreads from credit default swaps. Additionally, when the counterparty has exposure to the Company related to SLM Corporation derivatives, the Company fully collateralizes the exposure minimizing the adjustment necessary to the derivative valuations for the Company’s credit risk. While trusts that contain derivatives are not required to post collateral to counterparties, the credit quality and securitized nature of the trusts minimizes any adjustments for the counterparty’s exposure to the trusts. It is the Company’s policy to compare its derivative fair values to those received by its counterparties in order to validate the model’s outputs. The carrying value of borrowings designated as the hedged item in a SFAS No. 133 fair value hedge are adjusted for changes in fair value due to benchmark interest rates and foreign-currency exchange rates. These valuations are determined through standard bond pricing models and option models (when applicable) using the stated terms of the borrowings, and observable yield curves, foreign currency exchange rates, and volatilities.

During 2008 and 2009, the bid/ask spread widened significantly for certain interest rate indices for which the Company had derivatives as a result of market inactivity. As such, significant adjustments for the bid/ask spread and unobservable inputs were used in the fair value calculation resulting in these instruments being classified as level 3 in the hierarchy. Additionally, significant unobservable inputs were used to model the amortizing notional of some swaps tied to securitized asset balances and as such, these derivatives have been classified as level 3 in the hierarchy.

Residual Interests

The Residual Interests are carried at fair value in the financial statements. No active market exists for student loan Residual Interests; as such, the fair value is calculated using discounted cash flow models and option models. Observable inputs from active markets are used where available, including yield curves and volatilities. Significant unobservable inputs such as prepayment speeds, default rates, certain bonds’ costs of funds and discount rates, are used in determining the fair value and require significant judgment. These unobservable inputs are internally determined based upon analysis of historical data and expected industry trends. On a quarterly basis the Company back tests its prepayment speed, default rates and costs of funds assumptions by comparing those assumptions to actuals experienced. Additionally, the Company uses non-binding broker quotes and industry analyst reports which show changes in the indicative prices of the asset-backed securities tranches immediately senior to the Residual Interest as an indication of potential changes in the discount rate used to value the Residual Interests. Market transactions are not available to validate the models’ results. An analysis of the impact of changes to significant inputs is addressed further in Note 6, “Student Loan Securitization.”

The following tables summarize the valuation of the Company’s financial instruments that are marked-to-market on a recurring basis in the consolidated financial statements as of June 30, 2009 and December 31, 2008.


	Fair Value Measurements on a Recurring
	Basis as of June 30, 2009
												Cash
(Dollars in millions)	Level 1			Level 2			Level 3		Total			Collateral			Net

Assets
Available for sale investments	$	—		$	1,187		$	—	$	1,187		$	—		$	1,187
Retained Interest in off-balance sheet securitized loans		—			—			1,821		1,821			—			1,821
Derivative instruments⁽¹⁾⁽²⁾		—			1,584			790		2,374			(1,055	)		1,319

Total Assets	$	—		$	2,771		$	2,611	$	5,382		$	(1,055	)	$	4,327

Liabilities⁽³⁾
Derivative instruments⁽¹⁾⁽²⁾	$	(2	)	$	(1,065	)	$	—	$	(1,067	)	$	772		$	(295	)

Total Liabilities	$	(2	)	$	(1,065	)	$	—	$	(1,067	)	$	772		$	(295	)


	Fair Value Measurements on a Recurring
	Basis as of December 31, 2008
													Cash
(Dollars in millions)	Level 1			Level 2			Level 3			Total			Collateral			Net

Assets
Available for sale investments	$	—		$	861		$	—		$	861		$	—		$	861
Retained Interest in off-balance sheet securitized loans		—			—			2,200			2,200			—			2,200
Derivative instruments⁽¹⁾⁽²⁾		—			3,014			—			3,014			(1,624	)		1,390

Total Assets	$	—		$	3,875		$	2,200		$	6,075		$	(1,624	)	$	4,451

Liabilities⁽³⁾
Derivative instruments⁽¹⁾⁽²⁾	$	(3	)	$	(648	)	$	(341	)	$	(992	)	$	—		$	(992	)

Total Liabilities	$	(3	)	$	(648	)	$	(341	)	$	(992	)	$	—		$	(992	)


⁽¹⁾		Fair value of derivative instruments is comprised of market value less accrued interest and excludes collateral.

⁽²⁾		Level 1 derivatives include euro-dollar futures contracts. Level 2 derivatives include derivatives indexed to interest rate indices and currencies that are considered liquid. Level 3 derivatives include derivatives indexed to illiquid interest rate indices and derivatives for which significant adjustments were made to observable inputs.

⁽³⁾		Borrowings which are the hedged items in a fair value hedge relationship and which are adjusted for changes in value due to benchmark interest rates only are not carried at full fair value and are not reflected in this table.

The following table summarizes the change in balance sheet carrying value associated with Level 3 financial instruments carried at fair value on a recurring basis during the three and six months ended June 30, 2009 and 2008.


	Three Months Ended June 30,
	2009									2008
	Residual			Derivative						Residual			Derivative
(Dollars in millions)	Interests			Instruments			Total			Interests			Instruments			Total

Balance, beginning of period	$	1,951		$	437		$	2,388		$	2,874		$	(52	)	$	2,822
Total gains/(losses) (realized and unrealized):
Included in earnings⁽¹⁾		36			206			242			(43	)		(72	)		(115	)
Included in other comprehensive income		—			—			—			—			—			—
Purchases, issuances and settlements		(166	)		147			(19	)		(286	)		3			(283	)
Transfers in and/or out of Level 3		—			—			—			—			—			—

Balance, end of period	$	1,821		$	790		$	2,611		$	2,545		$	(121	)	$	2,424

Change in unrealized gains/(losses) relating to instruments still held at the reporting date	$	(90	)⁽²⁾	$	339	⁽³⁾	$	249		$	(192	)⁽²⁾	$	(68	)⁽³⁾	$	(260	)


	Six Months Ended June 30,
	2009									2008
	Residual			Derivative						Residual			Derivative
(Dollars in millions)	Interests			Instruments			Total			Interests			Instruments			Total

Balance, beginning of period	$	2,200		$	(341	)	$	1,859		$	3,044		$	(71	)	$	2,973
Total gains/(losses) (realized and unrealized):
Included in earnings⁽¹⁾		(99	)		(124	)		(223	)		17			(62	)		(45	)
Included in other comprehensive income		—			—			—			—			—			—
Purchases, issuances and settlements		(280	)		187			(93	)		(516	)		12			(504	)
Transfers in and/or out of Level 3		—			1,068			1,068			—			—			—

Balance, end of period	$	1,821		$	790		$	2,611		$	2,545		$	(121	)	$	2,424

Change in unrealized gains/(losses) relating to instruments still held at the reporting date	$	(351	)⁽²⁾	$	66	⁽³⁾	$	(285	)	$	(280	)⁽²⁾	$	(49	)⁽³⁾	$	(329	)


⁽¹⁾		“Included in earnings” is comprised of the following amounts recorded in the specified line item in the consolidated statements of income:


	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in millions)	2009			2008			2009			2008

Servicing and securitization revenue	$	36		$	(43	)	$	(99	)	$	17
Gains (losses) on derivative and hedging activities, net		264			(72	)		(28	)		(62	)
Interest expense		(58	)		—			(96	)		—

Total	$	242		$	(115	)	$	(223	)	$	(45	)


⁽²⁾		Recorded in “servicing and securitization revenue (loss)” in the consolidated statements of income.

⁽³⁾		Recorded in “gains (losses) on derivative and hedging activities, net” in the consolidated statements of income.

In addition, at June 30, 2009, the Company had real estate owned assets, related to its Purchased Paper — Mortgage/Properties business, held on its balance sheet at fair value totaling $130 million. These assets are carried at the lower of cost or fair value and as such are marked-to-market on a non-recurring basis. Fair value is determined using significant unobservable inputs primarily based on broker price opinions and are considered Level 3 valuations.

The following table summarizes the fair values of the Company’s financial assets and liabilities, including derivative financial instruments, as of June 30, 2009 and December 31, 2008.


	June 30, 2009									December 31, 2008
	Fair			Carrying						Fair			Carrying
(Dollars in millions)	Value			Value			Difference			Value			Value			Difference

Earning assets
FFELP loans	$	127,239		$	132,306		$	(5,067	)	$	107,319		$	124,220		$	(16,901	)
Private Education Loans		18,035			21,850			(3,815	)		14,141			20,582			(6,441	)
Other loans		364			489			(125	)		619			729			(110	)
Cash and investments		13,458			13,458			—			8,646			8,646			—

Total earning assets		159,096			168,103			(9,007	)		130,725			154,177			(23,452	)

Interest-bearing liabilities
Short-term borrowings		47,160			47,332			172			41,608			41,933			325
Long-term borrowings		110,827			125,880			15,053			93,462			118,225			24,763

Total interest-bearing liabilities		157,987			173,212			15,225			135,070			160,158			25,088

Derivative financial instruments
Floor Income/Cap contracts		(1,143	)		(1,143	)		—			(1,466	)		(1,466	)		—
Interest rate swaps		151			151			—			1,374			1,374			—
Cross currency interest rate swaps		2,323			2,323			—			2,116			2,116			—
Futures contracts		(2	)		(2	)		—			(3	)		(3	)		—
Other		(22	)		(22	)		—			—			—			—
Other
Residual interest in securitized assets		1,821			1,821			—			2,200			2,200			—

Excess of net asset fair value over carrying value							$	6,218								$	1,636

Segment Reporting

6 Months Ended

Jun. 30, 2009

Segment Reporting [Abstract]

Segment Reporting


16.	Segment Reporting

The Company has two primary operating segments as defined in SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” — the Lending operating segment and the APG, formerly known as DMO, operating segment. The Lending and APG operating segments meet the quantitative thresholds for reportable segments identified in SFAS No. 131. Accordingly, the results of operations of the Company’s Lending and APG segments are presented below. The Company has smaller operating segments including the Guarantor Servicing, Loan Servicing, and Upromise operating segments, as well as certain other products and services provided to colleges and universities which do not meet the quantitative thresholds identified in SFAS No. 131. Therefore, the results of operations for these operating segments and the revenues and expenses associated with these other products and services are combined with corporate overhead and other corporate activities within the Corporate and Other reportable segment.

The management reporting process measures the performance of the Company’s operating segments based on the management structure of the Company as well as the methodology used by management to evaluate performance and allocate resources. Management, including the Company’s chief operating decision makers, evaluates the performance of the Company’s operating segments based on their profitability. As discussed further below, management measures the profitability of the Company’s operating segments based on “Core Earnings” net income. Accordingly, information regarding the Company’s reportable segments is provided based on a “Core Earnings” basis. The Company’s “Core Earnings” performance measures are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. “Core Earnings” net income reflects only current period adjustments to GAAP net income as described below. Unlike financial accounting, there is no comprehensive, authoritative guidance for management reporting. The management reporting process measures the performance of the operating segments based on the management structure of the Company and is not necessarily comparable with similar information for any other financial institution. The Company’s operating segments are defined by the products and services they offer or the types of customers they serve, and they reflect the manner in which financial information is currently evaluated by management. Intersegment revenues and expenses are netted within the appropriate financial statement line items consistent with the income statement presentation provided to management. Changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial information.

The Company’s principal operations are located in the United States, and its results of operations and long-lived assets in geographic regions outside of the United States are not significant. In the Lending segment, no individual customer accounted for more than 10 percent of its total revenue during the three months ended June 30, 2009 and 2008. United Student Aid Funds, Inc. (“USA Funds”) is the Company’s largest customer in both the APG and Corporate and Other segments. During the six months ended June 30, 2009 and 2008, USA Funds accounted for 13 percent and 28 percent, respectively, of the aggregate revenues generated by the Company’s APG and Corporate and Other segments. No other customers accounted for more than 10 percent of total revenues in those segments for the years mentioned.

Lending

In the Company’s Lending operating segment, the Company originates and acquires both FFELP loans and Private Education Loans. As of June 30, 2009, the Company managed $188.1 billion of student loans, of which $153.6 billion or 82 percent are federally insured, and has 10 million student and parent customers. In the six months ended June 30, 2009, the Company originated $4 million in mortgage loans which were sold. The Company’s mortgage and other consumer loan portfolio totaled $428 million at June 30, 2009.

Private Education Loans consist of two general types: (1) those that are designed to bridge the gap between the cost of higher education and the amount financed through either capped federally insured loans or the borrowers’ resources, and (2) those that are used to meet the needs of students in alternative learning programs such as career training, distance learning and lifelong learning programs. Most higher education Private Education Loans are made in conjunction with a FFELP loan and as such are marketed through the same channel as FFELP loans by the same sales force. Unlike FFELP loans, Private Education Loans are subject to the full credit risk of the borrower. The Company manages this additional risk through historical risk-performance underwriting strategies, the addition of qualified cosigners and a combination of higher interest rates and loan origination fees that compensate the Company for the higher risk.

APG

The Company’s APG operating segment provides a wide range of accounts receivable and collections services including student loan default aversion services, defaulted student loan portfolio management services, contingency collections services for student loans and other asset classes, and accounts receivable management and collection for purchased portfolios of receivables that are delinquent or have been charged off by their original creditors, and sub-performing and non-performing mortgage loans. The Company’s APG operating segment serves the student loan marketplace through a broad array of default management services on a contingency fee or other pay-for-performance basis to 14 FFELP guarantors and for campus-based programs.

In addition to collecting on its own purchased receivables and mortgage loans, the APG operating segment provides receivable management and collection services for federal agencies, credit card clients and other holders of consumer debt.

The Company concluded in 2008 that its APG purchased paper business no longer produced a strategic fit, and the Company decided to wind down this business. Due to the continued weakening of the U.S. economy, during the second quarter of 2009, the Company recorded $8 million of impairment related to declines in the fair value of mortgage loans and real estate held by the Company’s mortgage purchased paper subsidiary and $13 million of impairment related to the Company’s non-mortgage purchase paper subsidiary. These impairments are recorded within collections revenue (loss) as they are not considered restructuring expenses.

Corporate and Other

The Company’s Corporate and Other segment includes the aggregate activity of its smaller operating segments, primarily its Guarantor Servicing, Loan Servicing and Upromise operating segments. Corporate and Other also includes several smaller products and services, as well as corporate overhead.

In the Guarantor Servicing operating segment, the Company provides a full complement of administrative services to FFELP guarantors including guarantee issuance, account maintenance, and guarantee fulfillment. In the Loan Servicing operating segment, the Company provides a full complement of activities required to service student loans on behalf of lenders who are unrelated to the Company. Such servicing activities generally commence once a loan has been fully disbursed and include sending out payment coupons to borrowers, processing borrower payments, originating and disbursing FFELP Consolidation Loans on behalf of the lender, and other administrative activities required by ED.

Upromise markets and administers a consumer savings network and also provides program management, transfer and servicing agent services, and administration services for 529 college-savings plans. The Company’s other products and services include comprehensive financing and loan delivery solutions that it provides to college financial aid offices and students to streamline the financial aid process. Corporate overhead includes all of the typical headquarter functions such as executive management, accounting and finance, human resources and marketing.

Measure of Profitability

The tables below include the condensed operating results for each of the Company’s reportable segments. Management, including the chief operating decision makers, evaluates the Company on certain performance measures that the Company refers to as “Core Earnings” performance measures for each operating segment. While “Core Earnings” results are not a substitute for reported results under GAAP, the Company relies on “Core Earnings” performance measures to manage each operating segment because it believes these measures provide additional information regarding the operational and performance indicators that are most closely assessed by management.

“Core Earnings” performance measures are the primary financial performance measures used by management to develop the Company’s financial plans, track results, and establish corporate performance targets and incentive compensation. Management believes this information provides additional insight into the financial performance of the core business activities of its operating segments. Accordingly, the tables presented below reflect “Core Earnings” operating measures reviewed and utilized by management to manage the business. Reconciliation of the “Core Earnings” segment totals to the Company’s consolidated operating results in accordance with GAAP is also included in the tables below.

Segment Results and Reconciliations to GAAP


	Three Months Ended June 30, 2009
						Corporate			Total “Core					Total
(Dollars in millions)	Lending		APG			and Other			Earnings”		Adjustments⁽²⁾			GAAP

Interest income:
FFELP Stafford and Other Student Loans	$	310	$	—		$	—		$	310	$	14		$	324
FFELP Consolidation Loans		394		—			—			394		67			461
Private Education Loans		559		—			—			559		(166	)		393
Other loans		18		—			—			18		—			18
Cash and investments		4		—			4			8		(1	)		7

Total interest income		1,285		—			4			1,289		(86	)		1,203
Total interest expense		824		5			3			832		(13	)		819

Net interest income (loss)		461		(5	)		1			457		(73	)		384
Less: provisions for loan losses		402		—			—			402		(124	)		278

Net interest income (loss) after provisions for loan losses		59		(5	)		1			55		51			106
Contingency fee revenue		—		73			—			73		—			73
Collections revenue		—		22			—			22		—			22
Guarantor servicing fees		—		—			25			25		—			25
Other income (loss)		360		—			46			406		(481	)		(75	)

Total other income		360		95			71			526		(481	)		45
Restructuring expenses		4		—			—			4		—			4
Operating expenses		141		80			85			306		10			316

Total expenses		145		80			85			310		10			320

Income (loss) before income tax expense (benefit)		274		10			(13	)		271		(440	)		(169	)
Income tax expense (benefit)⁽¹⁾		102		4			(5	)		101		(147	)		(46	)
Less: net income attributable to noncontrolling interest		—		—			—			—		—			—

Net income (loss) attributable to SLM Corporation	$	172	$	6		$	(8	)	$	170	$	(293	)	$	(123	)

Economic Floor Income (net of tax) not included in “Core Earnings”	$	89	$	—		$	—		$	89


⁽¹⁾		Income taxes are based on a percentage of net income before tax for each individual reportable segment.

⁽²⁾		“Core Earnings” adjustments to GAAP:


	Three Months Ended June 30, 2009
	Net Impact of			Net Impact of					Net Impact
	Securitization			Derivative			Net Impact of		of Acquired
(Dollars in millions)	Accounting			Accounting			Floor Income		Intangibles			Total

Net interest income (loss)	$	(230	)	$	67		$	90	$	—		$	(73	)
Less: provisions for loan losses		(124	)		—			—		—			(124	)

Net interest income (loss) after provisions for loan losses		(106	)		67			90		—			51
Contingency fee revenue		—			—			—		—			—
Collections revenue		—			—			—		—			—
Guarantor servicing fees		—			—			—		—			—
Other income (loss)		81			(562	)		—		—			(481	)

Total other income (loss)		81			(562	)		—		—			(481	)
Restructuring expenses		—			—			—		—			—
Operating expenses		—			—			—		10			10

Total expenses		—			—			—		10			10

Total pre-tax “Core Earnings” adjustments to GAAP	$	(25	)	$	(495	)	$	90	$	(10	)		(440	)

Income tax benefit													(147	)
Less: net income attributable to noncontrolling interest													—

Total “Core Earnings” adjustments to GAAP												$	(293	)


	Three Months Ended June 30, 2008
						Corporate			Total “Core					Total
(Dollars in millions)	Lending		APG			and Other			Earnings”		Adjustments⁽²⁾			GAAP

Interest income:
FFELP Stafford and Other Student Loans	$	524	$	—		$	—		$	524	$	(26	)	$	498
FFELP Consolidation Loans		908		—			—			908		(138	)		770
Private Education Loans		665		—			—			665		(256	)		409
Other loans		21		—			—			21		—			21
Cash and investments		81		—			5			86		(15	)		71

Total interest income		2,199		—			5			2,204		(435	)		1,769
Total interest expense		1,605		7			5			1,617		(251	)		1,366

Net interest income (loss)		594		(7	)		—			587		(184	)		403
Less: provisions for loan losses		192		—			—			192		(49	)		143

Net interest income (loss) after provisions for loan losses		402		(7	)		—			395		(135	)		260
Contingency fee revenue		—		84			—			84		—			84
Collections revenue		—		27			—			27		(1	)		26
Guarantor servicing fees		—		—			24			24		—			24
Other income		62		—			45			107		322			429

Total other income		62		111			69			242		321			563
Restructuring expenses		31		5			11			47		—			47
Operating expenses		155		110			73			338		16			354

Total expenses		186		115			84			385		16			401

Income (loss) before income tax expense (benefit)		278		(11	)		(15	)		252		170			422
Income tax expense (benefit)⁽¹⁾		103		(4	)		(6	)		93		60			153
Less: net income attributable to noncontrolling interest		—		3			—			3		—			3

Net income (loss) attributable to SLM Corporation	$	175	$	(10	)	$	(9	)	$	156	$	110		$	266

Economic Floor Income (net of tax) not included in “Core Earnings”	$	22	$	—		$	—		$	22


⁽¹⁾		Income taxes are based on a percentage of net income before tax for each individual reportable segment.

⁽²⁾		“Core Earnings” adjustments to GAAP:


	Three Months Ended June 30, 2008
	Net Impact of			Net Impact of					Net Impact
	Securitization			Derivative		Net Impact of			of Acquired
(Dollars in millions)	Accounting			Accounting		Floor Income			Intangibles			Total

Net interest income (loss)	$	(254	)	$	89	$	(19	)	$	—		$	(184	)
Less: provisions for loan losses		(49	)		—		—			—			(49	)

Net interest income (loss) after provisions for loan losses		(205	)		89		(19	)		—			(135	)
Contingency fee revenue		—			—		—			—			—
Collections revenue (loss)		(1	)		—		—			—			(1	)
Guarantor servicing fees		—			—		—			—			—
Other income (loss)		(40	)		362		—			—			322

Total other income (loss)		(41	)		362		—			—			321
Restructuring expenses		—			—		—			—			—
Operating expenses		1			—		—			15			16

Total expenses		1			—		—			15			16

Total pre-tax “Core Earnings” adjustments to GAAP	$	(247	)	$	451	$	(19	)	$	(15	)		170

Income tax expense													60
Less: net income attributable to noncontrolling interest													—

Total “Core Earnings” adjustments to GAAP												$	110


	Six Months Ended June 30, 2009
						Corporate			Total “Core					Total
(Dollars in millions)	Lending		APG			and Other			Earnings”		Adjustments⁽²⁾			GAAP

Interest income:
FFELP Stafford and Other Student Loans	$	672	$	—		$	—		$	672	$	(5	)	$	667
FFELP Consolidation Loans		833		—			—			833		117			950
Private Education Loans		1,122		—			—			1,122		(342	)		780
Other loans		35		—			—			35		—			35
Cash and investments		6		—			9			15		(2	)		13

Total interest income		2,668		—			9			2,677		(232	)		2,445
Total interest expense		1,773		10			8			1,791		55			1,846

Net interest income (loss)		895		(10	)		1			886		(287	)		599
Less: provisions for loan losses		751		—			—			751		(223	)		528

Net interest income (loss) after provisions for loan losses		144		(10	)		1			135		(64	)		71
Contingency fee revenue		—		148			—			148		—			148
Collections revenue		—		—			—			—		1			1
Guarantor servicing fees		—		—			59			59		—			59
Other income (loss)		461		—			96			557		(432	)		125

Total other income		461		148			155			764		(431	)		333
Restructuring expenses		5		2			2			9		—			9
Operating expenses		272		169			156			597		20			617

Total expenses		277		171			158			606		20			626

Income (loss) before income tax expense (benefit)		328		(33	)		(2	)		293		(515	)		(222	)
Income tax expense (benefit)⁽¹⁾		122		(12	)		(1	)		109		(187	)		(78	)
Less: net income attributable to noncontrolling interest		—		—			—			—		—			—

Net income (loss) attributable to SLM Corporation	$	206	$	(21	)	$	(1	)	$	184	$	(328	)	$	(144	)

Economic Floor Income (net of tax) not included in “Core Earnings”	$	168	$	—		$	—		$	168


⁽¹⁾		Income taxes are based on a percentage of net income before tax for each individual reportable segment.

⁽²⁾		“Core Earnings” adjustments to GAAP:


	Six Months Ended June 30, 2009
	Net Impact of			Net Impact of					Net Impact
	Securitization			Derivative			Net Impact of		of Acquired
(Dollars in millions)	Accounting			Accounting			Floor Income		Intangibles			Total

Net interest income (loss)	$	(473	)	$	17		$	169	$	—		$	(287	)
Less: provisions for loan losses		(223	)		—			—		—			(223	)

Net interest income (loss) after provisions for loan losses		(250	)		17			169		—			(64	)
Contingency fee revenue		—			—			—		—			—
Collections revenue		1			—			—		—			1
Guarantor servicing fees		—			—			—		—			—
Other income (loss)		26			(458	)		—		—			(432	)

Total other income (loss)		27			(458	)		—		—			(431	)
Restructuring expenses		—			—			—		—			—
Operating expenses		1			—			—		19			20

Total expenses		1			—			—		19			20

Total pre-tax “Core Earnings” adjustments to GAAP	$	(224	)	$	(441	)	$	169	$	(19	)		(515	)

Income tax benefit													(187	)
Less: net income attributable to noncontrolling interest													—

Total “Core Earnings” adjustments to GAAP												$	(328	)


	Six Months Ended June 30, 2008
						Corporate			Total “Core					Total
(Dollars in millions)	Lending		APG			and Other			Earnings”		Adjustments⁽²⁾			GAAP

Interest income:
FFELP Stafford and Other Student Loans	$	1,018	$	—		$	—		$	1,018	$	(56	)	$	962
FFELP Consolidation Loans		1,896		—			—			1,896		(290	)		1,606
Private Education Loans		1,415		—			—			1,415		(562	)		853
Other loans		45		—			—			45		—			45
Cash and investments		222		—			11			233		(39	)		194

Total interest income		4,596		—			11			4,607		(947	)		3,660
Total interest expense		3,429		14			10			3,453		(472	)		2,981

Net interest income (loss)		1,167		(14	)		1			1,154		(475	)		679
Less: provisions for loan losses		374		—			—			374		(94	)		280

Net interest income (loss) after provisions for loan losses		793		(14	)		1			780		(381	)		399
Contingency fee revenue		—		169			—			169		—			169
Collections revenue		—		84			—			84		—			84
Guarantor servicing fees		—		—			58			58		—			58
Other income		106		—			97			203		119			322

Total other income		106		253			155			514		119			633
Restructuring expenses		46		6			15			67		—			67
Operating expenses		318		216			144			678		32			710

Total expenses		364		222			159			745		32			777

Income (loss) before income tax expense (benefit)		535		17			(3	)		549		(294	)		255
Income tax expense (benefit)⁽¹⁾		197		6			(1	)		202		(112	)		90
Less: net income attributable to noncontrolling interest		—		3			—			3		—			3

Net income (loss) attributable to SLM Corporation	$	338	$	8		$	(2	)	$	344	$	(182	)	$	162

Economic Floor Income (net of tax) not included in “Core Earnings”	$	49	$	—		$	—		$	49


⁽¹⁾		Income taxes are based on a percentage of net income before tax for each individual reportable segment.

⁽²⁾		“Core Earnings” adjustments to GAAP:


	Six Months Ended June 30, 2008
	Net Impact of			Net Impact of						Net Impact
	Securitization			Derivative			Net Impact of			of Acquired
(Dollars in millions)	Accounting			Accounting			Floor Income			Intangibles			Total

Net interest income (loss)	$	(449	)	$	(2	)	$	(24	)	$	—		$	(475	)
Less: provisions for loan losses		(94	)		—			—			—			(94	)

Net interest income (loss) after provisions for loan losses		(355	)		(2	)		(24	)		—			(381	)
Contingency fee revenue		—			—			—			—			—
Collections revenue		—			—			—			—			—
Guarantor servicing fees		—			—			—			—			—
Other income		30			89			—			—			119

Total other income		30			89			—			—			119
Restructuring expenses		—			—			—			—			—
Operating expenses		1			—			—			31			32

Total expenses		1			—			—			31			32

Total pre-tax “Core Earnings” adjustments to GAAP	$	(326	)	$	87		$	(24	)	$	(31	)		(294	)

Income tax benefit														(112	)
Less: net income attributable to noncontrolling interest														—

Total “Core Earnings” adjustments to GAAP													$	(182	)

Summary of “Core Earnings” Adjustments to GAAP

The adjustments required to reconcile from the Company’s “Core Earnings” results to its GAAP results of operations relate to differing treatments for securitization transactions, derivatives, Floor Income, and certain other items that management does not consider in evaluating the Company’s operating results. The following table reflects aggregate adjustments associated with these areas for the three and six months ended June 30, 2009 and 2008.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in millions)	2009			2008			2009			2008

“Core Earnings” adjustments to GAAP:
Net impact of securitization accounting⁽¹⁾	$	(25	)	$	(247	)	$	(224	)	$	(326	)
Net impact of derivative accounting⁽²⁾		(495	)		451			(441	)		87
Net impact of Floor Income⁽³⁾		90			(19	)		169			(24	)
Net impact of acquired intangibles⁽⁴⁾		(10	)		(15	)		(19	)		(31	)
Net tax effect⁽⁵⁾		147			(60	)		187			112

Total “Core Earnings” adjustments to GAAP	$	(293	)	$	110		$	(328	)	$	(182	)


⁽¹⁾		Securitization: Under GAAP, certain securitization transactions in the Company’s Lending operating segment are accounted for as sales of assets. Under the Company’s “Core Earnings” presentation for the Lending operating segment, the Company presents all securitization transactions on a “Core Earnings” basis as long-term non-recourse financings. The upfront “gains” on sale from securitization transactions as well as ongoing “servicing and securitization revenue” presented in accordance with GAAP are excluded from “Core Earnings” net income and replaced by the interest income, provisions for loan losses, and interest expense as they are earned or incurred on the securitization loans. The Company also excludes transactions with its off-balance sheet trusts from “Core Earnings” net income as they are considered intercompany transactions on a “Core Earnings” basis.

⁽²⁾		Derivative accounting: “Core Earnings” net income excludes periodic unrealized gains and losses arising primarily in the Company’s Lending operating segment, and to a lesser degree in the Company’s Corporate and Other reportable segment, that are caused primarily by the one-sided mark-to-market derivative valuations prescribed by SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” on derivatives that do not qualify for “hedge treatment” under GAAP. Under the Company’s “Core Earnings” presentation, the Company recognizes the economic effect of these hedges, which generally results in any cash paid or received being recognized ratably as an expense or revenue over the hedged item’s life.

⁽³⁾		Floor Income: The timing and amount (if any) of Floor Income earned in the Company’s Lending operating segment is uncertain and in excess of expected spreads. Therefore, the Company only includes such income in “Core Earnings” when it is Fixed Rate Floor Income that is economically hedged. The Company employs derivatives, primarily Floor Income Contracts, to economically hedge Floor Income. As discussed above in “Derivative Accounting,” these derivatives do not qualify as effective accounting hedges, and therefore, under GAAP, they are marked-to-market through the “gains (losses) on derivative and hedging activities, net” line in the consolidated statement of income with no offsetting gain or loss recorded for the economically hedged items. For “Core Earnings,” the Company reverses the fair value adjustments on the Floor Income Contracts economically hedging Floor Income and includes in income the amortization of net premiums received on contracts economically hedging Fixed Rate Floor Income.

⁽⁴⁾		Acquired Intangibles: The Company excludes goodwill and intangible impairment and amortization of acquired intangibles.

⁽⁵⁾		Net Tax Effect: Such tax effect is based upon the Company’s “Core Earnings” effective tax rate for the year.

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008	Jun. 30, 2009	Jun. 30, 2008
Preferred stock, series A
Statement [Line Items]
Dividends per preferred share	0.87	0.87	1.74	1.74
Preferred stock, series B
Statement [Line Items]
Dividends per preferred share	0.51	0.88	1.17	2.31
Preferred stock, series C
Statement [Line Items]
Dividends per preferred share	18.13	18.13	36.25	33.23
Retained Earnings \| Preferred stock, series A
Statement [Line Items]
Dividends per preferred share	0.87	0.87	1.74	1.74
Retained Earnings \| Preferred stock, series B
Statement [Line Items]
Dividends per preferred share	0.51	0.88	1.17	2.31
Retained Earnings \| Preferred stock, series C
Statement [Line Items]
Dividends per preferred share	18.13	18.13	36.25	33.23

Label	Element	Value
Preferred stock, series C \| Total Stockholders Equity Member
Dividends per preferred share	slm_DividendsPerPreferredShare	33.23
Dividends per preferred share	slm_DividendsPerPreferredShare	18.13
Dividends per preferred share	slm_DividendsPerPreferredShare	36.25
Dividends per preferred share	slm_DividendsPerPreferredShare	18.13
Preferred stock, series A \| Total Stockholders Equity Member
Dividends per preferred share	slm_DividendsPerPreferredShare	1.74
Dividends per preferred share	slm_DividendsPerPreferredShare	0.87
Dividends per preferred share	slm_DividendsPerPreferredShare	1.74
Dividends per preferred share	slm_DividendsPerPreferredShare	0.87
Preferred stock, series B \| Total Stockholders Equity Member
Dividends per preferred share	slm_DividendsPerPreferredShare	2.31
Dividends per preferred share	slm_DividendsPerPreferredShare	0.88
Dividends per preferred share	slm_DividendsPerPreferredShare	1.17
Dividends per preferred share	slm_DividendsPerPreferredShare	0.51