SEC Filing | SLM Corporation

SLM CORPORATION

Date: November 7, 2011

/s/ Jonathan C. Clark

Jonathan C. Clark

Executive Vice President and Chief Financial Officer

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Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 7, 2011

SLM CORPORATION

(Exact name of registrant as specified in its charter)


Delaware	001-13251	52-2013874
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

300 Continental Drive, Newark, Delaware		19713
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (302) 283-8000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events.

SLM Corporation frequently provides relevant information to its investors via posting to its corporate website. On November 7, 2011, a presentation entitled “Q3 2011 Investor Presentation” was made available on SLM Corporation’s web site at https://www1.salliemae.com/about/investors/webcasts/default.htm. In addition, the document is being furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d)

Exhibits.



99.1*		Q3 2011 Investor Presentation.

*	Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX


Exhibit No.		Description

99.1*		Q3 2011 Investor Presentation.

*	Furnished herewith.

Exhibit 99.1

SLM CORPORATION

Q3 2011 Investor Presentation

Exhibit 99.1

The following information is current as of November 7, 2011 (unless otherwise noted) and should be read in connection with SLM Corporation’s

2010 Annual Report on Form 10-K (the “2010 Form 10-K”) and subsequent reports filed with the Securities and Exchange Commission (the

“SEC”). Our actual results may differ materially from the forward-looking statements and information contained in this Presentation due to a

variety of factors, including, but not limited to, those described in our 2010 Form 10-K and our second quarter Form 10-Q in “Risk Factors”

and in subsequent reports filed with the SEC.

This Presentation contains forward-looking statements and information based on management’s current expectations as of the date of this

dependent upon future events, are forward-looking statements. Forward-looking statements are subject to risks, uncertainties, assumptions

and other factors that may cause actual results to be materially different from those reflected in such forward-looking statements. These

factors include, among others, increases in financing costs; limits on liquidity; increases in costs associated with compliance with laws and

regulations; changes in accounting standards and the impact of related changes in significant accounting estimates; any adverse outcomes in

any significant litigation to which we are a party; credit risk associated with our exposure to third parties, including counterparties to our

derivative transactions; and changes in the terms of student loans and the educational credit marketplace (including changes resulting from

new laws and the implementation of existing laws). We could also be affected by, among other things: changes in our funding costs and

availability; reductions to our credit ratings or the credit ratings of the United States of America; failures of our operating systems or

infrastructure, including those of third-party vendors; damage to our reputation; failures to successfully implement cost-cutting and

restructuring initiatives and adverse effects of such initiatives on our business; changes in the demand for educational financing or in financing

preferences of lenders, educational institutions, students and their families; changes in law and regulations with respect to the student lending

business and financial institutions generally; increased competition from banks and other consumer lenders; the creditworthiness of our

customers; changes in the general interest rate environment, including the rate relationships among relevant money-market instruments and

those of our earning assets versus our funding arrangements; changes in general economic conditions; and changes in the demand for debt

management services. The preparation of our consolidated financial statements also requires management to make certain estimates and

assumptions including estimates and assumptions about future events. These estimates or assumptions may prove to be incorrect. All forward-

looking statements contained in this Presentation are qualified by these cautionary statements and are made only as of the date of this

Presentation. We do not undertake any obligation to update or revise these forward-looking statements to conform the statement to actual

results or changes in our expectations.

FORWARD-LOOKING STATEMENTS

presentation.

Statements

that

are

not

historical

facts,

including

statements

about

our

beliefs

expectations

and

statements

that

assume

or are

SLM CORPORATION

SLM Corporation Overview

Page 4

The U.S. Student Loan Market

Page 12

Credit Quality

Page 20

Servicing: A Competitive Advantage

Page 31

Funding Diversity and Liquidity

Page 37

Risk-Adjusted Capitalization

Page 50

FFELP Appendix

Page 53

Private Credit Appendix

Page 58

SLM Appendix

Page 82

SLM CORPORATION OVERVIEW

SLM CORPORATION

#1 saving and paying for college company with 40-

years of leadership in the education lending market

#1 servicer and collector of student loans in the U.S.

servicing FFELP and Private Credit education loans

Serving 25 million unique customers, as of September

30, 2011

Servicing for third parties, including 3.4 million loans for

the Department of Education (“ED”), as of September

30, 2011

Fully independent private sector company with scale

and a broad franchise, traded on the NYSE (ticker: SLM)

$177

billion student loan portfolio, 80% of which is U.S.

government guaranteed, as of September 30, 2011

96% of student loans were funded with term liabilities

of various durations, as of September 30, 2011

Federal Family Education Loan Program (“FFELP”).

As of September 30, 2011

Net of provision

As of September 30, 2011

A BRIEF CORPORATE HISTORY

1965

•

Congress creates the Guaranteed Student Loan Program,

currently known as FFELP

1972

•

Congress establishes, as a GSE, the Student Loan

Marketing Association or “Sallie Mae”

1996

•

Privatization of Sallie Mae approved by Congress, SLM

Corporation holding company created

2004

•

GSE dissolved…

SLM Corporation becomes a fully

independent, private sector corporation

2008

•

Challenging economy; U.S. Government support of FFELP,

private education lending curtailed

2009

•

SLM wins 5 year contract to service for US Dept Education

•

Smart Option private loan introduced

•

FFELP eliminated in legislative reform July 2010

•

SLM acquires $25 billion FFELP portfolio from Student Loan

Corporation

2010

SLM Corporate

Debt Ratings

Moody’s

S & P

Fitch

Long

Term

Ba1

BBB

BBB-

Short

Term

Not-

Prime

A-3

Outlook

Stable

Loan Portfolio

Loan Type

$billions

FFELP Loans

$140.7

80%

Private

$36.1

20%

Total Portfolio

$176.8

100%

Education

($ millions), except per share amounts

Q3 11

Q2 11

Q3 10

EPS (Reported)

$0.36

$0.48

$0.37

Net Income

$188

$260

$202

Net Interest Income

$758

$761

$775

Loan Loss Provision

$409

$291

$358

Fee and Other Income - Excluding Debt Repurchase Gains

$198

$193

$196

Debt Repurchase Gains

$18

Operating Expenses

$285

$268

$302

Tangible Capital Ratio

2.2%

2.3%

2.0%

Average Student Loans

$178,620

$180,783

$184,139

Q3 11 “CORE EARNINGS”

SUMMARY

•

Private Credit student loan originations increased 29% year-over-year

•

Loan loss provision includes $124 million attributable to the adoption of new

accounting guidance for troubled debt restructurings

•

Credit quality continues to improve

* For a GAAP to “Core Earnings” reconciliation, see slide 83

FFELP LOAN SEGMENT EARNINGS DETAIL

($ millions)

Q3 11

Q2 11

Q3 10

Average Student Loans

$141,848

$143,999

$147,822

Net Interest Income after Provision - FFELP

$337

$342

$340

Net Interest Margin - FFELP

0.97%

0.98%

0.94%

Operating Expenses

$188

$192

$182

OpEx Annualized as a % of Average Student Loans

0.52%

0.53%

0.49%

($ millions)

Q3 11

Q2 11

Q3 10

Private Originations

$1,077

$264

$835

Average Student Loans

$36,772

$36,784

$36,317

Net Interest Income after Provision - Private

$23

$136

$79

Net Interest Margin - Private Education

4.03%

4.05%

3.87%

Operating Expenses

$82

$73

$99

OpEx Annualized as a % of Average Student Loans

0.88%

0.80%

1.08%

CONSUMER LENDING SEGMENT EARNINGS

DETAIL

THREE ASPECTS OF THE SLM BUSINESS

MODEL

Consumer Lending

•

Largest originator of Private Education Loans

•

Significant long term value

•

Legacy portfolio quality vastly improved

Business Services

•

Businesses include

loan

servicing

and

collections

for

Department

Education,

payment

processing for colleges and universities and 529 plan servicing

•

Attractive fee business with little capital required & high return on equity

•

ABS servicing cash flows are super senior

•

Opportunities exist to expand services provided, including industry consolidation

•

Efficient cost structure and top performer

FFELP Loan Portfolio

•

Existing portfolios generating substantial income and cash flow

•

Residuals stable due to minimal credit and interest rate risk

•

Actively seeking to acquire additional FFELP loan portfolios

•

Approximately $30 billion of FFELP assets acquired since January

2010

OFFICE OF THE CHIEF EXECUTIVE

OFFICER

Al Lord,

Chief Executive Officer

Jack Remondi, President &

Chief Operating Officer

Jonathan Clark, EVP & Chief

Financial Officer

Laurent Lutz, EVP & General

Counsel

David West, SVP & Chief

Credit Officer

April Stercula, SVP

Administration

Steve Hauber, SVP &

Chief Audit Officer

THE U.S. STUDENT LOAN MARKET

FAVORABLE STUDENT LOAN MARKET

TRENDS

Source: College Board

Note: Academic years, average published tuition, fees, room and board charges at four-year

institutions; enrollment-weighted

Higher Education Enrollment (millions)

Source: National Center for Education Statistics

Note: Total enrollment in all degree-granting institutions; middle alternative projections

for 2010 onward

Annual Cost of Education ($ thousands)

Source: President’s 2012 Budget. Net commitments by fiscal year

Note: Excludes consolidation volume

Federal Student Loan Origination Volume ($ billions)

Source: U.S. Census Bureau, Current Population Survey, 2010 Annual Social and Economic

Supplement. Represents median earnings for a full time, year-round worker over age 25.

Unemployment data as of Dec. 2010. Represents unemployment for civilian non-institutional

population over age 25.

Unemployment

Average annual income

18.2

19.1

20.4

20.6

20.7

20.9

21.3

21.6

22.0

22.2

22.5

22.8

23.0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

10.5

11.4

12.1

12.8

13.6

14.4

15.2

16.2

17.1

$26.1

$27.5

$28.7

$30.5

$32.3

$34.2

$35.5

$37.0

$38.6

2004

2005

2006

2007

2008

2009

2010

2011

2012

Public

Private

45.6

51.7

55.8

58.9

64.4

75.8

94.5

104.3

116.1

124.3

131.6

139.4

147.8

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

10%

12%

14%

16%

20,000

40,000

60,000

80,000

100,000

120,000

Less than

H.S.

High school

Some college

Associate

Bachelor's

Master's

Doctorate

Professional

Relationship Between Higher Education, Income and

Employment

COLLEGE GRADS EXPERIENCE

LOWER LEVELS OF UNEMPLOYMENT

Total Unemployment Rate

Unemployment Rate with a Bachelor's Degree or Higher

Source: U.S. Department of Labor, Bureau of Labor Statistics as of 9/30/2011

SLM PRIVATE EDUCATION LOAN

ORIGINATIONS

-70%

-60%

-50%

-40%

-30%

-20%

-10%

10%

20%

30%

40%

$200

$400

$600

$800

$1,000

$1,200

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

Originations

Y/Y Growth (%)

SLM’S PRIVATE EDUCATION LOAN

PORTFOLIO

Private Education Loan Portfolio Characteristics

$36 billion portfolio

20% of SLM’s total student loan portfolio

Loans are based on floating interest rates, with loan margins determined

by the credit quality of the borrower and/or cosigner

Approximately 61% of portfolio has a cosigner, typically a parent

Higher education loans typically non-dischargeable in bankruptcy

Integrated underwriting, servicing and collections

As of September 30, 2011

SLM’S NEW PRIVATE EDUCATION LOAN

PRODUCT

Smart

Option

Student

Loan

product

offers

three

repayment

choices

designed

to help borrowers balance their goals and budget while in school

Interest

Only

Requires

interest

only

payment

during

in-school

period

Fixed Repayment -

Requires $25 monthly payments during in-school period

Deferred Repayment –

Allows deferred payments while the customer is in school

Repayment

term

driven

cumulative

amount

borrowed

and

grade

level

Full communication with customers during in-school period

Full collection activities employed at both the customer and cosigner level

All loans certified by the school’s financial aid office to ensure that customers

borrow no more than the cost of attendance

Private education loan products bridge the funding gap between the cost of a college education and

funds available through U.S. Department of Education (ED) programs, grants, and other sources

Estimates for academic year 2010-11 project that 20 million students will enroll in higher education and

incur costs of over $410 billion; $9 billion of that is funded by private education loans

Assuming

Federal

Loans

and

Grants

remain

constant

–

increase

the

cost

education

would

result in a $15 billion incremental funding requirement for students and families

Source: College Board, Trends in College Pricing, U.S. Department of Education 2010

Cost of

attendance

gap

Cost of College (Based on a Four-Year Term)

Total Cost of Education (in billions)

2010/2011 Academic Year

Cost of

attendance

gap

AY 2000-2001

AY 2010-2011

ROLE OF PRIVATE EDUCATION LOAN

Source: College Board, U.S. Department of Education & Company analysis

$103 B

$109 B

$189 B

$9 B

Federal

Loans

Family

Contributions

Grants

Private

Education

Loans

$17,125

$31,000

$112,235

$42,588

$147,972

$64,560

Full

-Time

Private School

Full

-Time

Public School

Full

-Time

Private School

Full

-Time

Public School

ED Lending Limit

Cost of attendance gap

PRIVATE CREDIT INDUSTRY ORIGINATIONS

2009-10 academic year market share approximately 33%

Source: College

Board,

Trends

Higher

Education

Series

(2010).

2009-2010

industry

data

preliminary. Data reported

by academic year, SLM quarterly data converted to academic year basis.

Private Education Loans declined as result of an increase in federal student loan limits, an

overall increase in the use of federal student loans as well as an increase in federal

grants.

CREDIT QUALITY

LOAN LOSSES

Private Education

Loans

(2)

20%

U.S. Government

Guaranteed Loans

(2)

80%

Charge-Offs

(1)

= 0.06%

Charge-Offs

(1)

= 2.93%

Total Charge-Offs

(1)

= 0.64%

(1)

All data as of September 30, 2011. Annualized FFELP charge-offs as a percentage of average FFELP loans. Annualized Private Education Loan charge-offs as

a percentage of average Private Education Loans. Annualized Total charge-offs as a percentage of average FFELP Loans and Private Education Loans.

(2)

Percentages of total student loan portfolio based upon average portfolio balances.

Student Loan

Portfolio

(2)

(1)

Payments due includes all periods of active repayment, whether the borrower was delinquent or current. Also included are

periods spent in deferment, although payments are typically not due during this time. Periods in a forbearance status are not included.

(2)

Excludes Sallie Mae Smart Option, LAW, MED, MBA, and bar-study/residency loans.

SLM PRIVATE CREDIT DEFAULT EMERGENCE PROFILE

PAYMENTS DUE

(1)

–

TRADITIONAL VS. NON-TRADITIONAL

PRIVATE

CREDIT

DEFAULT

PERFORMANCE

The probability of default substantially diminishes as the number of payments and years

of seasoning increases

56%

11%

56%

66%

74%

79%

83%

86%

90%

92%

94%

96%

97%

98%

99%

100%

20%

40%

60%

80%

100%

108

120

132

144

156

168

180

# Payments Made

Defaults Per Payments Made

Cumulative Defaults

Historical Defaults by Payments Made

Historical Defaults by Months in Repayment

13%

16%

13%

10%

20%

36%

49%

59%

68%

74%

79%

83%

86%

89%

92%

95%

98%

100%

20%

40%

60%

80%

100%

108

120

132

144

156

168

180

Months Since Repayment Begin Date

Defaults Per Months Since Repayment Begin Date

Cumulative Defaults

Non-Traditional loans represent approximately 10% of the Private Education Loan

portfolio but nearly a third of charge-offs

CHARGE-OFF TRENDS

MIX OF TRADITIONAL VS. NON-TRADITIONAL

$ Charge-offs

Charge-off rate as a % of

repayment balance

(1) Charge-offs as a percentage of average loans in repayment annualized for the quarters presented

PRIVATE EDUCATION LOAN PORTFOLIO

PERFORMANCE

Q3 11

Q2 11

Q1 11

Q4 10

Q3 10

Charge-offs - Traditional Portfolio

(1)

2.9%

2.8%

2.9%

3.6%

3.9%

Charge-offs - Non-Traditional Portfolio

(1)

11.5%

12.5%

13.4%

14.9%

17.6%

Charge-offs - Total Portfolio

(1)

3.7%

3.9%

4.8%

5.4%

90+ Day Delinq as a % of Repay - Traditional Portfolio

4.0%

3.7%

4.1%

4.2%

4.5%

90+ Day Delinq as a % of Repay - Non-Traditional Portfolio

14.3%

13.2%

14.4%

15.0%

16.0%

90+ Day Delinq as a % of Repay - Total Portfolio

5.0%

4.6%

5.1%

5.3%

5.7%

Forb as a % of Forb & Repay - Traditional Portfolio

4.3%

4.5%

4.4%

4.1%

Forb as a % of Forb & Repay - Non-Traditional Portfolio

6.7%

7.0%

6.5%

6.1%

Forb as a % of Forb & Repay - Total Portfolio

4.5%

4.7%

4.6%

4.3%

Allowance as a % of Loans in Repay - Traditional Portfolio

5.7%

5.2%

5.1%

4.9%

5.1%

Allowance as a % of Loans in Repay - Non-Traditional Portfolio

25.4%

24.8%

27.1%

28.2%

31.4%

Allowance as a % of Loans in Repay - Total Portfolio

7.5%

7.1%

7.2%

7.3%

7.9%

PRIVATE EDUCATION LOAN PORTFOLIO

PERFORMANCE

(1) Charge-offs as a percentage of average loans in repayment annualized for the quarters presented

Traditional

Loans

with

Cosigner

Q3 11

Q2 11

Q1 11

Q4 10

Q3 10

Outstanding Balance as a % of Total

59%

58%

57%

56%

90+ Delinquency as a % of Repayment

2.9%

2.7%

3.0%

3.1%

3.3%

Forbearance as a % of Repayment & Forbearance

3.8%

4.0%

3.9%

4.0%

3.8%

Charge-Offs

Repayment

(1)

1.9%

1.8%

2.0%

2.4%

Traditional

Loans

without

Cosigner

Q3 11

Q2 11

Q1 11

Q4 10

Q3 10

Outstanding Balance as a % of Total

32%

33%

90+ Delinquency as a % of Repayment

5.9%

5.5%

5.9%

6.0%

6.3%

Forbearance as a % of Repayment & Forbearance

4.9%

5.1%

4.9%

4.5%

Charge-Offs

Repayment

(1)

4.9%

4.6%

4.8%

5.1%

6.3%

Non-Traditional

Loans

with

Cosigner

Q3 11

Q2 11

Q1 11

Q4 10

Q3 10

Outstanding Balance as a % of Total

90+ Delinquency as a % of Repayment

12.2%

11.0%

12.0%

12.6%

13.3%

Forbearance as a % of Repayment & Forbearance

7.7%

8.1%

7.5%

7.1%

7.2%

Charge-Offs

Repayment

(1)

8.0%

8.8%

9.2%

10.0%

11.5%

Non-Traditional

Loans

without

Cosigner

Q3 11

Q2 11

Q1 11

Q4 10

Q3 10

Outstanding Balance as a % of Total

90+ Delinquency as a % of Repayment

15.1%

14.1%

15.4%

16.0%

17.1%

Forbearance as a % of Repayment & Forbearance

6.3%

6.5%

6.0%

5.7%

5.6%

Charge-Offs

Repayment

(1)

12.9%

14.0%

15.1%

17.0%

18.9%

SIGNIFICANT IMPROVEMENT IN PORTFOLIO

QUALITY

$ Volume in

Billions

% of Non

Traditional

% of

Cosigned

% of For

Profit

Average

Winning FICO

Actual

2008

$7.4

15%

54%

33%

709

2009

$6.6

13%

56%

27%

711

2010

$5.2

11%

59%

21%

713

Projected

(2)

2011

$3.2

10%

62%

17%

714

2012

$1.4

65%

15%

719

2013

$0.6

71%

11%

725

Legacy Loans Entering Repayment

(1)

Total originations in 2009 had an average winning FICO of 745 and 83% were cosigned.

Total originations in 2010 had an average winning FICO of 739 and 89% were cosigned.

Total YTD originations in 2011 had an average winning FICO of 748 and 92% were cosigned.

(1)

Excludes Smart Option loans.

(2)

Projected loans entering repayment does not include new loan originations which are expected to be 100% Traditional loans and have significantly higher

FICO scores and cosigners.

Note: Volume for all years is based on outstanding balances.

LOAN SEASONING

Dollars in millions

September 30, 2011

Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

6,930

Loans in Forbearance

761

8.6%

169

2.9%

112

2.4%

1.9%

1.3%

1,166

4.3%

Loans in Repayment-

Current

6,937

78.7%

5,286

89.1%

4,144

90.7%

2,939

93.1%

4,671

94.6%

23,977

87.5%

Loans in Repayment-

Delinq 31-60 days

385

4.4%

172

2.9%

121

2.6%

2.1%

1.7%

827

3.0%

Loans in Repayment-

Delinq 61-90 days

198

2.2%

1.2%

1.1%

0.8%

0.7%

383

1.4%

Loans in Repayment-

Delinq 90 + days

532

6.0%

231

3.9%

142

3.1%

2.1%

1.7%

1,054

3.8%

8,813

100%

5,930

100%

4,571

100%

3,156

100%

4,937

100%

27,407

100%

Charge-offs as a % of loans in repayment

5.4%

2.6%

1.8%

1.3%

1.1%

2.9%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

763

Loans in Forbearance

136

11.8%

4.7%

3.6%

2.6%

2.1%

194

6.7%

Loans in Repayment-

Current

624

54.4%

371

70.1%

336

78.2%

224

82.1%

413

83.5%

1,968

68.5%

Loans in Repayment-

Delinq 31-60 days

106

9.2%

6.8%

5.8%

5.1%

4.8%

205

7.1%

Loans in Repayment-

Delinq 61-90 days

6.3%

3.9%

3.0%

2.7%

126

4.4%

Loans in Repayment-

Delinq 90 + days

210

18.3%

14.4%

9.6%

7.5%

6.9%

382

13.3%

1,148

100%

529

100%

430

100%

273

100%

495

100%

2,875

100%

Charge-offs as a % of loans in repayment

18.8%

11.5%

6.1%

4.7%

3.7%

11.5%

Total Managed

Monthly Scheduled Payments Due

Not Yet in Repayment

7,693

Loans in Forbearance

897

9.0%

194

3.0%

127

2.5%

1.9%

1.4%

1,360

4.5%

Loans in Repayment-

Current

7,561

75.9%

5,657

87.6%

4,480

89.6%

3,163

92.2%

5,084

93.6%

25,945

85.7%

Loans in Repayment-

Delinq 31-60 days

491

4.9%

208

3.2%

146

2.9%

2.3%

108

2.0%

1,032

3.4%

Loans in Repayment-

Delinq 61-90 days

270

2.7%

1.4%

1.3%

1.0%

0.9%

509

1.7%

Loans in Repayment-

Delinq 90 + days

742

7.5%

307

4.8%

183

3.7%

2.6%

116

2.1%

1,436

4.7%

9,961

100%

6,459

100%

5,001

100%

3,429

100%

5,432

100%

30,282

100%

Charge-offs as a % of loans in repayment

6.9%

3.4%

2.2%

1.5%

1.3%

3.7%

More than 48 payments

Total

Total Loans in Repayment or Forbearance

Loan Status

1-12 payments

13-24 payments

25-36 payments

37-48 payments

Total

Total Loans in Repayment or Forbearance

Loan Status

1-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Loan Status

1-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

LOAN SEASONING

Dollars in millions

June 30, 2011

Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

6,431

Loans in Forbearance

842

8.8%

175

2.9%

103

2.5%

1.7%

1.2%

1,225

4.5%

Loans in Repayment-

Current

7,561

79.2%

5,447

89.7%

3,801

91.0%

2,825

93.9%

4,330

95.0%

23,964

87.6%

Loans in Repayment-

Delinq 31-60 days

378

4.0%

155

2.5%

104

2.5%

1.7%

1.5%

759

2.8%

Loans in Repayment-

Delinq 61-90 days

239

2.5%

1.4%

1.3%

0.8%

0.7%

433

1.6%

Loans in Repayment-

Delinq 90 + days

529

5.5%

207

3.4%

116

2.8%

1.9%

1.5%

978

3.6%

9,549

100%

6,069

100%

4,177

100%

3,008

100%

4,556

100%

27,359

100%

Charge-offs as a % of loans in repayment

4.5%

2.7%

1.9%

1.4%

1.1%

2.8%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

785

Loans in Forbearance

148

11.9%

4.7%

3.7%

2.5%

2.2%

205

7.0%

Loans in Repayment-

Current

693

55.7%

397

71.4%

330

79.6%

215

83.2%

395

84.3%

2,030

69.0%

Loans in Repayment-

Delinq 31-60 days

109

8.8%

6.7%

5.6%

5.2%

4.7%

204

6.9%

Loans in Repayment-

Delinq 61-90 days

7.1%

4.2%

3.0%

2.8%

2.4%

142

4.8%

Loans in Repayment-

Delinq 90 + days

206

16.5%

13.4%

8.3%

6.7%

6.4%

361

12.3%

1,244

100%

556

100%

415

100%

259

100%

468

100%

2,942

100%

Charge-offs as a % of loans in repayment

18.9%

13.1%

6.7%

5.4%

5.0%

12.5%

Total Managed

Monthly Scheduled Payments Due

Not Yet in Repayment

7,216

Loans in Forbearance

990

9.2%

200

3.0%

118

2.6%

1.8%

1.3%

1,430

4.7%

Loans in Repayment-

Current

8,254

76.5%

5,844

88.2%

4,131

89.9%

3,040

93.1%

4,725

94.0%

25,994

85.8%

Loans in Repayment-

Delinq 31-60 days

487

4.5%

192

2.9%

127

2.8%

2.0%

1.8%

963

3.2%

Loans in Repayment-

Delinq 61-90 days

327

3.0%

108

1.6%

1.4%

1.0%

0.8%

575

1.9%

Loans in Repayment-

Delinq 90 + days

735

6.8%

281

4.2%

150

3.3%

2.2%

100

2.0%

1,339

4.4%

10,793

100%

6,625

100%

4,592

100%

3,267

100%

5,024

100%

30,301

100%

Charge-offs as a % of loans in repayment

6.2%

3.6%

2.4%

1.7%

1.5%

3.7%

More than 48 payments

Total

Total Loans in Repayment or Forbearance

Loan Status

1-12 payments

13-24 payments

25-36 payments

37-48 payments

Total

Total Loans in Repayment or Forbearance

Loan Status

1-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Loan Status

1-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

LOAN SEASONING

Dollars in millions

September 30, 2010

Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

9,405

Loans in Forbearance

690

7.5%

140

2.6%

2.2%

1.6%

1.3%

994

4.1%

Loans in Repayment- Current

7,333

79.6%

4,740

89.1%

3,388

91.8%

2,294

93.9%

3,213

94.8%

20,968

87.2%

Loans in Repayment- Delinq 31-60 days

385

4.2%

146

2.7%

2.2%

1.7%

1.6%

709

2.9%

Loans in Repayment- Delinq 61-90 days

220

2.4%

1.2%

0.9%

0.8%

0.7%

360

1.5%

Loans in Repayment- Delinq 90 + days

588

6.4%

230

4.3%

104

2.8%

2.0%

1.6%

1,026

4.3%

9,216

100%

5,320

100%

3,691

100%

2,443

100%

3,387

100%

24,057

100%

Charge-offs as a % of loans in repayment

6.5%

3.7%

1.9%

1.5%

1.2%

3.9%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

1,112

Loans in Forbearance

131

9.7%

4.7%

3.0%

2.4%

1.9%

176

6.1%

Loans in Repayment- Current

754

55.9%

420

72.1%

274

79.3%

186

82.8%

324

82.2%

1,958

67.6%

Loans in Repayment- Delinq 31-60 days

114

8.5%

6.1%

5.4%

4.5%

4.8%

198

6.8%

Loans in Repayment- Delinq 61-90 days

6.0%

3.5%

3.0%

2.6%

2.8%

129

4.5%

Loans in Repayment- Delinq 90 + days

269

19.9%

14.6%

9.6%

7.5%

8.0%

436

15.1%

1,349

100%

583

100%

346

100%

225

100%

394

100%

2,897

100%

Charge-offs as a % of loans in repayment

25.8%

16.4%

8.2%

6.5%

5.3%

17.6%

Total Managed

Monthly Scheduled Payments Due

Not Yet in Repayment

10,517

Loans in Forbearance

821

7.8%

161

2.7%

2.3%

1.7%

1.4%

1,170

4.3%

Loans in Repayment- Current

8,087

76.5%

5,160

87.4%

3,662

90.7%

2,480

92.9%

3,537

93.6%

22,926

85.1%

Loans in Repayment- Delinq 31-60 days

499

4.7%

182

3.1%

101

2.5%

1.9%

907

3.4%

Loans in Repayment- Delinq 61-90 days

301

2.8%

1.4%

1.1%

0.9%

489

1.8%

Loans in Repayment- Delinq 90 + days

857

8.1%

315

5.3%

137

3.4%

2.5%

2.3%

1,462

5.4%

10,565

100%

5,903

100%

4,037

100%

2,668

100%

3,781

100%

26,954

100%

Charge-offs as a % of loans in repayment

9.0%

5.0%

2.4%

1.9%

1.6%

5.4%

More than 48 payments

Total

Total Loans in Repayment or Forbearance

Loan Status

1-12 payments

13-24 payments

25-36 payments

37-48 payments

Total

Total Loans in Repayment or Forbearance

Loan Status

1-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Loan Status

1-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

SERVICING: A COMPETITIVE

ADVANTAGE

BUSINESS SERVICES SEGMENT

“Core Earnings”

Revenue of $337 million in Q3 2011

More than 78% of revenue generated by FFELP servicing and contingent

collections

ED servicing and collections businesses will grow organically with federal

Direct Lending, added focus on increasing market share through performance

Growth

529

account

asset

servicing

and

transaction

processing

key

objective

Plan

leverage

campus

relationships

and

servicing

capabilities

grow

Campus Solutions processing business

($ millions)

Q3 11

Q2 11

Q3 10

Intercompany loan servicing

$183

$187

$164

Third-party loan servicing

$20

Guarantor servicing

$15

$16

Other servicing

$24

$22

$23

Contingency revenue

$84

$86

$84

Other Business Services revenue

$11

$13

BUSINESS SERVICES SEGMENT EARNINGS

DETAIL

SLM’S COMPETITIVE ADVANTAGE

SLM has a distinct competitive advantage in all facets of the

education loan market.

Best in Class

Vertically Integrated

Origination/

Servicing/Collections

Strongest National

Brand in

Education

with Consumers

and Schools

State-of-the-Art

Loan Delivery Platform

Largest & Most

Experienced

Sales Team

Breadth of

Products & Services

Over $238B

Serviced,

million

Customers

Economies of Scale

Singular Focus

Scale

OPERATIONS LOCATIONS

Fishers, IN

•Collections

•

Information Technology

•

Servicing

•

Fulfillment

•

Call Center

•

Sales

Reston, VA

•

Finance

•

Legal

•

Information Technology

New York State

Arcade, Perry,

Horseheads

•

Collections

Cincinnati, OH

(GRC)

•

Collections

Murray, UT

•

Sallie Mae Bank

Wilkes-Barre, PA

•

Servicing

•

Call Center

Newark, DE Headquarters

•

Credit &Collections

•

Customer Resolution Srvcs

•

Servicing

•

Fraud

•

Business Development

Washington, DC

•

Government Relations

Moorestown, NJ

•

Collections

Corporate Headquarters

Newton, MA

•

Upromise

•

Business

Development

Kansas City, MO

•

Upromise

•

Campus Solutions

Muncie, IN

•

Collections

SLM PRIVATE EDUCATION LOAN COLLECTIONS

Sallie Mae services and collects the vast majority of

loans in its Private Education Loan portfolio

Private Education Loan collections are conducted by a

stand-alone consumer credit collections unit, separate

from the company’s FFELP collections operations

Private Education Loan collections are managed by

individuals with extensive experience managing

collections operations for credit cards and other

consumer loans

Over the past two years, Private Education Loan

collections technology and practices have been

enhanced

Multi-variable analysis has enabled prioritization

of collection efforts on higher risk borrowers

Forbearance policies have been enhanced to

reduce reliance on forbearance as a collection

tool, while still meeting customer needs during

an economic downturn

Additional workout and settlement programs

have been introduced to help customers avoid

default

Collection workstations, dialer capabilities, and

internet utilities have all been enhanced with

more effective technology solutions

Sallie Mae Private Education Loans are charged-off at

the end of the month if the loan exceeds 212 days past

due

Overview

Collection Philosophy and Fundamentals

Segmented Collection Practices by Risk Tier

Determine optimal contact channel based on

borrower’s preferences and risk profile. Channels

include letter, phone, email, text messaging, Internet

Phone attempts begin at 5-15 days past due

Simultaneous collections efforts on borrower and

cosigner

For lowest risk segments, contact begins at 30 days

due to high self-cure rates

In high risk segments, communication begins before

repayment to notify borrower of obligation coming due

Delinquency is reported to credit bureaus for borrower

and co-signer beginning at 45 days past due and

monthly thereafter, with no reporting for loans in

forbearance

Focus on account ownership by collectors for middle

and late stage accounts

Tenured collectors assigned to higher risk accounts

Credit reports reviewed as part of repayment

negotiation

Locate and make contact with the borrower and/or co-

signer simultaneously

Understand and document each borrower’s unique

circumstance and reason for delinquency

Secure and understand how they can stay up-to-date

once cured from delinquency

Document each account and update demographic and

employment information

Focus on cash collections as the primary account

resolution approach

FUNDING DIVERSITY AND

LIQUIDITY

2011 Q3 CAPITAL MARKETS SUMMARY

•

On October 5 the company closed on a $3.4 billion ABCP facility which matures in

January 2014.

•

Paid dividend of $0.10 per common share.

•

Repurchased 9.5 million shares on the open market which concluded our

previously announced $300 million share repurchase program.

•

Repurchased $9 million of unsecured debt.

Private Education Loans

Consolidation FFELP

Private Education Loans

Issue

$0.6B SLM Trust 2011-A

$0.8B SLM Trust 2011-2

$0.8B SLM Trust 2011-B

Pricing Date

April 14, 2011

May 26, 2011

June 15, 2011

Collateral

Private Education Loans

US Govt. Guaranteed FFELP

Consolidation Loans

Private Education Loans

Prepayment

Speed

(1)

100% Consolidation Loan Ramp

Tranching

Moody’s

Amt

(1)

Pricing

(2)

A-1 Aaa $287 2.0 L+100

A-2 Aaa $175 5.1 4.41%

A-3 Aaa $100 6.9 L+250

Moody’s

Amt

(1)

Pricing

(3)

A-1 Aaa $622 3.9 L+65

A-2 Aaa $175 11.2 L+120

B A3 $24 13.8 L+391

Moody’s

Amt

(1)

Pricing

(2)

A-1 Aaa $400 2.0 L+90

A-2 Aaa $300 5.3 3.78%

A-3 Aaa $125 7.3 L+250

(1)

Estimated based on a variety of assumptions concerning loan repayment behavior, as more fully described in the related prospectus,

which may be obtained at http://www2.salliemae.com/investors/debtasset/slmsltrusts/. Actual average life may vary significantly

from estimates.

(2)

Pricing represents the yield to expected maturity.

(3)

Pricing represents the discount margin to the 10% optional redemption date.

RECENT ABS TRANSACTIONS

•

Employ conservative long-term funding model

HIGH PERCENTAGE OF STUDENT LOANS

FUNDED TO TERM

$177 Billion Student Loan Portfolio as of

September 30, 2011

Fixed Spread

Liabilities with

Average Life of

5.0 years, 7%

ABCP Conduit

& FHLB, 4%

Funded to

Term*, 89%

$182 Billion Student Loan Portfolio as of

September 30, 2010

Fixed Spread

Liabilities with

Average Life of

4.8 years, 7%

ABCP Conduit

& FHLB, 4%

Funded to

Term*, 89%

* Funded to Term includes 12% or $21.8 billion of student loans funded under the Straight A Funding Facility

as of September 30, 2011 and 20% or $35.7 billion of student loans funded under the ED Purchase and

Participation Program and Straight A Funding Facility as of September 30, 2010.

SLM ASSET-BACKED FUNDING

SLM ABS Term Issuance Volume

(1)

Reported at quarter closing dates, net of paydowns.

(2)

Balances inclusive of FFELP and legacy private ABCP, legacy UBS Phoenix facility, FHLB Des Moines and seller financing for the

SLC acquisition.

SLM Secured Funding

ABS Issuance ($ in billions)

Q3 11

Q2 11

Q1 11

2010

2009

2008

Non-Consolidation FFELP ABS

$ -

$ 2.0

$ -

$ 18.5

Consolidation FFELP ABS

0.8

5.9

Private Credit ABS

1.4

4.2

7.5

Total ABS Issuance

2.2

$ 0.8 $ 6.2

$ 13.4

$ 18.5

Secured Borrowings ($ in billions)

Q3 11

Q2 11

Q1 11

2010

2009

2008

Net ED Participation Program

(1)

$ -

$ 9.0

$ 7.4

Straight –

A Funding Facility

22.0

22.8

23.6

24.5

14.3

ABCP & Other Secured Facilities

(2)

7.2

7.3

6.6

7.9

8.8

24.8

Total Asset Funding

$ 29.2

$ 30.1

$ 30.2

$ 32.4

$ 32.1

$ 32.2

SLM CORPORATE DEBT ACTIVITY

SLM Corporate Debt Issuance Volume

SLM Corporate Debt Repurchases

Note: Total may not foot due to rounding.

(1)

US$ equivalent at the time of issuance

(2)

Face value amounts repurchased

SLM Senior Unsecured Debt Outstanding

Issuance Type (US$ in billions)

2011

2010

2009

2008

2007

US$ Global & Medium Term Notes

$ 2.0

$ 1.5

$ -

$ 2.5

$ 1.4

Foreign Currency Denominated

(1)

0.2

Extendible Notes

Retail Note Program

Total Corporate Debt Issuance

$ 2.0

$ 1.5

$ -

$ 2.5

$ 1.6

Denomination (US$ in millions)

Q3 11

Q2 11

Q1 11

2010

2009

USD

(2)

$ 9

$ 57

$ 775

$ 1,387

$ 2,169

Foreign Currency Denominated

(2)

3,481

1,278

Total

(2)

$ 9

$ 60

$ 825

$ 4,868

$ 3,447

Accounting Gain Generated

$ -

$ 0.5

$ 64

$ 317

$ 536

Note: Does not include Sallie Mae Bank or Subsidiary funding

•

Repurchased $894 million of debt YTD Q311

•

Repurchased $4.9 billion of debt in 2010

UNSECURED DEBT MATURITIES

$2.1

$1.8

$2.3

$3.0

$0.7

$2.3

$0.2

$2.8

$3.8

As of September 30, 2011

(par value, $ in billions)

UNENCUMBERED ASSETS & UNSECURED

DEBT

•The difference between unencumbered assets and outstanding

unsecured debt continues to diminish

($ in billions)

9/30/11

12/31/10

12/31/09

12/31/08

FFELP Stafford and Plus Loans, net

FFELP Consolidation Loans, net

0.2

0.5

1.6

Private Education Loans, net

11.0

11.1

12.5

15.7

Other Loans

0.2

0.3

0.4

0.7

Available Cash & Investments

4.9

5.3

8.1

5.1

Retained Interests*

1.8

2.2

Other Assets

4.6

4.1

5.2

5.8

Total Unencumbered Tangible Assets

Unsecured Debt Outstanding

Unencumbered Assets & Unsecured Debt

* On 1/1/10, upon adopting ASC 810, the Retained Interests were removed from the consolidated balance sheet and the assets and

liabilities of off-balance sheet ABS were consolidated onto the balance sheet.

** Amounts include loans, cash, and accrued interest receivable less debt outstanding for all secured borrowing facilities. Amounts

reflect the current balance and prior period adjustments made to account for the impact of ASC 815. Further detail of the nature

of the adjustment can be found in the 3Q 2011 SLM Corporation Supplemental Earnings Disclosure.

1.0

1.6

35.1

30.1

34.9

42.1

Net Assets in Secured Financing

Facilities

9/30/11

12/31/10

12/31/09

12/31/08

Off-Balance Sheet ABS (Non-GAAP)*

$ -

$ 0.6

$ 0.9

On-Balance Sheet ABS (GAAP)**

12.7

13.1

12.7

13.4

Total

12.7

13.1

13.3

14.3

21.7

25.5

22.3

26.9

0.8

3.8

Note: Totals may not add due to rounding

Net residual represents excess distribution, net of payments on floor contracts and receipts from basis swaps

(1)

2008 –

2010 APBs are an average of 4 quarterly 2-point averages.

(2)

Interest to be capitalized not available for On-Balance Sheet Indentured Trust balance

YTD

9/30/11

2010

2009

2008

Servicing (Cash Paid)

$ 426

$ 533

$ 549

$ 525

Net Residual* (Excess Distributions)

523

746

1,435

1,338

Net Cash Flow

496

1,465

1,296

589

$ 1,445

$ 2,743

$ 3,280

$ 2,452

Servicing (Cash Paid)

$ 143

$ 179

$ 130

$ 97

Residual (Excess Distribution)

403

Net Cash Flow

$ 149

$ 187

$ 278

$ 581

$ 1,594

$ 2,930

$ 3,558

$ 3,033

YTD

9/30/11

2010

2009

2008

$ 94,414

$ 99,041

$ 102,754

$ 97,363

45,868

38,767

36,628

32,543

$ 140,282

$ 137,808

$ 139,382

$ 129,906

$ 25,761

$ 25,854

$ 19,144

$ 14,505

2,641

$ 25,761

$ 25,854

$ 21,785

$ 17,146

$ 166,043

$ 163,661

$ 161,167

$ 147,052

Total Private Credit

Total FFELP and Private Credit

Term FFELP

Other Secured FFELP

(2)

Total FFELP

Private Credit

Term PC

Other Secured Financings

FFELP

Term Securitized

Other Secured FFELP

Total FFELP

Private Credit

Term Securitized

Other Secured Financings

Total Private Credit

Total FFELP and Private Credit

Average Principal Balances

(1)

$ in Millions

SECURED CASH FLOW

as of 9/30/11

Q411

2012

2013

2014

2015

2016

2017

Projected FFELP Average Balance

$137,617

$132,539

$123,459

$112,860

$102,453

$92,779

$83,004

Projected Excess Spread

$220

$833

$811

$748

$683

$635

$607

Projected Servicing Revenue

$185

$710

$659

$601

$545

$486

$429

Projected Total Revenue

$404

$1,543

$1,470

$1,350

$1,228

$1,122

$1,036

2018

2019

2020

2021

2022

2023

2024

2025

Projected FFELP Average Balance

$73,613

$64,590

$55,895

$48,002

$41,842

$36,521

$31,458

$26,560

Projected Excess Spread

$657

$588

$512

$436

$354

$312

$278

$254

Projected Servicing Revenue

$373

$319

$267

$223

$193

$167

$143

$120

Projected Total Revenue

$1,030

$907

$779

$659

$547

$479

$422

$374

2026

2027

2028

2029

2030

2031

2032

2033

Projected FFELP Average Balance

$21,849

$17,313

$13,255

$10,117

$7,688

$5,604

$3,716

$2,088

Projected Excess Spread

$221

$183

$149

$118

$96

$74

$51

$27

Projected Servicing Revenue

$98

$77

$59

$45

$35

$25

$16

Projected Total Revenue

$319

$260

$208

$164

$131

$99

$67

$36

Assumptions

CP/LIBOR = 10 basis points, No Floor Income, CPR/CDR = Stafford & Plus (5.5%), Consolidation (2.5%)

* These projections are based on internal estimates and assumptions and are subject to ongoing review and modification. These projections may prove to be incorrect.

($ in Millions)

•

Total Cash Flows from Projected Excess Spread = $8.8 Billion

•

Total Cash Flows from Projected Servicing Revenues = $5.8 Billion

PROJECTED

CASH

FLOWS

FROM

FFELP

PORTFOLIO

CP -

LIBOR BASIS

Q3 FFELP CP Index Loan Funding By Index

$ Volume in Billions

Average Rate

Spread to CP

1 month LIBOR

$27

0.21%

-0.01

Conduit Facilities

$29

0.22%

-0.02

3 month LIBOR

$38

0.30%

-0.10

FFELP Assets indexed to 90 day CP total

$133 billion

$38 billion of CP indexed loans are fixed

rate consolidation loans with no basis risk

in the current interest rate environment

$56 billion of CP indexed loans are

funded with one month LIBOR or

liabilities more closely correlated to one

month than three month LIBOR

One month LIBOR is less volatile than

three month LIBOR and more correlated

to 90 day CP index during periods of

market stress

90 Day CP Yield, 3 Month LIBOR and 1 Month LIBOR rates provided by Bloomberg

$ volume is based on average balances. As of 9/30/11

Numbers may not add due to rounding

Average Quarterly Spread

CP -

LIBOR

CP Yield -

3MLibor

CP Yield -

1MLibor

SALLIE MAE BANK

Utah based ILC regulated by FDIC and Utah Department of Financial Institutions

(UDFI)

Charter granted October 2005

Originates Sallie Mae’s private education loans

Funded through affiliate and brokered deposits and a direct retail deposit program

launched in Feb 2010

21.4% Total Risk-based Capital at September 30, 2011

Dividend of $400 million paid in October 2010

Strong cash position used to fund Private Credit originations

Deposits totaled $5.7 billion at September 30, 2011

•

$3.8 billion Brokered Deposits

•

$1.9 billion Direct Retail and other affiliate and non-affiliate Deposits

Brokered Deposit term portfolio has a weighted average maturity of 16.8 months

Total deposits increased by 10.9% in 3Q11 due primarily to increases in the

brokered money market account with Merrill Lynch and the retail deposit portfolio

Bank charter

Current bank activity

Deposit taking activities

SALLIE MAE BANK –

CAPITAL & DEPOSITS

*Primarily affiliate deposit accounts with no stated maturities

Bank Deposits

($ millions)

Sep 11

Jun 11

Mar 11

Dec 10

Sep 10

Jun 10

Brokered CDs

$3,262

$4,177

$4,604

$4,961

$5,023

Brokered –

Other

519

284

273

274

234

190

Retail Deposits

1,435

1,199

1,222

1,090

838

242

Other Deposits*

529

436

461

458

542

441

Total Deposits

$5,745

$5,181

$6,133

$6,426

$6,575

$5,896

Regulatory Capital Ratios

Ratio

Sep 11

Jun 11

Mar 11

Dec 10

Sep 10

Jun 10

Tier 1 Leverage

16.4%

15.3%

12.9%

12.1%

16.7%

17.2%

Tier 1 Risk Based

20.3%

23.1%

17.0%

18.7%

26.7%

30.4%

Total Risk Based

21.4%

24.4%

18.3%

19.7%

27.7%

31.4%

RISK-ADJUSTED CAPITALIZATION

CAPITALIZATION

SLM Corporation

3Q11

2010

2009

2008

Tangible Equity/”Core Earnings”

Assets

(1)

2.2%

2.0%

1.8%

Tangible Equity/Charge-Offs

(2)

(1)

GAAP tangible stockholders’ equity as a percentage of total “Core Earnings” assets.

(2)

Average GAAP tangible equity including preferred stock to charge-offs. SLM charge-offs based on total “Core Earnings” loans, annualized.

CAPITAL ALLOCATION

SLM

allocates

capital

internally

based

the

risk

the

assets

supports

SLM Corp

Assets

Capital

Allocation

Private

Education

Loans

18% of

Assets

Government

Guaranteed

Loan Assets

71% of

Assets

Based on Risk

*Other Assets includes a small amount of goodwill & intangibles for which capital is allocated at 100%

Cash,

Investments,

Other Assets

11% of

Assets

0.50%

12%

0% -

15%*

FFELP APPENDIX

Outstanding Government Student

Loan Market Distribution

FFYE 9/30/2010 ($ in billions)

Top 10 Holders of FFELP Loans

FFYE 9/30/2010 ($ in millions)

Sources: President’s FY 2012 Budget, US Department of Education Report 4/2011

Includes $26.1 billion of FFELP Loans Purchased from the Student Loan Corporation on December 31, 2010

Student Loan Xpress is a CIT company

FEDERAL STUDENT LOAN MARKET

FDLP, $221

FFELP ABS,

$237

FFELP

Straight -

A, $38

FFELP

Loans,

$151

FFELP

owned by

ED, $110

Lender Name

FY10

SLM CORPORATION

$148,649

NELNET

$24,514

WELLS FARGO

$20,722

BRAZOS GROUP

$12,080

JPMORGAN CHASE BANK

$9,616

PA HIGHER ED ASST AUTH (PHEAA)

$9,575

COLLEGE LOAN CORP

$8,669

CIT

$8,317

PNC

$7,549

Goal Financial

$6,881

Top 10 Holders

$256,572

SLM FFELP ABS ISSUE CHARACTERISTICS

Issue size of $0.5B to $1.0B

Tranches or pass-through

denominated in US$

AAA rated senior tranches make up

to 97% of issue structure

Floating rate tied to 1 mo. LIBOR

Amortizing tranches, with 1 to

15(+) year average lives

Masterservicer is Sallie Mae, Inc.

Explicit U.S. government guarantee

of underlying collateral insulates

bondholders from virtually any loss

of principal

(1)

Formerly a 20% risk-weighted

asset, now a <10% risk-weighted

under Basel II’s IRB methodology

Offer significantly higher spreads

than government agency securities

with comparable risk profiles

Short (1-3 yrs), intermediate (3-7

yrs), long (7-10 yrs) and very long

(10-15+ yrs) term tranches

available at new issue and in

secondary

(1) Principal and accrued interest on underlying FFELP loan collateral carry a guarantee of 97%-100% dependent on origination year

and on meeting the servicing requirements of the U.S. Department of Education.

Typical SLM FFELP ABS Transaction Features

Unique Characteristics of FFELP Loan ABS

SLM STAFFORD/PLUS ABS TRUSTS

PREPAYMENT ANALYSIS

Annualized CPRs for SLM Stafford/PLUS ABS Trusts have decreased

significantly as incentives for borrowers to consolidate have declined

Historical SLM Stafford/PLUS ABS CPRs

Years Since Inception

* Average CPR is the simple (non-weighted) average of four Quarterly CPR calculations for each calendar year. Quarterly CPR assumes School and Grace

loans are not scheduled to make payments. Deferment, Forbearance and Repayment loans are scheduled to make payments.

SLM CONSOLIDATION ABS TRUSTS

PREPAYMENT ANALYSIS

Historical Consolidation ABS CPRs

* Average CPR is the simple (non-weighted) average of four Quarterly CPR calculations for each calendar year. Quarterly CPR assumes School and Grace loans are

not scheduled to make payments. Deferment, Forbearance and Repayment loans are scheduled to make payments.

CPRs for SLM Consolidation ABS Trusts have declined significantly following

legislation that prevented in-school and re-consolidation of borrowers’

loans

PRIVATE CREDIT APPENDIX

RECENT SLM PRIVATE EDUCATION LOAN ABS

CHARACTERISTICS

Issue size of $500M to $1.0B

Triple-A rated senior notes only; no

subordinate tranches

Credit enhancement comprised of

overcollateralization and a reserve

account

Multiple tranches with 1-7(+) yr

average lives

Both fixed and floating rate issuance

tied to 1 mo. LIBOR

Private education loans made to

students and parents to fund college

tuition, room and board

Floating rate tied to LIBOR or Prime

Underwritten using FICO, Custom

Scorecard & DTI w/risk-based pricing

70(+)% with co-borrowers, typically a

parent

Typically non-dischargeable in

bankruptcy

Serviced exclusively by Sallie Mae

Recent SLM Private Loan ABS Structures

Collateral Characteristics

SLM PRIVATE EDUCATION LOAN GROSS

DEFAULTS

As of August 31, 2011

8.43%

9.22%

10.00%

10.88%

11.94%

10.20%

12.93%

9.86%

9.32%

11.02%

12.23%

9.06%

4.05%

4.01%

2.99%

4.16%

3.44%

1.38%

2.94%

1.00%

1.40%

0.00%

10.01%

11.05%

11.87%

12.71%

14.11%

11.96%

14.89%

11.48%

10.87%

12.77%

14.24%

11.07%

5.52%

5.68%

4.47%

6.15%

5.78%

2.02%

4.20%

1.84%

1.90%

0.13%

0.06%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2002-A

2003-A

2003-B

2003-C

2004-A

2004-B

2005-A

2005-B

2006-A

2006-B

2006-C

2007-A

2009-B

2009-C

2009-D

2009-

CTL

2009-

CTP

2010-

2010-B

2010-C

2011-A

2011-B

Actual-to-Date Cumulative Gross Defaults,

including Bankruptcy Information

All Trust Loans

Bankruptcy or death -

other (3)

Bankruptcy or death -

now current or paid off (2)

Charge

off -

212+ days delinquent (1)

For SLM Private Education Loan Trusts issued prior to 2005-B, the servicer has the option, but not the obligation, to repurchase loans that (i) become 180+ days delinquent

and/or (ii) have a borrower who filed for bankruptcy or died. Prior to November 1, 2008, the servicer exercised this repurchase option and actual charge-offs in these

trusts equaled zero. Beginning November 1, 2008, the servicer ceased purchasing from the trust loans that are more than 180 days delinquent. For the purposes of

comparison across all deals, this chart reflects trust charge-offs for SLM Private Education Loan Trusts issued prior to 2005-B as if the servicer had never exercised its

repurchase option.

(1)

Charge-offs per the servicer’s portfolio definition which is generally 212+ days delinquent. Includes loans for which a borrower has filed bankruptcy which have

subsequently become 212+ days delinquent.

(2)

Charge-offs due to a borrower’s bankruptcy filing for which the loan is now current or paid off.

(3)

Charge-offs due to a borrower’s bankruptcy filing or death for which the loan is not current or paid off but has not become 212+ days delinquent. These loans are in

various statuses including: bankruptcy stay, deferment, forbearance or delinquency.

SLM PRIVATE CREDIT GROSS DEFAULTS

CONSTRAINING RATING AGENCY STRESS LEVELS AT ISSUANCE

As of September 30, 2011

2011-A and 2011-B default rates are expressed as a proportion of repayment balance.

Constraining Rating Agency Stress Levels at Issuance for 'AAA’

PRIVATE CREDIT ABS TRUSTS

FORBEARANCE

Forbearance usage is typically highest when loans enter repayment, and

declines as loans season

Use of forbearance as a collection tool peaked in early 2008; forbearance

has since declined as a result of changes in SLM’s forbearance strategy

PRIVATE CREDIT ABS TRUSTS

31-60 DAY DELINQUENCIES

Early stage delinquencies remained relatively steady through 2009

and 2010 even as unemployment increased

PRIVATE CREDIT ABS TRUSTS

61-90 DAY DELINQUENCIES

Delinquencies show seasonal trends associated with groups of borrowers entering

repayment at the same time after the grace period following graduation

Delinquency has continued to improve since 2009

PRIVATE CREDIT ABS TRUSTS

90+ DAY DELINQUENCIES

As expected, later stage delinquency has remained elevated in recent periods due

to tightening of forbearance and the current economic environment

Increased emphasis on cash payment during delinquency means more

borrowers

remain in delinquency instead of receiving forbearance

Because they are paying, fewer delinquent borrowers are expected

to default

Charge-offs decline in the latter half of 2009, after an increase

resulting from changes to forbearance policy

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

14.0%

Quarters Since Inception

2002

2003

2004

2005

2006

2007

2009

2010

2011

12.0%

Annualized Gross Charge-Offs as a Percent of Loans in Repayment

All Loans in SLM Trusts by Year of Issuance

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

PRIVATE CREDIT ABS TRUSTS

ANNUALIZED GROSS CHARGE-OFFS

(1) For SLM Private Credit Student Loan Trusts issued prior to 2005-B, the servicer has the option, but not the obligation, to repurchase loans that (i) become 180+ days delinquent and/or (ii) have a

borrower who filed for bankruptcy or died . Prior to November 1, 2008, the servicer exercised this repurchase option and actual charge-offs in these trusts equaled zero. Beginning November 1, 2008,

the servicer ceased purchasing from the trust loans that are more than 180 days delinquent. For the purposes of comparison across all deals, this chart reflects trust charge-offs for SLM Private Credit

Student Loan Trusts issued prior to 2005-B as if the servicer had never exercised its repurchase option.

(1) For SLM Private Credit Student Loan Trusts issued prior to 2005-B, the servicer has the option, but not the obligation, to repurchase loans that (i) become 180+ days delinquent

and/or (ii) have a borrower who filed for bankruptcy or died . Prior to November 1, 2008, the servicer exercised this repurchase option and actual charge-offs in these trusts equaled

zero. Beginning November 1, 2008, the servicer ceased purchasing from the trust loans that are more than 180 days delinquent. For the purposes of comparison across all deals,

this chart reflects trust charge-offs for SLM Private Credit Student Loan Trusts issued prior to 2005-B as if the servicer had never exercised its repurchase option.

The decline in forbearance resulted in:

Increased defaults in mid 2009

A more front loaded default curve

No increase in lifetime defaults

Cumulative Gross Charge-Offs as a Percent of Original Pool Balance

All Loans in SLM Trusts by Year of Issuance

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Quarters Since Inception

2002

2003

2004

2005

2006

2007

2009

2010

2011

PRIVATE CREDIT ABS TRUSTS

HISTORICAL

CUMULATIVE

GROSS

CHARGE-OFFS

(1)

Historical SLM Private Credit ABS CPRs

Constant prepayment rates increased in 2007 due to the introduction

of Private Credit Consolidation loans, but then declined accordingly

following SLM’s decision to suspend its consolidation loan program

2002-A

2003-A

2003-B

2003-C

2004-A

2004-B

2005-A

2005-B

2006-A

2006-B

2006-C

2007-A

2009-B

2009-C

2009-D

2009-CTL

2009-CTP

2010-AL

2010-AP

2010-B

2010-C

2011-A

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

0.0%

SLM PRIVATE CREDIT ABS TRUSTS

PREPAYMENT ANALYSIS

The following cohort default triangles provide loan performance information for certain

private education loans of SLM Corporation and its consolidated subsidiaries that

meet such subsidiaries’

current securitization criteria (including those criteria listed

below):

Program types include Undergraduate/Graduate

(1)

, Direct-to-Consumer (“DTC”)

(2)

, Career

Training

(3)

Private

Consolidation

Loans

and

Smart

Option

(interest

only)

loans

FICO scores are based on the greater of the borrower and co-borrower scores as of a date

near the loan application and must be at least:

Undergraduate/Graduate at not-for-profit schools:

640

Undergraduate/Graduate at for-profit schools:

670

DTC loans:

670

Career Training loans:

670

Private Consolidation loans:

640

Excludes loans made at selected schools that have historically experienced higher rates of

default

The cohort default triangles are not representative of the characteristics of the portfolio

of private education loans of SLM Corporation and its consolidated subsidiaries as a

whole or any particular securitization trust

COHORT DEFAULT TRIANGLES

(1)

Undergraduate/Graduate loans marketed under the Signature Student Loan brand.

(2)

Direct-to-Consumer Loans marketed under the Tuition Answer brand.

(3)

Career Training loans provide eligible borrowers financing at technical , trade, K-12 or tutoring schools.

The cohort default triangles featured on subsequent slides are segmented by loan program type,

FICO score, co-borrower status, and school type

Terms and calculations used in the cohort default triangles are defined below:

Repayment

Year

–

The

calendar

year

loans

entered

repayment

Disbursed

Principal

Entering

Repayment

–

The

amount

principal

entering

repayment

given year, based on disbursed principal prior to any interest capitalization

Years

Repayment

–

Measured

years

between

repayment

start

date

and

default

date.

Zero represents defaults that occurred prior to the start of repayment.

Periodic

Defaults

–

Defaulted

principal

each

Year

Repayment

percentage

the

disbursed principal entering repayment in each Repayment Year

•

Defaulted principal includes any interest capitalization that occurred prior to default

•

Defaulted principal is not reduced by any amounts recovered after the loan defaulted

•

Because the numerator includes capitalized interest while the denominator does not, default rates are

higher than if the numerator and denominator both included capitalized interest

Total

–

The

sum

Periodic

Defaults

across

Years

Repayment

for

each

Repayment

Year

COHORT DEFAULT TRIANGLES

Note: Data as of 9/30/11.

(1)

Undergraduate/Graduate loans marketed under the Signature Student Loan brand.

(2)

Periodic Defaults for the most recent two calendar Years in Repayment are for a partial year.

(3)

Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.

Undergraduate/Graduate

(1)

COHORT DEFAULT TRIANGLES

Undergraduate/Graduate

(1)

Without Co-signer

Undergraduate/Graduate

(1)

With Co-signer

Note: Data as of 9/30/11.

(1)

Undergraduate/Graduate loans marketed under the Signature Student Loan brand.

(2)

Periodic Defaults for the most recent two calendar Years in Repayment are for a partial year.

(3)

Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.

COHORT DEFAULT TRIANGLES

COHORT DEFAULT TRIANGLES

Note: Data as of 9/30/11.

(1)

Undergraduate/Graduate loans marketed under the Signature Student Loan brand.

(2)

Periodic Defaults for the most recent two calendar Years in Repayment are for a partial year.

(3)

Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.

Undergraduate/Graduate

(1)

Non-Profit

Undergraduate/Graduate

(1)

For-Profit

COHORT DEFAULT TRIANGLES

Note: Data as of 9/30/11.

(1)

Undergraduate/Graduate loans marketed under the Signature Student Loan brand.

(2)

FICO scores are based on the greater of the borrower and co-borrower scores as of a date near the loan application.

(3)

Periodic Defaults for the most recent two calendar Years in Repayment are for a partial year.

(4)

Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.

Undergraduate/Graduate

(1)

Loans, FICO 740-850

(2)

Undergraduate/Graduate

(1)

Loans, FICO 700-739

(2)

COHORT DEFAULT TRIANGLES

Note: Data as of 9/30/11.

(1)

Undergraduate/Graduate loans marketed under the Signature Student Loan brand.

(2)

FICO scores are based on the greater of the borrower and co-borrower scores as of a date near the loan application.

(3)

Periodic Defaults for the most recent two calendar Years in Repayment are for a partial year.

(4)

Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.

Undergraduate/Graduate

(1)

Loans, FICO 670-699

(2)

Undergraduate/Graduate

(1)

Loans, FICO 640-669

(2)

Smart Option

(1)

(interest only) Without Co-signer

Smart Option

(1)

(interest only) With Co-signer

COHORT DEFAULT TRIANGLES

Note: Data as of 9/30/11.

(1)

Private education loans loans marketed under the Smart Option Student Loan brand.

(2)

Periodic Defaults for the most recent two calendar Years in Repayment are for a partial year.

(3)

Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.

Private Consolidation Loans Without Co-signer

Private Consolidation Loans With Co-signer

COHORT DEFAULT TRIANGLES

Note: Data as of 9/30/11.

(1)

Periodic Defaults for the most recent two calendar Years in Repayment are for a partial year.

(2)

Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.

COHORT DEFAULT TRIANGLES

Note: Data as of 9/30/11.

(1)

FICO scores are based on the greater of the borrower and co-borrower scores as of a date near the loan application.

(2)

Periodic Defaults for the most recent two calendar Years in Repayment are for a partial year.

(3)

Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.

DTC With Co-signer, FICO

670

(1)

DTC Without Co-signer, FICO

670

(1)

COHORT DEFAULT TRIANGLES

Note: Data as of 9/30/11.

(1)

FICO scores are based on the greater of the borrower and co-borrower scores as of a date near the loan application.

(2)

Periodic Defaults for the most recent two calendar Years in Repayment are for a partial year.

(3)

Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.

Career Training Loans, 670+ FICO

(1)

RECENT PRIVATE LOAN ABS TRUST

PERFORMANCE

Sallie

Mae

currently

collecting

payments

from

much

higher

percentage

delinquent borrowers than in the past

Delinquent borrowers who have made at least one payment during

delinquency are far less likely to default

10%

15%

20%

25%

30%

>90 Day Delinquent Borrowers

Trust Loans with a Payment Made in the

Last Month

10%

20%

30%

40%

50%

60%

Dlq in Sep-09

Dflt as of Sep-10

Dlq in Sep-10

Dflt as of Sep-11

Default Rate One Year Later

Trust Loans >90 dpd

Payments Made vs No Payments Made

Payments Made

No Payments Made

RECOVERIES

As of year end 2010, Sallie Mae expected to collect 27% of a defaulted loan’s

balance, on average, across its managed private education loan portfolio

Recoveries

are

typically

realized

over

many

years

result

the

prevalent

use

long-term payment plans

While student loans are non-dischargeable in bankruptcy, the proceedings can

postpone recoveries until after borrowers emerge from bankruptcy

In 2005, Sallie Mae changed its recovery practices, leading to an increase in overall

recoveries and earlier collection of recovered amounts

Loans

that

defaulted

1998-2003

had

recovery

rates

–

14%

five

years

after default

The 2005 cohort had a recovery rate of 22.5% five years after default

Recovery experience for more recent cohorts has varied based on economic

conditions and the characteristics of defaulted loans

In 3Q 2011, Sallie Mae provided additional provision for loan loss to provide for

potential uncertainty regarding future recoveries due to continued high

unemployment rates; the 27% life-of loan recovery expectation remains in place

SLM APPENDIX

($ in millions, except per share amounts)

Quarters Ended

September 30, 2011

June 30, 2011

September 30, 2010

Dollars

Diluted EPS

Dollars

Diluted

EPS

Dollars

Diluted EPS

GAAP net income (loss)

(47)

(0.10)

(6)

(0.02)

(495)

(1.06)

Adjustment from GAAP to "Core Earnings"

Net impact of derivative accounting

371

414

269

Net impact of goodwill and acquired intangibles

670

Total "Core Earnings" Adjustments before net tax effect

377

420

939

Net tax effect

(142)

(154)

(242)

Total "Core Earnings" Adjustments

235

266

697

"Core Earnings"

$188

$0.36

$260

$0.48

$202

$0.37

GAAP TO CORE EARNINGS

RECONCILIATION

SALLIE MAE INVESTOR RELATIONS

WEBSITE

SLM

student

loan

trust

data

(Debt/asset

backed

securities

–

SLM

Student

Loan Trusts)

Static pool information –

Detailed portfolio stratifications by trust as of the cutoff date

Accrued interest factors

Quarterly distribution factors

Historical

trust

performance

monthly

charge-off,

delinquency,

loan

status,

CPR,

etc.

trust

Since issued CPR –

monthly CPR data by trust since issuance

SLM

student

loan

performance

trust

–

Issue

details

Current and historical monthly distribution reports

Distribution factors

Current rates

Prospectus for public transactions and Rule 144A transactions are available through underwriters

Additional information (Webcasts and presentations)

Archived and historical webcasts, transcripts and investor presentations