SEC Filing | SLM Corporation

SLM CORPORATION

Date: February 28, 2012

/s/ Jonathan C. Clark

Jonathan C. Clark

Executive Vice President and Chief Financial Officer

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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): February 28, 2012

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 (the “Company”) frequently provides relevant information to its investors via posting to its corporate website. On February 28, 2012, a presentation entitled “Q4 2011 Investor Presentation” was made available on the Company’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*		Q4 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*		Q4 2011 Investor Presentation.

*	Furnished herewith.

Exhibit 99.1

SLM CORPORATION

Q4 2011 Investor Presentation

FEBRUARY 28, 2012

Exhibit 99.1

Forward-Looking Statements

The following information is current as of February 28, 2012 (unless otherwise noted) and should be read in connection with SLM Corporation’s 2011 Annual Report on Form 10-K

(the “2011 Form 10-K”) and subsequent reports filed with the Securities and Exchange Commission (the “SEC”).

This Presentation contains forward-looking statements and information based on management’s current expectations as of the date of this presentation. Statements that are not

historical facts, including statements about our opinions, beliefs or expectations and statements that assume or are 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, the risks and uncertainties set forth in Item 1A “Risk Factors” and elsewhere in the 2011 Form 10-K and

subsequent filings with the SEC; 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.

SLM Corporation

SLM Corporation Overview

Page 4

The U.S. Student Loan Market

Page 11

Credit Quality

Page 19

Servicing: A Competitive Advantage

Page 28

Funding Diversity and Liquidity

Page 32

Risk-Adjusted Capitalization

Page 43

FFELP ABS Appendix

Page 46

Private Education Loan ABS Appendix

Page 51

SLM Appendix

Page 73

SLM Corporation Overview

#1 saving, planning and paying for education

company with 40-years of leadership in the

education lending market

#1 servicer and collector of student loans in the

U.S.

for

FFELP

and

Private

Education

Loans

Serving 25 million unique customers, as of

December 31, 2011

Servicing for third parties, including 3.6 million loans

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

December 31, 2011

Fully independent private sector company with

scale and a broad franchise, traded on the

NASDAQ (ticker: SLM)

$174

billion student loan portfolio, 79% of which is

insured or guaranteed, as of December 31, 2011

SLM Corporation

Federal Family Education Loan Program (“FFELP”).

As of December 31, 2011

Net of provision

A Brief Corporate History

As of December 31, 2011

1965

1972

1996

2004

2008

2009

2010

SLM Corporate

Debt Ratings

Moody’s

S & P

Fitch

Long-

Term

Ba1

BBB-

Short-

Term

Not-Prime

A-3

Outlook

Stable

Loan Portfolio

Loan Type

$billions

FFELP Loans

$138.1

79%

Private

Education

$36.3

21%

Total Portfolio

$174.4

100%

•

Congress creates the Guaranteed Student Loan Program, currently known

as FFELP

•

Congress establishes, as a GSE, the Student Loan Marketing Association

or “Sallie Mae”

•

Privatization of Sallie Mae approved by Congress, SLM Corporation holding

company created

•

GSE dissolved…

SLM Corporation becomes a fully independent, private

sector corporation

•

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

education lending curtailed

•

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

Q4 11 “Core Earnings”

Summary

Private Education Loan originations increased 19% for 2011 year-over-year

Achieved quarterly operating expense goal of less than $250 million in Q4 11

Credit quality continues to improve

($ millions), except per share amounts

2011

2010

Q411

Q410

EPS (Reported)

$1.83

$1.92

$0.51

$0.75

Net Income

$977

$1,028

$268

$401

Net Interest Income

$3,064

$2,982

$773

$739

Loan Loss Provision

$1,295

$1,419

$292

$320

Fee and Other Income - Excluding Debt Repurchase Gains

$767

$1,119

$188

$499

Debt Repurchase Gains

$64

$317

$118

Operating Expenses

$1,100

$1,208

$243

$308

Tangible Capital Ratio

2.5%

2.2%

Average Student Loans

$180,064

$178,577

$176,567

$164,196

* For a GAAP to “Core Earnings” reconciliation, see slide 74

Consumer Lending Segment Earnings Detail

($ millions)

2011

2010

Q411

Q410

Private Originations

$2,737

$2,307

$457

$413

Average Student Loans

$36,955

$36,534

$37,259

$36,674

Net Interest Income after Provision - Private

$455

$311

$162

$115

Net Interest Margin - Private Education

4.09%

3.85%

4.16%

3.92%

Operating Expenses

$304

$350

$67

$85

OpEx Annualized as a % of Average Student Loans

0.82%

0.96%

0.72%

0.92%

FFELP Loan Segment Earnings Detail

($ millions)

2011

2010

Q411

Q410

Average Student Loans

$143,109

$142,043

$139,308

$127,522

Net Interest Income after Provision - FFELP

$1,361

$1,270

$337

$309

Net Interest Margin - FFELP

0.98%

0.93%

0.97%

0.99%

Operating Expenses

$760

$736

$185

$180

OpEx Annualized as a % of Average Student Loans

0.53%

0.51%

0.53%

0.54%

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

Three Aspects of the SLM Business Model

The U.S. Student Loan Market

Favorable Student Loan Market Trends

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

enrollment-weighted

Higher Education Enrollment (millions)

Source: U.S. Department of Education, National Center for Education Statistics, 1990 through 2009 Integrated

Postsecondary Education Data System, "Fall Enrollment Survey" (IPEDS-EF:90–99), Spring 2001 through

Spring 2010; and Enrollment in Degree-Granting Institutions Model, 1980–2009.

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)

Relationship Between Higher Education, Income and Employment

Source: U.S. Census Bureau, Current Population Survey, 2011 Annual Social and Economic Supplement.

Represents median earnings for a full time, year-round worker over age 25. Unemployment data as of Quarter

IV 2011 Represents unemployment for civilian non-institutional population over age 25.

Unemployment

Average annual income

Source: Trends in College Pricing.

2011 The College Board,. www.collegeboard.org,

College Grads Experience Lower Levels of Unemployment

Source: U.S. Department of Labor, Bureau of Labor Statistics as of 01/31/2012

SLM Private Education Loan Originations

Private Education Loan Portfolio Characteristics

–

$36 billion portfolio

–

21% 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 62% of portfolio has a cosigner, typically a parent

–

Higher education loans typically non-dischargeable in bankruptcy

–

Integrated underwriting, servicing and collections

SLM’s Private Education Loan Portfolio

As of December 31, 2011

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

school

Repayment term is driven by 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

SLM’s New Private Education Loan Product

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 2011-12 project that 20 million students will enroll in higher education and incur costs

of over $436 billion; $7 billion of that is funded by private education loans

Assuming

Federal

Loans

and

Grants

remain

constant

–

increase

the

cost

education

would

result

$17

billion incremental funding requirement for students and families

Role of Private Education Loan

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

Total Cost of Education (in billions)

2011/2012 Academic Year

Source: U.S. Department of Education, President’s 2013 Budget & Company analysis

Cost of

attendance

gap

Cost of

attendance

gap

AY 2000-2001

AY 2010-2011

$112,240

$42,600

$147,960

$64,600

$17,125

$31,000

$95,115

$25,475

$116,960

$33,600

-Time

Private School

Full

-Time

Public School

Full

-Time

Private School

Full

-Time

Public School

ED Lending Limit

Cost of attendance gap

Full

$113

$116

$200

Federal

Family

Grants

Education

Contributions

Private

Loans

Source:

Trends

College

Pricing.

2011

The

College

Board,.

www.collegeboard.org.

U.S. Department of Education 2010

2010-11 academic year market share approximately 40%

Private Credit Industry Originations

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.

$3.8

$4.8

$7.1

$7.7

$4.8

$2.3

$2.5

$9.4

$13.0

$16.0

$19.0

$21.1

$10.3

$6.8

$6.0

03-04

04-05

05-06

06-07

07-08

08-09

09-10

10-11

SLM vs. Industry Originations

(billions)

SLM

Total Market

Credit Quality

Private Education

Loans

(2)

21%

U.S. Government

Guaranteed

Loans

(2)

79%

Charge-Offs

(1)

= 0.06%

Charge-Offs

(1)

= 2.90%

Total Charge-Offs

(1)

= 0.64%

(1)

All data as of December 31, 2011. FFELP charge-offs as a percentage of average FFELP Loans. Private Education Loan charge-offs as a percentage of average Private

Education Loans. 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)

Loan Losses

Private Credit Default Performance

Historical Defaults by Payments Made

Historical Defaults by Months in Repayment

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

increases

As of December 31, 2011

57%

11%

57%

68%

75%

80%

84%

87%

90%

93%

94%

96%

97%

98%

99%

100%

50%

100%

108

120

132

144

156

168

180

# Payments Made

Defaults Per # Payments Made

Cumulative Defaults

13%

16%

13%

10%

21%

37%

50%

61%

69%

75%

80%

84%

87%

90%

93%

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

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

Private Education Loan Portfolio Performance

Q4 11

Q3 11

Q2 11

Q1 11

Q4 10

Charge-offs

Traditional

Portfolio

2.7%

2.9%

2.8%

2.9%

3.6%

Charge-offs

Non-Traditional

Portfolio

11.9%

11.5%

12.5%

13.4%

14.9%

Charge-offs

Total

Portfolio

3.5%

3.7%

3.9%

4.8%

90+

Day

Delinq

Repay

Traditional

Portfolio

4.0%

3.7%

4.1%

4.2%

90+

Day

Delinq

Repay

Non-Traditional

Portfolio

13.6%

14.3%

13.2%

14.4%

15.0%

90+

Day

Delinq

Repay

Total

Portfolio

4.9%

5.0%

4.6%

5.1%

5.3%

Forb

Repay

Traditional

Portfolio

4.2%

4.3%

4.5%

4.4%

Forb

Repay

Non-Traditional

Portfolio

6.6%

6.7%

7.0%

6.5%

6.1%

Forb

Repay

Total

Portfolio

4.4%

4.5%

4.7%

4.6%

Allowance

Loans

Repay

Traditional

Portfolio

5.6%

5.7%

5.2%

5.1%

4.9%

Allowance

Loans

Repay

Non-Traditional

Portfolio

23.1%

25.4%

24.8%

27.1%

28.2%

Allowance

Loans

Repay

Total

Portfolio

7.2%

7.5%

7.1%

7.2%

7.3%

(1)

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

Q4 11

Q3 11

Q2 11

Q1 11

Q4 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%

Forbearance as a % of Repayment & Forbearance

3.8%

4.0%

3.9%

4.0%

Charge-Offs

Repayment

(1)

1.7%

1.9%

1.8%

2.0%

Traditional

Loans

without

Cosigner

Q4 11

Q3 11

Q2 11

Q1 11

Q4 10

Outstanding Balance as a % of Total

32%

33%

90+ Delinquency as a % of Repayment

5.8%

5.9%

5.5%

5.9%

6.0%

Forbearance as a % of Repayment & Forbearance

4.7%

4.9%

5.1%

4.9%

Charge-Offs

Repayment

(1)

4.5%

4.9%

4.6%

4.8%

5.1%

Non-Traditional

Loans

with

Cosigner

Q4 11

Q3 11

Q2 11

Q1 11

Q4 10

Outstanding Balance as a % of Total

90+ Delinquency as a % of Repayment

11.8%

12.2%

11.0%

12.0%

12.6%

Forbearance as a % of Repayment & Forbearance

7.8%

7.7%

8.1%

7.5%

7.1%

Charge-Offs

Repayment

(1)

7.8%

8.0%

8.8%

9.2%

10.0%

Non-Traditional

Loans

without

Cosigner

Q4 11

Q3 11

Q2 11

Q1 11

Q4 10

Outstanding Balance as a % of Total

90+ Delinquency as a % of Repayment

14.4%

15.1%

14.1%

15.4%

16.0%

Forbearance as a % of Repayment & Forbearance

6.1%

6.3%

6.5%

6.0%

5.7%

Charge-Offs

Repayment

(1)

13.6%

12.9%

14.0%

15.1%

17.0%

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 originations in 2011 had an average winning FICO of 748 and 91% were cosigned.

Significant Improvement in Private Education Loan 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

2011

$3.4

10%

62%

17%

714

Projected

2012

$1.4

65%

15%

718

2013

$0.6

71%

11%

724

Legacy Loans Entering Repayment

(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.

(2)

Loan Seasoning

Dollars in millions

December 31, 2011

Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

5,866

Loans in Forbearance

787

9.7%

169

2.7%

112

2.1%

1.7%

1.2%

1,195

4.2%

Loans in Repayment- Current

6,231

76.9%

5,658

89.5%

4,770

91.1%

3,245

93.1%

5,206

94.5%

25,110

87.6%

Loans in Repayment- Delinq 31-60 days

397

4.9%

177

2.8%

132

2.5%

2.0%

1.7%

868

3.0%

Loans in Repayment- Delinq 61-90 days

177

2.2%

1.2%

1.0%

0.8%

393

1.4%

Loans in Repayment- Delinq 90 + days

515

6.4%

242

3.8%

162

3.1%

2.3%

1.8%

1,096

3.8%

Total Loans in Repayment or Forbearance

8,107

100%

6,324

100%

5,239

100%

3,485

100%

5,507

100%

28,662

100%

Charge-offs as a % of loans in repayment

5.0%

2.5%

1.8%

1.4%

1.1%

2.7%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

656

Loans in Forbearance

133

11.7%

4.7%

3.3%

2.6%

2.2%

191

6.6%

Loans in Repayment- Current

635

55.8%

356

69.4%

340

77.6%

241

82.3%

440

83.5%

2,012

69.2%

Loans in Repayment- Delinq 31-60 days

109

9.6%

6.9%

5.8%

4.8%

4.5%

208

7.2%

Loans in Repayment- Delinq 61-90 days

6.0%

4.2%

3.5%

2.8%

2.7%

127

4.4%

Loans in Repayment- Delinq 90 + days

194

17.0%

14.5%

9.9%

7.5%

7.1%

371

12.8%

Total Loans in Repayment or Forbearance

1,139

100%

513

100%

438

100%

293

100%

526

100%

2,909

100%

Charge-offs as a % of loans in repayment

19.2%

12.3%

7.0%

5.6%

4.5%

11.9%

Total

Monthly Scheduled Payments Due

Not Yet in Repayment

6,522

Loans in Forbearance

920

10.0%

194

2.8%

126

2.2%

1.8%

1.3%

1,386

4.4%

Loans in Repayment- Current

6,866

74.3%

6,014

88.0%

5,110

90.0%

3,486

92.3%

5,646

93.6%

27,122

85.9%

Loans in Repayment- Delinq 31-60 days

506

5.5%

212

3.1%

158

2.8%

2.2%

117

1.9%

1,076

3.4%

Loans in Repayment- Delinq 61-90 days

245

2.6%

100

1.5%

1.4%

1.1%

0.9%

520

1.6%

Loans in Repayment- Delinq 90 + days

709

7.7%

317

4.6%

205

3.6%

102

2.7%

134

2.2%

1,467

4.6%

Total Loans in Repayment or Forbearance

9,246

100%

6,837

100%

5,677

100%

3,778

100%

6,033

100%

31,571

100%

Charge-offs as a % of loans in repayment

6.7%

3.2%

2.2%

1.7%

1.4%

3.5%

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Loan Status

0-12 payments

13-24 payments

25-36 payments

Total

37-48 payments

More than 48 payments

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

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%

Total Loans in Repayment or Forbearance

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%

Total Loans in Repayment or Forbearance

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

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%

Total Loans in Repayment or Forbearance

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%

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

Loan Seasoning

Dollars in millions

December 31, 2010

Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

7,419

Loans in Forbearance

844

8.8%

144

2.4%

2.0%

1.6%

1.2%

1,156

4.4%

Loans in Repayment- Current

7,552

79.0%

5,438

89.6%

3,744

91.7%

2,484

93.6%

3,632

94.7%

22,850

87.2%

Loans in Repayment- Delinq 31-60 days

411

4.3%

171

2.8%

2.3%

1.9%

1.7%

794

3.0%

Loans in Repayment- Delinq 61-90 days

180

1.9%

1.1%

0.8%

0.7%

340

1.3%

Loans in Repayment- Delinq 90 + days

572

6.0%

248

4.1%

119

2.9%

2.1%

1.7%

1,060

4.0%

Total Loans in Repayment or Forbearance

9,559

100%

6,070

100%

4,084

100%

2,653

100%

3,834

100%

26,200

100%

Charge-offs as a % of loans in repayment

5.7%

3.7%

2.1%

1.7%

1.4%

3.6%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

921

Loans in Forbearance

136

9.9%

4.7%

2.6%

2.5%

2.1%

184

6.1%

Loans in Repayment- Current

790

57.5%

417

70.8%

293

78.6%

195

82.0%

343

81.7%

2,038

68.1%

Loans in Repayment- Delinq 31-60 days

126

9.1%

6.5%

5.6%

4.9%

217

7.3%

Loans in Repayment- Delinq 61-90 days

5.7%

3.9%

3.1%

2.4%

2.9%

131

4.4%

Loans in Repayment- Delinq 90 + days

243

17.7%

14.9%

10.0%

7.8%

8.3%

422

14.1%

Total Loans in Repayment or Forbearance

1,373

100%

589

100%

373

100%

238

100%

419

100%

2,992

100%

Charge-offs as a % of loans in repayment

21.4%

15.3%

7.7%

6.0%

5.5%

14.9%

Total

Monthly Scheduled Payments Due

Not Yet in Repayment

8,340

Loans in Forbearance

980

9.0%

167

2.5%

2.1%

1.6%

1.3%

1,340

4.6%

Loans in Repayment- Current

8,342

76.3%

5,855

87.9%

4,037

90.6%

2,679

92.7%

3,975

93.5%

24,888

85.3%

Loans in Repayment- Delinq 31-60 days

537

4.9%

209

3.1%

117

2.6%

2.2%

2.0%

1,011

3.5%

Loans in Repayment- Delinq 61-90 days

258

2.4%

1.4%

1.2%

0.9%

471

1.6%

Loans in Repayment- Delinq 90 + days

815

7.5%

336

5.0%

156

3.5%

2.6%

100

2.3%

1,482

5.1%

Total Loans in Repayment or Forbearance

10,932

100%

6,659

100%

4,457

100%

2,891

100%

4,253

100%

29,192

100%

Charge-offs as a % of loans in repayment

7.6%

4.7%

2.6%

2.0%

1.8%

4.8%

More than 48 payments

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Servicing: A Competitive Advantage

“Core Earnings”

Revenue of $1.4 billion in 2011

Approximately 76% of revenue generated by services performed on FFELP Loans

ED servicing and collections businesses will grow organically with increase in 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

Business Services Segment

Business Services Segment Earnings Detail

($ millions)

2011

2010

Q411

Q410

Intercompany loan servicing

$739

$648

$180

$155

Third-party loan servicing

$82

$77

$22

Guarantor servicing

$52

$93

$12

$15

Other servicing

$97

$94

$24

Contingency revenue

$333

$330

$85

$78

Other Business Services revenue

$70

$51

$40

$14

Operations locations

Corporate Headquarters

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

Newton, MA

•

Upromise

•

Business

Development

Kansas City, MO

•

Upromise

•

Campus Solutions

Muncie, IN

•

Collections

Funding Diversity and Liquidity

Issued $765 million of FFELP ABS

Issued $547 million of Private ABS

Expanded and extended our FFELP ABCP facility to 2015

Issued $1.5 billion of unsecured debt

Increased quarterly dividend on common shares by 25%

Announced $500 million share repurchase program

2012 Capital Markets Summary

As of February 29, 2012

Non-Consolidation FFELP

Consolidation FFELP

Issue

$765M SLM Trust 2012-1

$836M SLM Trust 2011-3

$821M SLM Trust 2011-2

Pricing Date

January 11, 2012

November 10, 2011

May 19, 2011

Collateral

US Govt. Guaranteed FFELP

Stafford and Plus Loans

US Govt. Guaranteed FFELP

Consolidation Loans

US Govt. Guaranteed FFELP

Consolidation Loans

Prepayment

Speed

(1)

6% Constant Prepayment

Rate

2% Constant Prepayment Rate

100% Consolidation Loan Ramp

Tranching

Moody’s

Amt

(1)

Pricing

(2)

A-1 Aaa $170 1.1 L+25

A-2 Aaa $225 3.3 L+45

A-3 Aaa $347 7.1 L+110

B Aa1 $23 9.0 L+399

Moody’s

Amt

(1)

Pricing

(2)

A Aaa $812 7.8 L+125

B A3 $24 17.6 L+90

(3)

Moody’s

Amt

(1)

Pricing

(2)

A-1 Aaa $622 3.9 L+65

A-2 Aaa $175 11.2 L+120

B A3 $24 13.8 L+391

Recent SLM FFELP ABS Transactions

(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 call.

(3)

Notes were retained by SLM or an affiliate at settlement.

Recent SLM Private ABS Transactions

Private Education Loans

Issue

$547M SLM Trust 2012-A

$721M SLM Trust 2011-C

$825M SLM Trust 2011-B

Pricing Date

February 2, 2012

November 21, 2011

June 15, 2011

Collateral

Private Education Loans

Prepayment

Speed

(1)

Tranching

Moody’s

Amt

(1)

Pricing

(2)

A-1

Aaa

$379

2.0

L+140

A-2

Aaa

$168

5.2

Total

$547

3.0

L+217

Moody’s

Amt

(1)

Pricing

(2)

A-1 Aaa $332

1.5

L+140

A-2A

Aaa

$90

5.0

L+325

A-2B

Aaa

$299

5.0

s+325

Total

$721

3.4

L+287

Moody’s

Amt

(1)

Pricing

(2)

A-1 Aaa $400 2.0

L+90

A-2

Aaa

$300

5.3

s+185

A-3 Aaa $125

7.3

L+250

Total

$825

4.0

L+179

(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)

Yield on fixed rate tranches were 3.86%, 4.59% and 3.78% for 2012-A, 2011-C and 2011-B respectively.

s+285

Conservative long-term funding model

High Percentage of Student Loans Funded to Term

FFELP Consolidation

Term ABS, $79 , 45%

FFELP Non-

Consolidation Term

ABS, $25 , 14%

Private Term ABS,

$19 , 11%

Indentures, $1 , 1%

Straight A Conduit,

$21 , 12%

ABCP Conduit &

FHLB, $7 , 4%

Fixed Spread

Liabilities with

Average Life of 5.1

years, $23 , 13%

$175 Billion Student Loan

Portfolio

as of December 31, 2011

Unsecured Debt Maturities

Note: Does not include Sallie Mae Bank or Subsidiary funding

Repurchased $894 million of debt in 2011

Repurchased $4.9 billion of debt in 2010

$1.7

$2.3

$3.0

$0.7

$2.3

$1.0

$2.8

$0.2

$4.4

$10

As of January 31, 2012

(par value, $ in billions)

Unencumbered Assets & Unsecured Debt

($ in billions)

12/31/11

12/31/10

12/31/09

12/31/08

FFELP Stafford and Plus Loans, net

FFELP Consolidation Loans, net

Private Education Loans, net

Other Loans

Available Cash & Investments

Retained Interests*

Other Assets

Total Unencumbered Tangible Assets

Unsecured Debt Outstanding

Unencumbered Assets & Unsecured Debt

Net Assets in Secured Financing

Facilities

12/31/11

12/31/10

12/31/09

12/31/08

Off-Balance Sheet ABS (Non-GAAP)*

On-Balance Sheet ABS (GAAP)**

Total

The difference between unencumbered assets and outstanding unsecured debt continues to

diminish

$ 3.8

15.7

0.7

5.1

2.2

5.8

34.9

42.1

0.8

1.0

1.6

0.2

0.5

11.0

11.1

12.5

0.2

0.3

0.4

3.9

5.3

8.1

1.8

4.1

5.2

20.2

22.3

30.1

24.1

26.9

35.1

1.6

$ -

12.9

13.1

$ -

$ 0.6

12.7

13.3

$ 0.9

13.4

14.3

* 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 4Q 2011 SLM

Corporation Supplemental Earnings Disclosure.

Secured Cash Flow

Note: Totals may not add due to rounding

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

2011

2010

2009

2008

Servicing (Cash Paid)

Net Residual* (Excess Distributions)

Net Cash Flow

Servicing (Cash Paid)

Residual (Excess Distribution)

Net Cash Flow

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

$ in Millions

Total Private Credit

Total FFELP and Private Credit

Term FFELP

Other Secured FFELP

Total FFELP

Private Credit

Term PC

Other Secured Financings

$ 563

$ 533

$ 549

$ 525

715

746

1,435

1,338

568

1,465

1,296

589

$ 1,846

$ 2,743

3,280

$ 2,452

$ 189

$ 179

$ 130

$ 97

403

$ 219

$ 187

$ 278

$ 581

$ 2,065

2,930

$ 3,558

$ 3,033

2011

2010

2009

2008

$ 109,509

99,041

$ 102,754

97,363

29,466

38,767

36,628

32,543

$ 138,975

$ 137,808

$ 139,382

129,906

$ 25,619

25,854

19,144

14,505

233

2,641

$ 25,853

$ 25,854

$ 21,785

$ 17,146

164,828

$ 163,661

$ 161,167

$ 147,052

Projected Cash Flows From FFELP Portfolio

as of 12/31/11

2012

2013

2014

2015

2016

2017

2018

2019

Projected FFELP Average Balance

$129,821

$117,875

$106,298

$95,944

$86,502

$77,008

$68,089

$59,642

Projected Excess Spread

$851

$826

$739

$657

$618

$563

$526

$542

Projected Servicing Revenue

$701

$639

$576

$521

$467

$413

$361

$311

Projected Total Revenue

$1,551

$1,465

$1,315

$1,178

$1,085

$976

$886

$853

2020

2021

2022

2023

2024

2025

2026

2027

Projected FFELP Average Balance

$51,738

$44,352

$38,031

$32,980

$28,266

$23,753

$19,524

$15,441

Projected Excess Spread

$469

$415

$341

$295

$262

$238

$206

$175

Projected Servicing Revenue

$264

$221

$184

$158

$135

$114

$94

$75

Projected Total Revenue

$734

$636

$525

$453

$397

$352

$300

$250

2028

2029

2030

2031

2032

2033

Projected FFELP Average Balance

$11,674

$8,695

$6,539

$4,787

$3,218

$1,873

Projected Excess Spread

$141

$113

$86

$68

$49

$27

Projected Servicing Revenue

$57

$43

$32

$24

$17

$10

Projected Total Revenue

$198

$155

$118

$92

$65

$37

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 = $8.2 Billion

Total Cash Flows from Projected Servicing Revenues = $5.4 Billion

Bank charter

–

Utah based ILC regulated by FDIC and Utah Department of Financial Institutions (UDFI)

–

Charter granted October 2005

Current bank activity

–

Originates Sallie Mae’s Private Education Loans

–

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

in February 2010

–

19.5% Total Risk-based Capital at December 31, 2011

–

Dividend of $100 million paid in November 2011

Deposit taking activities

–

Strong cash position used to fund Private Education Loan originations

–

Deposits totaled $6.3 billion at December 31, 2011

•

$4.3 billion Brokered Deposits

•

$2.0 billion Direct Retail and other affiliate and non-affiliate Deposits

–

Brokered Deposit term portfolio has a weighted average maturity of 14.9 months

–

Total deposits increased by 10.1% in 4Q11 due primarily to increases in the brokered CD

portfolio in preparation for the January peak season

Sallie Mae Bank

Sallie Mae Bank –

Capital & Deposits

*Primarily affiliate deposit accounts with no stated maturities

Bank Deposits ($ millions)

Dec 11

Sep 11

Jun 11

Mar 11

Dec 10

Sep 10

Brokered CDs

$3,734

$3,262

$4,177

$4,604

$4,961

Brokered –

Other

529

519

284

273

274

234

Retail Deposits

1,589

1,435

1,199

1,222

1,090

838

Other Deposits*

473

529

436

461

458

542

Total Deposits

$6,325

$5,745

$5,181

$6,133

$6,426

$6,575

Regulatory Capital Ratios

Ratio

Dec 11

Sep 11

Jun 11

Mar 11

Dec 10

Sep 10

Tier 1 Leverage

14.9%

16.4%

15.3%

12.9%

12.1%

16.7%

Tier 1 Risk Based

18.3%

20.3%

23.1%

17.0%

18.7%

26.7%

Total Risk Based

19.5%

21.4%

24.4%

18.3%

19.7%

27.7%

Risk-Adjusted Capitalization

Strong Capital Position

($ in Billions)

Q4 11

Q3 11

Q4 10

GAAP Capital

$5.3

$4.8

$5.0

Goodwill & Intangibles

(0.5)

Derivative Mark-to-Market

1.0

1.2

0.7

Unamortized Premiums from Floors

0.8

0.4

Tangible Economic Capital

$6.5

$6.4

$5.6

Private Loan Reserve

2.2

2.0

Available Risk Capital

$8.7

$8.5

$7.6

Risk Assets (Before Loan Loss Reserves)

Private Credit

$38.5

$38.3

$37.7

Other Risk Assets

1.1

1.3

1.5

Total Risk Assets

$39.6

$39.2

Capital to Risk Assets:

22.0%

21.5%

19.5%

Capital Allocation

SLM

allocates

capital

internally

based

the

risk

the

assets

supports

Assets

0.50%

12%

Capital

Allocation

0% -

15%*

Cash,

Investments,

Other Assets

10% of

Assets

Private

Education

Loans

19% 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%

FFELP ABS Appendix

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

Federal Student Loan Market

Outstanding Government Student Loan

Market Distribution

FFYE 9/30/2011 ($ in billions)

Top 10 Holders of FFELP Loans

FFYE 9/30/2010 ($ in millions)

Source: Department of Education Annual Performance and Accountability Reports, FY 2011, Notes to the Principal Financial Statements, Credit Programs note; Federally-owned FFELP is calculated based on receivables in purchase

program and participated loans sold to the Department.

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

Student Loan Xpress is a CIT company

FFELP

owned by

ED, $147

FDLP, $256

FFELP

Loans, $328

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

Master servicer is Sallie Mae, Inc.

Insurance or 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

SLM FFELP ABS Issue Characteristics

(1) Principal and accrued interest on underlying FFELP loan collateral carry insurance or 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

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

* 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.

Prepayment Analysis

SLM Consolidation ABS Trusts

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

borrowers’

loans

Prepayment Analysis

Private Education Loan ABS Appendix

SLM ABS Issuance Profile

Sallie Mae is among largest issuers of ABS globally, having issued $246 billion in

ABS transactions to date

Sallie

Mae

has

been

the

market

leader

Private

Education

Loans

since

the

late

’80s,

with targeted originations of $3.2 billion in 2012

Prior to the financial crisis, Sallie Mae was a programmatic issuer of Private

Education Loan ABS

In 2011, Sallie Mae reestablished programmatic issuance of private education

student loan ABS

–

April

2011

$562

million

2011-A

–

June

2011

$825

million

2011-B

issue,

with

collateral

characteristics

and

structure

consistent

with

2011-A

–

Nov

2011

$721

million

2011-C

issue,

with

collateral

characteristics

and

structure

consistent

with

2011-A

and

2011-B

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 Education Loan ABS Characteristics

Recent SLM Private Loan ABS Structures

Collateral Characteristics

SLM Private Education Loan ABS Summary

09-B

09-C

09-D

09-CT

10-A

10-B

10-C

11-A

11-B

11-C

12-A

(1) Assumes Prime/LIBOR spread of 2.75%.

Bond Amount ($mil)

2,593

1,109

1,680

590

1,550

869

1,701

562

825

743

547

Bond Wtd Avg Life @4CPR (yrs)

4.4

3.8

3.9

2.4

4.1

5.3

6.5

3.8

4.0

3.4

3.0

6.00%

4.00%

3.00%

1.85%

2.78%

4.22%

4.16%

1.89%

1.79%

2.87%

2.17%

Initial AAA Enhancement (%)

35%

34%

32%

37%

23%

45%

37%

21%

18%

26%

27%

Loan Program (%)

Signature/Law/MBA/Med

68%

50%

52%

76%

46%

89%

88%

91%

71%

61%

Smart Option

10%

20%

Consolidation

13%

10%

14%

11%

Direct to Consumer

19%

40%

34%

10%

20%

12%

Career Training

100%

13%

26%

Total

100%

Loan Status (%)

School, Grace, Deferment

63%

62%

57%

63%

12%

36%

55%

37%

25%

Repayment

34%

35%

40%

98%

32%

85%

60%

43%

60%

73%

Forbearance

Wtd Avg Term to Maturity (Mo.)

209

208

211

141

190

169

194

192

189

182

171

% Loans with Cosigner

63%

64%

70%

72%

65%

62%

72%

75%

71%

75%

% Loans with No Cosigner

37%

36%

30%

28%

35%

38%

28%

25%

29%

25%

Wtd Avg FICO at Origination

728

727

731

747

739

734

727

737

736

733

735

Wtd Avg Recent FICO at Issuance

714

713

714

725

732

713

723

722

720

724

WA FICO (Cosigner at Origination)

742

741

744

753

749

744

742

747

745

744

745

WA FICO (Cosigner at Rescored)

733

731

729

734

739

740

733

736

731

734

732

WA FICO (Borrower at Origination)

703

704

707

734

714

712

701

709

710

704

705

WA FICO (Borrower at Rescored)

680

684

686

703

691

716

679

690

695

688

700

Wtd

Avg

Loan

Margin

LIBOR

6.86%

6.88%

6.86%

10.63%

7.44%

8.19%

7.64%

7.47%

7.83%

8.35%

Wtd

Avg

Loan

Margin

Prime

2.37%

2.77%

2.43%

2.94%

2.37%

1.89%

1.83%

2.03%

2.28%

2.37%

Wtd

Avg

LIBOR Equivalent Margin

(1)

5.19%

5.60%

5.23%

6.99%

7.09%

5.26%

4.64%

7.35%

7.17%

6.23%

6.60%

Bond Wtd

Avg

LIBOR Equivalent Spread

(1)

Constraining rating agency AAA/Aaa gross default stress levels at issuance

Source: Sallie Mae, Moody’s, Standard & Poor’s, Fitch.

27.6%

25.6%

33.9%

36.3%

54.8%

44.4%

49.8%

48.2%

52.6%

50.1%

56.8%

54.4%

59.4%

58.0%

55.7%

52.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

06-A

06-B

06-C

07-A

09-A

09-B

09-C

09-D

09-CT

10-A

10-B

10-C

11-A

11-B

11-C

12-A

SLM Private Education Loan ABS 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

SLM Private Education Loan ABS 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

cash

payment

during

delinquency

means

borrowers

remain

delinquency instead of receiving forbearance

Because

they

are

paying,

fewer

delinquent

borrowers

are

expected

default

Sallie Mae is currently collecting payments from a much higher percentage of delinquent

borrowers than in the past

Delinquent borrowers who have made at least one payment during delinquency are far less

likely to default

Recent Private Education Loan ABS Trust Performance

>90 Day Delinquent Borrowers

Trust Loans with a Payment Made in the

Last Month

Default Rate One Year Later

Trust Loans >90 dpd

Payments Made vs No Payments Made

SLM Private Education Loan ABS Annualized Gross Charge-Offs

(1)

For

SLM

Private

Education

Student

Loan

Trusts

issued

prior

2005-B,

the

servicer

has

the

option,

but

not

the

obligation,

repurchase

loans

that

(i)

become

180+

days

delinquent

and/or

(ii)

have

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

Charge-offs declined in the latter half of 2009, after an increase resulting from changes to

forbearance policy

Charge-off levels have steadily declined through the economic downturn

SLM Private Education Loan ABS Gross Defaults

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

died.

Prior

November

2008,

the

servicer

exercised

this

repurchase

option

and

actual

charge-offs

these

trusts

equaled

zero.

Beginning

November

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

generally

212+

days

delinquent.

Includes

loans

for

which

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

borrower’s

bankruptcy

filing

death

for

which

the

loan

not

current

paid

off

but

has

not

become

212+

days

delinquent.

These

loans

are

various

statuses

including:

bankruptcy stay, deferment, forbearance or delinquency.

As of November 30, 2011

Recoveries

are

typically

realized

over

many

years

result

the

prevalent

use

long-term

payment plans

While student loans are generally 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 Private Education Loan ABS Prepayment Analysis

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

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

Cohort Default Triangles

Note: Data as of 12/31/11.

(1)

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

(2)

Periodic Defaults for the most recent calendar Year 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)

Undergraduate/Graduate

(1)

Without

Co-signer

Undergraduate/Graduate

(1)

With

Co-signer

Note: Data as of 12/31/11.

(1)

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

(2)

Periodic

Defaults

for

the

most

recent

calendar

Year

Repayment

are

for

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

Note: Data as of 12/31/11.

(1)

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

(2)

Periodic

Defaults

for

the

most

recent

calendar

Year

Repayment

are

for

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

Undergraduate/Graduate

(1)

Loans, FICO 740-850

(2)

Undergraduate/Graduate

(1)

Loans, FICO 700-739

(2)

Note: Data as of 12/31/11.

(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

calendar

Year

Repayment

are

for

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.

Cohort Default Triangles

Note: Data as of 12/31/11.

(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

calendar

Year

Repayment

are

for

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)

Cohort Default Triangles

Private Consolidation Loans Without Co-signer

Private Consolidation Loans With Co-signer

Note: Data as of 12/31/11.

(1)

Periodic

Defaults

for

the

most

recent

calendar

Year

Repayment

are

for

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

DTC

With

Co-signer,

FICO

670

(1)

DTC

Without

Co-signer,

FICO

670

(1)

Cohort Default Triangles

Note: Data as of 12/31/11.

(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 calendar Year 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)

Cohort Default Triangles

Note: Data as of 12/31/11.

(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 calendar Year 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.

SLM Appendix

GAAP to Core Earnings Reconciliation

($ in millions, except per share amounts)

Years Ended

Quarters Ended

December 31, 2011

December 31, 2010

December 31, 2011

December 31, 2010

Dollars

Diluted EPS

Dollars

Diluted EPS

Dollars

Diluted EPS

Dollars

Diluted EPS

GAAP net income

633

1.18

530

0.94

511

0.99

447

0.84

Adjustment from GAAP to "Core Earnings"

Net impact of derivative accounting

540

(83)

(377)

(75)

Net impact of goodwill and acquired intangibles

699

Total "Core Earnings" Adjustments before net tax effect

564

616

(372)

(65)

Net tax effect

(220)

(118)

129

Total "Core Earnings" Adjustments

344

498

(243)

(46)

"Core Earnings"

$977

$1.83

$1,028

$1.92

$268

$0.51

$401

$0.75

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

Sallie Mae Investor Relations Website