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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 5, 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 frequently provides relevant information to its investors via posting to its corporate website. On November 5, 2012, a presentation entitled “Q3 2012 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 2012 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.

 

    SLM CORPORATION
Date: November 5, 2012     By:   /s/ Jonathan C. Clark
      Jonathan C. Clark
      Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

 

Exhibit
No.

   

Description

99.1*    Q3 2012 Investor Presentation.

 

* Furnished herewith.
Exhibit 99.1
SLM CORPORATION
Q3 2012 Investor Presentation
NOVEMBER 5, 2012
Exhibit 99.1

2
Forward-Looking Statements; Non-GAAP Financial Measures
The
following
information
is
current
as
of
November
5,
2012
(unless
otherwise
noted)
and
should
be
read
in
connection
with
SLM
Corporation’s
Annual
Report
on
Form
10-K
for
the
year
ended
December
31,
2011
(the
“2011
Form
10-K”),
the
Company’s,
first,
second
and
third
quarter
Forms
10-Q
and
subsequent
reports
filed
with
the
Securities
and
Exchange
Commission
(the
“SEC”).
Definitions
for
capitalized
terms
in
this
presentation
not
defined
herein
can
be
found
in
the
2011
Form
10-K
(filed
with
the
SEC
on
February
27,
2012).
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,
the
Company’s,
first,
second
and
third
quarter
Forms
10-Q
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.
The
Company
reports
financial
results
on
a
GAAP
basis
and
also
provides
certain
core
earnings
performance
measures.
The
difference
between
the
Company’s
core
earnings
and
GAAP
results
for
the
periods
presented
were
the
unrealized,
mark-to-market
gains/losses
on
derivative
contracts
and
the
goodwill
and
acquired
intangible
asset
amortization
and
impairment.
These
items
are
recognized
in
GAAP
but
not
in
core
earnings
results.
The
Company
provides
core
earnings
measures
because
this
is
what
management
uses
when
making
management
decisions
regarding
the
Company’s
performance
and
the
allocation
of
corporate
resources.
The
Company’s
core
earnings
are
not
defined
terms
within
GAAP
and
may
not
be
comparable
to
similarly
titled
measures
reported
by
other
companies.
For
additional
information,
see
“Core
Earnings
—
Definition
and
Limitations”
in
the
Company’s
third
quarter
Form
10-Q
for
a
further
discussion
and
a
complete
reconciliation
between
GAAP
net
income
and
core
earnings.

3
SLM Corporation
SLM Corporation Overview
Page 4
The U.S. Student Loan Market
Page 11
Credit Quality
Page 19
Servicing: A Competitive Advantage
Page 29
Funding Diversity and Liquidity
Page 33
Risk-Adjusted Capitalization
Page 44
FFELP ABS Appendix
Page 47
Private Education Loan ABS Appendix
Page 52
SLM Appendix
Page 73

4
SLM Corporation Overview

5
#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
1
and
Private
Education
Loans
Serving 25 million unique customers and
approximately $250 billion in loans, as of
September 30, 2012
Servicing for third parties, including 4.1 million loans
for the Department of Education (“ED”), as of
September 30, 2012
Fully independent private sector company with
scale and a broad franchise, traded on the
NASDAQ (ticker: SLM)
$165
billion student loan portfolio, 77% of which is
insured or guaranteed, as of September 30, 2012
SLM Corporation
Federal
Family
Education
Loan
Program
(“FFELP”).
1

6
As of September 30, 2012
Net of provision
A Brief Corporate History
As of September 30, 2012

7
Q3 12 “Core Earnings”
Summary
*
*
For
a
GAAP
to
“Core
Earnings”
reconciliation,
see
slide
74
($ millions, except per share amounts)
Q3 12
Q2 12
Q3 11
EPS (Reported)
$0.58
$0.49
$0.36
Net Income
$277
$243
$188
Net Interest Income
$718
$655
$758
Loan Loss Provision
$270
$243
$409
Fee and Other Income - Excluding Debt Repurchase Gains
$190
$192
$198
Debt Repurchase Gains
$44
$20
-
Operating Expenses
$244
$239
$285
Average Student Loans
$167,166
$172,436
$178,620

8
Consumer Lending Segment Earnings Detail –
“Core Earnings”
Basis
(1)
Includes non-GAAP adjustments of 0.08%, 0.11%, and 0.09%, respectively, related to the accounting for derivative instruments.
($ millions)
Q3 12
Q2 12
Q3 11
Private Originations
$1,349
$321
$1,077
Average Private Education Loans
$37,545
$37,543
$36,772
Net Interest Income after Provision -
Private
$155
$187
$23
Net Interest Margin -
Private Education
(1)
4.05%
4.14%
4.03%
Operating Expenses
$67
$64
$82
OpEx Annualized as a % of Average Private Education Loans
0.71%
0.69%
0.88%
Net Income (Loss)
$63
$85
($27)

9
FFELP Loan Segment Earnings Detail –
“Core Earnings”
Basis
(1)As
a
result
of
the
recently
completed
Special
Direct
Consolidation
Loan
Initiative,
net
interest
income
was
reduced
by
the
acceleration
of
$50
million
of
non-cash
loan
premium
amortization
and
the
FFELP
student
loan
spread
was
reduced
by
15
basis
points.
(2)Includes
non-GAAP
adjustments
of
(0.32%),
(0.30%),
and
(0.38%),
respectively,
related
to
the
accounting
for
derivative
instruments.
($ millions)
Q3 12
Q2 12
Q3 11
Average FFELP Loans
$129,621
$134,893
$141,848
Net Interest Income after Provision -
FFELP
(1)
$298
$228
$337
Net Interest Margin -
FFELP
(2)
0.92%
0.70%
0.97%
Operating Expenses
$171
$181
$188
OpEx Annualized as a % of Average FFELP Loans
0.53%
0.54%
0.52%
Net Income
$94
$44
$107

10
Three Aspects of the SLM Business Model
–
Largest originator of Private Education Loans
–
Significant long term value
–
High quality loan originations growing in double digits
–
Growing net income
–
Businesses
include
loan
servicing
and
collections
for
Department
of
Education,
payment
processing
for
colleges
and
universities
and
529
savings plan servicing
–
ABS servicing cash flows are super senior
–
Opportunities exist to expand services provided, including industry
consolidation
–
Efficient cost structure and top performer
–
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
Consumer Lending
Business Services
FFELP Loan Portfolio

11
The U.S. Student Loan Market

12
Favorable Student Loan Market Trends
Source: Trends in College Pricing.©
2012 The College Board,. www.collegeboard.org,
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 2013 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.

13
College Grads Experience Lower Levels of Unemployment
Source:
U.S.
Department
of
Labor,
Bureau
of
Labor
Statistics
as
of
06/30/2012

14
SLM Private Education Loan Originations

15
Private Education Loan Portfolio Characteristics
–
$37 billion portfolio
–
23% of SLM’s total student loan portfolio
–
Approximately 64% of portfolio has a cosigner, typically a parent
–
Loans originated since 2009 are approximately 90% cosigned with average FICO
scores above 740
–
Higher education loans typically non-dischargeable in bankruptcy
–
Integrated underwriting, servicing and collections
SLM’s Private Education Loan Portfolio
As of September 30, 2012

16
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 the customer to defer payments while in-school
Variable and Fixed Interest Rate Options
Repayment
term
is
driven
by
cumulative
amount
borrowed
and
grade
level
Full communication with customers during in-school period
Full
collection
activities
are
employed
at
both
the
customer
and
cosigner
level
All loans are certified by the school’s financial aid office to help ensure that customers borrow no
more than the cost of attendance
SLM’s Private Education Smart Option Student Loan Products

17
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 which is funded by private education loans
Assuming Federal Loans and Grants remain constant –
a 4% increase in the cost of education would result in a $17
billion incremental funding requirement for students and families
Role of Private Education Loan
Source: Trends in College Pricing
.©
2012 The College Board,. www.collegeboard.org,
U.S. Department of Education 2012
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

18
2011-12 academic year market share approximately 47%
Private Credit Industry Originations
Source: Trends in Student Aid.©
2012 The College Board,. www.collegeboard.org,
industry data is preliminary. Based on current dollars. Data reported by academic year, SLM quarterly data converted to academic year basis.
Private Education Loan originations declined from their peak as a result of an
increase in federal student loan limits, an overall increase in the use of federal
student loans, an increase in federal grants, and tighter underwriting standards.

19
Credit Quality

20
+
=
Private Education
Loans
(2)
22%
U.S. Government
Guaranteed
Loans
(2)
78%
Charge-Offs
(1)
= 0.07%
Charge-Offs
(1)
= 2.52%
Total Charge-Offs
(1)
= 0.61%
(1)
All data as of September 30, 2012. 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)
Loan Losses

21
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 September 30, 2012

22
Private Education Loan Portfolio Performance
(1) Charge-offs as a percentage of average loans in repayment annualized for the quarters presented
Q312
Q212
Q112
Q411
Q311
Charge-offs - Traditional Portfolio
(1)
2.6%
2.5%
2.3%
2.7%
2.9%
Charge-offs - Non-Traditional Portfolio
(1)
10.5%
9.8%
10.3%
11.9%
11.5%
Charge-offs - Total Portfolio
(1)
3.2%
3.1%
3.0%
3.5%
3.7%
90+ Day Delinq as a % of Repay - Traditional Portfolio
4.4%
3.7%
3.6%
4.0%
4.0%
90+ Day Delinq as a % of Repay - Non-Traditional Portfolio
14.6%
12.6%
12.5%
13.6%
14.3%
90+ Day Delinq as a % of Repay - Total Portfolio
5.3%
4.5%
4.4%
4.9%
5.0%
Forb as a % of Forb & Repay - Traditional Portfolio
3.1%
4.1%
4.1%
4.2%
4.3%
Forb as a % of Forb & Repay - Non-Traditional Portfolio
5.0%
6.4%
6.8%
6.6%
6.7%
Forb as a % of Forb & Repay - Total Portfolio
3.2%
4.3%
4.3%
4.4%
4.5%
Allowance as a % of Loans in Repay - Traditional Portfolio
5.8%
5.7%
5.8%
5.6%
5.7%
Allowance as a % of Loans in Repay - Non-Traditional Portfolio
21.5%
22.5%
22.8%
23.1%
25.4%
Allowance as a % of Loans in Repay - Total Portfolio
7.1%
7.1%
7.2%
7.2%
7.5%

23
Private Education Loan Portfolio Performance
(1) Charge-offs as a percentage of average loans in repayment annualized for the quarters presented
Traditional Loans with a Cosigner
Q312
Q212
Q112
Q411
Q311
Outstanding Balance as a % of Total
62%
60%
60%
59%
59%
90+ Delinquency as a % of Repayment
3.2%
2.7%
2.6%
2.9%
2.9%
Forbearance as a % of Repayment & Forbearance
2.9%
3.8%
3.7%
3.8%
3.8%
Charge-Offs as a % of Repayment
(1)
1.6%
1.5%
1.4%
1.7%
1.9%
Traditional Loans without a Cosigner
Q312
Q212
Q112
Q411
Q311
Outstanding Balance as a % of Total
30%
31%
31%
32%
32%
90+ Delinquency as a % of Repayment
6.7%
5.5%
5.5%
5.8%
5.9%
Forbearance as a % of Repayment & Forbearance
3.3%
4.5%
4.7%
4.7%
4.9%
Charge-Offs as a % of Repayment
(1)
4.5%
4.3%
3.9%
4.5%
4.9%
Non-Traditional Loans with a Cosigner
Q312
Q212
Q112
Q411
Q311
Outstanding Balance as a % of Total
3%
3%
3%
3%
3%
90+ Delinquency as a % of Repayment
12.3%
10.3%
10.4%
11.8%
12.2%
Forbearance as a % of Repayment & Forbearance
6.2%
7.6%
8.1%
7.8%
7.7%
Charge-Offs as a % of Repayment
(1)
6.9%
6.6%
7.1%
7.8%
8.0%
Non-Traditional Loans without a Cosigner
Q312
Q212
Q112
Q411
Q311
Outstanding Balance as a % of Total
6%
6%
6%
7%
7%
90+ Delinquency as a % of Repayment
15.6%
13.5%
13.3%
14.4%
15.1%
Forbearance as a % of Repayment & Forbearance
4.5%
5.9%
6.2%
6.1%
6.3%
Charge-Offs as a % of Repayment
(1)
11.9%
11.1%
11.6%
13.6%
12.9%

24
Improvement in Portfolio Quality & Mix
Originations of $3.2 bn in 2009 had an average FICO of 745 and 83% were cosigned.
Originations of $2.3 bn in 2010 had an average FICO of 739 and 89% were cosigned.
Originations of $2.7 bn in 2011 had an average FICO of 748 and 91% were cosigned.
YTD originations of $3.0 bn had an average FICO of 748 and 91% were cosigned.
Legacy Loans Entering Repayment
(1)
(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.
$ 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
$3.5
10%
62%
17%
714
Projected
(2)
2012
$1.9
9%
65%
14%
716
2013
$0.5
7%
67%
15%
726

25
(Dollars in millions)
September 30, 2012
Traditional Portfolio
Monthly Scheduled Payments Due
Not Yet in Repayment
6,234
          
Loans in Forbearance
501
             
7.4%
150
             
2.4%
110
             
2.1%
57
                 
1.5%
80
                   
1.2%
898
             
3.1%
Loans in Repayment- Current
5,215
          
76.8%
5,744
          
90.1%
4,794
          
90.7%
3,627
          
93.0%
6,547
            
94.8%
25,927
        
88.6%
Loans in Repayment- Delinq 31-60 days
270
             
4.0%
166
             
2.6%
141
             
2.7%
88
                 
2.3%
119
                 
1.7%
784
             
2.7%
Loans in Repayment- Delinq 61-90 days
170
             
2.5%
77
                 
1.2%
65
                 
1.2%
38
                 
1.0%
49
                   
0.7%
399
             
1.4%
Loans in Repayment- Delinq 90 + days
630
             
9.3%
238
             
3.7%
176
             
3.3%
92
                 
2.4%
110
                 
1.6%
1,246
          
4.3%
6,786
$        
100%
6,375
$        
100%
5,286
$        
100%
3,902
$        
100%
6,905
$          
100%
29,254
$     
100%
Charge-offs as a % of loans in repayment
6.1%
2.2%
1.6%
1.2%
0.9%
2.6%
Non-Traditional Portfolio
Monthly Scheduled Payments Due
Not Yet in Repayment
566
             
Loans in Forbearance
87
                 
9.6%
19
                 
4.7%
12
                 
2.8%
8
                   
2.3%
12
                   
1.9%
138
             
5.0%
Loans in Repayment- Current
482
             
53.4%
334
             
70.9%
321
             
77.0%
286
             
83.6%
536
                 
86.1%
1,959
          
71.1%
Loans in Repayment- Delinq 31-60 days
71
                 
7.8%
32
                 
6.7%
24
                 
5.9%
16
                 
4.8%
27
                   
4.3%
170
             
6.2%
Loans in Repayment- Delinq 61-90 days
51
                 
5.7%
17
                 
3.6%
15
                 
3.7%
8
                   
2.4%
14
                   
2.2%
105
             
3.8%
Loans in Repayment- Delinq 90 + days
211
             
23.4%
68
                 
14.5%
45
                 
10.8%
24
                 
7.0%
34
                   
5.4%
382
             
13.9%
902
$           
100%
470
$           
100%
417
$           
100%
342
$           
100%
623
$             
100%
2,754
$        
100%
Charge-offs as a % of loans in repayment
20.1%
10.7%
5.8%
3.6%
3.4%
10.5%
Total
Monthly Scheduled Payments Due
Not Yet in Repayment
6,800
          
Loans in Forbearance
588
             
7.7%
169
             
2.5%
122
             
2.1%
65
                 
1.5%
92
                   
1.2%
1,036
          
3.2%
Loans in Repayment- Current
5,697
          
74.1%
6,078
          
88.8%
5,115
          
89.7%
3,913
          
92.2%
7,083
            
94.1%
27,886
        
87.1%
Loans in Repayment- Delinq 31-60 days
341
             
4.4%
198
             
2.9%
165
             
2.9%
104
             
2.5%
146
                 
1.9%
954
             
3.0%
Loans in Repayment- Delinq 61-90 days
221
             
2.9%
94
                 
1.4%
80
                 
1.4%
46
                 
1.1%
63
                   
0.8%
504
             
1.6%
Loans in Repayment- Delinq 90 + days
841
             
10.9%
306
             
4.5%
221
             
3.9%
116
             
2.7%
144
                 
1.9%
1,628
          
5.1%
7,688
$        
100%
6,845
$        
100%
5,703
$        
100%
4,244
$        
100%
7,528
$          
100%
32,008
$     
100%
Charge-offs as a % of loans in repayment
7.7%
2.7%
1.9%
1.4%
1.1%
3.2%
Total
Total Loans in Repayment or Forbearance
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
More than 48 payments
Total
Total Loans in Repayment or Forbearance
Total Loans in Repayment or Forbearance
Loan Status
0-12 payments
13-24 payments
25-36 payments
37-48 payments
Loan Seasoning

26
(Dollars in millions)
Loan Seasoning
June 30, 2012
Traditional Portfolio
Monthly Scheduled Payments Due
Loan Status
0-12 payments
13-24 payments
25-36 payments
37-48 payments
More than 48 payments
Total
Not Yet in Repayment
5,529
Loans in Forbearance
717
9.3%
190
3.1%
131
2.5%
66
1.8%
82
1.3%
1,186
4.1%
Loans in Repayment-
Current
5,881
76.0%
5,504
89.2%
4,799
90.6%
3,344
93.0%
6,141
95.1%
25,669
87.7%
Loans in Repayment-
Delinq 31-60 days
380
4.9%
173
2.8%
139
2.6%
71
2.0%
99
1.5%
862
2.9%
Loans in Repayment-
Delinq 61-90 days
240
3.1%
95
1.5%
77
1.4%
39
1.1%
47
0.7%
498
1.7%
Loans in Repayment-
Delinq 90 + days
521
6.7%
209
3.4%
152
2.9%
75
2.1%
89
1.4%
1,046
3.6%
Total Loans in Repayment or Forbearance
7,739
$
100%
6,171
$ 
100%
5,298
$
100%
3,595
$
100%
6,458
$
100%
29,261
$
100%
Charge-offs as a % of loans in repayment
5.1%
2.4%
1.6%
1.3%
0.9%
2.5%
Non-Traditional Portfolio
Monthly Scheduled Payments Due
Loan Status
0-12 payments
13-24 payments
25-36 payments
37-48 payments
More than 48 payments
Total
Not Yet in Repayment
569
Loans in Forbearance
121
12.0%
24
4.9%
16
3.8%
8
2.5%
13
2.2%
182
6.4%
Loans in Repayment-
Current
525
52.0%
343
70.8%
329
77.3%
277
84.1%
507
86.1%
1,981
69.8%
Loans in Repayment-
Delinq 31-60 days
98
9.7%
34
7.1%
25
5.9%
16
4.6%
23
3.9%
196
6.9%
Loans in Repayment-
Delinq 61-90 days
81
8.0%
24
4.9%
16
3.8%
9
2.9%
15
2.6%
145
5.1%
Loans in Repayment-
Delinq 90 + days
185
18.3%
60
12.3%
39
9.2%
19
5.9%
31
5.2%
334
11.8%
Total Loans in Repayment or Forbearance
1,010
$
100%
485
$  
100%
425
$  
100%
329
$  
100%
589
$  
100%
2,838
$  
100%
Charge-offs as a % of loans in repayment
17.8%
10.2%
5.1%
3.5%
3.4%
9.8%
Total
Monthly Scheduled Payments Due
Loan Status
0-12 payments
13-24 payments
25-36 payments
37-48 payments
More than 48 payments
Total
Not Yet in Repayment
6,098
Loans in Forbearance
838
9.6%
214
3.2%
147
2.6%
74
1.9%
95
1.3%
1,368
4.3%
Loans in Repayment-
Current
6,406
73.2%
5,847
87.9%
5,128
89.6%
3,621
92.3%
6,648
94.4%
27,650
86.1%
Loans in Repayment-
Delinq 31-60 days
478
5.5%
207
3.1%
164
2.9%
87
2.2%
122
1.7%
1,058
3.3%
Loans in Repayment-
Delinq 61-90 days
321
3.6%
119
1.8%
93
1.6%
48
1.2%
62
0.9%
643
2.0%
Loans in Repayment-
Delinq 90 + days
706
8.1%
269
4.0%
191
3.3%
94
2.4%
120
1.7%
1,380
4.3%
Total Loans in Repayment or Forbearance
8,749
$
100%
6,656
$
100%
5,723
$
100%
3,924
$
100%
7,047
$
100%
32,099
$
100%

27
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%
59
                 
1.9%
65
                   
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%
65
                 
2.1%
84
                   
1.7%
827
             
3.0%
Loans in Repayment- Delinq 61-90 days
198
             
2.2%
72
                 
1.2%
52
                 
1.1%
26
                 
0.8%
35
                   
0.7%
383
             
1.4%
Loans in Repayment- Delinq 90 + days
532
             
6.0%
231
             
3.9%
142
             
3.1%
67
                 
2.1%
82
                   
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%
25
                 
4.7%
15
                 
3.6%
7
                   
2.6%
11
                   
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%
36
                 
6.8%
25
                 
5.8%
14
                 
5.1%
24
                   
4.8%
205
             
7.1%
Loans in Repayment- Delinq 61-90 days
72
                 
6.3%
21
                 
3.9%
13
                 
3.0%
7
                   
2.7%
13
                   
2.7%
126
             
4.4%
Loans in Repayment- Delinq 90 + days
210
             
18.3%
76
                 
14.4%
41
                 
9.6%
21
                 
7.5%
34
                   
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
Monthly Scheduled Payments Due
Not Yet in Repayment
7,693
          
Loans in Forbearance
897
             
9.0%
194
             
3.0%
127
             
2.5%
66
                 
1.9%
76
                   
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%
79
                 
2.3%
108
                 
2.0%
1,032
          
3.4%
Loans in Repayment- Delinq 61-90 days
270
             
2.7%
93
                 
1.4%
65
                 
1.3%
33
                 
1.0%
48
                   
0.9%
509
             
1.7%
Loans in Repayment- Delinq 90 + days
742
             
7.5%
307
             
4.8%
183
             
3.7%
88
                 
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
Total Loans in Repayment or Forbearance
Loan Status
0-12 payments
13-24 payments
25-36 payments
37-48 payments
Total
Total Loans in Repayment or Forbearance
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

28
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 Performance
0%
10%
20%
30%
40%
50%
60%
Dlq in Sep-10
Default as of Sep
-11
Dlq in Sep
-11
Default as of Sep
-12
Default Rate One Year Later
> 90 dpd Payment Made vs No Payments Made

29
Servicing: A Competitive Advantage

30
Revenue of $976 million in the first nine months of 2012
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
Plan to leverage campus relationships and servicing capabilities
to grow Campus
Solutions and other fee income businesses
Business Services Segment –
“Core Earnings”
Basis

31
Business Services Segment Earnings Detail –
“Core Earnings”
Basis
($ millions)
Q3 12
Q2 12
Q3 11
Intercompany loan servicing
$164
$172
$183
Third-party loan servicing
$26
$26
$20
Guarantor servicing
$11
$11
$15
Other servicing
$23
$21
$24
Contingency revenue
$85
$87
$84
Other Business Services revenue
$7
$8
$11
Net Income
$131
$138
$139

32
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

33
Funding Diversity and Liquidity

34
Issued $6.9 billion of FFELP ABS
Issued $4.2 billion of Private ABS
Expanded and extended our FFELP ABCP facility to 2015
Issued $2.65 billion of long term unsecured debt
Paid quarterly dividend of $0.125 per common share
Repurchased
48.2
million
common
shares;
spent
$730
million
•
$170 million of remaining common share repurchase authorization
As of September 30, 2012
2012 Capital Markets Summary
1
1

35
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.
Non-Consolidation FFELP
Non-Consolidation FFELP
Consolidation FFELP
Issue
$1,249M SLM Trust 2012-6
$1,252M SLM Trust  2012-5
$1,536M SLM Trust  2012-4
Pricing Date
September 11, 2012
July 10, 2012
June 6, 2012
Collateral
US Govt. Guaranteed FFELP Stafford and Plus
Loans
US Govt. Guaranteed FFELP Stafford and Plus
Loans
US Govt. Guaranteed FFELP Consolidation
Loans
Prepayment Speed
(1)
6% Constant Prepayment Rate
6% Constant Prepayment Rate
2% Constant Prepayment Rate
Tranching
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1   Aaa       $277    1.1    
L+16
A-2   Aaa       $360    3.3    
L+28
A-3   Aaa       $575    7.0    
L+75
B      Aa2         $37    9.0    
L+374
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1   Aaa       $280    1.0     
L+20
A-2   Aaa       $360    3.3     
L+35
A-3   Aaa       $575    7.0     
L+80
B      Aa3         $37    9.0     
L+404
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1   Aaa    $1,491    8.2     
L+110
B      A2           $45  17.1     
L+434
Non-Consolidation FFELP
Non-Consolidation FFELP
Non-Consolidation FFELP
Issue
$1,252M SLM Trust 2012-3
$824M SLM Trust 2012-2
$765M SLM Trust 2012-1
Pricing Date
April 24, 2012
March 6, 2012
January 11, 2012
Collateral
US Govt. Guaranteed FFELP Stafford and Plus
Loans
US Govt. Guaranteed FFELP Stafford and Plus
Loans
US Govt. Guaranteed FFELP Stafford and Plus
Loans
Prepayment Speed
(1)
6% Constant Prepayment Rate
6% Constant Prepayment Rate
6% Constant Prepayment Rate
Tranching
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1   Aaa    $1,215    4.6     
L+65
B      Aa3         $38    9.1     
L+397
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1   Aaa      $799    4.7     
L+70
B      Aa1        $25    9.2     
L+393
Moody’s
Amt
WAL
(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

36
Recent SLM Private 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)
Yield on fixed rate tranches were 2.10%, 2.98%, 3.34%, 3.51%, and 3.86% for 2012-E, 2012-D ,2012-C, 2012-B, and 2012-A respectively.
Private Education Loans
Private Education Loans
Private Education Loans
Issue
$976M SLM Trust 2012-E
$640M SLM Trust 2012-D
$1,135M SLM Trust 2012-C
Pricing Date
October 11, 2012
July 23, 2012
May 23, 2012
Collateral
Private Education Loans
Private Education Loans
Private Education Loans
Prepayment Speed
(1)
4%
4%
4%
Tranching
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1     Aaa      $676   1.7    L+75
A-2A  Aaa      $100   4.5     s+ 140
A-2B  Aaa      $200
4.5
L+175
Total                $976   2.6     L+122
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1     Aaa      $450   1.7     L+105
A-2     Aaa      $190
4.3
s+230
Total                $640   2.5     L+169
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1     Aaa      $781   1.75    L+110
A-2     Aaa      $354
4.5
s+235
Total             $1,135  2.6      L+177
Private Education Loans
Private Education Loans
Issue
$891M SLM Trust 2012-B
$547M SLM Trust 2012-A
Pricing Date
April 4, 2012
February 2, 2012
Collateral
Private Education Loans
Private Education Loans
Prepayment Speed
(1)
4%
4%
Tranching
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1     Aaa      $482   1.5     L+110
A-2     Aaa      $342   4.2     s+240
A-3     Aaa      $67
5.7
L+300
Total                $891   2.9     L+212
Moody’s
Amt
WAL
(1)
Pricing
(2)
A-1     Aaa      $379   2.0      L+140
A-2     Aaa      $168
5.2
s+285
Total                $547   3.0      L+217

37
High Percentage of Student Loans Funded to Term
*
Gross loans, Numbers may not add due to rounding.

38
Unsecured Debt Maturities
Note:  Does not include Sallie Mae Bank or Subsidiary funding

39
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
2011
Form
10-
K.
($ in billions)
9/30/12
12/31/11
12/31/10
12/31/09
FFELP Stafford and Plus Loans, net
$                  0.6
$                   0.8
$                1.0
$               
1.6
FFELP Consolidation Loans, net
0.4
0.2
0.5
0.5
Private Education Loans, net
10.8
11.0
11.1
12.5
Other Loans
0.2
0.2
0.3
0.4
Available Cash & Investments
4.3
3.9
5.3
8.1
Retained Interests*
-
-
-
1.8
Other Assets
4.1
4.1
4.1
5.2
Total Unencumbered Tangible Assets
$               20.4
$                20.2
$          
22.3
$                30.1
Unsecured Debt Outstanding
$               25.4
$                24.1
$           
26.9
$                35.1
Unencumbered Assets & Unsecured Debt
Net Assets in Secured Financing
Facilities
9/30/12
12/31/11
12/31/10
12/31/09
Off-Balance Sheet ABS (Non-GAAP)*
$           -
$           -
$           -
$          0.6
On-Balance Sheet ABS (GAAP)**
13.0
12.9
13.1
12.7
Total
$        13.0
$        12.9
$        13.1
$        13.3

40
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
YTD 2012
2011
2010
2009
Servicing (Cash Paid)
$           396
$           563
$           533
$           549
Net Residual* (Excess Distributions)
446
715
746
1,435
Net Cash Flow
740
568
1,465
1,296
$        1,583
$        1,846
$        2,743
$        3,280
Servicing (Cash Paid)
$           133
$           189
$           179
$           130
Residual (Excess Distribution)
77
28
8
90
Net Cash Flow
18
2
-
58
$           228
$           219
$           187
$           278
$        1,811
$        2,065
$        2,930
$        3,558
YTD 2012
2011
2010
2009
$     105,292
$     109,509
$       99,041
$     102,754
23,930
29,466
38,767
36,628
$     129,222
$     138,975
$     137,808
$     139,382
$       24,673
$       25,619
$       25,854
$       19,144
2,139
233
-
2,641
$       26,812
$       25,853
$       25,854
$       21,785
$     156,034
$     164,828
$     163,661
$     161,167
FFELP
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

41
Projected Cash Flows From FFELP Portfolio
*
Assumptions
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 = $7.8 Billion
Total Cash Flows from Projected Servicing Revenues = $4.9 Billion
as of  9/30/12
2012
2013
2014
2015
2016
2017
2018
2019
Projected FFELP Average Balance
$125,371
$117,614
$106,851
$96,279
$86,628
$77,195
$68,398
$60,122
Projected Excess Spread
$219
$823
$757
$672
$620
$557
$576
$548
Projected Servicing Revenue
$165
$627
$570
$515
$460
$407
$356
$308
Projected Total Revenue
$384
$1,451
$1,326
$1,187
$1,080
$964
$933
$857
2020
2021
2022
2023
2024
2025
2026
2027
Projected FFELP Average Balance
$52,403
$45,201
$38,992
$33,926
$29,164
$24,593
$20,286
$16,119
Projected Excess Spread
$480
$423
$346
$303
$272
$248
$217
$187
Projected Servicing Revenue
$264
$222
$186
$161
$138
$117
$97
$78
Projected Total Revenue
$744
$645
$532
$464
$411
$365
$314
$265
2028
2029
2030
2031
2032
2033
Projected FFELP Average Balance
$12,258
$9,176
$6,920
$5,073
$3,419
$1,997
Projected Excess Spread
$154
$124
$97
$78
$56
$37
Projected Servicing Revenue
$60
$45
$34
$26
$18
$11
Projected Total Revenue
$214
$169
$131
$103
$74
$48

42
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
–
15.7% Total Risk-based Capital at September 30, 2012
–
Dividends of $345 million paid year-to-date 2012
Deposit taking activities
–
Strong cash position used to fund Private Education Loan originations
–
Deposits totaled $6.3 billion at September 30, 2012
•
$4.2 billion Brokered Deposits
•
$2.1 billion Direct Retail and other affiliate and non-affiliate Deposits
–
Brokered Deposit term portfolio has a weighted average maturity of 22.3 months
–
Total deposits increased by 22% in 3Q12 due primarily to peak season cash needs
Sallie Mae Bank

43
Sallie Mae Bank –
Capital & Deposits
*Primarily affiliate deposit accounts with no stated maturities

44
Risk-Adjusted Capitalization

45
Strong Capital Position
($ in Billions)
Q3 12
Q2 12
Q1 12
GAAP Capital
$4.9
$4.9
$5.0
Goodwill & Intangibles
(0.5)
                
(0.5)
                 
(0.5)
                 
Derivative Mark-to-Market
1.2
                 
1.1
                   
1.1
                   
Unamortized Premiums from Floors
0.6
                 
0.7
                   
0.7
                   
Tangible Economic Capital*
$6.3
$6.2
$6.4
Private Loan Loss Reserve
2.2
                 
2.2
                   
2.2
                   
Available Risk Capital*
$8.5
$8.4
$8.6
Risk Assets (Before Loan Loss Reserves)
Private Credit
$39.3
$38.6
$38.9
Other Risk Assets
1.1
                 
1.1
                   
1.1
                   
Total Risk Assets
$40.4
$39.7
$40.0
Capital to Risk Assets:
21.0%
21.2%
21.6%
*
“Tangible
Economic
Capital”
and
“Available
Risk
Capital”
are
non-GAAP
financial
measures.
The
reconciliation
to
GAAP
capital
is
shown
on
this
slide.

46
Capital Allocation
SLM allocates capital internally based on the risk of the assets
it supports
Assets
0.50%
12%
Capital
Allocation
0% -
15%*
Cash,
Investments,
Other Assets
11% of
Assets
Private
Education
Loans
20% of
Assets
Government
Guaranteed
Loan Assets
69% of
Assets
Based on Risk
*Other Assets includes a small amount of goodwill & intangible assets for which capital is allocated at 100%

47
FFELP ABS Appendix

48
Lender Name
FY11
SLM CORPORATION
$139,540
NELNET
$25,169
WELLS FARGO
$17,923
BRAZOS GROUP
$10,976
JPMORGAN CHASE BANK
$9,371
PA HIGHER ED ASST AUTH (PHEAA)
$8,172
PNC
$7,732
College Loan Corp
$7,645
CIT
$7,396
Goal Financial
$6,466
Top 10 Holders
$240,390
Federal Student Loan Market
Top 10 Holders of FFELP Loans
FFYE 9/30/2011 ($ 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.
1 Student Loan Xpress is a CIT company
1

49
Issue size of $0.5B to $1.5B
Tranches or pass-through denominated in
US$
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 yields 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

50
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

51
SLM Consolidation ABS Trusts
Historical Consolidation ABS CPRs
CPRs for SLM Consolidation ABS Trusts have declined significantly following legislation that prevented in-school and re-
consolidation
of
borrowers’
loans
Prepayment Analysis
*  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.

52
Private Education Loan ABS Appendix

53
SLM Private Loan ABS Issuance Profile
Sallie Mae is among largest issuers of ABS globally, having issued close to $250
billion in Private and FFELP ABS transactions to date
Sallie Mae has been the market leader in Private Education Loans
since the late ’80s,
with expected originations of at least $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
Executed 3 transactions in 2011 totaling $2.1 billion
Executed 5 transactions YTD 2012 totaling $4.2 billion

54
Issue size of $500M to $1.5B
Triple-A rated senior notes only; no
subordinate tranches
20-30% overcollateralization
Multiple tranches with 2, 5, and/or 7 yr
average lives
Fixed rate or floating rate tied to 1 month
LIBOR
Full-turbo structure
Collateralized by loans made to students
and parents to fund college tuition, room
and board
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

55
SLM Private Education Loan ABS Summary
(1) Smart
Option
loans
considered
as
‘in
repayment’
if
borrowers
are
making
either
interest
only
payments
or
principal
and
interest
payments,
regardless
of
whether
the
borrower
is
otherwise in school, grace, or deferment status.
(2) Assumes Prime/LIBOR spread of 2.75%.
Summary Information
09-B
09-C
09-D
09-CT
10-A
10-B
10-C
11-A
11-B
11-C
12-A
12-B
12-C
12-D
12-E
Bond Amount ($mil)
2,593
1,109
1,680
590
1,550
869
1,701
562
825
721
547
891
1,135
640
976
Initial AAA Enhancement (%)
35%
34%
32%
37%
23%
45%
37%
21%
18%
24%
27%
26%
25%
25%
21%
Loan Program (%)
Signature/Law/MBA/Med
68%
50%
52%
--
76%
46%
89%
88%
91%
71%
61%
48%
43%
37%
35%
Smart Option
--
--
--
--
--
--
--
--
--
10%
20%
30%
40%
45%
48%
Consolidation
13%
10%
14%
--
1%
8%
11%
0%
0%
7%
6%
9%
5%
5%
5%
Direct to Consumer
19%
40%
34%
--
10%
20%
--
9%
6%
12%
12%
12%
12%
12%
12%
Career Training
--
--
--
100%
13%
26%
--
3%
3%
0%
1%
1%
0%
0%
0%
Total
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Payment Status (%)
(1)
School, Grace, Deferment
63%
62%
57%
0%
63%
12%
36%
55%
55%
37%
25%
20%
16%
11%
13%
Repayment
34%
35%
40%
98%
32%
85%
60%
43%
43%
60%
73%
78%
81%
87%
85%
Forbearance
3%
3%
3%
2%
5%
3%
3%
2%
3%
2%
2%
2%
3%
2%
2%
Wtd Avg Term to Maturity (Mo.)
209
208
211
141
190
169
194
192
189
182
171
164
151
144
148
% Loans with Cosigner
63%
63%
64%
70%
72%
65%
62%
72%
75%
71%
75%
77%
79%
80%
80%
% Loans with No Cosigner
37%
37%
36%
30%
28%
35%
38%
28%
25%
29%
25%
23%
21%
20%
20%
Wtd Avg FICO at Origination
728
727
731
747
739
734
727
737
736
733
735
736
737
740
733
Wtd Avg Recent FICO at Issuance
714
713
714
725
725
732
713
723
722
720
724
726
728
730
722
WA FICO (Cosigner at Origination)
742
741
744
753
749
744
742
747
745
744
745
745
745
748
741
WA FICO (Cosigner at Rescored)
733
731
729
734
739
740
733
736
731
734
732
734
735
738
728
WA FICO (Borrower at Origination)
703
704
707
734
714
712
701
709
710
704
705
705
707
710
702
WA FICO (Borrower at Rescored)
680
684
686
703
691
716
679
690
695
688
700
700
702
698
696
Wtd Avg LIBOR Equivalent Margin
(2)
5.19%
5.60%
5.23%
6.99%
7.09%
5.26%
4.64%
7.35%
7.17%
7.17%
6.60%
6.86%
7.02%
7.07%
7.34%

56
Constraining rating agency AAA/Aaa gross default stress levels at issuance
Source: Sallie Mae, Moody’s, Standard & Poor’s, Fitch.

57
Private Education 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

58
SLM Private Education ABS Trusts: 90+ Day Delinquencies
As expected, later stage delinquency has remained elevated in recent periods due to tightening of forbearance
policy 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

59
SLM Private Education ABS Trusts: Annualized Gross Charge-offs
Charge-offs have declined steadily since late 2009, after an increase resulting from changes to forbearance policy
and a weak economic environment
(1) For SLM Private Education 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 equalled 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.

60
SLM Private Education Loan Gross Defaults
As of August 31, 2012
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.

61
Recoveries
Recoveries are typically realized over many years as a result of
the prevalent use of 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
in
1998-2003
had
recovery
rates
of
7
–
14%
five
years
after
default
–
The 2005 cohort had a recovery rate of 24% six years after default
Recovery experience for more recent cohorts has varied based on economic conditions and the
characteristics of defaulted loans
In Q3 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

62
SLM Private Education Loan ABS Trusts –
Prepayment Analysis
Historical SLM Private Education Loan ABS CPRs
Constant prepayment rates increased in 2007 due to the introduction of Private Education Consolidation loans,
then declined following SLM’s decision to suspend its consolidation loan program in 2008

63
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.

64
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
of
principal
entering
repayment
in
a
given year, based on disbursed principal prior to any interest capitalization
–
Years in Repayment
–
Measured in years between repayment start date and default date. 
Zero represents defaults that occurred prior to the start of repayment.
–
Periodic Defaults
–
Defaulted principal in each Year in Repayment as a percentage of 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
of
Periodic
Defaults
across
Years
in
Repayment
for
each
Repayment
Year
Cohort Default Triangles

65
Cohort Default Triangles
Note: Data as of 9/30/12.
(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.

66
Note: Data as of 9/30/12.
(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

67
Note: Data as of 9/30/12.
(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

68
Note: Data as of 9/30/12.
(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.
Cohort Default Triangles

69
Note: Data as of 9/30/12.
(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.
Cohort Default Triangles

70
Private Consolidation Loans Without Co-signer
Private Consolidation Loans With Co-signer
Note: Data as of 9/30/12.
(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

71
Note: Data as of 9/30/12.
(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.
Cohort Default Triangles

72
72
Note: Data as of 9/30/12.
(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)
Cohort Default Triangles

73
SLM Appendix

74
GAAP to “Core Earnings”
Reconciliation
($ in millions, except per share amounts)
Quarters Ended
September 30, 2012
June 30, 2012
September 30, 2011
Dollars
Diluted EPS
Dollars
Diluted EPS
Dollars
Diluted EPS
GAAP net income (loss)
188
$         
0.39
$    
292
$         
0.59
$    
(47)
$    
(0.10)
$            
Adjustment from GAAP to "Core Earnings"
Net impact of derivative accounting
140
(82)
371
Net impact of goodwill and acquired intangible assets
5
5
6
Total "Core Earnings" Adjustments before net tax effect
145
(77)
377
Net tax effect
(56)
28
(142)
Total "Core Earnings" Adjustments
89
(49)
235
"Core Earnings"
$277
$0.58
$243
$0.49
$188
$0.36

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. by trust 
–
Since issued CPR –
monthly CPR data by trust since issuance
SLM student loan performance by 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
www.salliemae.com/investors