SEC Filing | SLM Corporation

SLM CORPORATION

Date: August 6, 2013

/s/ Laurent C. Lutz

Laurent C. Lutz

Executive Vice President, General Counsel

and Secretary

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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): August 6, 2013

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 7.01

REGULATION FD DISCLOSURE.

SLM Corporation (the “Company”) frequently provides relevant information to its investors via posting to its corporate website. On August 6, 2013, a presentation entitled “Q2 2013 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.

The information contained in, or incorporated into, this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS.

(d)

Exhibits


Exhibit Number		Description

99.1*		Q2 2013 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 Number		Description

99.1*		Q2 2013 Investor Presentation.

*	Furnished herewith.

EX 99.1

SLM CORPORATION

Q2 2013 Investor Presentation

AUGUST 6, 2013

Forward-Looking Statements; Non-GAAP Financial Measures

The following information is current as of August 6, 2013 (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, 2012

(the “2012 Form 10-K”), 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 2012

Form 10-K (filed with the SEC on February 26, 2013).

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 the company’s 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 company’s Annual Report on Form 10-K for the year ended Dec. 31, 2012 and subsequent filings with the Securities and Exchange

Commission; 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 the company is a party; credit risk associated with the company’s exposure to third parties, including counterparties

to the company’s 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).

The company could also be affected by, among other things: changes in its funding costs and availability; reductions to its credit ratings or the credit ratings of the United States of America; failures of its

operating systems or infrastructure, including those of third-party vendors; damage to its reputation; failures to successfully implement cost-cutting and adverse effects of such initiatives on its business; risks

associated with restructuring initiatives, including the company’s recently announced strategic plan to separate its existing operations into two separate publicly traded companies; 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 its customers; changes in the general interest rate environment, including the rate relationships

among relevant money-market instruments and those of its earning assets vs. its funding arrangements; changes in general economic conditions; and changes in the demand for debt management services.

The preparation of the company’s 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 release are qualified by these cautionary statements and are made only as of the date of this release. The

company does not undertake any obligation to update or revise these forward-looking statements to conform the statement to actual results or changes in its 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 second quarter earnings release for a further discussion and a complete reconciliation between GAAP net income and core earnings.

SLM Corporation

The U.S. Student Loan Market

Page 4

SLM Corporation Overview

Page 9

Credit Quality

Page 17

Funding Diversity and Liquidity

Page 29

Risk-Adjusted Capital

Page 39

FFELP ABS Appendix

Page 42

Private Education Loan ABS Appendix

Page 47

SLM Appendix

Page 68

The U.S. Student Loan Market

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)

Annual Cost of Education ($ thousands)

Source: CBO May 2013 Baseline Projections for the Student Loan Program by fiscal year

Note: Excludes consolidation volume

Federal Student Loan Origination Volume ($ billions)

Relationship Between Higher Education, Income and Employment

Source: U.S. Bureau of Labor Statistics, Current Population Survey, 2012 Annual Social and Economic

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

Annual

Average

2012.

Represents

unemployment

for

civilian

non-institutional

population

over

age

25.

Unemployment

Average annual income

19.1

20.4

21.0

21.3

21.5

22.2

23.8

2008

2009

2010

2011

2012

2013

2016

2021

11.4

12.1

12.8

13.6

14.4

16.2

17.1

17.9

$27.5

$28.7

$30.5

$32.0

$33.8

$35.1

$36.5

$38.0

$39.5

2005

2006

2007

2008

2009

2010

2011

2012

2013

Public

Private

15.2

105.9

109.0

112.5

116.6

120.5

124.4

128.4

132.3

136.4

2013

2014

2015

2016

2017

2018

2019

2020

2021

10%

12%

14%

10,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Less than H.S.

High school

Some college

Associate

Bachelor's

Master's

Doctorate

Professional

20,000

30,000

SOURCE: U.S. Department of Education, National Center for Education Statistics, Higher Education General Information Survey

(HEGIS), "Fall Enrollment in Colleges and Universities" surveys, 1970 and 1980; Integrated Postsecondary

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

2012, Enrollment component; and Projections of Education Statistics to 2021. U.S. Department of Commerce,

Census Bureau, Current Population Survey (CPS), October, selected years, 1970 through 2011. (This table was

prepared December 2012.)

College Grads Experience Lower Levels of Unemployment

Source: U.S. Bureau of Labor Statistics as of 3/31/2013

Total Unemployment Rate

Unemployment Rate with a Bachelor's Degree or Higher

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 21 million students will enroll in higher education and incur costs

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

Role of Private Education Loans

Source:

Trends

College

Pricing

.©

2012

The

College

Board,.

U.S. Department of Education 2012

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

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

Total Cost of Education (in billions)

2011/2012 Academic Year

www.collegeboard.org,

2011-12 academic year market share approximately 47%

Private Education Loan Industry Originations

Source:

Trends

Student

Aid.

2012

The

College

Board,.

www.collegeboard.org,

industry

data

preliminary.

Based

current

dollars.

Data

reported

academic

year,

SLM

quarterly

data

converted

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.

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

$146

billion student loan portfolio, 75% of which

is insured or guaranteed

Fully independent private sector company with

scale and a broad franchise, traded on the

NASDAQ (ticker: SLM)

SLM Corporation

Federal Family Education Loan Program (“FFELP”).

As of June 30, 2013

Net of provision

A Brief Corporate History

As of July 31, 2013

1965

•

Congress

creates

the

Guaranteed

Student

Loan

Program,

currently

known

as FFELP

1972

•

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

or “Sallie Mae”

1996

•

Privatization of Sallie Mae approved by Congress, SLM Corporation

holding company created

2004

•

GSE dissolved…

SLM Corporation becomes a fully independent, private

sector corporation

2008

•

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

education lending curtailed

2009

•

Smart Option private loan introduced

•

SLM wins 5 year contract to service for US Dept. Education

2010

•

FFELP eliminated in legislative reform July 2010

•

SLM acquires $25 billion FFELP portfolio from Student Loan Corporation

2013

•Announces planned separation into two distinct business, an education

loan management company and a consumer banking company.

SLM Corporate

Debt

Ratings

Moody’s

S & P

Fitch

Long

Term

Ba1

BBB

BB+

Short

Term

Not-Prime

A-3

Outlook

Neg.

Loan Portfolio

Loan Type

$billions

FFELP Loans

$108.5

75%

Private

Education

$37.1

25%

Total Portfolio

$145.6

100%

Q2 13 “Core Earnings”

Summary

* For

GAAP

“Core

Earnings”

reconciliation,

see

slide

($ millions, except per share amounts)

Q2 13

Q1 13

Q2 12

EPS (Reported)

$1.02

$0.61

$0.49

Net Income

$462

$283

$243

Net Interest Income

$675

$676

$656

Loan Loss Provision

$201

$241

$243

Fee and Other Income

$476

$279

$208

Operating Expenses

$258

$250

$231

Average Student Loans

$152,135

$160,261

$172,436

Consumer Lending Segment Earnings Detail –

“Core Earnings”

Basis

($ millions)

Q2 13

Q1 13

Q2 12

Private Originations

$368

$1,411

$321

Average Private Education Loans

$38,154

$38,406

$37,543

Net Interest Income after Provision - Private

$235

$196

$188

Net Interest Margin - Private Education

(1)

4.12%

4.15%

4.14%

Operating Expenses

$76

$68

$63

OpEx Annualized as a % of Average Private Education Loans

0.80%

0.71%

0.68%

Net Income

$107

$87

$85

(1)

Includes non-GAAP adjustments of 0.04%, 0.03%, and 0.11%, respectively, related to the accounting for derivative instruments.

Business Services Segment Earnings Detail –

“Core Earnings”

Basis

($ millions)

Q2 13

Q1 13

Q2 12

Intercompany loan servicing

$137

$149

$172

Third-party loan servicing

$33

$27

$26

Guarantor servicing

$10

$11

Other servicing

$20

$19

$18

Contingency revenue

$109

$99

$87

Other Business Services revenue

Net Income

$166

$125

$137

FFELP Loan Segment Earnings Detail –

“Core Earnings”

Basis

($ millions)

Q2 13

Q1 13

Q2 12

Average FFELP Loans

$113,981

$121,855

$134,893

Net Interest Income after Provision - FFELP

$244

$245

$228

Net Interest Margin - FFELP

(1)

0.87%

0.83%

0.70%

Operating Expenses

$144

$157

$181

OpEx Annualized as a % of Average FFELP Loans

0.51%

0.52%

0.54%

Net Income

$237

$104

$44

(1)Includes non-GAAP adjustments of (0.38%), (0.40%), and (0.30%) respectively, related to the accounting for derivative instruments.

$257 million and $55 million gains from residual interest sales in Q2 13 and Q1 13, respectively

Operations Locations

Corporate Headquarters

Fishers, IN

•Collections

•

Information Technology

•

Servicing

•

Fulfillment

•

Call Center

•

Sales

Reston, VA

•

Finance/Accounting

•

Legal

•

Information Technology

New York State

(Arcade, Perry,

Horseheads)

•

Collections

Cincinnati, OH

•

Collections

Salt Lake City, UT

•

Sallie Mae Bank

Wilkes-Barre, PA

•

Servicing

•

Call Center

Newark, DE Headquarters

•

Executive Offices

•Credit &Collections

•

Customer Resolution

•

Servicing

•

Fraud

•

Business Development

Washington, DC

•

Government Relations

Moorestown, NJ

•

Collections

Newton, MA

•

Upromise Inv.

& Rewards

•

Business Dev.

Kansas City, MO

•

Upromise Investments

Muncie, IN

•

Collections

Credit Quality

Private Education Loan Portfolio Characteristics

–

$37 billion portfolio

–

25% of SLM’s total student loan portfolio

–

Approximately 66% 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 June 30, 2013

Smart

Option

Student

Loan

product

offers

three

repayment

choices

designed

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

defer

payments

while

in-school

Variable and Fixed Interest Rate Options

Repayment

term

driven

cumulative

amount

borrowed

and

grade

level

Full communication with customers during in-school period

Full

collection

activities

are

employed

both

the

customer

and

cosigner

level

All loans are certified by the school’s financial aid office to ensure that proceeds are used for

education expenses

SLM’s Private Education Smart Option Student Loan Products

Private Education Loans –

High Quality Originations

Originations of $3.3 bn in 2012 had an average winning FICO of 748 and 90% were cosigned.

Originations of $2.7 bn in 2011 had an average winning FICO of 748 and 91% were cosigned.

Originations of $2.3 bn in 2010 had an average winning FICO of 739 and 89% were cosigned.

Low Risk = Smart Option, Legacy Traditional Cosigned, and Law/MBA/MED/CT/Other

Moderate Risk = Legacy Traditional Non-Cosigned

Elevated Risk = Non-Traditional

Consumer Lending Segment –

High Quality Portfolio

Private Education

Loans

(2)

25%

U.S. Government

Guaranteed Loans

75%

Charge-Offs

(1)

= 0.07%

Charge-Offs

(1)

= 2.34%

Total Charge-Offs

(1)

= 0.63%

(1)

All data as of Six Months Ended June 30, 2013. 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

SLM Loan Losses

(2)

Private Credit Default Performance

As of June 30, 2013

14%

17%

14%

11%

22%

39%

52%

63%

71%

77%

82%

86%

89%

92%

94%

96%

98%

100%

50%

100%

108

120

132

144

156

168

180

Months Since Repayment Begin Date

Defaults Per Months Since Repayment Begin Date

Cumulative Defaults

60%

11%

60%

71%

78%

83%

86%

89%

92%

94%

95%

96%

97%

98%

99%

100%

50%

100%

108

120

132

144

156

168

180

# Payments Made

Defaults Per Payments Made

Cumulative Defaults

Historical Defaults by Payments Made

Historical Defaults by Months in Repayment

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

increases

Private Education Loan Portfolio Performance

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

Q213

Q113

Q412

Q312

Q212

Charge-offs - Traditional Portfolio

(1)

2.1%

2.5%

3.4%

2.6%

2.5%

Charge-offs - Non-Traditional Portfolio

(1)

9.1%

8.7%

13.2%

10.5%

9.8%

Charge-offs - Total Portfolio

(1)

2.7%

3.0%

4.2%

3.2%

3.1%

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

3.1%

3.3%

3.9%

4.4%

3.7%

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

10.2%

11.2%

12.6%

14.6%

12.6%

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

3.6%

3.9%

4.6%

5.3%

4.5%

Forb as a % of Forb & Repay - Traditional Portfolio

3.4%

3.2%

3.3%

3.1%

4.1%

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

5.5%

5.1%

5.0%

6.4%

Forb as a % of Forb & Repay - Total Portfolio

3.5%

3.4%

3.5%

3.2%

4.3%

Allowance as a % of Loans in Repay - Traditional Portfolio

5.6%

5.7%

5.8%

5.7%

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

21.0%

20.7%

21.5%

22.5%

Allowance as a % of Loans in Repay - Total Portfolio

6.8%

6.9%

7.1%

Private Education Loan Portfolio Performance

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

Traditional Loans with a Cosigner

Q213

Q113

Q412

Q312

Q212

Outstanding Balance as a % of Total

64%

63%

62%

60%

90+ Delinquency as a % of Repayment

2.3%

2.4%

2.9%

3.2%

2.7%

Forbearance as a % of Repayment & Forbearance

3.3%

3.2%

3.3%

2.9%

3.8%

Charge-Offs as a % of Repayment

(1)

1.4%

1.6%

2.1%

1.6%

1.5%

Traditional Loans without a Cosigner

Q213

Q113

Q412

Q312

Q212

Outstanding Balance as a % of Total

29%

30%

31%

90+ Delinquency as a % of Repayment

4.6%

5.1%

5.8%

6.7%

5.5%

Forbearance as a % of Repayment & Forbearance

3.6%

3.3%

3.4%

3.3%

4.5%

Charge-Offs as a % of Repayment

(1)

3.7%

4.3%

5.9%

4.5%

4.3%

Non-Traditional Loans with a Cosigner

Q213

Q113

Q412

Q312

Q212

Outstanding Balance as a % of Total

90+ Delinquency as a % of Repayment

8.7%

9.5%

10.9%

12.3%

10.3%

Forbearance as a % of Repayment & Forbearance

6.8%

6.6%

6.5%

6.2%

7.6%

Charge-Offs as a % of Repayment

(1)

6.2%

5.6%

8.8%

6.9%

6.6%

Non-Traditional Loans without a Cosigner

Q213

Q113

Q412

Q312

Q212

Outstanding Balance as a % of Total

90+ Delinquency as a % of Repayment

10.9%

12.0%

13.3%

15.6%

13.5%

Forbearance as a % of Repayment & Forbearance

5.0%

4.5%

4.6%

4.5%

5.9%

Charge-Offs as a % of Repayment

(1)

10.3%

10.0%

15.0%

11.9%

11.1%

(Dollars in millions)

Loan Seasoning

June 30, 2013

Traditional Portfolio

Monthly

Scheduled Payments Due

Not Yet in Repayment

5,475

Loans in Forbearance

498

7.8%

170

3.2%

149

2.7%

1.9%

112

1.3%

1,015

3.4%

Loans in Repayment-

Current

5,249

81.8%

4,683

89.2%

4,996

91.0%

4,169

93.1%

8,121

95.2%

27,218

90.2%

Loans in Repayment-

Delinq 31-60 days

201

3.1%

126

2.4%

117

2.1%

1.9%

122

1.4%

650

2.1%

Loans in Repayment-

Delinq 61-90 days

137

2.1%

1.5%

1.3%

1.0%

0.7%

395

1.3%

Loans in Repayment-

Delinq 90 + days

334

5.2%

193

3.7%

155

2.8%

2.1%

115

1.4%

892

3.0%

6,419

100%

5,249

100%

5,490

100%

4,479

100%

8,533

100%

30,170

100%

Charge-offs as a % of loans in repayment

4.8%

2.3%

1.7%

1.2%

0.9%

2.1%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

421

Loans in Forbearance

12.1%

5.1%

3.4%

2.8%

1.8%

145

5.5%

Loans in Repayment-

Current

422

59.2%

313

72.5%

307

79.0%

286

83.3%

650

87.8%

1,978

75.6%

Loans in Repayment-

Delinq 31-60 days

7.4%

6.1%

5.1%

4.4%

3.8%

142

5.4%

Loans in Repayment-

Delinq 61-90 days

6.2%

4.1%

3.4%

2.7%

2.2%

100

3.8%

Loans in Repayment-

Delinq 90 + days

108

15.1%

12.2%

9.1%

6.8%

4.4%

252

9.6%

713

100%

432

100%

388

100%

343

100%

741

100%

2,617

100%

Charge-offs as a % of loans in repayment

17.4%

10.6%

6.6%

4.2%

3.1%

9.1%

Total

Monthly Scheduled Payments Due

Not Yet in Repayment

5,896

Loans in Forbearance

584

8.2%

192

3.4%

162

2.8%

2.0%

126

1.4%

1,160

3.5%

Loans in Repayment-

Current

5,671

79.5%

4,996

87.9%

5,303

90.2%

4,455

92.4%

8,771

94.6%

29,196

89.0%

Loans in Repayment-

Delinq 31-60 days

254

3.6%

152

2.7%

137

2.3%

2.1%

150

1.6%

792

2.4%

Loans in Repayment-

Delinq 61-90 days

181

2.5%

1.7%

1.5%

1.1%

0.9%

495

1.5%

Loans in Repayment-

Delinq 90 + days

442

6.2%

246

4.3%

190

3.2%

118

2.4%

148

1.6%

1,144

3.5%

7,132

100%

5,681

100%

5,878

100%

4,822

100%

9,274

100%

32,787

100%

Charge-offs as a % of loans in repayment

6.1%

2.9%

2.1%

1.5%

1.1%

2.7%

More than 48 payments

Total

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

(Dollars in millions)

Loan Seasoning

March 31, 2013

Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

5,959

Loans in Forbearance

502

7.8%

166

3.1%

134

2.4%

1.6%

1.1%

966

3.2%

Loans in Repayment- Current

5,191

80.8%

4,837

89.6%

5,033

91.3%

4,214

93.8%

7,797

95.5%

27,072

90.3%

Loans in Repayment- Delinq 31-60 days

198

3.1%

116

2.2%

111

2.0%

1.6%

100

1.2%

597

2.0%

Loans in Repayment- Delinq 61-90 days

147

2.3%

1.4%

1.2%

1.0%

0.7%

393

1.3%

Loans in Repayment- Delinq 90 + days

386

6.0%

201

3.7%

165

3.0%

2.0%

116

1.4%

960

3.2%

6,424

100%

5,397

100%

5,511

100%

4,494

100%

8,162

100%

29,988

100%

Charge-offs as a % of loans in repayment

6.1%

2.4%

1.8%

1.4%

0.9%

2.5%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

475

Loans in Forbearance

11.1%

4.7%

2.9%

2.4%

1.8%

135

5.1%

Loans in Repayment- Current

454

59.5%

319

73.0%

312

78.5%

291

84.7%

621

87.9%

1,997

75.5%

Loans in Repayment- Delinq 31-60 days

7.1%

5.2%

5.3%

3.9%

3.2%

134

5.1%

Loans in Repayment- Delinq 61-90 days

5.4%

4.2%

3.5%

2.7%

2.1%

3.7%

Loans in Repayment- Delinq 90 + days

127

16.7%

13.6%

9.8%

6.5%

4.9%

282

10.7%

762

100%

437

100%

397

100%

344

100%

706

100%

2,646

100%

Charge-offs as a % of loans in repayment

16.8%

10.1%

6.3%

4.1%

3.0%

8.7%

Total Managed

Monthly Scheduled Payments Due

Not Yet in Repayment

6,434

Loans in Forbearance

587

8.2%

184

3.2%

145

2.5%

1.6%

106

1.2%

1,101

3.4%

Loans in Repayment- Current

5,645

78.6%

5,156

88.4%

5,345

90.5%

4,505

93.1%

8,418

94.9%

29,069

89.1%

Loans in Repayment- Delinq 31-60 days

252

3.5%

139

2.4%

132

2.2%

1.8%

123

1.4%

731

2.2%

Loans in Repayment- Delinq 61-90 days

189

2.6%

1.6%

1.4%

1.1%

0.8%

491

1.5%

Loans in Repayment- Delinq 90 + days

513

7.1%

260

4.5%

204

3.4%

115

2.4%

150

1.7%

1,242

3.8%

7,186

100%

5,834

100%

5,908

100%

4,838

100%

8,868

100%

32,634

100%

Charge-offs as a % of loans in repayment

7.2%

3.0%

2.1%

1.6%

1.1%

3.0%

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

Total

Total Loans in Repayment or Forbearance

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

(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%

1.8%

1.3%

1,186

4.1%

Loans

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

Repayment-

Delinq

31-60

days

380

4.9%

173

2.8%

139

2.6%

2.0%

1.5%

862

2.9%

Loans

Repayment-

Delinq

61-90

days

240

3.1%

1.5%

1.4%

1.1%

0.7%

498

1.7%

Loans

Repayment-

Delinq

days

521

6.7%

209

3.4%

152

2.9%

2.1%

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%

4.9%

3.8%

2.5%

2.2%

182

6.4%

Loans

Repayment-

Current

525

52.0%

343

70.8%

329

77.3%

277

84.1%

507

86.1%

1,981

69.8%

Loans

Repayment-

Delinq

31-60

days

9.7%

7.1%

5.9%

4.6%

3.9%

196

6.9%

Loans

Repayment-

Delinq

61-90

days

8.0%

4.9%

3.8%

2.9%

2.6%

145

5.1%

Loans

Repayment-

Delinq

days

185

18.3%

12.3%

9.2%

5.9%

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%

1.9%

1.3%

1,368

4.3%

Loans

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

Repayment-

Delinq

31-60

days

478

5.5%

207

3.1%

164

2.9%

2.2%

122

1.7%

1,058

3.3%

Loans

Repayment-

Delinq

61-90

days

321

3.6%

119

1.8%

1.6%

1.2%

0.9%

643

2.0%

Loans

Repayment-

Delinq

days

706

8.1%

269

4.0%

191

3.3%

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%

Charge-offs as a % of loans in repayment

6.6%

2.9%

1.9%

1.5%

1.1%

3.1%

Funding Diversity and Liquidity

Issued $2.5 billion of Private ABS

Issued $3.7 billion of FFELP ABS

Issued $1.5 billion of long-term unsecured debt

Sold residual interests in five FFELP securitization trusts totaling $12.5 billion of assets

Returned

$400

million

shareholders

through

common

repurchases

during

half

2013

In July 2013, the company authorized an additional $400 million for common share repurchases

Closed on a $6.8 billion FFELP ABCP facility and a $1.1 billion Private ABCP facility

Repurchased $800 million of outstanding unsecured debt through tender offers

Maintained excess capital at Bank and SLM Corporation

2013 Capital Markets Summary

(1)

As of June 30, 2013.

Non-Consolidation FFELP

Issue

$1,246M SLM Trust 2013-3

$1,246M SLM Trust 2013-2

$1,249M SLM Trust 2013-1

Pricing Date

June 12, 2013

April 3, 2013

February 5, 2013

Collateral

US Govt. Guaranteed or Insured

FFELP Stafford and Plus Loans

US Govt. Guaranteed or Insured

FFELP Stafford and Plus Loans

US Govt. Guaranteed or Insured

FFELP Stafford and Plus Loans

Prepayment

Speed

(1)

6% Constant Prepayment Rate

Tranching

Moody’s

Amt

WAL

(1)

Pricing

(2)

A-1 Aaa $262 1.0 L+26

A-2 Aaa $315 3.0 L+36

A-3 Aaa $634 6.7 L+60

B Aa1 $35 8.9 L+240

Moody’s

Amt

WAL

(1)

Pricing

(2)

A Aaa $1,211 4.4 L+45

B Aa1 $35 8.8 L+210

Moody’s

Amt

WAL

(1)

Pricing

(2)

A-1 Aaa $280 1.0 L+17

A-2 Aaa $396 3.3 L+25

A-3 Aaa $538 6.8 L+55

B A1 $35 8.6 L+225

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.

Recent SLM Private Education Loan 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 A-2 tranches were 2.11%, 1.78% and 2.10%, for 2013-B, 2013-A, and 2012-E, respectively. Yield on fixed rate B tranches were 3.48% and 3.69%, for

2013-B and 2013-A,, respectively.

Private Education Loans

Issue

$1,135M SLM Trust 2013-B

$1,108M SLM Trust 2013-A

$976M SLM Trust 2012-E

Pricing Date

April 25, 2013

February 27, 2013

October 11, 2012

Collateral

Private Education Loans

Prepayment Speed

(1)

Tranching

Moody’s

Amt

WAL

(1)

Pricing

(2)

Moody’s

Amt

WAL

(1)

Pricing

(2)

Moody’s

Amt

WAL

(1)

Pricing

(2)

A-1

Aaa

$690

1.8

L+60

A-2A

Aaa

$143

4.6

s+ 95

A-2B

Aaa

$143

4.6

L+105

$132

5.7

s+238

Total

$1,108

2.9

L+115

A-1

Aaa

$680

1.7

L+65

A-2A

Aaa

$245

4.8

s+ 105

A-2B

Aaa

$100

4.8

L+110

$110

6.0

s+260

Total

$1,135

3.1

L+120

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

High Percentage of Student Loans Funded to Term

Gross loans, Numbers may not add due to rounding.

Fixed

Spread

Liabilities,

$24

Conduits, $12 Bn

$146* Billion Student Loan Portfolio

as of June 30, 2013

FFELP Consolidation Term ABS, $60 Bn

FFELP Non-Consolidation Term ABS, $30 Bn

Private Term ABS, $20 Bn

Funded to Term, $110 Bn

Unsecured Debt Maturities

Note: Does not include Sallie Mae Bank or Subsidiary funding

Total unsecured debt outstanding of $17.5 billion

As of June 30, 2013

(par value, $ in billions)

$10

$1.2

$2.5

$1.5

$2.3

$1.8

$2.8

$0.2

$1.5

$3.7

Secured Cash Flow

Note: Totals may not add due to rounding, As of June 30, 2013

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

$ in Millions

2013 YTD

2012

2011

2010

FFELP

Term Securitized

Servicing (Cash Paid)

256

526

563

533

Net Residual* (Excess Distributions)

286

628

715

746

Other Secured FFELP

Net Cash Flow

305

934

568

1,465

Total FFELP

847

2,088

1,846

2,743

Total Proceeds from Residual Sales

589

Private Credit

Term Securitized

Servicing (Cash Paid)

100

181

189

179

Residual (Excess Distribution)

103

Other Secured Financings

Net Cash Flow

Total Private Credit

160

306

219

187

Total FFELP and Private Credit

1,596

2,394

2,065

2,930

Average Principal Balances

2013 YTD

2012

2011

2010

FFELP

Term FFELP

98,858

104,913

109,509

99,041

Other Secured FFELP

13,109

22,271

29,466

38,767

Total FFELP

111,967

127,184

138,975

137,808

Private Credit

Term Private Credit

26,577

25,111

25,619

25,854

Other Secured Financings

769

1,875

233

Total Private Credit

27,346

26,987

25,853

25,854

Total FFELP and Private Credit

139,314

154,171

164,828

163,661

Projected Cash Flows From FFELP Portfolio

Assumptions

No Floor Income, CPR/CDR = Stafford & Plus (4.0%), Consolidation (3.0%)

Excludes assets and excess spread associated with residual sales

* 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 = $8.1 Billion

Total Cash Flows from Projected Servicing Revenues = $4.5 Billion

as of 6/30/13

2013

2014

2015

2016

2017

2018

2019

2020

Projected FFELP Average Balance

$103,954

$97,107

$87,813

$78,744

$70,129

$61,795

$54,069

$46,878

Projected Excess Spread

$447

$820

$749

$720

$768

$698

$628

$557

Projected Servicing Revenue

$308

$579

$527

$477

$426

$374

$325

$279

Projected Total Revenue

$755

$1,399

$1,276

$1,197

$1,194

$1,071

$953

$836

2021

2022

2023

2024

2025

2026

2027

2028 - 2033

Projected FFELP Average Balance

$40,251

$34,204

$29,073

$24,931

$21,055

$17,375

$13,915

$5,563

Projected Excess Spread

$490

$425

$342

$287

$258

$223

$190

$501

Projected Servicing Revenue

$237

$198

$165

$141

$120

$100

$82

$206

Projected Total Revenue

$727

$623

$507

$428

$379

$324

$271

$707

Bank charter

–

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

–

Charter granted October 2005

Current bank activity

–

Total assets of $9.1 billion at June 30, 2013

–

Originates Sallie Mae’s Private Education Loans

–

Funded through affiliate, brokered and direct retail deposits

–

17.1% Total Risk-based Capital at June 30, 2013

–

Dividends of $120 million paid 2013 YTD

Deposit taking activities

–

Deposits totaled $7.6 billion at June 30, 2013

•

$4.6 billion Brokered Deposits

•

$3.0 billion Direct Retail and other affiliate and non-affiliate Deposits

–

Brokered Deposit term portfolio has a weighted average maturity of 20.3 months

–

Total deposits increased 48% over 2Q12 and decreased 5% versus 1Q13

Sallie Mae Bank

Sallie Mae Bank –

Capital & Deposits

*Primarily affiliate deposit accounts with no stated maturities

Bank Deposits ($ millions)

Brokered CDs

Brokered –

Other

Retail Deposits

Other Deposits*

Total Deposits

$3,552

$3,975

$4,098

$3,346

$2,352

$3,455

536

685

810

1,069

1,077

1,071

2,548

2,521

2,131

1,634

1,676

1,768

462

446

529

502

469

463

$7,634

$8,042

$7,800

$6,319

$5,159

$6,221

Mar 12

Jun 12

Sep 12

Dec 12

Mar 13

Jun 13

Mar 12

Jun 12

Sep 12

Dec 12

Mar 13

Jun 13

Regulatory Capital Ratios

Ratio

Tier 1 Leverage

Tier 1 Risk Based

Total Risk Based

11.5%

16.3%

17.1%

14.8%

13.8%

10.4%

11.5%

15.0%

16.1%

15.7%

14.8%

13.8%

17.3%

18.4%

17.7%

16.7%

14.2%

Risk-Adjusted Capital

Strong Capital Position

($ in Billions)

GAAP Capital

Goodwill & Intangibles

Derivative Mark-to-Market

Unamortized Premiums from Floors

Tangible Economic Capital

Private Loan Reserve

Available Risk Capital

Risk Assets (Before Loan Loss Reserves)

Private Credit

Other Risk Assets

Total Risk Assets

Capital to Risk Assets:

Q2 13

Q1 13

Q2 12

$5.4

$5.2

$4.9

(0.5)

(0.4)

0.9

1.0

1.1

0.7

0.5

$6.4

$6.2

2.2

2.1

$8.5

$8.4

$39.3

$39.6

$38.6

1.1

1.0

$40.2

$40.6

$39.7

21.2%

20.7%

21.2%

* “Tangible Economic Capital” and “Available Risk Capital” are non-GAAP financial measures. The reconciliation to GAAP capital is shown on this slide.

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

23% of

Assets

FFELP

Loans

67% of

Assets

Based on Risk

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

FFELP ABS Appendix

Federal Student Loan Market

Outstanding Government Student Loan Market Distribution

FFYE 9/30/2012 ($ in billions)

Source: Department of Education, U.S. Department of Education FY 2012 Agency Financial Report

FFELP owned

by ED, $147

FDLP, $494

FFELP Loans,

$291

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

SLM Stafford/PLUS ABS Trusts

Annualized CPRs for SLM Stafford/PLUS ABS Trusts have decreased significantly as incentives for borrowers to consolidate have declined

After

temporary

increase

mid

2012

due

the

Special

Direct

Consolidation

Loan

program,

CPRs

decreased

the

fourth

quarter

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

make

payments.

Deferment,

Forbearance

and

Repayment

loans

are

scheduled

make

payments.

45%

50%

35%

40%

25%

30%

15%

20%

10%

45%

50%

35%

40%

25%

30%

15%

20%

10%

2002 Trusts

2003 Trusts

2004 Trusts

2005 Trusts

2006 Trusts

2007 Trusts

2008 Trusts

2010 Trusts

2012 Trusts

Prepayment Analysis

Years Since Inception

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.

Prepayment Analysis

10%

13%

15%

18%

20%

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

10%

13%

15%

18%

20%

2002 Trusts

2003 Trusts

2004 Trusts

2005 Trusts

2006 Trusts

2007 Trusts

2009 Trusts

2011 Trusts

SLM Consolidation ABS Trusts

Years Since Inception

CPRs for SLM Consolidation ABS Trusts have declined significantly following legislation that prevented in-school and re-consolidation of borrowers’

loans

After

temporary

increase

mid

2012

due

the

Special

Direct

Consolidation

Loan

program,

CPRs

decreased

the

fourth

quarter

Private Education Loan ABS Appendix

SLM Private Education Loan ABS Issuance Profile

Sallie Mae is among largest issuers of ABS globally, having issued close to $267

billion in Private and FFELP ABS transactions to date

Sallie

Mae

has

been

the

market

leader

Private

Education

Loans

since

the

late

’80s,

with expected originations of at least $4.0 billion in 2013

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 Loan

ABS

Executed 3 transactions in 2011 totaling $2.1 billion

Executed

transactions

2012

totaling

$4.2

billion

Executed

transactions

2013

YTD

totaling

$2.5

billion

Issue size of $500M to $1.5B

Triple-A rated senior notes, Single-A rated

subordinated notes

20-30% Triple-A 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 & judgmental criteria w/risk-

based pricing

~80% with cosigners, 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

(1) Smart

Option

loans

considered

‘in

repayment’

borrowers

are

making

either

interest

only

payments

principal

and

interest

payments,

regardless

whether

the

borrower

otherwise in school, grace, or deferment status.

SLM

Private

Education

Loan

ABS

Trusts

(2009-D

Present)

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

13-A

13-B

Bond Amount ($mil)

1,680

590

1,550

869

1,701

562

825

721

547

891

1,135

640

976

1,108

1,135

Initial AAA Enhancement (%)

32%

37%

23%

45%

37%

21%

18%

24%

27%

26%

25%

21%

26%

22%

Loan Program (%)

Smart Option

10%

20%

30%

40%

45%

48%

63%

Signature/Law/MBA/Med

52%

76%

46%

89%

88%

91%

71%

61%

48%

43%

37%

35%

26%

29%

Consolidation

14%

11%

Direct to Consumer

34%

10%

20%

12%

Career Training

100%

13%

26%

Total

100%

Payment Status (%)

(1)

School, Grace, Deferment

57%

63%

12%

36%

55%

45%

37%

38%

40%

39%

44%

59%

62%

Full P&I Repayment

40%

98%

32%

85%

60%

43%

52%

60%

57%

59%

54%

39%

36%

Forbearance

Wtd Avg Term to Maturity (Mo.)

211

141

190

169

194

192

189

182

171

164

151

144

148

144

146

% Loans with Cosigner

64%

70%

72%

65%

62%

72%

75%

71%

75%

77%

79%

80%

% Loans with No Cosigner

36%

30%

28%

35%

38%

28%

25%

29%

25%

23%

21%

20%

Wtd Avg FICO at Origination

731

747

739

734

727

737

736

733

735

736

737

740

733

741

740

Wtd Avg Recent FICO at Issuance

714

725

732

713

723

722

720

724

726

728

730

722

733

734

WA FICO (Cosigner at Origination)

744

753

749

744

742

747

745

744

745

748

741

751

750

WA FICO (Cosigner at Rescored)

729

734

739

740

733

736

731

734

732

734

735

738

728

745

746

WA FICO (Borrower at Origination)

707

734

714

712

701

709

710

704

705

707

710

702

703

702

WA FICO (Borrower at Rescored)

686

703

691

716

679

690

695

688

700

702

698

696

683

684

Summary Information

Constraining rating agency triple-A gross default stress levels at issuance

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

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

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%

49.3%

50.9%

48.2%

52.5%

52.2%

48.7%

06-A

06-C

07-A

09-A

09-B

09-C

09-D

09-CT

10-B

10-C

06-B

10-A

11-A

11-B

11-C

12-A

12-C

12-E

13-B

12-B

12-D

13-A

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

Loans in Forbearance as a Percent of Loans in Repayment and Forbearance

All Loans in SLM Trusts by Year of Issuance

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%

5.00%

0.00%

10.00%

15.00%

20.00%

25.00%

2002

2003

2004

2005

2006

2007

2009

2010

2011

2012

2003

2002

2004

2005

2006

2007

2009

2010

2011

SLM Private Education ABS Trusts: 90+ Day Delinquencies

0.00%

5.00%

90+ Day Delinquencies as a Percent of Loans in Repayment

All Loans in SLM Trusts by Year of Issuance

10.00%

0.00%

5.00%

10.00%

Quarter since Inception

2002

2003

2004

2005

2006

2007

2009

2010

2011

2012

As expected, later stage delinquency has remained elevated in recent periods due to tightening of forbearance

policy 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

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.

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

All Loans in SLM Trusts by Year of Issuance

Quarter since Inception

15.00%

10.00%

5.00%

0.00%

15.00%

10.00%

5.00%

0.00%

2002

2003

2004

2005

2006

2007

2009

2010

2011

2012

SLM Private Education Loan Gross Defaults

As of May 31, 2013

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.

Actual-to-Date Cumulative Gross Defaults

including Bankruptcy Information

All Trust Loans

24.0%

22.0%

20.0%

18.0%

16.0%

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

Charge-off - 212+ days delinquent (1)

Bankruptcy or death - now current or paid off .(2)

Bankruptcy or death - other (3)

11.40%

12.83%

14.10%

14.90%

16.61%

14.79%

18.38%

15.15%

15.05%

17.29%

19.19%

16.76%

9.52%

9.57%

6.54%

5.64%

5.83%

3.50%

3.20%

2.33%

2.03%

1.45%

1.15%

0.80%

0.56%

0.10%

9.47%

10.63%

11.78%

12.63%

13.93%

12.54%

15.94%

13.07%

12.97%

14.99%

16.51%

14.01%

7.00%

6.17%

5.23%

3.69%

4.66%

2.67%

2.62%

1.06%

0.83%

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

–

The 2005 cohort had a recovery rate of 26% seven 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

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

2002-A

2005-B

2010-A

2012-B

2003-A

2006-A

2010-B

2012-C

2012-D

2010-C

2006-B

2003-B

2003-C

2006-C

2011-A

2012-E

2011-B

2007-A

2004-A

2004-B

2009-CT

2011-C

2012-A

2009-D

2005-A

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 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 cosigner scores as of a date near the loan

application and must be at least:

–

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

•

Undergraduate/Graduate

not-for-profit

schools:

640

•

Undergraduate/Graduate

for-profit

schools:

670

•

DTC

loans:

670

•

Career

Training

loans:

670

•

Private

Consolidation

loans:

640

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

FICO score, cosigner 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 in a

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 6/30/13.

(1)

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

(2)

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

(3)

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

Undergraduate/Graduate

(1)

Note: Data as of 6/30/13.

(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

Undergraduate/Graduate

(1)

With

Co-signer

Undergraduate/Graduate

(1)

Without

Co-signer

Note: Data as of 6/30/13.

(1)

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

(2)

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

(3)

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

Undergraduate/Graduate

(1)

Non-Profit

Undergraduate/Graduate

(1)

For-Profit

Cohort Default Triangles

Undergraduate/Graduate

(1)

Loans, FICO 740-850

(2)

Undergraduate/Graduate

(1)

Loans, FICO 700-739

(2)

Note: Data as of 6/30/13.

(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

Note: Data as of 6/30/13.

(1)

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

(2)

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

(3)

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

(4)

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

Undergraduate/Graduate

(1)

Loans, FICO 670-699

(2)

Undergraduate/Graduate

(1)

Loans, FICO 640-669

(2)

Cohort Default Triangles

Private Consolidation Loans Without Co-signer

Private Consolidation Loans With Co-signer

Note: Data as of 6/30/13.

(1)

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

(2)

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

Cohort Default Triangles

Note: Data as of 6/30/13.

(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 Year sin Repayment are for a partial year.

(3)

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

DTC With Co-signer, FICO

670

(1)

DTC Without Co-signer, FICO

670

(1)

Cohort Default Triangles

Note: Data as of 6/30/13.

(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