SLM (SLM) 8-K Sallie Mae Reports Second-quarter 2010 Results

Exhibit 99.1

FOR IMMEDIATE RELEASE	Media Contact:	Investor Contacts:
	Martha Holler	Steve McGarry
	703/984-5178	703/984-6746
		Joe Fisher
		703/984-5755

SALLIE MAE REPORTS SECOND-QUARTER 2010 RESULTS

RESTON, Va., July 20, 2010—SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, reported core earnings net income of $209 million ($.39 per diluted share) for the second quarter 2010, which included an after-tax gain of $57 million ($.11 per diluted share) from $1.4 billion of unsecured debt repurchases. These results compare to core earnings net income of $170 million ($.31 per diluted share) in the second quarter 2009. On a GAAP basis, net income was $338 million ($.63 per diluted share) in the second-quarter 2010, vs. a net loss of $123 million ($.32 per diluted share) in the year-ago period.

Core earnings net interest income after provision for loan losses was $377 million in the second quarter, compared to $343 million in the prior quarter and $55 million in the year-ago quarter.

CEO Albert Lord said, “Second quarter earnings were much improved from one year ago. On the credit front, it is quite evident that economic conditions continue to weigh heavily on our out-of-school customers, almost 20 percent of whom entered repayment in the last 8 months. We will continue to concentrate on service, quality private loan growth and new businesses that help families invest in college.”

Lord continued, “Management is intensely focused on refitting the company to its changed circumstances and enhancing value for our shareholders.”

Loan Originations

The company originated $3.1 billion in federal student loans in the 2010 second quarter, compared to $3.7 billion in the year-ago period. The decrease was the result of the termination of the guaranteed loan program effective June 30 and institutions’ transition to the government’s loan program.

During the second-quarter 2010, the company originated $219 million of private student loans, compared to $387 million in the year-ago period. Private student loan originations continue to be affected by increased federal student loan availability and more students’ enrollment at lower-cost institutions.

Private Education Loan Portfolio Quality

Managed private education loan charge-offs were $336 million in the second quarter compared to $284 million in the previous quarter and $355 million in the year-ago quarter. Delinquencies as a percentage of private education loans in repayment declined to 11.9 percent from the previous quarter’s 12.2 percent. The core earnings provision for private education loan losses was $349 million in the second quarter, compared to $325 million in the first quarter.

Sallie Mae • 12061 Bluemont Way • Reston, VA 20190 • www.SallieMae.com

Funding and Liquidity

The company completed a $1.2 billion long-term federal student loan securitization during the quarter and had $11.8 billion of primary liquidity at June 30, 2010.

Other Income and Operating Expenses

Core earnings fee income, which includes the gain on debt repurchases, was $308 million in the second quarter, compared to the year-ago quarter’s $528 million.

Core earnings operating expenses excluding restructuring and related asset impairments were $331 million for the quarter, compared to $298 million in the year-ago quarter. With the passage of legislation that ended federal loan originations, the company accelerated the strategic restructuring of its business and initiated several investments to improve future operating efficiencies and position the company for additional growth. Restructuring ($24 million) and other litigation expenses totaled $43 million in the quarter.

GAAP

Sallie Mae officially reports financial results on a GAAP basis and also presents certain core earnings performance measures. The company’s management, equity investors, credit rating agencies and debt capital providers use these core earnings measures to monitor the company’s business performance. Both a description of the core earnings treatment and a full reconciliation to the GAAP income statement can be found at: www.salliemae.com/about/investors/stockholderinfo/earningsinfo/, click on the Second Quarter 2010 Supplemental Earnings Disclosure.

The company adopted Financial Accounting Standards Board updates as of Jan. 1, 2010, and as a result, the company’s GAAP and core earnings presentations for securitization accounting are the same, and managed and on-balance sheet (GAAP) student loan portfolios are now the same size.

The primary difference between the company’s second-quarter 2010 core earnings and GAAP results is the impact of derivative and hedge accounting. Second-quarter 2010 GAAP results include the net impact of a $301 million unrealized, mark-to-market, pre-tax gain on certain derivative contracts that are recognized in GAAP, but not in core earnings, results.

Presentation slides for the conference call discussed below may be accessed on www.salliemae.com/about/investors/stockholderinfo/webcast.

***

The company will host an earnings conference call tomorrow, July 21, 2010, at 8 a.m. EDT. Sallie Mae executives will discuss various highlights of the quarter and to answer questions related to the company’s performance. Individuals interested in participating should call the following number tomorrow, July 21, starting at 7:45 a.m. EDT: (877) 356-5689 (USA and Canada) or (706) 679-0623 (International) and use access code 83583661. The conference call will be replayed continuously beginning at 11:30 a.m. EDT on July 21, 2010, and concluding at midnight EDT on Aug. 4, 2010. To access the replay, please dial (800) 642-1687 (USA and Canada) or dial (706) 645-9291 (International) and use access code 83583661. In addition, there will be a live audio Web cast of the conference call, which may be accessed atwww.SallieMae.com. A replay will be available 30 to 45 minutes after the live broadcast.

Sallie Mae • 12061 Bluemont Way • Reston, VA 20190 • www.SallieMae.com

This press release contains “forward-looking statements” based on management’s current expectations as of the date of this release. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Because such statements inherently involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks include, among others, changes in the terms of student loans and the educational credit marketplace arising from the implementation of applicable laws and regulations, and from changes in such laws and regulations, adverse results in legal disputes, changes in the demand for educational financing or in financing preferences of educational institutions, students and their families, limited liquidity, increased financing costs and changes in the general interest rate environment. For more information, see the company’s filings with the Securities and Exchange Commission, including the forward-looking statements contained in the company’s Supplemental Financial Information Second Quarter 2010. All information in this release is as of July 20, 2010. 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 the Company’s expectations.

***

SLM Corporation(NYSE: SLM), commonly known as Sallie Mae, is the nation’s leading saving, planning and paying for education company. Sallie Mae’s saving programs, planning resources and financing options have helped more than 31 million people make the investment in higher education. Through its subsidiaries, the company manages $184 billion in education loans and serves 10 million student and parent customers. In addition, the company’s Upromise program has enabled 12 million members to earn more than $550 million in rewards to help pay for college. Its Upromise affiliates also manage more than $23 billion in 529 college-savings plans. Sallie Mae offers services to a range of institutional clients, including colleges and universities, student loan guarantors and state and federal agencies. More information is available at www.SallieMae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.

###

Sallie Mae • 12061 Bluemont Way • Reston, VA 20190 • www.SallieMae.com

SLM CORPORATION

Supplemental Earnings Disclosure

June 30, 2010
(In millions, except per share amounts)
(Unaudited)

	Quarters ended									Six months ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2010			2010			2009			2010			2009
SELECTED FINANCIAL INFORMATION AND RATIOS
GAAP Basis(1)
Net income (loss) attributable to SLM Corporation	$	338		$	240		$	(123	)	$	578		$	(144	)
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders	$	.63		$	.45		$	(.32	)	$	1.08		$	(.42	)
Return on assets		.68	%		.50	%		(.30	)%		.59	%		(.18	)%
“Core Earnings” Basis(1)(2)(3)
“Core Earnings” net income attributable to SLM Corporation	$	209		$	212		$	170		$	421		$	184
“Core Earnings” diluted earnings per common share attributable to SLM Corporation common shareholders	$	.39		$	.39		$	.31		$	.78		$	.28
“Core Earnings” return on assets		.42	%		.44	%		.34	%		.43	%		.19	%
OTHER OPERATING STATISTICS
Average on-balance sheet student loans	$	184,571		$	181,533		$	153,588		$	183,060		$	151,636
Average off-balance sheet student loans		—			—			34,902			—			35,237
Average Managed student loans	$	184,571		$	181,533		$	188,490		$	183,060		$	186,873
Ending on-balance sheet student loans, net	$	183,643		$	181,886		$	154,157
Ending off-balance sheet student loans, net		—			—			33,961
Ending Managed student loans, net	$	183,643		$	181,886		$	188,118
Ending Managed FFELP Stafford and Other Student Loans, net	$	67,457		$	64,346		$	68,374
Ending Managed FFELP Consolidation Loans, net		81,035			82,178			85,272
Ending Managed Private Education Loans, net		35,151			35,362			34,472
Ending Managed student loans, net	$	183,643		$	181,886		$	188,118

⁽¹⁾ Diluted earnings per common share attributable to SLM Corporation common shareholders from continuing and discontinued operations on both a GAAP basis and “Core Earnings” basis for the quarters ended June 30, 2010, March 31, 2010 and June 30, 2009 and for the six months ended June 30, 2010 and 2009 was:

	Quarters ended							Six months ended
	June 30,		March 31,		June 30,			June 30,		June 30,
	2010		2010		2009			2010		2009
GAAP Basis
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders:
Continuing operations	$	.63	$	.45	$	(.31	)	$	1.08	$	(.31	)
Discontinued operations		—		—		(.01	)		—		(.11	)
Total	$	.63	$	.45	$	(.32	)	$	1.08	$	(.42	)
“Core Earnings” Basis(2)(3)
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders:
Continuing operations	$	.39	$	.39	$	.32		$	.78	$	.39
Discontinued operations		—		—		(.01	)		—		(.11	)
Total	$	.39	$	.39	$	.31		$	.78	$	.28

(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive system of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.
(3)	“Core Earnings” does not include Floor Income unless it is Fixed Rate Floor Income that is economically hedged. The amount of this Economic Floor Income (net of tax) excluded from “Core Earnings” for the three months ended June 30, 2010, March 31, 2010 and June 30, 2009 and for the six months ended June 30, 2010 and 2009 was:

	Quarters ended						Six months ended
	June 30,		March 31,		June 30,		June 30,		June 30,
	2010		2010		2009		2010		2009
Total Economic Floor Income earned on Managed loans, not included in “Core Earnings” (net of tax)	$	1	$	3	$	89	$	4	$	168
Total Economic Floor Income earned, not included in “Core Earnings” (net of tax) per common share attributable to SLM Corporation common shareholders	$	—	$	.01	$	.17	$	.01	$	.36

SLM CORPORATION

Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)

	June 30,			March 31,			June 30,
	2010			2010			2009
Assets
FFELP Stafford and Other Student Loans (net of allowance for losses of $122,192; $119,522; and $102,857, respectively)	$	47,280,248		$	47,928,753		$	44,044,636
FFELP Stafford LoansHeld-for-Sale		20,177,860			16,418,101			18,159,232
FFELP Consolidation Loans (net of allowance for losses of $66,493; $66,693; and $50,181, respectively)		81,034,596			82,177,664			70,102,304
Private Education Loans (net of allowance for losses of $2,042,413; $2,018,676; and $1,396,707, respectively)		35,150,686			35,361,689			21,850,688
Cash and investments		7,680,116			8,241,961			8,212,439
Restricted cash and investments		6,252,914			6,115,399			5,245,702
Retained Interest in off-balance sheet securitized loans		—			—			1,820,614
Goodwill and acquired intangible assets, net		1,157,888			1,167,599			1,233,871
Other assets		8,584,404			10,101,919			10,514,309
Total assets	$	207,318,712		$	207,513,085		$	181,183,795
Liabilities
Short-term borrowings	$	46,472,435		$	41,102,389		$	47,331,576
Long-term borrowings		152,250,912			157,983,266			125,880,044
Other liabilities		3,508,617			3,671,734			3,120,636
Total liabilities		202,231,964			202,757,389			176,332,256
Commitments and contingencies
Equity
Preferred stock, par value $.20 per share, 20,000 shares authorized:
Series A: 3,300; 3,300; and 3,300 shares, respectively, issued at stated value of $50 per share		165,000			165,000			165,000
Series B: 4,000; 4,000; and 4,000 shares, respectively, issued at stated value of $100 per share		400,000			400,000			400,000
Series C: 7.25% mandatory convertible preferred stock: 810; 810; and 1,150 shares, respectively, issued at liquidation preference of $1,000 per share		810,370			810,370			1,149,770
Common stock, par value $.20 per share, 1,125,000 shares authorized: 553,571; 553,408; and 534,842 shares, respectively, issued		110,715			110,682			106,969
Additional paid-in capital		5,122,583			5,106,094			4,709,053
Accumulated other comprehensive loss, net of tax benefit		(43,333	)		(42,511	)		(48,683	)
Retained earnings		391,169			72,062			229,865
Total SLM Corporation stockholders’ equity before treasury stock		6,956,504			6,621,697			6,711,974
Common stock held in treasury: 67,775; 67,564; and 67,128 shares, respectively		1,869,760			1,866,020			1,860,440
Total SLM Corporation stockholders’ equity		5,086,744			4,755,677			4,851,534
Noncontrolling interest		4			19			5
Total equity		5,086,748			4,755,696			4,851,539
Total liabilities and equity	$	207,318,712		$	207,513,085		$	181,183,795

Supplemental information — assets and liabilities of variable interest entities:

	June 30,		March 31,		June 30,
	2010		2010		2009
FFELP Stafford and Other Student Loans	$	66,130,975	$	62,163,939	$	59,530,772
FFELP Consolidation Loans		79,558,032		81,460,381		69,618,020
Private Education Loans		23,561,695		23,860,189		5,834,568
Restricted cash and investments		5,881,972		5,724,454		4,389,635
Other assets		2,856,872		4,323,164		3,567,605
Short-term borrowings		37,014,277		33,766,308		40,814,409
Long-term borrowings		127,904,461		130,114,526		90,454,256

2

SLM CORPORATION

Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)

	Quarters ended									Six months ended
	June 30,			March 31,			June 30,			June 30,		June 30,
	2010			2010			2009			2010		2009
Interest income:
FFELP Stafford and Other Student Loans	$	325,042		$	283,437		$	323,939		$	608,479	$	666,755
FFELP Consolidation Loans		550,920			523,325			460,690			1,074,245		950,052
Private Education Loans		575,340			565,154			393,019			1,140,494		780,060
Other loans		7,254			8,996			18,468			16,250		34,888
Cash and investments		6,299			4,949			7,044			11,248		13,015
Total interest income		1,464,855			1,385,861			1,203,160			2,850,716		2,444,770
Total interest expense		568,933			531,384			819,459			1,100,317		1,846,006
Net interest income		895,922			854,477			383,701			1,750,399		598,764
Less: provisions for loan losses		382,239			359,120			278,112			741,359		528,391
Net interest income after provisions for loan losses		513,683			495,357			105,589			1,009,040		70,373
Other income:
Securitization servicing and Residual Interest revenue (loss)		—			—			87,488			—		(7,817	)
Gains (losses) on sales of loans and securities, net		(3,515	)		8,653			—			5,138		—
Gains (losses) on derivative and hedging activities, net		95,316			(82,410	)		(561,795	)		12,906		(457,770	)
Contingency fee revenue		88,181			80,311			73,368			168,492		148,183
Collections revenue		17,219			21,966			23,933			39,185		67,589
Guarantor servicing fees		22,457			36,090			24,772			58,547		58,780
Other		164,899			190,410			399,065			355,309		591,523
Total other income		384,557			255,020			46,831			639,577		400,488
Expenses:
Operating expenses		346,520			328,020			308,164			674,540		603,280
Restructuring expenses		17,666			26,282			3,333			43,948		7,106
Total expenses		364,186			354,302			311,497			718,488		610,386
Income (loss) from continuing operations, before income tax expense (benefit)		534,054			396,075			(159,077	)		930,129		(139,525	)
Income tax expense (benefit)		196,103			155,795			(43,110	)		351,898		(48,627	)
Net income (loss) from continuing operations		337,951			240,280			(115,967	)		578,231		(90,898	)
Loss from discontinued operations, net of tax		—			—			(6,542	)		—		(52,716	)
Net income (loss)		337,951			240,280			(122,509	)		578,231		(143,614	)
Less: net income attributable to noncontrolling interest		133			140			211			273		492
Net income (loss) attributable to SLM Corporation		337,818			240,140			(122,720	)		577,958		(144,106	)
Preferred stock dividends		18,711			18,678			25,800			37,389		52,195
Net income (loss) attributable to SLM Corporation common stock	$	319,107		$	221,462		$	(148,520	)	$	540,569	$	(196,301	)
Net income (loss) attributable to SLM Corporation:
Continuing operations, net of tax	$	337,818		$	240,140		$	(116,178	)	$	577,958	$	(91,390	)
Discontinued operations, net of tax		—			—			(6,542	)		—		(52,716	)
Net income (loss) attributable to SLM Corporation	$	337,818		$	240,140		$	(122,720	)	$	577,958	$	(144,106	)
Basic earnings (loss) per common share attributable to SLM Corporation common shareholders:
Continuing operations	$	.66		$	.46		$	(.31	)	$	1.12	$	(.31	)
Discontinued operations		—			—			(.01	)		—		(.11	)
Total	$	.66		$	.46		$	(.32	)	$	1.12	$	(.42	)
Average common shares outstanding		484,832			484,259			466,799			484,547		466,780
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders:
Continuing operations	$	.63		$	.45		$	(.31	)	$	1.08	$	(.31	)
Discontinued operations		—			—			(.01	)		—		(.11	)
Total	$	.63		$	.45		$	(.32	)	$	1.08	$	(.42	)
Average common and common equivalent shares outstanding		527,391			526,631			466,799			527,013		466,780
Dividends per common share attributable to SLM Corporation common shareholders	$	—		$	—		$	—		$	—	$	—

3

SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

	Quarter ended June 30, 2010
			Asset
			Performance					Total “Core					Total
	Lending		Group			Other		Earnings”(2)		Adjustments			GAAP
Interest income:
FFELP Stafford and Other Student Loans	$	324,052	$	—		$	—	$	324,052	$	990		$	325,042
FFELP Consolidation Loans		418,031		—			—		418,031		132,889			550,920
Private Education Loans		575,340		—			—		575,340		—			575,340
Other loans		7,254		—			—		7,254		—			7,254
Cash and investments		2,554		—			3,745		6,299		—			6,299
Total interest income		1,327,231		—			3,745		1,330,976		133,879			1,464,855
Total interest expense		571,952		—			—		571,952		(3,019	)		568,933
Net interest income		755,279		—			3,745		759,024		136,898			895,922
Less: provisions for loan losses		382,239		—			—		382,239		—			382,239
Net interest income after provisions for loan losses		373,040		—			3,745		376,785		136,898			513,683
Other income:
Contingency fee revenue		—		88,181			—		88,181		—			88,181
Collections revenue		—		17,219			—		17,219		—			17,219
Guarantor servicing fees		—		—			22,457		22,457		—			22,457
Other income		127,587		—			53,009		180,596		76,104			256,700
Total other income		127,587		105,400			75,466		308,453		76,104			384,557
Expenses:
Direct operating expenses		166,761		75,256			52,872		294,889		9,710			304,599
Overhead expenses		27,325		11,115			3,481		41,921		—			41,921
Operating expenses		194,086		86,371			56,353		336,810		9,710			346,520
Restructuring expenses		15,762		(109	)		2,013		17,666		—			17,666
Total expenses		209,848		86,262			58,366		354,476		9,710			364,186
Income from continuing operations, before income tax expense		290,779		19,138			20,845		330,762		203,292			534,054
Income tax expense(1)		106,600		7,016			7,641		121,257		74,846			196,103
Net income from continuing operations		184,179		12,122			13,204		209,505		128,446			337,951
Loss from discontinued operations, net of tax		—		—			—		—		—			—
Net income		184,179		12,122			13,204		209,505		128,446			337,951
Less: net income attributable to noncontrolling interest		—		133			—		133		—			133
Net income attributable to SLM Corporation	$	184,179	$	11,989		$	13,204	$	209,372	$	128,446		$	337,818
Economic Floor Income (net of tax) not included in “Core Earnings”	$	1,231	$	—		$	—	$	1,231

(1)	Income taxes are based on a percentage of net income before tax for the individual reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive system of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.

4

SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

	Quarter ended March 31, 2010
			Asset
			Performance				Total “Core					Total
	Lending		Group		Other		Earnings”(2)		Adjustments			GAAP
Interest income:
FFELP Stafford and Other Student Loans	$	274,347	$	—	$	—	$	274,347	$	9,090	��	$	283,437
FFELP Consolidation Loans		363,755		—		—		363,755		159,570			523,325
Private Education Loans		565,154		—		—		565,154		—			565,154
Other loans		8,996		—		—		8,996		—			8,996
Cash and investments		445		—		4,504		4,949		—			4,949
Total interest income		1,212,697		—		4,504		1,217,201		168,660			1,385,861
Total interest expense		515,130		—		—		515,130		16,254			531,384
Net interest income		697,567		—		4,504		702,071		152,406			854,477
Less: provisions for loan losses		359,120		—		—		359,120		—			359,120
Net interest income after provisions for loan losses		338,447		—		4,504		342,951		152,406			495,357
Other income:
Contingency fee revenue		—		80,311		—		80,311		—			80,311
Collections revenue		—		21,966		—		21,966		—			21,966
Guarantor servicing fees		—		—		36,090		36,090		—			36,090
Other income		141,317		—		56,521		197,838		(81,185	)		116,653
Total other income		141,317		102,277		92,611		336,205		(81,185	)		255,020
Expenses:
Direct operating expenses		145,758		75,557		62,218		283,533		9,712			293,245
Overhead expenses		20,613		10,773		3,389		34,775		—			34,775
Operating expenses		166,371		86,330		65,607		318,308		9,712			328,020
Restructuring expenses		21,336		1,608		3,338		26,282		—			26,282
Total expenses		187,707		87,938		68,945		344,590		9,712			354,302
Income from continuing operations, before income tax expense		292,057		14,339		28,170		334,566		61,509			396,075
Income tax expense(1)		107,068		5,257		10,327		122,652		33,143			155,795
Net income from continuing operations		184,989		9,082		17,843		211,914		28,366			240,280
Loss from discontinued operations, net of tax		—		—		—		—		—			—
Net income		184,989		9,082		17,843		211,914		28,366			240,280
Less: net income attributable to noncontrolling interest		—		140		—		140		—			140
Net income attributable to SLM Corporation	$	184,989	$	8,942	$	17,843	$	211,774	$	28,366		$	240,140
Economic Floor Income (net of tax) not included in “Core Earnings”	$	2,866	$	—	$	—	$	2,866

(1)	Income taxes are based on a percentage of net income before tax for the individual reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive system of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.

5

SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

	Quarter ended June 30, 2009
			Asset
			Performance						Total “Core						Total
	Lending		Group			Other			Earnings”(2)			Adjustments			GAAP
Interest income:
FFELP Stafford and Other Student Loans	$	309,553	$	—		$	—		$	309,553		$	14,386		$	323,939
FFELP Consolidation Loans		394,288		—			—			394,288			66,402			460,690
Private Education Loans		558,667		—			—			558,667			(165,648	)		393,019
Other loans		18,468		—			—			18,468			—			18,468
Cash and investments		3,683		—			4,319			8,002			(958	)		7,044
Total interest income		1,284,659		—			4,319			1,288,978			(85,818	)		1,203,160
Total interest expense		832,030		—			—			832,030			(12,571	)		819,459
Net interest income		452,629		—			4,319			456,948			(73,247	)		383,701
Less: provisions for loan losses		401,790		—			—			401,790			(123,678	)		278,112
Net interest income after provisions for loan losses		50,839		—			4,319			55,158			50,431			105,589
Other income:
Contingency fee revenue		—		73,368			—			73,368			—			73,368
Collections revenue		—		23,933			—			23,933			—			23,933
Guarantor servicing fees		—		—			24,772			24,772			—			24,772
Other income (loss)		359,363		—			46,273			405,636			(480,878	)		(75,242	)
Total other income		359,363		97,301			71,045			527,709			(480,878	)		46,831
Expenses:
Direct operating expenses		133,547		76,348			52,354			262,249			9,687			271,936
Overhead expenses		21,475		11,223			3,530			36,228			—			36,228
Operating expenses		155,022		87,571			55,884			298,477			9,687			308,164
Restructuring expenses		4,147		(729	)		(85	)		3,333			—			3,333
Total expenses		159,169		86,842			55,799			301,810			9,687			311,497
Income (loss) from continuing operations, before income tax expense		251,033		10,459			19,565			281,057			(440,134	)		(159,077	)
Income tax expense (benefit)(1)		93,083		3,504			7,337			103,924			(147,034	)		(43,110	)
Net income (loss) from continuing operations		157,950		6,955			12,228			177,133			(293,100	)		(115,967	)
Loss from discontinued operations, net of tax		—		(6,478	)		—			(6,478	)		(64	)		(6,542	)
Net income (loss)		157,950		477			12,228			170,655			(293,164	)		(122,509	)
Less: net income attributable to noncontrolling interest		—		211			—			211			—			211
Net income (loss) attributable to SLM Corporation	$	157,950	$	266		$	12,228		$	170,444		$	(293,164	)	$	(122,720	)
Economic Floor Income (net of tax) not included in “Core Earnings”	$	88,899	$	—		$	—		$	88,899

(1)	Income taxes are based on a percentage of net income before tax for the individual reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive system of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.

Net income (loss) attributable to SLM Corporation:
Continuing operations, net of tax	$	157,950	$	6,744		$	12,228	$	176,922		$	(293,100	)	$	(116,178	)
Discontinued operations, net of tax		—		(6,478	)		—		(6,478	)		(64	)		(6,542	)
Net income (loss) attributable to SLM Corporation	$	157,950	$	266		$	12,228	$	170,444		$	(293,164	)	$	(122,720	)

6

SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

	Six months ended June 30, 2010
			Asset
			Performance				Total “Core					Total
	Lending		Group		Other		Earnings”(2)		Adjustments			GAAP
Interest income:
FFELP Stafford and Other Student Loans	$	598,399	$	—	$	—	$	598,399	$	10,080		$	608,479
FFELP Consolidation Loans		781,786		—		—		781,786		292,459			1,074,245
Private Education Loans		1,140,494		—		—		1,140,494		—			1,140,494
Other loans		16,250		—		—		16,250		—			16,250
Cash and investments		2,999		—		8,249		11,248		—			11,248
Total interest income		2,539,928		—		8,249		2,548,177		302,539			2,850,716
Total interest expense		1,087,082		—		—		1,087,082		13,235			1,100,317
Net interest income		1,452,846		—		8,249		1,461,095		289,304			1,750,399
Less: provisions for loan losses		741,359		—		—		741,359		—			741,359
Net interest income after provisions for loan losses		711,487		—		8,249		719,736		289,304			1,009,040
Other income:
Contingency fee revenue		—		168,492		—		168,492		—			168,492
Collections revenue		—		39,185		—		39,185		—			39,185
Guarantor servicing fees		—		—		58,547		58,547		—			58,547
Other income		268,904		—		109,530		378,434		(5,081	)		373,353
Total other income		268,904		207,677		168,077		644,658		(5,081	)		639,577
Expenses:
Direct operating expenses		312,519		150,813		115,090		578,422		19,422			597,844
Overhead expenses		47,938		21,888		6,870		76,696		—			76,696
Operating expenses		360,457		172,701		121,960		655,118		19,422			674,540
Restructuring expenses		37,098		1,499		5,351		43,948		—			43,948
Total expenses		397,555		174,200		127,311		699,066		19,422			718,488
Income from continuing operations, before income tax expense		582,836		33,477		49,015		665,328		264,801			930,129
Income tax expense(1)		213,668		12,273		17,968		243,909		107,989			351,898
Net income from continuing operations		369,168		21,204		31,047		421,419		156,812			578,231
Loss from discontinued operations, net of tax		—		—		—		—		—			—
Net income		369,168		21,204		31,047		421,419		156,812			578,231
Less: net income attributable to noncontrolling interest		—		273		—		273		—			273
Net income attributable to SLM Corporation	$	369,168	$	20,931	$	31,047	$	421,146	$	156,812		$	577,958
Economic Floor Income (net of tax) not included in “Core Earnings”	$	4,097	$	—	$	—	$	4,097

(1)	Income taxes are based on a percentage of net income before tax for the individual reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive system of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.

7

SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

	Six months ended June 30, 2009
			Asset
			Performance					Total “Core						Total
	Lending		Group			Other		Earnings‘(2)			Adjustments			GAAP
Interest income:
FFELP Stafford and Other Student Loans	$	671,472	$	—		$	—	$	671,472		$	(4,717	)	$	666,755
FFELP Consolidation Loans		833,184		—			—		833,184			116,868			950,052
Private Education Loans		1,121,949		—			—		1,121,949			(341,889	)		780,060
Other loans		34,888		—			—		34,888			—			34,888
Cash and investments		5,862		—			9,447		15,309			(2,294	)		13,015
Total interest income		2,667,355		—			9,447		2,676,802			(232,032	)		2,444,770
Total interest expense		1,790,909		—			—		1,790,909			55,097			1,846,006
Net interest income		876,446		—			9,447		885,893			(287,129	)		598,764
Less: provisions for loan losses		750,876		—			—		750,876			(222,485	)		528,391
Net interest income after provisions for loan losses		125,570		—			9,447		135,017			(64,644	)		70,373
Other income:
Contingency fee revenue		—		148,183			—		148,183			—			148,183
Collections revenue		—		66,900			—		66,900			689			67,589
Guarantor servicing fees		—		—			58,780		58,780			—			58,780
Other income		461,731		—			96,054		557,785			(431,849	)		125,936
Total other income		461,731		215,083			154,834		831,648			(431,160	)		400,488
Expenses:
Direct operating expenses		257,262		159,769			98,140		515,171			19,446			534,617
Overhead expenses		40,701		21,271			6,691		68,663			—			68,663
Operating expenses		297,963		181,040			104,831		583,834			19,446			603,280
Restructuring expenses		5,684		(74	)		1,496		7,106			—			7,106
Total expenses		303,647		180,966			106,327		590,940			19,446			610,386
Income (loss) from continuing operations, before income tax expense		283,654		34,117			57,954		375,725			(515,250	)		(139,525	)
Income tax expense (benefit)(1)		105,094		11,751			21,472		138,317			(186,944	)		(48,627	)
Net income (loss) from continuing operations		178,560		22,366			36,482		237,408			(328,306	)		(90,898	)
Loss from discontinued operations, net of tax		—		(52,588	)		—		(52,588	)		(128	)		(52,716	)
Net income (loss)		178,560		(30,222	)		36,482		184,820			(328,434	)		(143,614	)
Less: net income attributable to noncontrolling interest		—		492			—		492			—			492
Net income (loss) attributable to SLM Corporation	$	178,560	$	(30,714	)	$	36,482	$	184,328		$	(328,434	)	$	(144,106	)
Economic Floor Income (net of tax) not included in “Core Earnings”	$	168,287	$	—		$	—	$	168,287

(1)	Income taxes are based on a percentage of net income before tax for the individual reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive system of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.

Net income (loss) attributable to SLM Corporation:
Continuing operations, net of tax	$	178,560	$	21,874		$	36,482	$	236,916		$	(328,306	)	$	(91,390	)
Discontinued operations, net of tax		—		(52,588	)		—		(52,588	)		(128	)		(52,716	)
Net income (loss) attributable to SLM Corporation	$	178,560	$	(30,714	)	$	36,482	$	184,328		$	(328,434	)	$	(144,106	)

8

SLM CORPORATION

Reconciliation of “Core Earnings” Net Income to GAAP Net Income
(In thousands, except per share amounts)
(Unaudited)

	Quarters ended									Six months ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2010			2010			2009			2010			2009
“Core Earnings” net income attributable to SLM Corporation(1)(2)	$	209,372		$	211,774		$	170,444		$	421,146		$	184,328
“Core Earnings” adjustments:
Net impact of securitization accounting		—			—			(25,861	)		—			(224,451	)
Net impact of derivative accounting		301,421			120,107			(494,581	)		421,528			(440,571	)
Net impact of Floor Income		(88,419	)		(48,886	)		90,002			(137,305	)		169,045
Net impact of acquired intangibles		(9,710	)		(9,712	)		(9,758	)		(19,422	)		(19,401	)
Total “Core Earnings” adjustments before income tax effect		203,292			61,509			(440,198	)		264,801			(515,378	)
Net income tax effect		(74,846	)		(33,143	)		147,034			(107,989	)		186,944
Total “Core Earnings” adjustments		128,446			28,366			(293,164	)		156,812			(328,434	)
GAAP net income (loss) attributable to SLM Corporation	$	337,818		$	240,140		$	(122,720	)	$	577,958		$	(144,106	)
GAAP diluted earnings (loss) per common share attributable to SLM Corporation common shareholders	$	.63		$	.45		$	(.32	)	$	1.08		$	(.42	)
(1)  “Core Earnings” diluted earnings (loss) per common share attributable to SLM Corporation common shareholders	$	.39		$	.39		$	.31		$	.78		$	.28
(2)  Total Economic Floor Income earned on Managed loans, not included in “Core Earnings” (net of tax)	$	1,231		$	2,866		$	88,899		$	4,097		$	168,287
Total Economic Floor Income earned, not included in “Core Earnings” (net of tax) per common share attributable to SLM Corporation common shareholders	$	—		$	.01		$	.17		$	.01		$	.36

“Core Earnings”

In accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), we prepare financial statements in accordance with GAAP. In addition to evaluating the Company’s GAAP-based financial information, management evaluates the Company’s business segments on a basis that, as allowed under the Financial Accounting Standards Board’s (“FASB’s”) Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” differs from GAAP. We refer to management’s basis of evaluating our segment results as “Core Earnings” presentations for each business segment and we refer to this information in our presentations with credit rating agencies and lenders. While “Core Earnings” are not a substitute for reported results under GAAP, we rely on “Core Earnings” to manage each operating segment because we believe these measures provide additional information regarding the operational and performance indicators that are most closely assessed by management.

Our “Core Earnings” are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. “Core Earnings” net income reflects only current period adjustments to GAAP net income as described below. Unlike financial accounting, there is no comprehensive, authoritative guidance for management reporting and as a result, our management reporting is not necessarily comparable

9

with similar information for any other financial institution. Our operating segments are defined by products and services or by types of customers, and reflect the manner in which financial information is currently evaluated by management. Intersegment revenues and expenses are netted within the appropriate financial statement line items consistent with the income statement presentation provided to management. Changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial information.

Limitations of “Core Earnings”

While GAAP provides a uniform, comprehensive basis of accounting, for the reasons described above, management believes that “Core Earnings” are an important additional tool for providing a more complete understanding of the Company’s results of operations. Nevertheless, “Core Earnings” are subject to certain general and specific limitations that investors should carefully consider. For example, as stated above, unlike financial accounting, there is no comprehensive, authoritative guidance for management reporting. Our “Core Earnings” are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. Unlike GAAP, “Core Earnings” reflect only current period adjustments to GAAP. Accordingly, the Company’s “Core Earnings” presentation does not represent a comprehensive basis of accounting. Investors, therefore, may not compare our Company’s performance with that of other financial services companies based upon “Core Earnings.” “Core Earnings” results are only meant to supplement GAAP results by providing additional information regarding the operational and performance indicators that are most closely used by management, the Company’s board of directors, rating agencies and lenders to assess performance.

Other limitations arise from the specific adjustments that management makes to GAAP results to derive “Core Earnings” results. For example, in reversing the unrealized gains and losses that result from ASC 815, “Derivatives and Hedging,” on derivatives that do not qualify for hedge accounting treatment, as well as on derivatives that do qualify but are in part ineffective because they are not perfect hedges, we focus on the long-term economic effectiveness of those instruments relative to the underlying hedged item and isolate the effects of interest rate volatility and changing credit spreads on the fair value of such instruments during the period. Under GAAP, the effects of these factors on the fair value of the derivative instruments (but often not on the underlying hedged item) tend to show more volatility in the short term. While our presentation of our results on a “Core Earnings” basis provides important information regarding the performance of our Managed portfolio, a limitation of this presentation is that we are presenting the ongoing spread income on loans that have been sold off-balance sheet for GAAP purposes to a trust managed by us. While we believe that our “Core Earnings” presentation presents the economic substance of our Managed loan portfolio, it understates earnings volatility from securitization gains, securitization servicing income and Residual Interest Income. Our “Core Earnings” results exclude certain Floor Income, which is real cash income, from our reported results and therefore may understate earnings in certain periods. Management’s financial planning and valuation of operating results, however, does not take into account Floor Income because of its inherent uncertainty, except when it is Fixed Rate Floor Income that is economically hedged through Floor Income Contracts.

Pre-Tax Differences between “Core Earnings” and GAAP

Our “Core Earnings” are the primary financial performance measures used by management to evaluate performance and to allocate resources. Accordingly, financial information is reported to management on a “Core Earnings” basis by reportable segment, as these are the measures used regularly by our chief operating decision makers. Our “Core Earnings” are used in developing our financial plans and tracking results, and also in establishing corporate performance targets and incentive compensation. Management believes this information provides additional insight into the financial performance of the Company’s core business activities. “Core Earnings” net income reflects only current period adjustments to GAAP net income, as described in the more detailed discussion of the differences between “Core Earnings” and GAAP that follows, which includes further detail on each specific adjustment required to reconcile our “Core Earnings” segment presentation to our GAAP earnings.

10

1)  Securitization Accounting:Under GAAP, prior to the adoption of topic updates to ASC 810, “Consolidation,” certain securitization transactions in our Lending operating segment were accounted for as sales of assets. Under “Core Earnings” for the Lending operating segment, we presented all securitization transactions on a “Core Earnings” basis as long-term non-recourse financings. The upfront “gains” on sale from securitization transactions, as well as ongoing “securitization servicing and Residual Interest revenue (loss)” presented in accordance with GAAP, were excluded from “Core Earnings” and were replaced by interest income, provisions for loan losses, and interest expense as earned or incurred on the securitization loans. We also excluded transactions with our off-balance sheet trusts from “Core Earnings” as they were considered intercompany transactions on a “Core Earnings” basis. On January 1, 2010, the Company prospectively adopted the topic updates to ASC 810, which resulted in the consolidation of these off-balance sheet securitization trusts at their historical cost basis. As of January 1, 2010, there are no longer differences between the Company’s GAAP and “Core Earnings” presentation for securitization accounting. As a result, effective January 1, 2010, the Company’s Managed and on-balance sheet (GAAP) portfolios are the same.

Upon the adoption of topic updates to ASC 810, the Company removed the $1.8 billion of Residual Interests (associated with its off-balance sheet securitization trusts as of December 31, 2009) from the consolidated balance sheet and the Company consolidated $35.0 billion of assets ($32.6 billion of which are student loans, net of a $550 million allowance for loan losses) and $34.4 billion of liabilities (primarily trust debt), which resulted in an approximate $750 million after-tax reduction of stockholders’ equity (recorded as a cumulative effect adjustment to retained earnings). After the adoption of topic updates to ASC 810, the Company’s results of operations no longer reflect securitization servicing and Residual Interest revenue (loss) related to these securitization trusts, but instead report interest income, provisions for loan losses associated with the securitized assets and interest expense associated with the debt issued from the securitization trusts to third parties, consistent with the Company’s accounting treatment of prior on-balance securitization trusts.

2)	Derivative Accounting:“Core Earnings” exclude periodic unrealized gains and losses that are caused primarily by themark-to-market derivative valuations prescribed by ASC 815 on derivatives that do not qualify for hedge accounting treatment under GAAP. These unrealized gains and losses occur in our Lending operating segment. In our “Core Earnings” presentation, we recognize the economic effect of these hedges, which generally results in any cash paid or received being recognized ratably as an expense or revenue over the hedged item’s life.
3)	Floor Income:The timing and amount (if any) of Floor Income earned in our Lending operating segment is uncertain and in excess of expected spreads. Therefore, we only include such income in “Core Earnings” when it is Fixed Rate Floor Income that is economically hedged. We employ derivatives, primarily Floor Income Contracts and futures, to economically hedge Floor Income. As discussed above in “Derivative Accounting,” these derivatives do not qualify as effective accounting hedges, and therefore, under GAAP, they aremarked-to-market through the “gains (losses) on derivative and hedging activities, net” line in the consolidated statement of income with no offsetting gain or loss recorded for the economically hedged items. For “Core Earnings,” we reverse the fair value adjustments on the Floor Income Contracts and futures economically hedging Floor Income and include in income the amortization of net premiums received on contracts economically hedging Fixed Rate Floor Income.
4)	Acquired Intangibles:Our “Core Earnings” exclude goodwill and intangible impairment and the amortization of acquired intangibles.

11