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

Exhibit 99.1

FOR IMMEDIATE RELEASE

SALLIE MAE REPORTS THIRD-QUARTER 2010 RESULTS

RESTON, Va., Oct. 19, 2010— SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, reported core earnings net income of $189 million ($.35 diluted earnings per share) for the third-quarter 2010, compared to $164 million ($.26 diluted earnings per share) for the year-ago quarter.

“This quarter’s results are indicative of our current earnings power until we finish rightsizing the company in 2011,” said Albert L. Lord, vice chairman and CEO. “We recognize the magnitude of this task and are confident that we will achieve it.”

On a GAAP basis, the company reported a net loss of $495 million ($1.06 diluted loss per share), vs. $159 million net income ($.25 diluted earnings per share) in the same quarter last year, after writing off $660 million of goodwill and intangible assets and an unrealized, net loss from the mark to market on hedging activity. The former is primarily the result of new market data and the business impact of recent legislation: the company determined that goodwill and intangible assets within certain operating segments were impaired. The non-cash charge does not impact the company’s tangible capital or capital ratios.

Loan Originations and Servicing

During the quarter, the company originated $835 million in private education loans, 92 percent of which had cosigners.

In addition to its owned and serviced loans, the company serviced in the third quarter approximately 2.5 million accounts on behalf of the federal government and other third-party clients. Since quarter end, the servicing operation has added 1.3 million third-party accounts.

In September, the company announced an agreement to purchase an interest in $28 billion of securitized federal student loans and related assets from The Student Loan Corporation. The transaction is expected to close by year-end 2010.

Private Education Loan Portfolio Quality

The company had $25.8 billion of private education loans in repayment at Sept. 30, compared to $21.7 billion one year earlier. At the same time, third-quarter 2010 delinquencies as a percentage of private education loans in repayment (11.1 percent) declined from the previous quarter (11.9 percent) and the year-ago quarter (12.6 percent). This favorable trend reflects the improving quality of the portfolio.

The third-quarter 2010 private education loan loss provision was $330 million, down from both the previous and year-ago quarters. Net charge-offs were $348 million in the 2010 third quarter, an

expected seasonal increase from the second quarter’s $336 million related to the timing of graduates’ entry into repayment, and a decrease from the year-ago quarter’s $443 million.

Funding and Liquidity

In the third quarter, the company completed a $760 million federal student loan securitization and two private loan securitizations totaling $2.6 billion.

The company used the private loan transaction proceeds to redeem $1.5 billion of higher-priced issuances and to net approximately $1 billion.

Other Income and Operating Expenses

Core earnings fee income was $227 million in the third quarter, compared to the year-ago quarter’s $337 million that included a $74 million gain from debt repurchases.

Core earnings operating expenses excluding restructuring and related asset impairments were $319 million in the third-quarter 2010, compared to $331 million in the previous quarter and $303 million in the year-ago quarter.

GAAP

Sallie Mae 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 atwww.SallieMae.com/investors by clicking on Earnings.

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 third-quarter 2010 core earnings and GAAP results is the impact of a $660 million goodwill and intangible asset pre-tax impairment and a $183 million unrealized, mark-to-market, pre-tax loss on certain derivative contracts, both of which are recognized in GAAP but not in core earnings results.

Presentation slides for the conference call discussed below may be accessed atwww.SallieMae.com/investors under the Webcasts tab.

***

The company will host an earnings conference call tomorrow, Oct. 20, at 8 a.m. EDT. Sallie Mae executives will be on hand to discuss various highlights of the quarter and to answer questions related to the company’s performance. Individuals interested in participating in the call should dial (877) 356-5689 (USA and Canada) or dial (706) 679-0623 (international) and use access code 12880301 starting at 7:45 a.m. EDT. A live audio webcast of the conference call may be accessed atwww.SallieMae.com/investors. Investors may access a replay of the conference call via the company’s website within one hour after the call’s conclusion. A telephone replay may be accessed two hours after the

call’s conclusion through Nov. 4 by dialing (800) 642-1687 (USA and Canada) or (706) 645-9291 (international) with access code 12880301.

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 Third Quarter 2010. All information in this release is as of Oct. 19, 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. The company services $202 billion in education loans and serves 10 million student and parent customers. Its affiliate Upromise Investments, Inc., manages $27 billion in 529 college savings plans, and members of Upromise by Sallie Mae have earned more than $575 million in rewards to help pay for college. 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.

# # #

CONTACTS:

Media Martha Holler, (703) 984-5178,martha.holler@SallieMae.com
Patricia Nash Christel, (703) 984-5382,patricia.christel@SallieMae.com

Investors Steve McGarry, (703) 984-6746,steven.mcgarry@SallieMae.com
Joe Fisher, (703) 984-5755,joe.fisher@SallieMae.com

SLM CORPORATION

Supplemental Earnings Disclosure

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

	Quarters ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2010			2010			2009			2010			2009
SELECTED FINANCIAL INFORMATION AND RATIOS
GAAP Basis(1)
Net income (loss) attributable to SLM Corporation	$	(495	)	$	338		$	159		$	83		$	15
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders	$	(1.06	)	$	.63		$	.25		$	.06		$	(.17	)
Return on assets		(1.00	)%		.68	%		.37	%		.06	%		.01	%
“Core Earnings” Basis(1)(2)(3)
“Core Earnings” net income attributable to SLM Corporation	$	189		$	209		$	164		$	611		$	348
“Core Earnings” diluted earnings per common share attributable to SLM Corporation common shareholders	$	.35		$	.39		$	.26		$	1.13		$	.54
“Core Earnings” return on assets		.38	%		.42	%		.31	%		.42	%		.23	%
OTHER OPERATING STATISTICS
Average on-balance sheet student loans	$	184,139		$	184,571		$	157,530		$	183,424		$	153,622
Average off-balance sheet student loans		—			—			33,929			—			34,797
Average Managed student loans	$	184,139		$	184,571		$	191,459		$	183,424		$	188,419
Ending on-balance sheet student loans, net	$	182,135		$	183,643		$	158,846
Ending off-balance sheet student loans, net		—			—			33,335
Ending Managed student loans, net	$	182,135		$	183,643		$	192,181
Ending Managed FFELP Stafford and Other Student Loans, net	$	66,681		$	67,457		$	73,040
Ending Managed FFELP Consolidation Loans, net		79,912			81,035			84,235
Ending Managed Private Education Loans, net		35,542			35,151			34,906
Ending Managed student loans, net	$	182,135		$	183,643		$	192,181

⁽¹⁾ Diluted earnings (loss) 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 September 30, 2010, June 30, 2010 and September 30, 2009 and for the nine months ended September 30, 2010 and 2009 was:

	Quarters ended								Nine months ended
	September 30,			June 30,		September 30,			September 30,		September 30,
	2010			2010		2009			2010		2009
GAAP Basis
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders:
Continuing operations	$	(1.07	)	$	.63	$	.26		$	.05	$	(.04	)
Discontinued operations		.01			—		(.01	)		.01		(.13	)
Total	$	(1.06	)	$	.63	$	.25		$	.06	$	(.17	)
“Core Earnings” Basis(2)(3)
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders:
Continuing operations	$	.34		$	.39	$	.27		$	1.12	$	.67
Discontinued operations		.01			—		(.01	)		.01		(.13	)
Total	$	.35		$	.39	$	.26		$	1.13	$	.54

(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis 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 September 30, 2010, June 30, 2010 and September 30, 2009 and for the nine months ended September 30, 2010 and 2009 was:

	Quarters ended						Nine months ended
	September 30,		June 30,		September 30,		September 30,		September 30,
	2010		2010		2009		2010		2009
Total Economic Floor Income earned on Managed loans, not included in “Core Earnings” (net of tax)	$	12	$	1	$	23	$	16	$	191
Total Economic Floor Income earned, not included in “Core Earnings” (net of tax) per common share attributable to SLM Corporation common shareholders	$	.02	$	—	$	.05	$	.03	$	.41

SLM CORPORATION

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

	September 30,			June 30,			September 30,
	2010			2010			2009
Assets
FFELP Stafford and Other Student Loans (net of allowance for losses of $120,386; $122,192 and $101,343, respectively)	$	46,026,138		$	47,280,248		$	43,257,743
FFELP Stafford LoansHeld-for-Sale		20,655,561			20,177,860			23,846,566
FFELP Consolidation Loans (net of allowance for losses of $68,880; $66,493; and $54,384, respectively)		79,911,599			81,034,596			69,246,231
Private Education Loans (net of allowance for losses of $2,035,034; $2,042,413; and $1,401,496, respectively)		35,541,640			35,150,686			22,494,955
Cash and investments		6,992,621			7,680,116			7,021,808
Restricted cash and investments		5,837,546			6,252,914			5,760,583
Retained Interest in off-balance sheet securitized loans		—			—			1,838,203
Goodwill and acquired intangible assets, net		488,220			1,157,888			1,224,272
Other assets		10,653,449			8,584,404			11,753,563
Total assets	$	206,106,774		$	207,318,712		$	186,443,924
Liabilities
Short-term borrowings	$	45,388,432		$	46,472,435		$	53,406,554
Long-term borrowings		153,003,935			152,250,912			124,647,818
Other liabilities		3,140,330			3,508,617			3,400,527
Total liabilities		201,532,697			202,231,964			181,454,899
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 1,012 shares, respectively, issued at liquidation preference of $1,000 per share		810,370			810,370			1,012,370
Common stock, par value $.20 per share, 1,125,000 shares authorized:
553,787; 553,571; and 541,849 shares, respectively, issued		110,758			110,715			108,362
Additional paid-in capital		5,127,313			5,122,583			4,862,071
Accumulated other comprehensive loss, net of tax benefit		(44,159	)		(43,333	)		(44,143	)
Retained earnings (loss)		(122,565	)		391,169			346,347
Total SLM Corporation stockholders’ equity before treasury stock		6,446,717			6,956,504			6,850,007
Common stock held in treasury: 68,011; 67,775 and 67,159 shares, respectively		1,872,640			1,869,760			1,860,989
Total SLM Corporation stockholders’ equity		4,574,077			5,086,744			4,989,018
Noncontrolling interest		—			4			7
Total equity		4,574,077			5,086,748			4,989,025
Total liabilities and equity	$	206,106,774		$	207,318,712		$	186,443,924

Supplemental information — assets and liabilities of consolidated variable interest entities:

	September 30,		June 30,		September 30,
	2010		2010		2009
FFELP Stafford and Other Student Loans	$	65,557,473	$	66,130,975	$	64,993,570
FFELP Consolidation Loans		78,396,367		79,558,032		68,696,728
Private Education Loans		24,511,699		23,561,695		9,200,713
Restricted cash and investments		5,522,584		5,881,972		4,658,009
Other assets		4,373,606		2,856,872		4,334,239
Short-term borrowings		36,806,456		37,014,277		46,553,608
Long-term borrowings		128,473,542		127,904,461		92,222,000
Net assets of consolidated variable interest entities	$	13,081,731	$	13,070,808	$	13,107,651

2

SLM CORPORATION

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

	Quarters ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2010			2010			2009			2010			2009
Interest income:
FFELP Stafford and Other Student Loans	$	320,234		$	325,042		$	303,192		$	928,713		$	969,947
FFELP Consolidation Loans		564,586			550,920			481,592			1,638,831			1,431,644
Private Education Loans		610,893			575,340			396,339			1,751,387			1,176,399
Other loans		7,190			7,254			11,042			23,440			45,930
Cash and investments		7,630			6,299			6,881			18,878			19,896
Total interest income		1,510,533			1,464,855			1,199,046			4,361,249			3,643,816
Total interest expense		638,599			568,933			673,870			1,738,916			2,519,876
Net interest income		871,934			895,922			525,176			2,622,333			1,123,940
Less: provisions for loan losses		358,110			382,239			321,127			1,099,469			849,518
Net interest income after provisions for loan losses		513,824			513,683			204,049			1,522,864			274,422
Other income (loss):
Securitization servicing and Residual Interest revenue		—			—			155,065			—			147,248
Gains (losses) on sales of loans and securities, net		1,607			(3,515	)		12,452			6,745			12,752
Gains (losses) on derivative and hedging activities, net		(344,458	)		95,316			(111,556	)		(331,552	)		(569,326	)
Contingency fee revenue		83,746			88,181			82,200			252,238			230,383
Collections revenue		13,097			17,219			21,241			52,282			88,830
Guarantor servicing fees		15,996			22,457			48,087			74,543			106,867
Other		90,502			164,899			150,006			445,811			741,229
Total other income (loss)		(139,510	)		384,557			357,495			500,067			757,983
Expenses:
Operating expenses		319,219			336,810			303,130			974,337			887,008
Goodwill and acquired intangible assets impairment and amortization expense		669,668			9,710			9,774			689,090			29,176
Restructuring expenses		11,082			17,666			2,492			55,030			9,598
Total expenses		999,969			364,186			315,396			1,718,457			925,782
Income (loss) from continuing operations, before income tax expense (benefit)		(625,655	)		534,054			246,148			304,474			106,623
Income tax expense (benefit)		(127,558	)		196,103			80,423			224,340			31,796
Net income (loss) from continuing operations		(498,097	)		337,951			165,725			80,134			74,827
Income (loss) from discontinued operations, net of tax		3,211			—			(6,417	)		3,211			(59,133	)
Net income (loss)		(494,886	)		337,951			159,308			83,345			15,694
Less: net income attributable to noncontrolling interest		61			133			198			334			690
Net income (loss) attributable to SLM Corporation		(494,947	)		337,818			159,110			83,011			15,004
Preferred stock dividends		18,787			18,711			42,627			56,176			94,822
Net income (loss) attributable to SLM Corporation common stock	$	(513,734	)	$	319,107		$	116,483		$	26,835		$	(79,818	)
Net income (loss) attributable to SLM Corporation:
Continuing operations, net of tax	$	(498,158	)	$	337,818		$	165,527		$	79,800		$	74,137
Discontinued operations, net of tax		3,211			—			(6,417	)		3,211			(59,133	)
Net income (loss) attributable to SLM Corporation	$	(494,947	)	$	337,818		$	159,110		$	83,011		$	15,004
Basic earnings (loss) per common share attributable to SLM Corporation common shareholders:
Continuing operations	$	(1.07	)	$	.66		$	.26		$	.05		$	(.04	)
Discontinued operations		.01			—			(.01	)		.01			(.13	)
Total	$	(1.06	)	$	.66		$	.25		$	.06		$	(.17	)
Average common shares outstanding		484,936			484,832			470,280			484,678			467,960
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders:
Continuing operations	$	(1.07	)	$	.63		$	.26		$	.05		$	(.04	)
Discontinued operations		.01			—			(.01	)		.01			(.13	)
Total	$	(1.06	)	$	.63		$	.25		$	.06		$	(.17	)
Average common and common equivalent shares outstanding		484,936			527,391			471,058			486,209			467,960
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 September 30, 2010
			Asset
			Performance					Total “Core					Total
	Lending		Group		Other			Earnings”(2)		Adjustments			GAAP
Interest income:
FFELP Stafford and Other Student Loans	$	319,153	$	—	$	—		$	319,153	$	1,081		$	320,234
FFELP Consolidation Loans		409,973		—		—			409,973		154,613			564,586
Private Education Loans		610,893		—		—			610,893		—			610,893
Other loans		7,190		—		—			7,190		—			7,190
Cash and investments		3,214		—		4,416			7,630		—			7,630
Total interest income		1,350,423		—		4,416			1,354,839		155,694			1,510,533
Total interest expense		598,890		—		—			598,890		39,709			638,599
Net interest income		751,533		—		4,416			755,949		115,985			871,934
Less: provisions for loan losses		358,110		—		—			358,110		—			358,110
Net interest income after provisions for loan losses		393,423		—		4,416			397,839		115,985			513,824
Other income (loss):
Contingency fee revenue		—		83,746		—			83,746		—			83,746
Collections revenue		—		13,097		—			13,097		—			13,097
Guarantor servicing fees		—		—		15,996			15,996		—			15,996
Other income (loss)		57,869		—		55,928			113,797		(366,146	)		(252,349	)
Total other income (loss)		57,869		96,843		71,924			226,636		(366,146	)		(139,510	)
Expenses:
Direct operating expenses		165,133		65,922		61,017			292,072		—			292,072
Overhead expenses		16,517		8,359		2,271			27,147		—			27,147
Operating expenses		181,650		74,281		63,288			319,219		—			319,219
Goodwill and acquired intangible assets impairment and amortization expense		—		—		—			—		669,668			669,668
Restructuring expenses		10,315		1,665		(898	)		11,082		—			11,082
Total expenses		191,965		75,946		62,390			330,301		669,668			999,969
Income (loss) from continuing operations, before income tax expense		259,327		20,897		13,950			294,174		(919,829	)		(625,655	)
Income tax expense (benefit)(1)		95,069		7,704		5,115			107,888		(235,446	)		(127,558	)
Net income (loss) from continuing operations		164,258		13,193		8,835			186,286		(684,383	)		(498,097	)
Income from discontinued operations, net of tax		—		3,211		—			3,211		—			3,211
Net income		164,258		16,404		8,835			189,497		(684,383	)		(494,886	)
Less: net income attributable to noncontrolling interest		—		61		—			61		—			61
Net income attributable to SLM Corporation	$	164,258	$	16,343	$	8,835		$	189,436	$	(684,383	)	$	(494,947	)
Economic Floor Income (net of tax) not included in “Core Earnings”	$	12,145	$	—	$	—		$	12,145

(1)	Income taxes are based on a percentage of net income before tax for the reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis 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	$	164,258	$	13,132	$	8,835	$	186,225	$	(684,383	)	$	(498,158	)
Discontinued operations, net of tax		—		3,211		—		3,211		—			3,211
Net income (loss) attributable to SLM Corporation	$	164,258	$	16,343	$	8,835	$	189,436	$	(684,383	)	$	(494,947	)

4

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		—			294,889
Overhead expenses		27,325		11,115			3,481		41,921		—			41,921
Operating expenses		194,086		86,371			56,353		336,810		—			336,810
Goodwill and acquired intangible assets impairment and amortization expense		—		—			—		—		9,710			9,710
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 reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis 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 September 30, 2009
			Asset
			Performance					Total “Core						Total
	Lending		Group			Other		Earnings”(2)			Adjustments			GAAP
Interest income:
FFELP Stafford and Other Student Loans	$	340,652	$	—		$	—	$	340,652		$	(37,460	)	$	303,192
FFELP Consolidation Loans		429,617		—			—		429,617			51,975			481,592
Private Education Loans		560,791		—			—		560,791			(164,452	)		396,339
Other loans		11,042		—			—		11,042			—			11,042	��
Cash and investments		2,337		—			5,156		7,493			(612	)		6,881
Total interest income		1,344,439		—			5,156		1,349,595			(150,549	)		1,199,046
Total interest expense		659,971		—			—		659,971			13,899			673,870
Net interest income		684,468		—			5,156		689,624			(164,448	)		525,176
Less: provisions for loan losses		447,963		—			—		447,963			(126,836	)		321,127
Net interest income after provisions for loan losses		236,505		—			5,156		241,661			(37,612	)		204,049
Other income:
Contingency fee revenue		—		82,200			—		82,200			—			82,200
Collections revenue		—		21,241			—		21,241			—			21,241
Guarantor servicing fees		—		—			48,087		48,087			—			48,087
Other income		129,286		—			55,821		185,107			20,860			205,967
Total other income		129,286		103,441			103,908		336,635			20,860			357,495
Expenses:
Direct operating expenses		143,515		75,244			55,891		274,650			(83	)		274,567
Overhead expenses		16,931		8,848			2,784		28,563			—			28,563
Operating expenses		160,446		84,092			58,675		303,213			(83	)		303,130
Goodwill and acquired intangible assets impairment and amortization expense		—		—			—		—			9,774			9,774
Restructuring expenses		1,823		340			329		2,492			—			2,492
Total expenses		162,269		84,432			59,004		305,705			9,691			315,396
Income from continuing operations, before income tax expense		203,522		19,009			50,060		272,591			(26,443	)		246,148
Income tax expense(1)		75,113		8,502			18,483		102,098			(21,675	)		80,423
Net income from continuing operations		128,409		10,507			31,577		170,493			(4,768	)		165,725
Loss from discontinued operations, net of tax		—		(6,353	)		—		(6,353	)		(64	)		(6,417	)
Net income		128,409		4,154			31,577		164,140			(4,832	)		159,308
Less: net income attributable to noncontrolling interest		—		198			—		198			—			198
Net income attributable to SLM Corporation	$	128,409	$	3,956		$	31,577	$	163,942		$	(4,832	)	$	159,110
Economic Floor Income (net of tax) not included in “Core Earnings”	$	22,607	$	—		$	—	$	22,607

(1)	Income taxes are based on a percentage of net income before tax for the reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis 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	$	128,409	$	10,309		$	31,577	$	170,295		$	(4,768	)	$	165,527
Discontinued operations, net of tax		—		(6,353	)		—		(6,353	)		(64	)		(6,417	)
Net income (loss) attributable to SLM Corporation	$	128,409	$	3,956		$	31,577	$	163,942		$	(4,832	)	$	159,110

6

SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

	Nine months ended September 30, 2010
			Asset
			Performance				Total “Core					Total
	Lending		Group		Other		Earnings”(2)		Adjustments			GAAP
Interest income:
FFELP Stafford and Other Student Loans	$	917,552	$	—	$	—	$	917,552	$	11,161		$	928,713
FFELP Consolidation Loans		1,191,759		—		—		1,191,759		447,072			1,638,831
Private Education Loans		1,751,387		—		—		1,751,387		—			1,751,387
Other loans		23,440		—		—		23,440		—			23,440
Cash and investments		6,213		—		12,665		18,878		—			18,878
Total interest income		3,890,351		—		12,665		3,903,016		458,233			4,361,249
Total interest expense		1,685,972		—		—		1,685,972		52,944			1,738,916
Net interest income		2,204,379		—		12,665		2,217,044		405,289			2,622,333
Less: provisions for loan losses		1,099,469		—		—		1,099,469		—			1,099,469
Net interest income after provisions for loan losses		1,104,910		—		12,665		1,117,575		405,289			1,522,864
Other income:
Contingency fee revenue		—		252,238		—		252,238		—			252,238
Collections revenue		—		52,282		—		52,282		—			52,282
Guarantor servicing fees		—		—		74,543		74,543		—			74,543
Other income		326,773		—		165,458		492,231		(371,227	)		121,004
Total other income		326,773		304,520		240,001		871,294		(371,227	)		500,067
Expenses:
Direct operating expenses		477,652		216,735		176,107		870,494		—			870,494
Overhead expenses		64,455		30,247		9,141		103,843		—			103,843
Operating expenses		542,107		246,982		185,248		974,337		—			974,337
Goodwill and acquired intangible assets impairment and amortization expense		—		—		—		—		689,090			689,090
Restructuring expenses		47,413		3,164		4,453		55,030		—			55,030
Total expenses		589,520		250,146		189,701		1,029,367		689,090			1,718,457
Income from continuing operations, before income tax expense		842,163		54,374		62,965		959,502		(655,028	)		304,474
Income tax expense(1)		308,737		19,977		23,083		351,797		(127,457	)		224,340
Net income from continuing operations		533,426		34,397		39,882		607,705		(527,571	)		80,134
Income from discontinued operations, net of tax		—		3,211		—		3,211		—			3,211
Net income		533,426		37,608		39,882		610,916		(527,571	)		83,345
Less: net income attributable to noncontrolling interest		—		334		—		334		—			334
Net income attributable to SLM Corporation	$	533,426	$	37,274	$	39,882	$	610,582	$	(527,571	)	$	83,011
Economic Floor Income (net of tax) not included in “Core Earnings”	$	16,242	$	—	$	—	$	16,242

(1)	Income taxes are based on a percentage of net income before tax for the reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis 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	$	533,426	$	34,063	$	39,882	$	607,371	$	(527,571	)	$	79,800
Discontinued operations, net of tax		—		3,211		—		3,211		—			3,211
Net income (loss) attributable to SLM Corporation	$	533,426	$	37,274	$	39,882	$	610,582	$	(527,571	)	$	83,011

7

SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

	Nine months ended September 30, 2009
			Asset
			Performance					Total “Core						Total
	Lending		Group			Other		Earnings”(2)			Adjustments			GAAP
Interest income:
FFELP Stafford and Other Student Loans	$	1,012,124	$	—		$	—	$	1,012,124		$	(42,177	)	$	969,947
FFELP Consolidation Loans		1,262,801		—			—		1,262,801			168,843			1,431,644
Private Education Loans		1,682,740		—			—		1,682,740			(506,341	)		1,176,399
Other loans		45,930		—			—		45,930			—			45,930
Cash and investments		8,199		—			14,603		22,802			(2,906	)		19,896
Total interest income		4,011,794		—			14,603		4,026,397			(382,581	)		3,643,816
Total interest expense		2,450,880		—			—		2,450,880			68,996			2,519,876
Net interest income		1,560,914		—			14,603		1,575,517			(451,577	)		1,123,940
Less: provisions for loan losses		1,198,839		—			—		1,198,839			(349,321	)		849,518
Net interest income after provisions for loan losses		362,075		—			14,603		376,678			(102,256	)		274,422
Other income:
Contingency fee revenue		—		230,383			—		230,383			—			230,383
Collections revenue		—		88,141			—		88,141			689			88,830
Guarantor servicing fees		—		—			106,867		106,867			—			106,867
Other income		591,017		—			151,875		742,892			(410,989	)		331,903
Total other income		591,017		318,524			258,742		1,168,283			(410,300	)		757,983
Expenses:
Direct operating expenses		400,777		235,013			154,031		789,821			(39	)		789,782
Overhead expenses		57,632		30,119			9,475		97,226			—			97,226
Operating expenses		458,409		265,132			163,506		887,047			(39	)		887,008
Goodwill and acquired intangible assets impairment and amortization expense		—		—			—		—			29,176			29,176
Restructuring expenses		7,507		266			1,825		9,598			—			9,598
Total expenses		465,916		265,398			165,331		896,645			29,137			925,782
Income from continuing operations, before income tax expense		487,176		53,126			108,014		648,316			(541,693	)		106,623
Income tax expense(1)		180,207		20,255			39,954		240,416			(208,620	)		31,796
Net income from continuing operations		306,969		32,871			68,060		407,900			(333,073	)		74,827
Loss from discontinued operations, net of tax		—		(58,940	)		—		(58,940	)		(193	)		(59,133	)
Net income (loss)		306,969		(26,069	)		68,060		348,960			(333,266	)		15,694
Less: net income attributable to noncontrolling interest		—		690			—		690			—			690
Net income (loss) attributable to SLM Corporation	$	306,969	$	(26,759	)	$	68,060	$	348,270		$	(333,266	)	$	15,004
Economic Floor Income (net of tax) not included in “Core Earnings”	$	190,894	$	—		$	—	$	190,894

(1)	Income taxes are based on a percentage of net income before tax for the reportable segment.
(2)	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis 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	$	306,969	$	32,181		$	68,060	$	407,210		$	(333,073	)	$	74,137
Discontinued operations, net of tax		—		(58,940	)		—		(58,940	)		(193	)		(59,133	)
Net income (loss) attributable to SLM Corporation	$	306,969	$	(26,759	)	$	68,060	$	348,270		$	(333,266	)	$	15,004

8

SLM CORPORATION

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

	Quarters ended									Nine months ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2010			2010			2009			2010			2009
“Core Earnings” net income attributable to SLM Corporation(1)(2)	$	189,436		$	209,372		$	163,942		$	610,582		$	348,270
“Core Earnings” adjustments:
Net impact of securitization accounting		—			—			27,885			—			(196,566	)
Net impact of derivative accounting		(182,708	)		301,421			(36,598	)		238,820			(477,169	)
Net impact of Floor Income		(67,453	)		(88,419	)		(8,020	)		(204,758	)		161,025
Net impact of goodwill and acquired intangibles		(669,668	)		(9,710	)		(9,774	)		(689,090	)		(29,176	)
Total “Core Earnings” adjustments before income tax effect		(919,829	)		203,292			(26,507	)		(655,028	)		(541,886	)
Net income tax effect		235,446			(74,846	)		21,675			127,457			208,620
Total “Core Earnings” adjustments		(684,383	)		128,446			(4,832	)		(527,571	)		(333,266	)
GAAP net income (loss) attributable to SLM Corporation	$	(494,947	)	$	337,818		$	159,110		$	83,011		$	15,004
GAAP diluted earnings (loss) per common share attributable to SLM Corporation common shareholders	$	(1.06	)	$	.63		$	.25		$	.06		$	(.17	)
(1)  “Core Earnings” diluted earnings per common share attributable to SLM Corporation common shareholders	$	.35		$	.39		$	.26		$	1.13		$	.54
(2)  Total Economic Floor Income earned on Managed loans, not included in “Core Earnings” (net of tax)	$	12,145		$	1,231		$	22,607		$	16,242		$	190,894
Total Economic Floor Income earned, not included in “Core Earnings” (net of tax) per common share attributable to SLM Corporation common shareholders	$	.02		$	—		$	.05		$	.03		$	.41

“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, lenders and investors. 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

9

guidance for management reporting and as a result, our management reporting is not necessarily comparable 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, lenders and investors 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 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)	Goodwill and Acquired Intangibles:Our “Core Earnings” exclude goodwill and intangible impairment and the amortization of acquired intangibles.

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