SLM (SLM) 8-K Forward-Looking Statements; Non-GAAP Financial Measures

SLM CORPORATION

Q1 2013 Investor Presentation

MAY 6, 2013

Exhibit 99.1

2

Forward-Looking Statements; Non-GAAP Financial Measures

The

following

information

is

current

as

of

May

6,

2013

(unless

otherwise

noted)

and

should

be

read

in

connection

with

SLM

Corporation’s

Annual

Report

on

Form

10-K

for

the

year

ended

December

31,

2012

(the

“2012

Form

10-K”),

and

subsequent

reports

filed

with

the

Securities

and

Exchange

Commission

(the

“SEC”).

Definitions

for

capitalized

terms

in

this

presentation

not

defined

herein

can

be

found

in

the

2012

Form

10-K

(filed

with

the

SEC

on

February

26,

2013).

This

Presentation

contains

forward-looking

statements

and

information

based

on

management’s

current

expectations

as

of

the

date

of

this

presentation.

Statements

that

are

not

historical

facts,

including

statements

about

our

opinions,

beliefs

or

expectations

and

statements

that

assume

or

are

dependent

upon

future

events,

are

forward-looking

statements.

Forward-looking

statements

are

subject

to

risks,

uncertainties,

assumptions

and

other

factors

that

may

cause

actual

results

to

be

materially

different

from

those

reflected

in

such

forward-looking

statements.

These

factors

include,

among

others,

the

risks

and

uncertainties

set

forth

in

Item

1A

“Risk

Factors”

and

elsewhere

in

the

2012

Form

10-K,

the

Company’s

first

quarter

Form

10-Q

and

subsequent

filings

with

the

SEC;

increases

in

financing

costs;

limits

on

liquidity;

increases

in

costs

associated

with

compliance

with

laws

and

regulations;

changes

in

accounting

standards

and

the

impact

of

related

changes

in

significant

accounting

estimates;

any

adverse

outcomes

in

any

significant

litigation

to

which

we

are

a

party;

credit

risk

associated

with

our

exposure

to

third

parties,

including

counterparties

to

our

derivative

transactions;

and

changes

in

the

terms

of

student

loans

and

the

educational

credit

marketplace

(including

changes

resulting

from

new

laws

and

the

implementation

of

existing

laws).

We

could

also

be

affected

by,

among

other

things:

changes

in

our

funding

costs

and

availability;

reductions

to

our

credit

ratings

or

the

credit

ratings

of

the

United

States

of

America;

failures

of

our

operating

systems

or

infrastructure,

including

those

of

third-party

vendors;

damage

to

our

reputation;

failures

to

successfully

implement

cost-cutting

and

restructuring

initiatives

and

adverse

effects

of

such

initiatives

on

our

business;

changes

in

the

demand

for

educational

financing

or

in

financing

preferences

of

lenders,

educational

institutions,

students

and

their

families;

changes

in

law

and

regulations

with

respect

to

the

student

lending

business

and

financial

institutions

generally;

increased

competition

from

banks

and

other

consumer

lenders;

the

creditworthiness

of

our

customers;

changes

in

the

general

interest

rate

environment,

including

the

rate

relationships

among

relevant

money-market

instruments

and

those

of

our

earning

assets

versus

our

funding

arrangements;

changes

in

general

economic

conditions;

our

ability

to

successfully

effectuate

any

acquisitions

and

other

strategic

initiatives;

and

changes

in

the

demand

for

debt

management

services.

The

preparation

of

our

consolidated

financial

statements

also

requires

management

to

make

certain

estimates

and

assumptions

including

estimates

and

assumptions

about

future

events.

These

estimates

or

assumptions

may

prove

to

be

incorrect.

All

forward-looking

statements

contained

in

this

Presentation

are

qualified

by

these

cautionary

statements

and

are

made

only

as

of

the

date

of

this

Presentation.

We

do

not

undertake

any

obligation

to

update

or

revise

these

forward-looking

statements

to

conform

the

statement

to

actual

results

or

changes

in

our

expectations.

The

Company

reports

financial

results

on

a

GAAP

basis

and

also

provides

certain

core

earnings

performance

measures.

The

difference

between

the

Company’s

core

earnings

and

GAAP

results

for

the

periods

presented

were

the

unrealized,

mark-to-market

gains/losses

on

derivative

contracts

and

the

goodwill

and

acquired

intangible

asset

amortization

and

impairment.

These

items

are

recognized

in

GAAP

but

not

in

core

earnings

results.

The

Company

provides

core

earnings

measures

because

this

is

what

management

uses

when

making

management

decisions

regarding

the

Company’s

performance

and

the

allocation

of

corporate

resources.

The

Company’s

core

earnings

are

not

defined

terms

within

GAAP

and

may

not

be

comparable

to

similarly

titled

measures

reported

by

other

companies.

For

additional

information,

see

“Core

Earnings

—

Definition

and

Limitations”

in

the

Company’s

first

quarter

Form

10-Q

for

a

further

discussion

and

a

complete

reconciliation

between

GAAP

net

income

and

core

earnings.

3

SLM Corporation

SLM Corporation Overview

Page 4

The U.S. Student Loan Market

Page 11

Credit Quality

Page 19

Servicing: A Competitive Advantage

Page 28

Funding Diversity and Liquidity

Page 32

Risk-Adjusted Capital

Page 42

FFELP ABS Appendix

Page 45

Private Education Loan ABS Appendix

Page 50

SLM Appendix

Page 71

4

SLM Corporation Overview

5

#1 saving, planning and paying for education

company with 40-years of leadership in the

education lending market

#1 servicer and collector of student loans in the

U.S. for FFELP

1

and Private Education Loans

Serving 25 million unique customers

$157

billion student loan portfolio, 76% of which

is insured or guaranteed

Fully independent private sector company with

scale and a broad franchise, traded on the

NASDAQ (ticker: SLM)

SLM Corporation

1

Federal Family Education Loan Program (“FFELP”).

6

A Brief Corporate History

7

Q1 13 “Core Earnings”

Summary

*

($ millions, except per share amounts)

Q1 13

Q4 12

Q1 12

EPS (Reported)

$0.61

$0.55

$0.55

Net Income

$283

$257

$284

Net Interest Income

$675

$714

$732

Loan Loss Provision

$241

$314

$253

Fee and Other Income - Excluding Debt Repurchase Gains

$258

$201

$198

Debt Repurchase Gains

$29

$43

$37

Operating Expenses

$270

$252

$262

Average Student Loans

$160,261

$164,800

$174,942

*

For

a

GAAP

to

“Core

Earnings”

reconciliation,

see

slide

72

8

Consumer Lending Segment Earnings Detail –

“Core Earnings”

Basis

(1)

Includes non-GAAP adjustments of 0.03%, 0.05%, and 0.13%, respectively, related to the accounting for derivative instruments.

9

FFELP Loan Segment Earnings Detail –

“Core Earnings”

Basis

(1)

Includes

non-GAAP

adjustments

of

(0.40%),

(0.37%),

and

(0.27)

respectively,

related

to

the

accounting

for

derivative

instruments.

10

Three Aspects of the SLM Business Model

–

Largest originator of Private Education Loans

–

Significant long term value

–

High quality loan originations growing in double digits

–

Growing net income

–

Businesses

include

loan

servicing

and

collections

for

Department

of

Education, and 529 savings plan servicing

–

ABS servicing cash flows are super senior

–

Opportunities exist to expand services provided, including industry

consolidation

–

Efficient cost structure and top performer

–

Existing portfolios generating substantial income and cash flow

–

Residuals stable due to minimal credit and interest rate risk

–

Actively seeking to acquire additional FFELP loan portfolios

Consumer Lending

Business Services

FFELP Loan Portfolio

11

The U.S. Student Loan Market

12

Favorable Student Loan Market Trends

13

College Grads Experience Lower Levels of Unemployment

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

14

Private Education Loans –

High Quality Originations

Originations

of

$2.3

bn

in

2010

had

an

average

winning

FICO

of

739

and

89%

were

cosigned.

Originations

of

$2.7

bn

in

2011

had

an

average

winning

FICO

of

748

and

91%

were

cosigned.

Originations

of

$3.3

bn

in

2012

had

an

average

winning

FICO

of

748

and

90%

were

cosigned.

15

Private Education Loan Portfolio Characteristics

–

$37 billion portfolio

–

24% of SLM’s total student loan portfolio

–

Approximately 66% of portfolio has a cosigner, typically a parent

–

Loans originated since 2009 are approximately 90% cosigned with average FICO

scores above 740

–

Higher education loans typically non-dischargeable in bankruptcy

–

Integrated underwriting, servicing and collections

SLM’s Private Education Loan Portfolio

As of March 31, 2013

16

Smart

Option

Student

Loan

product

offers

three

repayment

choices

designed

to

help

borrowers

balance their goals and budget while in school

–

Interest Only -

Requires interest only payment during in-school period

–

Fixed Repayment -

Requires $25 monthly payments during in-school period

–

Deferred Repayment –

Allows the customer to defer payments while in-school

Variable and Fixed Interest Rate Options

Repayment

term

is

driven

by

cumulative

amount

borrowed

and

grade

level

Full communication with customers during in-school period

Full

collection

activities

are

employed

at

both

the

customer

and

cosigner

level

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

education expenses

SLM’s Private Education Smart Option Student Loan Products

17

Private Education Loan products bridge the funding gap between the cost of a college education and funds

available through U.S. Department of Education (ED) programs, grants, and other sources

Estimates for academic year 2011-12 project that 21 million students will enroll in higher education and incur costs

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

Role of Private Education Loans

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

Total

Cost

of

Education

(in

billions)

2011/2012

Academic

Year

18

2011-12 academic year market share approximately 47%

Private Education Loan Industry Originations

Source: Trends in Student Aid.©

2012 The College Board,. www.collegeboard.org,

industry data is preliminary. Based on current dollars. Data reported by academic year, SLM quarterly data converted to academic year basis.

Private Education Loan originations declined from their peak as a result of an

increase in federal student loan limits, an overall increase in the use of federal

student loans, an increase in federal grants, and tighter underwriting standards.

19

Credit Quality

20

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

Moderate Risk = Legacy Traditional Non-Cosigned

Elevated Risk = Non-Traditional

Consumer Lending Segment –

High Quality Portfolio

21

(1)

All data as of Quarter Ended March 31, 2013. Annualized FFELP charge-offs as a percentage of average FFELP Loans. Annualized Private Education Loan charge-offs as a

percentage of average Private Education Loans. Annualized total charge-offs as a percentage of average FFELP Loans and Private Education Loans.

(2)

Percentages of total student loan portfolio based upon average portfolio balances.

SLM Loan Losses

22

Private Credit Default Performance

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

increases

23

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

Q1 13

Q4 12

Q3 12

Q2 12

Q1 12

Charge-offs - Traditional Portfolio

(1)

2.5%

3.4%

2.6%

2.5%

2.3%

Charge-offs - Non-Traditional Portfolio

(1)

8.7%

13.2%

10.5%

9.8%

10.3%

Charge-offs - Total Portfolio

(1)

3.0%

4.2%

3.2%

3.1%

3.0%

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

3.3%

3.9%

4.4%

3.7%

3.6%

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

11.2%

12.6%

14.6%

12.6%

12.5%

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

3.9%

4.6%

5.3%

4.5%

4.4%

Forb as a % of Forb & Repay - Traditional Portfolio

3.2%

3.3%

3.1%

4.1%

4.1%

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

5.1%

5.1%

5.0%

6.4%

6.8%

Forb as a % of Forb & Repay - Total Portfolio

3.4%

3.5%

3.2%

4.3%

4.3%

Allowance as a % of Loans in Repay - Traditional Portfolio

5.7%

5.7%

5.8%

5.7%

5.8%

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

21.0%

20.7%

21.5%

22.5%

22.8%

Allowance as a % of Loans in Repay - Total Portfolio

6.9%

6.9%

7.1%

7.1%

7.2%

Private Education Loan Portfolio Performance

24

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

Private Education Loan Portfolio Performance

25

(Dollars in millions)

March 31, 2013

Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

5,959

Loans in Forbearance

502

7.8%

166

3.1%

134

2.4%

71

1.6%

93

1.1%

966

3.2%

Loans in Repayment- Current

5,191

80.8%

4,837

89.6%

5,033

91.3%

4,214

93.8%

7,797

95.5%

27,072

90.3%

Loans in Repayment- Delinq 31-60 days

198

3.1%

116

2.2%

111

2.0%

72

1.6%

100

1.2%

597

2.0%

Loans in Repayment- Delinq 61-90 days

147

2.3%

77

1.4%

68

1.2%

45

1.0%

56

0.7%

393

1.3%

Loans in Repayment- Delinq 90 + days

386

6.0%

201

3.7%

165

3.0%

92

2.0%

116

1.4%

960

3.2%

6,424

$        

100%

5,397

$        

100%

5,511

$        

100%

4,494

$        

100%

8,162

$          

100%

29,988

$��    

100%

Charge-offs as a % of loans in repayment

6.1%

2.4%

1.8%

1.4%

0.9%

2.5%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

475

Loans in Forbearance

85

11.1%

18

4.7%

11

2.9%

8

2.4%

13

1.8%

135

5.1%

Loans in Repayment- Current

454

59.5%

319

73.0%

312

78.5%

291

84.7%

621

87.9%

1,997

75.5%

Loans in Repayment- Delinq 31-60 days

54

7.1%

23

5.2%

21

5.3%

13

3.9%

23

3.2%

134

5.1%

Loans in Repayment- Delinq 61-90 days

42

5.4%

18

4.2%

14

3.5%

9

2.7%

15

2.1%

98

3.7%

Loans in Repayment- Delinq 90 + days

127

16.7%

59

13.6%

39

9.8%

23

6.5%

34

4.9%

282

10.7%

762

$           

100%

437

$           

100%

397

$           

100%

344

$           

100%

706

$             

100%

2,646

$        

100%

Charge-offs as a % of loans in repayment

16.8%

10.1%

6.3%

4.1%

3.0%

8.7%

Total Managed

Monthly Scheduled Payments Due

Not Yet in Repayment

6,434

Loans in Forbearance

587

8.2%

184

3.2%

145

2.5%

79

1.6%

106

1.2%

1,101

3.4%

Loans in Repayment- Current

5,645

78.6%

5,156

88.4%

5,345

90.5%

4,505

93.1%

8,418

94.9%

29,069

89.1%

Loans in Repayment- Delinq 31-60 days

252

3.5%

139

2.4%

132

2.2%

85

1.8%

123

1.4%

731

2.2%

Loans in Repayment- Delinq 61-90 days

189

2.6%

95

1.6%

82

1.4%

54

1.1%

71

0.8%

491

1.5%

Loans in Repayment- Delinq 90 + days

513

7.1%

260

4.5%

204

3.4%

115

2.4%

150

1.7%

1,242

3.8%

7,186

$        

100%

5,834

$        

100%

5,908

$        

100%

4,838

$        

100%

8,868

$          

100%

32,634

$     

100%

Charge-offs as a % of loans in repayment

7.2%

3.0%

2.1%

1.6%

1.1%

3.0%

Total

Total Loans in Repayment or Forbearance

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

More than 48 payments

Total

Total Loans in Repayment or Forbearance

Total Loans in Repayment or Forbearance

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

Loan Seasoning

26

(Dollars in millions)

December 31, 2012

Traditional Portfolio

Monthly Scheduled Payments Due

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Not Yet in Repayment

5,421

Loans in Forbearance

517

7.9%

173

3.1%

137

2.4%

74

1.7%

95

1.2%

996

3.3%

Loans in Repayment- Current

5,109

78.3%

5,042

88.8%

5,090

90.4%

4,114

92.9%

7,242

94.5%

26,597

88.9%

Loans in Repayment- Delinq 31-60 days

281

4.3%

160

2.8%

151

2.7%

98

2.2%

147

1.9%

837

2.8%

Loans in Repayment- Delinq 61-90 days

137

2.1%

75

1.3%

67

1.2%

40

0.9%

56

0.7%

375

1.3%

Loans in Repayment- Delinq 90 + days

484

7.4%

228

4.0%

184

3.3%

104

2.4%

121

1.6%

1,121

3.7%

Total Loans in Repayment or Forbearance

6,528

$

100%

5,678

$ 

100%

5,629

$

100%

4,430

$

100%

7,661

$ 

100%

29,926

$ 

100%

Charge-offs as a % of loans in repayment

8.6%

3.1%

2.1%

1.5%

1.1%

3.4%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Not Yet in Repayment

483

Loans in Forbearance

85

10.1%

21

4.7%

12

2.9%

9

2.5%

13

2.0%

140

5.1%

Loans in Repayment- Current

482

57.2%

324

70.6%

315

77.3%

289

82.7%

568

85.6%

1,978

72.6%

Loans in Repayment- Delinq 31-60 days

72

8.5%

29

6.4%

24

5.9%

18

5.1%

32

4.8%

175

6.4%

Loans in Repayment- Delinq 61-90 days

48

5.7%

20

4.3%

14

3.3%

9

2.6%

15

2.2%

106

3.9%

Loans in Repayment- Delinq 90 + days

156

18.5%

65

14.1%

43

10.6%

25

7.1%

36

5.4%

325

11.9%

Total Loans in Repayment or Forbearance

843

$   

100%

459

$   

100%

408

$   

100%

350

$   

100%

664

$   

100%

2,724

$   

100%

Charge-offs as a % of loans in repayment

26.6%

13.8%

8.1%

5.0%

3.7%

13.2%

Total

Monthly Scheduled Payments Due

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Not Yet in Repayment

5,904

Loans in Forbearance

602

8.2%

195

3.2%

149

2.5%

83

1.7%

107

1.3%

1,136

3.5%

Loans in Repayment- Current

5,591

75.9%

5,366

87.4%

5,405

89.5%

4,403

92.1%

7,810

93.8%

28,575

87.5%

Loans in Repayment- Delinq 31-60 days

353

4.8%

189

3.1%

175

2.9%

116

2.4%

179

2.1%

1,012

3.1%

Loans in Repayment- Delinq 61-90 days

185

2.5%

95

1.6%

81

1.3%

49

1.0%

71

0.9%

481

1.5%

Loans in Repayment- Delinq 90 + days

640

8.7%

292

4.8%

227

3.8%

129

2.7%

158

1.9%

1,446

4.4%

Total Loans in Repayment or Forbearance

7,371

$ 

100%

6,137

$ 

100%

6,037

$

100%

4,780

$

100%

8,325

$

100%

32,650

$ 

100%

Charge-offs as a % of loans in repayment

10.6%

3.8%

2.5%

1.8%

1.3%

4.2%

Loan Seasoning

27

(Dollars in millions)

March 31, 2012

Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

6,268

Loans in Forbearance

758

9.9%

174

2.8%

116

2.2%

57

1.6%

74

1.2%

1,178

4.1%

Loans in Repayment- Current

5,942

77.4%

5,566

90.1%

4,862

91.6%

3,357

93.8%

5,742

95.3%

25,468

88.5%

Loans in Repayment- Delinq 31-60 days

295

3.8%

141

2.3%

115

2.2%

60

1.7%

80

1.3%

690

2.4%

Loans in Repayment- Delinq 61-90 days

199

2.6%

87

1.4%

65

1.2%

32

0.9%

41

0.7%

424

1.5%

Loans in Repayment- Delinq 90 + days

487

6.3%

207

3.4%

148

2.8%

73

2.0%

89

1.5%

1,003

3.5%

7,681

$        

100%

6,175

$        

100%

5,306

$        

100%

3,579

$        

100%

6,026

$          

100%

28,764

$     

100%

Charge-offs as a % of loans in repayment

4.6%

2.0%

1.4%

1.2%

1.0%

2.3%

Non-Traditional Portfolio

Monthly Scheduled Payments Due

Not Yet in Repayment

649

Loans in Forbearance

134

12.8%

24

4.7%

16

3.6%

7

2.3%

12

2.1%

193

6.8%

Loans in Repayment- Current

587

55.9%

354

72.2%

342

79.3%

269

85.4%

478

86.2%

2,030

71.5%

Loans in Repayment- Delinq 31-60 days

86

8.2%

30

6.2%

21

4.9%

12

3.7%

19

3.4%

168

5.9%

Loans in Repayment- Delinq 61-90 days

66

6.3%

20

4.1%

14

3.3%

7

2.3%

13

2.3%

120

4.2%

Loans in Repayment- Delinq 90 + days

176

16.7%

63

12.8%

38

8.9%

20

6.3%

33

6.0%

330

11.6%

1,049

$        

100%

491

$           

100%

431

$           

100%

315

$           

100%

555

$             

100%

2,841

$        

100%

Charge-offs as a % of loans in repayment

16.9%

10.5%

6.8%

4.4%

4.2%

10.3%

Total Managed

Monthly Scheduled Payments Due

Not Yet in Repayment

6,917

Loans in Forbearance

892

10.2%

198

3.0%

132

2.3%

64

1.7%

86

1.3%

1,372

4.3%

Loans in Repayment- Current

6,529

74.8%

5,920

88.8%

5,204

90.7%

3,626

93.1%

6,220

94.5%

27,499

87.0%

Loans in Repayment- Delinq 31-60 days

381

4.4%

171

2.6%

136

2.4%

72

1.8%

99

1.5%

859

2.7%

Loans in Repayment- Delinq 61-90 days

265

3.0%

107

1.6%

79

1.4%

39

1.0%

54

0.8%

544

1.7%

Loans in Repayment- Delinq 90 + days

663

7.6%

270

4.0%

186

3.2%

93

2.4%

122

1.9%

1,334

4.2%

8,730

$        

100%

6,666

$        

100%

5,737

$        

100%

3,894

$        

100%

6,581

$          

100%

31,608

$     

100%

Charge-offs as a % of loans in repayment

6.0%

2.7%

1.8%

1.4%

1.3%

3.0%

More than 48 payments

Total

Total Loans in Repayment or Forbearance

Total Loans in Repayment or Forbearance

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

Total

Total Loans in Repayment or Forbearance

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Total

Loan Status

0-12 payments

13-24 payments

25-36 payments

37-48 payments

More than 48 payments

Loan Seasoning

28

Servicing: A Competitive Advantage

29

Revenue of $319 million in Q1 2013

Approximately 74% of revenue generated by services performed on FFELP Loans

ED servicing and collections businesses will grow organically with increase in federal

Direct Lending

Business Services Segment –

“Core Earnings”

Basis

30

Business Services Segment Earnings Detail –

“Core Earnings”

Basis

($ millions)

Q1 13

Q4 12

Q1 12

Intercompany loan servicing

$149

$158

$176

Third-party loan servicing

$27

$24

$22

Guarantor servicing

$10

$10

$11

Other servicing

$26

$26

$27

Contingency revenue

$99

$95

$90

Other Business Services revenue

$8

$10

$8

Net Income

$124

$134

$137

31

Operations locations

Corporate Headquarters

Fishers, IN

•Collections

•

Information Technology

•

Servicing

•

Fulfillment

•

Call Center

•

Sales

Reston, VA

•

Finance

•

Legal

•

Information Technology

New York State

Arcade, Perry,

Horseheads

•

Collections

Cincinnati, OH

(GRC)

•

Collections

Salt Lake City, UT

•

Sallie Mae Bank

Wilkes-Barre, PA

•

Servicing

•

Call Center

Newark, DE  Headquarters

•

Credit &Collections

•

Customer Resolution Srvcs

•

Servicing

•

Fraud

•

Business Development

Washington, DC

•

Government  Relations

Moorestown, NJ

•

Collections

Newton, MA

•

Upromise

•

Business 

Development

Kansas City, MO

•

Upromise

•

Campus Solutions

Muncie, IN

•

Collections

32

Funding Diversity and Liquidity

33

Issued $2.5 billion of Private ABS

Issued $2.5 billion of FFELP ABS

Issued $1.5 billion of long-term unsecured debt

Sold residual interest in two FFELP securitization trusts totaling $5.8 billion of assets

Refinanced $787 million of FFELP reset rate notes to term

Returned nearly $200 million to shareholders through share repurchases

(1)

Repurchased $800 million of outstanding debt through tender offers

Maintained excess capital at Bank and SLM Corporation

2013 Capital Markets Summary

(1)

As of March 31, 2013.

34

Non-Consolidation FFELP

Non-Consolidation FFELP

Consolidation FFELP

Issue

$1,246M SLM Trust 2013-2

$1,249M SLM Trust 2013-1

$1,527M SLM Trust 2012-8

Pricing Date

April 3, 2013

February 5, 2013

December 13, 2012

Collateral

US Govt. Guaranteed or Insured

FFELP Stafford and Plus Loans

US Govt. Guaranteed or Insured

FFELP Stafford and Plus Loans

US Govt. Guaranteed or Insured

FFELP Consolidation Loans

Prepayment

Speed

(1)

6% Constant Prepayment Rate

6% Constant Prepayment Rate

4% Constant Prepayment Rate

Tranching

Moody’s

Amt

WAL

(1)

Pricing

(2)

A      Aaa     $1,211    4.4      L+45

B      Aa1          $35    8.8      L+210

Moody’s

Amt

WAL

(1)

Pricing

(2)

A-1   Aaa       $280    1.0      L+17

A-2   Aaa       $396    3.3      L+25

A-3   Aaa       $538    6.8      L+55

B        A1         $35    8.6      L+225

Moody’s

Amt

WAL

(1)

Pricing

(2)

A      Aaa     $1,485    7.8      L+90

B        A1          $43  17.4      L+360

Recent SLM FFELP ABS Transactions

(1)

Estimated based on a variety of assumptions concerning loan repayment behavior, as more fully described in the related prospectus, which may be obtained at 

http://www2.salliemae.com/investors/debtasset/slmsltrusts/. Actual average life may vary significantly from estimates.

(2)

Pricing represents the yield to expected call.

35

Recent SLM Private Education Loan ABS Transactions

(1)

Estimated based on a variety of assumptions concerning loan repayment behavior, as more fully described in the related prospectus, which may be obtained at 

http://www2.salliemae.com/investors/debtasset/slmsltrusts/. Actual average life may vary significantly from estimates.

(2)

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

2013-B and 2013-A,, respectively.

Private Education Loans

Private Education Loans

Private Education Loans

Issue

$1,135M SLM Trust 2013-B

$1,108M SLM Trust 2013-A

$976M SLM Trust 2012-E

Pricing Date

April 25, 2013

February 27, 2013

October 11, 2012

Collateral

Private Education Loans

Private Education Loans

Private Education Loans

Prepayment Speed

(1)

4%

4%

4%

Tranching

Moody’s

Amt

WAL

(1)

Pricing

(2)

A-1     Aaa      $680   1.7      L+65

A-2A   Aaa      $245   4.8     s+ 105

A-2B   Aaa      $100   4.8     L+110

B         A          $110

6.0

s+260

Total             $1,135   3.1     L+120

Moody’s

Amt

WAL

(1)

Pricing

(2)

A-1      Aaa      $690   1.8    L+60

A-2A   Aaa      $143   4.6     s+ 95

A-2B   Aaa      $143   4.6     L+105

B         A          $132

5.7

s+238

Total             $1,108   2.9     L+115

Moody’s

Amt

WAL

(1)

Pricing

(2)

A-1     Aaa      $676   1.7    L+75

A-2A  Aaa      $100   4.5     s+ 140

A-2B  Aaa      $200

4.5

L+175

Total                $976   2.6     L+122

36

High Percentage of Student Loans Funded to Term

*

Dollars in billions; Gross loans; Numbers may not add due to rounding.

37

Note:  Does not include Sallie Mae Bank or Subsidiary funding

Total unsecured debt outstanding of $18.1 billion

Unsecured Debt Maturities

38

Secured Cash Flow

Note: Totals may not add due to rounding

*

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

Q1 13

2012

2011

2010

Servicing (Cash Paid)

$           129

$           526

$           563

$           533

Net Residual* (Excess Distributions)

              152

              628

              715

              746

Net Cash Flow

              161

              934

              568

           1,465

$           441

$        2,088

$        1,846

$        2,743

Servicing (Cash Paid)

$             49

$           181

$           189

$           179

Residual (Excess Distribution)

                28

              103

                28

                 8

Net Cash Flow

                 3

                22

                 2

-

$             80

$           306

$           219

$           187

$           521

$        2,394

$        2,065

$        2,930

Q1 13

2012

2011

2010

$     101,774

$     104,913

$     109,509

$       99,041

         14,195

         22,271

         29,466

         38,767

$     115,969

$     127,184

$     138,975

$     137,808

$       26,077

$       25,111

$       25,619

$       25,854

           1,205

           1,875

              233

-

$       27,282

$       26,987

$       25,853

$       25,854

$     143,251

$     154,171

$     164,828

$     163,661

Total Private Credit

Total FFELP and Private Credit

Term FFELP

Other Secured FFELP

Total FFELP

Private Credit

Term Private Credit

Other Secured Financings

FFELP

FFELP

Term Securitized

Other Secured FFELP

Total FFELP

Private Credit

Term Securitized

Other Secured Financings

Total Private Credit

Total FFELP and Private Credit

Average Principal Balances

$ in Millions

39

Projected Cash Flows From FFELP Portfolio

*

Assumptions

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

Excludes assets and excess spread associated with FFELP Trust 2006-2

* These projections are based on internal estimates and assumptions and are subject to ongoing review and modification.  These projections may prove to be incorrect.

($ in Millions)

Total Cash Flows from Projected Excess Spread = $8.8 Billion

Total Cash Flows from Projected Servicing Revenues = $4.7 Billion

as of  3/31/13

2013

2014

2015

2016

2017

2018

2019

2020

Projected FFELP Average Balance

$111,462

$103,233

$93,609

$84,153

$75,164

$66,443

$58,342

$50,786

Projected Excess Spread

$701

$866

$793

$727

$807

$733

$661

$586

Projected Servicing Revenue

$466

$579

$527

$477

$426

$374

$325

$279

Projected Total Revenue

$1,167

$1,445

$1,320

$1,204

$1,232

$1,107

$985

$865

2021

2022

2023

2024

2025

2026

2027

2028 - 2033

Projected FFELP Average Balance

$43,800

$37,404

$31,931

$27,454

$23,245

$19,234

$15,441

$6,246

Projected Excess Spread

$517

$449

$364

$306

$275

$238

$202

$536

Projected Servicing Revenue

$237

$198

$165

$141

$120

$100

$82

$206

Projected Total Revenue

$754

$647

$528

$447

$396

$338

$284

$742

40

Bank charter

–

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

–

Charter granted October 2005

Current bank activity

–

Total assets of $9.4 billion at March 31, 2013

–

Originates Sallie Mae’s Private Education Loans

–

Funded through affiliate, brokered and direct retail deposits

–

14.8% Total Risk-based Capital at March 31, 2013

–

Dividends of $120 million paid 2013 YTD

Deposit taking activities

–

Deposits totaled $8.0 billion at March 31, 2013

•

$5.1 billion Brokered Deposits

•

$2.9 billion Direct Retail and other affiliate and non-affiliate Deposits

–

Brokered Deposit term portfolio has a weighted average maturity of 21.1 months

–

Total deposits increased by 29% over Q112 and 3% over Q412

Sallie Mae Bank

41

Sallie Mae Bank –

Capital & Deposits

*Primarily affiliate deposit accounts with no stated maturities

42

Risk-Adjusted Capital

43

Strong Capital Position

* “Tangible

Economic

Capital”

and

“Available

Risk

Capital”

are

non-GAAP

financial

measures.

The

reconciliation

to

GAAP

capital

is

shown

on

this

slide.

($ in Billions)

Q1 13

Q4 12

Q1 12

Q1 13

Q4 12

Q3 12

GAAP Capital

$5.2

$5.1

$5.0

Goodwill & Intangibles

(0.4)

(0.4)

(0.5)

Derivative Mark-to-Market

1.0

1.1

1.1

Unamortized Premiums from Floors

0.5

0.6

0.7

Tangible Economic Capital

$6.2

$6.2

$6.4

Private Loan Reserve

2.2

2.2

2.2

Available Risk Capital

$8.4

$8.4

$8.6

Risk Assets (Before Loan Loss Reserves)

Private Credit

$39.6

$39.1

$38.9

Other Risk Assets

1.0

1.0

1.1

Total Risk Assets

$40.6

$40.1

$40.0

Capital to Risk Assets:

20.7%

21.0%

21.6%

44

Capital Allocation

SLM

allocates

capital

internally

based

on

the

risk

of

the

assets

it

supports

Assets

0.50%

12%

Capital

Allocation

0% -

15%*

Cash,

Investments,

Other Assets

10% of

Assets

Private

Education

Loans

22% of

Assets

FFELP

Loans

68% of

Assets

Based on Risk

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

45

FFELP ABS Appendix

46

Federal Student Loan Market

Outstanding Government Student Loan Market Distribution

FFYE 9/30/2012 ($ in billions)

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

47

Issue size of $0.5B to $1.5B

Tranches or pass-through denominated in

US$

AAA rated senior tranches make up to 97%

of issue structure

Floating rate tied to 1 mo. LIBOR

Amortizing tranches with 1 to 15(+) year

average lives

Master servicer is Sallie Mae, Inc.

Insurance or guarantee of underlying collateral

insulates bondholders from virtually any loss

of principal

(1)

Formerly a 20% risk-weighted asset, now a

<10% risk-weighted under Basel II’s IRB

methodology

Offer significantly higher yields than

government agency securities with

comparable risk profiles

Short (1-3 yrs), intermediate (3-7 yrs), long (7-

10 yrs) and very long (10-15+ yrs) term

tranches available at new issue and in

secondary

SLM FFELP ABS Issue Characteristics

(1) Principal and accrued interest on underlying FFELP loan collateral carry insurance or guarantee of 97%-100% dependent on origination year and on meeting

the servicing requirements of the U.S. Department of Education.

Typical SLM FFELP ABS Transaction Features

Unique Characteristics of FFELP Loan ABS

48

SLM Stafford/PLUS ABS Trusts

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

After a temporary increase in mid 2012 due to the Special Direct

Consolidation Loan program, CPRs decreased in the fourth quarter

* Average CPR is the simple (non-weighted) average of four Quarterly CPR calculations for each calendar year. Quarterly CPR assumes School and Grace loans are not

scheduled to make payments. Deferment, Forbearance and Repayment

loans are scheduled to make payments.

Prepayment

Analysis

49

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

loans

After a temporary increase in mid 2012 due to the Special Direct

Consolidation Loan program, CPRs decreased in the fourth quarter

SLM Consolidation ABS Trusts

* Average CPR is the simple (non-weighted) average of four Quarterly CPR calculations for each calendar year. Quarterly CPR assumes School and Grace loans are

not scheduled to make payments. Deferment, Forbearance and Repayment loans are scheduled to make payments.

Prepayment Analysis

50

Private Education Loan ABS Appendix

51

SLM Private Education Loan ABS Issuance Profile

Sallie Mae is among largest issuers of ABS globally, having issued close to $264

billion in Private and FFELP ABS transactions to date

Sallie Mae has been the market leader in Private Education Loans

since the late ’80s,

with expected originations of at least $4.0 billion in 2013

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

Education Loan ABS

In 2011, Sallie Mae reestablished programmatic issuance of Private Education Loan

ABS

Executed 3 transactions in 2011 totaling $2.1 billion

Executed 5 transactions in 2012 totaling $4.2 billion

Executed 3 transactions in 2013 YTD totaling $2.5 billion

52

Issue size of $500M to $1.5B

Triple-A rated senior notes only; no

subordinate tranches

20-30% overcollateralization

Multiple tranches with 2, 5, and/or 7 yr

average lives

Fixed rate or floating rate tied to 1 month

LIBOR

Full-turbo structure

Collateralized by loans made to students

and parents to fund college tuition, room

and board

Underwritten using FICO, Custom

Scorecard & judgmental criteria w/risk-

based pricing

70(+)% with cosigners, typically a parent

Typically non-dischargeable in bankruptcy

Serviced exclusively by Sallie Mae

Recent SLM Private Education Loan ABS Characteristics

Recent SLM Private Loan ABS Structures

Collateral Characteristics

53

SLM Private Education Loan ABS Summary

(1) Smart Option loans considered as ‘in repayment’

if borrowers are making either interest only payments or principal and interest payments, regardless of whether the borrower is

otherwise in school, grace, or deferment status.

54

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

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

55

Private Education ABS Trusts: Forbearance

Forbearance usage is typically highest when loans enter repayment, and declines as loans season

Use of forbearance as a collection tool peaked in early 2008; forbearance has since declined as a result of

changes in SLM’s forbearance strategy

56

SLM Private Education ABS Trusts: 90+ Day Delinquencies

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

policy and the current economic environment

Increased

emphasis

on

cash

payment

during

delinquency

means

more

borrowers

remain

in

delinquency

instead

of receiving forbearance

Because

they

are

paying,

fewer

delinquent

borrowers

are

expected

to

default

57

SLM Private Education ABS Trusts: Annualized Gross Charge-offs

Charge-offs have declined steadily since late 2009, after an increase resulting from changes to forbearance policy

and a weak economic environment

(1) For SLM Private Education Student Loan Trusts issued prior to 2005-B, the servicer has the option, but not the obligation, to repurchase loans that (i) become 180+ days

delinquent and/or (ii) have a borrower who filed for bankruptcy or died. Prior to November 1, 2008, the servicer exercised this repurchase option and actual charge-offs in these

trusts equalled zero.  Beginning November 1, 2008, the servicer ceased purchasing from the trust loans that are more than 180 days delinquent. For the purposes of comparison

across all deals, this chart reflects trust charge-offs for SLM Private Education Student Loan Trusts issued prior to 2005-B as if the servicer had never exercised its repurchase

option.

58

SLM Private Education Loan Gross Defaults

59

Recoveries

Recoveries are typically realized over many years as a result of

the prevalent use of long-

term payment plans

While student loans are generally non-dischargeable in bankruptcy, the proceedings can 

postpone recoveries until after borrowers emerge from bankruptcy

In 2005, Sallie Mae changed its recovery practices

–

The 2005 cohort had a recovery rate of 26% seven years after default

Recovery experience for more recent cohorts has varied based on economic conditions

and the characteristics of defaulted loans

In Q3 2011, Sallie Mae provided additional provision for loan loss to provide for potential

uncertainty regarding future recoveries due to continued high unemployment rates; the

27% life-of loan recovery expectation remains in place

60

SLM Private Education Loan ABS Trusts –

Prepayment Analysis

Constant prepayment rates increased in 2007 due to the introduction of Private Education Consolidation loans,

then declined following SLM’s decision to suspend its consolidation loan program in 2008

61

The following cohort default triangles provide loan performance information for certain Private Education Loans of

SLM Corporation and its consolidated subsidiaries that meet such

subsidiaries’

current securitization criteria

(including those criteria listed below):

–

Program types include Undergraduate/Graduate

(1)

, Direct-to-Consumer (“DTC”)

(2)

, Career Training

(3)

, Private

Consolidation

Loans

and

Smart

Option

(interest

only)

loans

–

FICO scores are based on the greater of the borrower and cosigner scores as of a date near the loan

application and must be at least:

•

Undergraduate/Graduate at not-for-profit schools:     640

•

Undergraduate/Graduate at for-profit schools:     670

•

DTC loans:    670

•

Career Training loans:     670

•

Private Consolidation loans:     640

–

Excludes loans made at selected schools that have historically experienced higher rates of default

The cohort default triangles are not representative of the characteristics of the portfolio of Private Education Loans

of SLM Corporation and its consolidated subsidiaries as a whole or any particular securitization trust

Cohort Default Triangles

(1)

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

(2)

Direct-to-Consumer Loans marketed under the Tuition Answer brand.

(3)

Career Training loans provide eligible borrowers financing at technical, trade, K-12 or tutoring schools.

62

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

FICO score, cosigner status, and school type

Terms and calculations used in the cohort default triangles are defined below:

–

Repayment Year

–

The calendar year loans entered repayment

–

Disbursed Principal Entering Repayment

–

The amount of principal entering repayment in a

given year, based on disbursed principal prior to any interest capitalization

–

Years in Repayment

–

Measured in years between repayment start date and default date. 

Zero represents defaults that occurred prior to the start of repayment.

–

Periodic Defaults

–

Defaulted principal in each Year in Repayment as a percentage of the

disbursed principal entering repayment in each Repayment Year

•

Defaulted principal includes any interest capitalization that occurred prior to default

•

Defaulted principal is not reduced by any amounts recovered after the loan defaulted

•

Because the numerator includes capitalized interest while the denominator does not, default rates are

higher than if the numerator and denominator both included capitalized interest

–

Total

–

The

sum

of

Periodic

Defaults

across

Years

in

Repayment

for

each

Repayment

Year

Cohort Default Triangles

63

Cohort Default Triangles

Note: Data as of 3/31/13.

(1)

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

(2)

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

(3)

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

Undergraduate/Graduate

(1)

64

Undergraduate/Graduate

(1)

Without Co-signer

Undergraduate/Graduate

(1)

With Co-signer

Note: Data as of 3/31/13.

(1)

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

(2)

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

(3)

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

Cohort Default Triangles

65

Note: Data as of 3/31/13.

(1)

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

(2)

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

(3)

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

Undergraduate/Graduate

(1)

Non-Profit

Undergraduate/Graduate

(1)

For-Profit

Cohort Default Triangles

66

Undergraduate/Graduate

(1)

Loans, FICO 740-850

(2)

Undergraduate/Graduate

(1)

Loans, FICO 700-739

(2)

Note: Data as of 3/31/13.

(1)

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

(2)

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

(3)

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

(4)

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

Cohort Default Triangles

67

Note: Data as of 3/31/13.

(1)

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

(2)

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

(3)

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

(4)

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

Undergraduate/Graduate

(1)

Loans, FICO 670-699

(2)

Undergraduate/Graduate

(1)

Loans, FICO 640-669

(2)

Cohort Default Triangles

68

Private Consolidation Loans Without Co-signer

Private Consolidation Loans With Co-signer

Note: Data as of 3/31/13.

(1)

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

(2)

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

Cohort Default Triangles

Disbursed Principal

Entering

Repayment Year

Repayment ($m)

0

1

2

3

4

5

6

7

8

Total

2006

$249

0.0%

0.1%

0.1%

0.5%

0.6%

0.6%

0.4%

0.0%

0.0%

2.3%

2007

$675

0.0%

0.0%

0.3%

0.4%

0.6%

0.4%

0.3%

0.0%

2.0%

2008

$376

0.0%

0.1%

0.4%

0.7%

0.6%

0.5%

0.1%

2.3%

Periodic Defaults by Years in Repayment

(1),(2)

Disbursed Principal

Entering

Repayment Year

Repayment ($m)

0

1

2

3

4

5

6

7

8

Total

2006

$125

0.0%

0.4%

1.0%

1.5%

1.6%

1.5%

1.0%

0.5%

0.0%

7.5%

2007

$295

0.0%

0.0%

0.9%

1.0%

1.3%

1.0%

0.8%

0.0%

5.0%

2008

$133

0.0%

0.2%

1.7%

2.1%

1.7%

1.6%

0.1%

7.2%

Periodic Defaults by Years in Repayment

(1),(2)

69

Note: Data as of 3/31/13.

(1)

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

(2)

Periodic Defaults for the most recent two calendar Year sin Repayment are for a partial year.

(3)

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

Cohort Default Triangles

Disbursed Principal

Entering

Repayment Year

Repayment ($m)

0

1

2

3

4

5

6

7

8

9

10

Total

2004

$8

0.0%

0.0%

0.0%

0.0%

0.0%

0.5%

0.1%

0.4%

0.0%

0.0%

0.0%

1.0%

2005

$65

0.0%

0.1%

0.8%

0.8%

1.4%

2.1%

1.1%

1.0%

0.4%

0.0%

7.8%

2006

$140

0.0%

0.7%

1.8%

4.4%

4.7%

2.4%

1.9%

1.3%

0.0%

17.4%

2007

$245

0.0%

0.6%

4.7%

6.3%

4.2%

2.7%

1.6%

0.0%

20.1%

2008

$370

0.0%

2.9%

5.9%

4.9%

3.5%

1.7%

0.0%

19.1%

2009

$399

0.0%

3.7%

4.0%

3.9%

2.0%

0.0%

13.7%

2010

$316

0.0%

3.5%

4.0%

3.7%

0.1%

11.3%

2011

$193

0.1%

3.7%

3.4%

0.1%

7.2%

2012

$105

0.0%

2.0%

0.2%

2.2%

Periodic Defaults by Years in Repayment

(2),(3)

Disbursed Principal

Entering

Repayment Year

Repayment ($m)

0

1

2

3

4

5

6

7

8

9

10

Total

2004

$2

0.0%

0.0%

1.7%

1.3%

0.6%

5.4%

2.2%

3.1%

1.2%

1.2%

0.0%

16.6%

2005

$19

0.0%

1.1%

2.1%

2.6%

4.1%

6.5%

2.8%

1.4%

0.3%

0.0%

20.8%

2006

$66

0.0%

1.5%

2.7%

6.6%

6.5%

4.0%

2.6%

1.6%

0.1%

25.5%

2007

$158

0.0%

1.1%

6.0%

8.1%

4.6%

3.6%

2.1%

0.0%

25.6%

2008

$256

0.0%

3.9%

8.0%

7.2%

4.1%

2.3%

0.0%

25.6%

2009

$236

0.1%

6.9%

6.2%

6.7%

3.7%

0.0%

23.6%

2010

$153

0.2%

8.3%

6.9%

6.4%

0.1%

21.8%

2011

$89

0.2%

7.8%

7.3%

0.3%

15.6%

2012

$47

0.0%

4.9%

0.2%

5.1%

Periodic Defaults by Years in Repayment

(2),(3)

70

70

Note: Data as of 3/31/13.

(1)

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

(2)

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

(3)

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

Career Training Loans, 670+ FICO

(1)

Cohort Default Triangles

Disbursed Principal

Entering

Repayment Year

Repayment ($m)

0

1

2

3

4

5

6

7

8

9

10

11

Total

2003

$291

0.0%

0.4%

1.4%

1.6%

1.8%

1.4%

1.3%

1.0%

0.8%

0.5%

0.3%

0.0%

10.6%

2004

$383

0.0%

0.4%

1.5%

2.3%

1.8%

1.8%

1.7%

1.1%

0.8%

0.4%

0.0%

11.8%

2005

$513

0.0%

0.3%

2.2%

2.2%

2.5%

2.2%

1.5%

1.0%

0.5%

0.0%

12.3%

2006

$633

0.0%

0.4%

2.5%

3.6%

3.2%

2.2%

1.5%

0.8%

0.0%

14.1%

2007

$675

0.0%

0.5%

3.5%

3.9%

2.9%

1.8%

0.9%

0.0%

13.6%

2008

$594

0.0%

0.6%

4.2%

3.5%

2.2%

1.1%

0.0%

11.6%

2009

$186

0.0%

0.2%

1.9%

1.9%

1.0%

0.0%

5.1%

2010

$24

0.0%

0.5%

0.9%

0.4%

0.0%

1.9%

Periodic Defaults by Years in Repayment

(2),(3)

71

SLM Appendix

72

GAAP to “Core Earnings”

Reconciliation

73

SLM student loan trust data (Debt/asset backed securities –

SLM Student Loan

Trusts)

–

Static pool information –

Detailed portfolio stratifications by trust as of the cutoff date

–

Accrued interest factors

–

Quarterly distribution factors

–

Historical trust performance  -

monthly charge-off, delinquency, loan status, CPR, etc. by trust 

–

Since issued CPR –

monthly CPR data by trust since issuance

SLM student loan performance by trust –

Issue details

–

Current and historical monthly distribution reports

–

Distribution factors

–

Current rates

–

Prospectus for public transactions and Rule 144A transactions are available through underwriters

Additional information (Webcasts and presentations)

–

Archived and historical webcasts, transcripts and investor presentations

Sallie Mae Investor Relations Website

www.salliemae.com/investors