First Marblehead (FMD) 8-K Fourth Quarter Fiscal 2008 Results

Exhibit 99.1

Contact:

Lee Jacobson

Investor Relations

617.638.2065

Janice Walker

Corporate Communications

617.638.2047

News for Immediate Release

First Marblehead Announces Full Year and

Fourth Quarter Fiscal 2008 Results

BOSTON, MA, August 21, 2008 – The First Marblehead Corporation (NYSE: FMD) today announced its financial and operating results for the fourth quarter of fiscal 2008 and for the fiscal year ended June 30, 2008.

For the fiscal year ended June 30, 2008, the company recorded a net loss of $235.1 million or $2.46 per diluted share compared to net income of $371.3 million or $3.92 per diluted share for the fiscal year ended June 30, 2007. For the fourth fiscal quarter, the company recorded a net loss of $56.6 million or $0.57 per diluted share compared to net income of $78 million or $0.83 per diluted share for the fiscal quarter ended June 30, 2007. Total revenues for the fiscal year ended June 30, 2008 were $(28.4) million, compared to $881 million for the same period last year. Revenues declined principally as a result of illiquidity in the financing market for private student loans, leading to the company’s inability to complete a securitization transaction during the last three fiscal quarters. In addition, adjustments made to certain assumptions used to estimate the fair value of service receivables, net of time value accretion, resulted in a $532.9 million pre-tax decrease in their total value. The voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code filed by The Education Resources Institute Inc. (TERI) on April 7, 2008 had a significant negative impact on the estimate of the fair value of service receivables for the year ended June 30, 2008.

During the fourth quarter of fiscal 2008, facilitated loan volume that was available to the company for securitization totaled $268 million, down 66% over the same period last year. The rolling twelve-month facilitated loan volume increased to $5.0 billion, up 17% for the twelve months ended June 30, 2008.

“Our fiscal results were negatively affected by the unprecedented market disruptions and TERI’s bankruptcy, but the company looks forward to better results as we continue to adapt our business model to meet the very strong demand for high quality private student loans. This week’s announcement of the completion of GS Capital Partners’ investment of an additional $132.7 million further strengthens the company’s balance sheet and positions the company for success in the future,” said Jack L. Kopnisky, First Marblehead's Chief Executive Officer and President.

First Marblehead plans to host a conference call with investors/analysts in September.

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Fiscal 2008 Earnings

About The First Marblehead Corporation – First Marblehead provides financial solutions that help students achieve their dreams. The company helps meet the growing demand for private education loans by offering national and regional financial institutions and educational institutions an integrated suite of design, implementation and capital market services for student loan programs. First Marblehead supports responsible lending and is a strong proponent of the smart borrowing principle, which encourages students to access scholarships, grants and federally-guaranteed loans before considering private education loans. For more information, go towww.firstmarblehead.com.

Statements in this press release, including the tables, regarding First Marblehead’s future financial and operating results, business model and the demand for private student loans, as well as any other statements that are not purely historical, constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon our historical performance, the historical performance of the securitization trusts and on our plans, estimates and expectations as of August 21, 2008. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future results, plans, estimates or expectations contemplated by us will be achieved. You are cautioned that matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause our actual financial or operational results, including the performance of securitization trusts and resulting cash flows, facilitated loan volumes or financing-related revenues, or the timing of events, to be materially different than those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: our ability to structure securitizations or alternative financings; the size, structure and timing of any securitizations or alternative financings; the demand for, and market acceptance of, loan programs that are not TERI-guaranteed, including our success in providing such alternatives to former, current and prospective clients; the inability of TERI to meet its guaranty obligations with regard to loans held by the securitization trusts; TERI’s rejection of its guaranty obligations, or challenges to the trusts’ security interests in segregated reserve accounts pledged by TERI to the trusts, in the context of TERI’s bankruptcy; degradation of credit quality or performance of the loan portfolios of the trusts First Marblehead has structured; the estimates we make and the assumptions on which we rely in preparing our financial statements; continued variance between the actual performance of securitization trusts and the key assumptions we have used to estimate the present value of additional structural advisory fees and residual revenues; and the other factors set forth under the caption "Item 1A. Risk Factors” in First Marblehead's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 12, 2008. Important factors that could cause or contribute to differences between the actual performance of the securitization trusts and our key assumptions include economic, regulatory, competitive and other factors affecting prepayment, default and recovery rates on the underlying securitized loan portfolio; capital market receptivity to private student loan asset-backed securities; trust expenses; and interest rate trends, including with regard to auction rate notes. We disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

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The First Marblehead Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three Months and Fiscal Years Ended June 30, 2008 and 2007

(Unaudited)

(in thousands, except per share amounts)

	Three months ended June 30,					Fiscal years ended June 30,
	2008			2007		2008			2007
Service revenues:
Up-front structural advisory fees	$	56		$	91,545	$	179,106		$	457,352
Additional structural advisory fees:
From new securitizations		—			9,409		24,304			43,984
Trust updates		(22,506	)		823		(44,106	)		1,363
Total additional structural advisory fees		(22,506	)		10,232		(19,802	)		45,347
Residuals
From new securitizations		—			43,303		116,972			182,744
Trust updates		(37,548	)		9,613		(488,832	)		29,548
Total residuals		(37,548	)		52,916		(371,860	)		212,292
Processing fees from TERI		17,683			35,884		126,540			134,845
Administrative and other fees		1,878			6,496		31,985			21,497
Total service revenues		(40,437	)		197,073		(54,031	)		871,333
Net interest income		6,664			2,757		25,622			9,371
Total revenues		(33,773	)		199,830		(28,409	)		880,704
Non-interest expenses:
Compensation and benefits		17,328			26,470		96,735			111,364
General and administrative expenses		46,478			41,006		261,812			141,591
Total non-interest expenses		63,806			67,476		358,547			252,955
Income (loss) from Operations		(97,579	)		132,354		(386,956	)		627,749
Other Income		—			3		—			16
Income (loss) before income taxes		(97,579	)		132,357		(386,956	)		627,765
Income tax expense (benefit)		(40,908	)		54,357		(151,880	)		256,434
Net income (loss)	$	(56,671	)	$	78,000	$	(235,076	)	$	371,331
Net income (loss) per share, basic	$	(0.57	)	$	0.83	$	(2.46	)	$	3.94
Net income (loss) per share, diluted		(0.57	)		0.83		(2.46	)		3.92
Cash dividends declared per share		—			0.25		0.395			0.62
Weighted average shares outstanding, basic		98,878			93,770		95,732			94,296
Weighted average shares outstanding, diluted		98,878			94,197		95,732			94,845

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The First Marblehead Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

As of June 30, 2008 and June 30, 2007

(Unaudited)

(amounts in thousands)

	June 30, 2008		June 30, 2007
Assets
Cash, cash equivalents and investments	$	140,909	$	224,587
Federal funds sold		80,215		10,334
Loans held for sale		497,324		37,052
Service receivables:
Structural advisory fees		113,842		133,644
Residuals		293,255		665,115
Processing fees from TERI		4,086		10,909
Total service receivables		411,183		809,668
Property and equipment, net		37,681		41,911
Goodwill		1,701		4,878
Intangible assets, net		1,956		2,597
Prepaid income taxes		—		49,345
Other prepaid expenses		15,377		26,904
Mortgage loans, held to maturity, net		10,754		—
Other assets		3,798		7,187
Total assets	$	1,200,898	$	1,214,463
Liabilities and Stockholders' Equity
Liabilities:
Deposits	$	244,113	$	53,523
Accounts payable and accrued expenses		20,543		59,044
Education loan warehouse facility		242,899		—
Income taxes payable		31,275		—
Net deferred income tax liability		10,385		247,748
Other liabilities		14,071		11,528
Total liabilities		563,286		371,843
Total Stockholders' Equity		637,612		842,620
Total liabilities and stockholders' equity	$	1,200,898	$	1,214,463

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The First Marblehead Corporation and Subsidiaries

Loan Facilitation Metrics

(Dollars in Millions)

	June 30, 2008			June 30, 2007			% Increase (Decrease)
Q4 Volume of Loans Available for Securitization
Direct-to-Consumer Loans	$	199		$	703		(72	%)
School Channel Loans		67			88		(24	%)
Private Label Loans		266			791		(66	%)
GATE Loans		2			1		100	%
Total Loan Facilitation Volume Available for Securitization	$	268		$	792		(66	%)
Rolling Twelve Month Volume of Loans Available for Securitization
Direct-to-Consumer Loans	$	3,726		$	2,973		25	%
School Channel Loans		728			808		(10	%)
Private Label Loans		4,454			3,781		18	%
GATE Loans		66			92		(28	%)
Total Loan Facilitation Volume Available for Securitization	$	4,520		$	3,873		17	%
Q4 Volume of Loans Not Available for Securitization
Direct-to-Consumer Loans	$	—		$	1		(100	%)
School Channel Loans		4			46		(91	%)
Total Loan Facilitation Volume Not Available for Securitization	$	4		$	47		(91	%)
Rolling Twelve Month Volume of Loans Not Available for Securitization
Direct-to-Consumer Loans	$	2		$	19		(89	%)
School Channel Loans		482			400		21	%
Total Loan Facilitation Volume Not Available for Securitization	$	484		$	419		16	%
Percentage of Loans Available for Securitization
Q4		99	%		94	%
Rolling Twelve Months		90	%		90	%
End of period Principal Balance of Loans Available for Securitization but not yet Securitized(1)
Direct-to-Consumer Loans	$	2,562		$	401
School Channel Loans		770			429
Private Label Loans		3,332			830
GATE Loans		67			2
Total Loan Principal Available for Securitization but not yet securitized	$	3,399		$	832		309	%

(1) Includes $1.125 billion principal amount of loans with respect to which our purchase rights terminated subsequent to June 30, 2008 in the context of the TERI reorganization.

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The First Marblehead Corporation and Subsidiaries

Balance Sheet Metrics

Roll-forward of Structural Advisory Fees and Residuals Receivables

(Dollars in Thousands)

	Three Months Ended June 30, 2008			Year Ended June 30, 2008
Structural Advisory Fees Receivable
Beginning of period balance	$	136,348		$	133,644
Additions from new securitizations		—			24,304
Trust updates:
Passage of time (fair value accretion)		2,538			10,258
Assumption Changes:
Change in timing and average prepayment rate		—			(3,535	)
Increase in discount rate		(29,737	)		(53,515	)
Increase in timing and average default rate		(62	)		(2,961	)
Other factors		4,755			5,647
Net change		(22,506	)		(44,106	)
End of period balance	$	113,842		$	113,842
Residuals Receivable
Beginning of period balance	$	330,803		$	665,115
Additions from new securitizations		—			116,972
Trust updates:
Passage of time (fair value accretion)		11,147			75,070
Assumption Changes:
Change in timing and average prepayment rate		11,832			(34,765	)
Increase in discount rate		(36,863	)		(129,169	)
Increase in timing and average default rate		(7,706	)		(49,929	)
Increase in auction rate notes spread		—			(93,813	)
TERI's inability to pay claims		—			(219,553	)
Increase in deliquency and collection costs		(15,946	)		(15,946	)
Other factors		(12	)		(20,727	)
Net change		(37,548	)		(488,832	)
End of period balance	$	293,255		$	293,255

Note: Factors affecting the valuation of structural advisory fees and residuals receivables include changes, if any, to the assumptions we use in estimating the fair value of these receivables. In light of recent developments in the asset-backed securities market and our ongoing evaluation of actual trust performance, we changed certain assumptions used to determine the fair value of our residual and structural advisory fee receivables at June 30, 2008. We continue to monitor the performance of trust assets against our expectations, as well as other inputs necessary to estimate the present value of our structural advisory fee and residuals receivables. We will make such additional adjustments to our estimates as we believe are necessary to value properly our receivables balances at each balance sheet date.

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