- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- DRAFT 3/26/98 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark One) [X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Fee required) For the fiscal year ended December 31, 1997 or [_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No fee required) For the transition period from to COMMISSION FILE NUMBERS 33-95474, 333-2502, 333-24949 SLM FUNDING CORPORATION* (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (FORMERLY KNOWN AS SALLIE MAE FUNDING CORPORATION)* (ORIGINATOR OF THE SALLIE MAE STUDENT LOAN TRUST 1995-1, THE SALLIE MAE STUDENT LOAN TRUST 1996-1, THE SLM STUDENT LOAN TRUST 1996-2, THE SLM STUDENT LOAN TRUST 1996-3, THE SLM STUDENT LOAN TRUST 1996-4, THE SLM STUDENT LOAN TRUST 1997-1, THE SLM STUDENT LOAN TRUST 1997-2, THE SLM STUDENT LOAN TRUST 1997-3, AND THE SLM STUDENT LOAN TRUST 1997-4) DELAWARE 23-2815650 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 777 TWIN CREEK DRIVE KILLEEN, TEXAS 76543 (ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE) OFFICES) (817) 554-4500 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No No documents are incorporated by reference into this Form 10-K. State the aggregate market value of the voting stock held by non-affiliates of the Registrant: None. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- This Annual Report on Form 10-K is filed in reliance upon (1) certain no- action letters issued by the Office of Chief Counsel, Division of Corporate Finance of the Securities and Exchange Commission stating that the Division will not object if periodic reports filed by the registrant pursuant to Sections 13 and 15(d) of the Securities and Exchange Act of 1934 are filed in the manner set forth in such letters and the requests for such letters and (2) the Registrant's filing letter accompanying the Registrant's Current Report on Form 8-K filed with the Commission on or about November 6, 1995 in which the Registrant described the manner in which it intended to file such periodic reports. PART I. ITEM 2. PROPERTIES. The property of the Sallie Mae Student Loan Trust 1995-1, the Sallie Mae Student Loan Trust 1996-1, the SLM Student Loan Trust 1996-2, the SLM Student Loan Trust 1996-3, the SLM Student Loan Trust 1996-4, the SLM Student Loan Trust 1997-1, the SLM Student Loan Trust 1997-2, the SLM Student Loan Trust 1997-3 and the SLM Student Loan Trust 1997-4 (collectively, the "Trusts") consist solely of pools of education loans to students and parents of students made under the Federal Family Education Loan Program, all funds collected in respect thereof and monies on deposit in certain trust accounts. For more information regarding the property of the Trusts, see the Annual Statements of Compliance (the "Annual Statements of Compliance") attached as Exhibit 19.1 hereto, required by Section 3.2 of the Administration Agreements (the "Administration Agreements"), dated as of October 26, 1995, March 6, 1996, April 26, 1996, July 9, 1996, October 3, 1996 and March 20, 1997, by and among the respective Trusts, the Student Loan Marketing Association (the "Administrator"), Chase Manhattan Bank USA, National Association, not in its individual capacity but solely as Trustee (the "Eligible Lender Trustee"), Sallie Mae Servicing Corporation (the "Servicer"), SLM Funding Corporation (the "Registrant") and Bankers Trust Company, not in its individual capacity but solely as Indenture Trustee (the "Indenture Trustee") and the Master Administration Agreement, dated as of May 1, 1997, between the Registrant and the Administrator. ITEM 3. LEGAL PROCEEDINGS. The Registrant knows of no material pending legal proceedings involving the Registrant or its property. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Nothing to report. PART II. ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. At December 31, 1997, the Registrant was a beneficial owner of the Trusts' Floating Rate Student Loan-Backed Certificates ("Certificates"), and there was one (1) registered holder of the Certificates, CEDE & Co., as nominee of The Depository Trust Company ("DTC"). There were sixteen (16) persons registered on the books of DTC as record owners of Certificates. There is no established trading market for the Certificates. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Nothing to report. PART III. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. At December 31, 1997, the Certificates held by the Registrant were registered in the name of CEDE and Co., as nominee of DTC. The books of DTC indicate that sixteen (16) participant institutions are the record owners of more than 5% of the Certificates. 2 (1) (2) (3) (4) TITLE OF NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS -------- ------------------- ----------------------- ---------- SALLIE MAE STUDENT LOAN TRUST 1995-1 CUSIP 795452AC5 $35,000,000 Floating Rate Chase Manhattan Bank $14,650,000 41.86% Student One Chase Manhattan Plaza principal Loan-Backed 3B-Proxy Dept amount of Certificates New York, NY 10081 certificates Floating Rate SSB-Custodian $18,500,000 52.86% Student c/o ADP Proxy Services principal Loan-Backed 51 Mercedes Way amount of Certificates Edgewood, NY 11717 certificates SALLIE MAE STUDENT LOAN TRUST 1996-1 CUSIP 795452AF8 $52,500,000 Floating Rate Chase Manhattan Bank $25,000,000 47.62% Student One Chase Manhattan Plaza principal Loan-Backed 3B-Proxy Dept amount of Certificates New York, NY 10081 certificates Floating Rate Chase/Chemical Bank $25,000,000 47.62% Student Auto Settle Dept principal Loan-Backed 4 New York Plaza amount of Certificates 4th Floor certificates New York, NY 10004 SLM STUDENT LOAN TRUST 1996-2 CUSIP 78442GAC0 $53,030,000 Floating Rate Bank of New York $3,000,000 5.66% Student 925 Patterson Plank Rd principal Loan-Backed Secaucus, NJ 07094 amount of Certificates certificates Floating Rate Boston Safe Deposit & Trust Co $23,000,000 43.37% Student c/o ADP Proxy Services principal Loan-Backed 51 Mercedes Way amount of Certificates Edgewood, NY 11717 certificates Floating Rate Chase/Chemical Bank $21,499,000 40.54% Student Auto Settle Dept principal Loan-Backed 4 New York Plaza amount of Certificates 4th Floor certificates New York, NY 10004 Floating Rate Citibank, N.A. $5,000,000 9.43% Student 111 Wall Street principal Loan-Backed 20th Floor, Zone 9 amount of Certificates New York, NY 10043 certificates 3 (1) (2) (3) (4) TITLE OF NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS -------- ------------------- ----------------------- ---------- SLM STUDENT LOAN TRUST 1996-3 CUSIP 78442GAF3 $52,750,000 Floating Rate Boston Safe Deposit & Trust Co $12,000,000 22.75% Student c/o ADP Proxy Services principal Loan-Backed 51 Mercedes Way amount of Certificates Edgewood, NY 11717 certificates Floating Rate Chase/Chemical Bank $19,000,000 36.02% Student Auto Settle Dept principal Loan-Backed 4 New York Plaza amount of Certificates 4th Floor certificates New York, NY 10004 Floating Rate Citibank, N.A. $5,000,000 9.48% Student 111 Wall Street principal Loan-Backed 20th Floor, Zone 9 amount of Certificates New York, NY 10043 certificates Floating Rate Huntington National Bank $5,500,000 10.43% Student 41 South High Street, 10th Fl principal Loan-Backed Columbus, OH 43287 amount of Certificates certificates Floating Rate NBD Bank, N.A. $3,000,000 5.69% Student 611 Woodward Ave principal Loan-Backed Detroit, MI 48226 amount of Certificates certificates Floating Rate SSB-Custodian $3,000,000 5.69% Student c/o ADP Proxy Services principal Loan-Backed 51 Mercedes Way amount of Certificates Edgewood, NY 11717 certificates SLM STUDENT LOAN TRUST 1996-4 CUSIP 78442GAJ5 $52,700,000 Floating Rate Boston Safe Deposit & Trust Co $8,000,000 15.18% Student c/o ADP Proxy Services principal Loan-Backed 51 Mercedes Way amount of Certificates Edgewood, NY 11717 certificates Floating Rate Chase/Chemical Bank $10,000,000 18.98% Student Auto Settle Dept principal Loan-Backed 4 New York Plaza amount of Certificates 4th Floor certificates New York, NY 10004 Floating Rate Citibank, N.A. $4,000,000 7.60% Student 111 Wall Street principal Loan-Backed 20th Floor, Zone 9 amount of Certificates New York, NY 10043 certificates Floating Rate Custodial Trust Company $14,300,000 27.13% Student 101 Carnegie Center principal Loan-Backed Princeton, NJ 08540 amount of Certificates certificates Floating Rate NBD Bank, N.A. $9,473,000 17.97% Student 611 Woodward Ave principal Loan-Backed Detroit, MI 48226 amount of Certificates certificates 4 (1) (2) (3) (4) TITLE OF NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS -------- ------------------- ----------------------- ---------- SLM STUDENT LOAN TRUST 1997-1 CUSIP 78442GAM8 $71,800,000 Floating Rate Bankers Trust Company $6,000,000.00 8.36% Student c/o BT Services Tennessee Inc. Loan-Backed 648 Grassmere Park Drive Certificates Nashville, TN 37211 Floating Rate Boston Safe Deposit & Trust Co. $35,800,000.00 49.86% Student c/o Mellon Bank N.A. Loan-Backed Three Mellon Bank Center Rm 153-3015 Certificates Pittsburgh, PA 15259 Floating Rate Chase Manhattan Bank/Chemical $12,000,000.00 16.71% Student 4 New York Plaza Loan-Backed Proxy Department, 13th Floor Certificates New York, NY 10004 Floating Rate Huntington National Bank $5,500,000.00 7.66% Student Proxy Department Loan-Backed 41 South High Street Certificates Columbus, OH 43287 Floating Rate J.P. Morgan Securities, Inc.--Asset Backed $6,500,000.00 9.05% Student 60 Wall Street, 6th Floor Loan-Backed New York, NY 10260-0060 Certificates Floating Rate The Northern Trust Company $6,000,000.00 8.36% Student 801 S. Canal C-In Loan-Backed Chicago, IL 60607 Certificates SLM STUDENT LOAN TRUST 1997-2 CUSIP 78442GAQ9 $87,450,000 Floating Rate The Bank of New York $14,000,000.00 16.01% Student 925 Patterson Plank Rd. Loan-Backed Secaucus, NJ 07094 Certificates Floating Rate Bankers Trust Company $30,000,000.00 34.31% Student c/o BT Services Tennessee Inc. Loan-Backed Nashville, TN 37211 Certificates Floating Rate Boston Safe Deposit & Trust Co. $9,450,000.00 10.81% Student c/o Mellon Bank N.A. Loan-Backed Three Mellon Bank Center Rm 153-3015 Certificates Floating Rate Chase Manhattan Bank/Chemical $13,000,000.00 14.87% Student 4 New York Plaza Loan-Backed Proxy Department, 13th Floor Certificates New York, NY 10004 Floating Rate J.P. Morgan Securities, Inc.--Asset Backed $5,000,000.00 5.72% Student 60 Wall Street, 6th Floor Loan-Backed New York, NY 10260-0060 Certificates 5 (1) (2) (3) (4) TITLE OF NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS -------- ------------------- ----------------------- ---------- Floating Rate The Northern Trust Company $7,000,000.00 8.00% Student 801 S. Canal C-In Loan-Backed Chicago, IL 60607 Certificates Floating Rate SSB-Custodian $8,000,000.00 9.15% Student Global Corp. Action Dept JAB5W Loan-Backed P.O. Box 1631 Certificates Boston, MA 02105-1631 SLM STUDENT LOAN TRUST 1997-3 CUSIP 78442GAT3 $90,150,000 Floating Rate The Bank of New York $13,150,000.00 14.59% Student 925 Patterson Plank Rd. Loan-Backed Secaucus, NJ 07094 Certificates Floating Rate Bankers Trust Company $12,200,000.00 13.53% Student c/o BT Services Tennessee, Inc. Loan-Backed 648 Grassmere Park Drive Certificates Nashville, TN 37211 Floating Rate Boston Safe Deposit & Trust Co. $24,800,000.00 27.51% Student c/o Mellon Bank N.A. Loan-Backed Three Mellon Bank Center Rm 153-3015 Certificates Pittsburgh, PA 15259 Floating Rate Custodial Trust Company $12,200,000.00 13.53% Student 101 Carnegie Center Loan-Backed Princeton, NJ 08540 Certificates Floating Rate Huntington National Bank $4,850,000.00 5.38% Student Proxy Department Loan-Backed 41 South High Street Certificates Columbus, OH 43287 Floating Rate The Northern Trust Company $6,600,000.00 7.32% Student 801 S. Canal C-In Loan-Backed Chicago, IL 60607 Certificates Floating Rate PNC Bank, NA $7,150,000.00 7.93% Student 1835 Market Street Loan-Backed 11 Penn Center, 15th Floor Certificates Philadelphia, PA 19103 Floating Rate SSB-Custodian $6,900,000.00 7.65% Student Global Corp. Action Dept JAB5W Loan-Backed P.O. Box 1631 Certificates Boston, MA 02105-1631 SLM STUDENT LOAN TRUST 1997-4 CUSIP 78442GAW6 $89,900,000 Floating Rate Custodial Trust Company $89,900,000.00 100.00% Student 101 Carnegie Center Loan-Backed Princeton, NJ 08540 Certificates ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Nothing to Report. 6 PART IV. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) Exhibits. The following documents are filed as part of this Annual Report on Form 10-K: DESIGNATION DESCRIPTION ----------- ----------- Exhibit 19.1 Annual Statements of Compliance Exhibit 19.2 Annual Independent Certified Public Accountant's Report (b) Reports on Form 8-K. Current Reports on Form 8-K were filed during the last quarter of the period covered by this report with the Commission on or about November 3, 1997, November 6, 1997 and December 4, 1997 in connection with a quarterly Distribution Date, certain computational materials and the closing of SLM Student Loan Trust 1997-4, respectively. 7 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED HEREUNTO DULY AUTHORIZED. Dated: March 30, 1998 SLM Funding Corporation By: /s/ Mark G. Overend --------------------------------- NAME: MARK G. OVEREND TITLE: PRESIDENT PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES INDICATED ON THE DATES INDICATED. SIGNATURE TITLE DATE --------- ----- ---- /s/ Mark G. Overend President and March 30, 1998 - ------------------------------------- Director (Principal MARK G. OVEREND Executive Officer) /s/ J. Lance Franke Chief Financial March 30, 1998 - ------------------------------------- Officer and J. LANCE FRANKE Director (Principal Financial Officer) /s/ William M.E. Rachal Treasurer and March 30, 1998 - ------------------------------------- Controller WILLIAM M.E. RACHAL (Principal Accounting Officer) /s/ Paul N. Schwartz Director March 30, 1998 - ------------------------------------- PAUL N. SCHWARTZ /s/ Douglas Johnson Director March 30, 1998 - ------------------------------------- DOUGLAS JOHNSON 8