0000950123-11-031664.txt : 201104010000950123-11-031664.hdr.sgml : 2011040120110331185237ACCESSION NUMBER:0000950123-11-031664CONFORMED SUBMISSION TYPE:8-KPUBLIC DOCUMENT COUNT:15CONFORMED PERIOD OF REPORT:20110331ITEM INFORMATION:Other EventsFILED AS OF DATE:20110401DATE AS OF CHANGE:20110331

FILER:

COMPANY DATA:COMPANY CONFORMED NAME:SLM CORPCENTRAL INDEX KEY:0001032033STANDARD INDUSTRIAL CLASSIFICATION:PERSONAL CREDIT INSTITUTIONS [6141]IRS NUMBER:522013874STATE OF INCORPORATION:DEFISCAL YEAR END:1231

FILING VALUES:FORM TYPE:8-KSEC ACT:1934 ActSEC FILE NUMBER:001-13251FILM NUMBER:11728098

BUSINESS ADDRESS:STREET 1:12061 BLUEMONT WAYCITY:RESTONSTATE:VAZIP:20190BUSINESS PHONE:7038103000

MAIL ADDRESS:STREET 1:12061 BLUEMONT WAYCITY:RESTONSTATE:VAZIP:20190

FORMER COMPANY:FORMER CONFORMED NAME:SALLIE MAEDATE OF NAME CHANGE:20020517

FORMER COMPANY:FORMER CONFORMED NAME:USA EDUCATION INCDATE OF NAME CHANGE:20000801

FORMER COMPANY:FORMER CONFORMED NAME:SLM HOLDING CORPDATE OF NAME CHANGE:19970203

8-K1w82268e8vk.htmFORM 8-K

e8vk

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section13 or 15(d) of the Securities Exchange Act of 1934

Dateof Report (Date of Earliest Event Reported): March31, 2011

SLM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

001-13251

52-2013874

(State or other jurisdiction

(Commission

(I.R.S. Employer

of incorporation)

File Number)

Identification No.)

12061 Bluemont Way, V3419, Reston,

Virginia

20190

(Address of principal executive offices)

(Zip Code)

Registrants telephone number, including area code: 703 810-3000

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy thefiling obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))

o Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))

Item8.01 Other Events

SLM Corporation frequently provides relevant information to its investors via posting to itscorporate website. On March31, 2011, a presentation entitled Periodic Default Percentages ForCertain Private Education Loans was made available on SLM Corporations website athttps://www1.salliemae.com/about/investors/webcasts/archived_presentations.htm. In addition, thedocument is being furnished herewith as Exhibit99.1.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SLM CORPORATION

By: /s/ Laurent C. Lutz

Name: Laurent C. Lutz

Title: Executive Vice President & General Counsel

Date: March31, 2011

SLM CORPORATION
Form8-K
CURRENT REPORT
EXHIBIT INDEX

Exhibit No. Description

99.1

Periodic Default Percentages For Certain Private Education Loans

EX-99.12w82268exv99w1.htmEX-99.1

exv99w1

Exhibit 99.1

SLM Corporation

Periodic Default Percentages ForCertain Private Education Loans

March 2011

March 2011

Forward-Looking Statements

The following information is current as of March 31, 2011 (unless otherwise noted) and should be read in connection withSLM Corporation's 2010 Annual Report on Form 10-K (the "2010 Form 10-K"). Our actual results may differ materially fromthose included in these forward-looking statements due to a variety of factors including, but not limited to, those describedin our 2010 Form 10-K in "Part I -Item 1A. Risk Factors" and in our quarterly reports on Form 10-Q in "Part II - Item 1A.Risk Factors."

This Presentation contains forward-looking statements and information based on management's current expectations as ofthe date of this presentation. Statements that are not historical facts, including statements about our beliefs orexpectations 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 bematerially different from those reflected in such forward-looking statements. These factors include, among others, increasesin financing costs; limits on liquidity; any adverse outcomes in any significant litigation to which we are a party; ourderivative counterparties terminating their positions with the Company if permitted by their contracts and the Companysubstantially incurring additional costs to replace any terminated positions; and changes in the terms of student loans andthe educational credit marketplace (including changes resulting from new laws and the implementation of existing laws).The Company could be affected by: changes in or the termination of various liquidity programs implemented by the federalgovernment; changes in the demand for educational financing or in financing preferences of lenders, educationalinstitutions, students and their families; changes in the composition of our Managed FFELP and Private Education Loanportfolios; changes in the general interest rate environment, including the rate relationships among relevant money-marketinstruments, and in the securitization markets, which may increase the costs or limit the availability of financings necessaryto initiate, purchase or carry education loans; changes in projections of losses from loan defaults; changes in generaleconomic conditions; changes in prepayment rates and credit spreads; and changes in the demand for debt managementservices. The preparation of our consolidated financial statements also requires management to make certain estimates andassumptions including estimates and assumptions about future events. These estimates or assumptions may prove to beincorrect. All forward-looking statements contained in this Presentation are qualified by these cautionary statements andare made only as of the date of this Presentation. The Company does not undertake any obligation to update or revisethese forward-looking statements to conform the statement to actual results or changes in the Company's expectations.

2

The following cohort default triangles provide loan performance information for certainprivate education loans of SLM Corporation and its consolidated subsidiaries thatmeet such subsidiaries' current securitization criteria (including those criteria listedbelow):

Program types include Undergraduate/Graduate(1), Direct-to-Consumer ("DTC")(2), and CareerTraining and Tutorial(3) loans

FICO scores are based on the greater of the borrower and co-borrower scores as of a datenear 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 and Tutorial loans: ^ 670

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

The cohort default triangles are not representative of the characteristics of the portfolioof private education loans of SLM Corporation and its consolidated subsidiaries as awhole or any particular securitization trust

COHORT DEFAULT TRIANGLES

3

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

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

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

The cohort default triangles featured on subsequent slides are segmented by loan program type,FICO score, co-borrower 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 agiven 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 thedisbursed 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 arehigher 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

4

COHORT DEFAULT TRIANGLES

Note: Data as of 12/31/10.

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

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

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.

5

Undergraduate/Graduate(1)

Undergraduate/Graduate(1) Without Co-signer

Undergraduate/Graduate(1) With Co-signer

6

COHORT DEFAULT TRIANGLES

Note: Data as of 12/31/10.

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

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

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.

7

COHORT DEFAULT TRIANGLES

Note: Data as of 12/31/10.

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

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

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

Undergraduate/Graduate(1) Loans, FICO 740-850(2)

Undergraduate/Graduate(1) Loans, FICO 700-739(2)

8

COHORT DEFAULT TRIANGLES

Note: Data as of 12/31/10.

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

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

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

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.

9

COHORT DEFAULT TRIANGLES

Note: Data as of 12/31/10.

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

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

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

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)

10

COHORT DEFAULT TRIANGLES

Note: Data as of 12/31/10.

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

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

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.

DTC With Co-signer, FICO ^ 670(1)

DTC Without Co-signer, FICO ^ 670(1)

11

COHORT DEFAULT TRIANGLES

Note: Data as of 12/31/10.

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

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

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.

All Career Training and Tutorial Loans, 670+ FICO(1)

Recoveries

12

As of year end 2010, Sallie Mae expected to collect 27 percent of a defaultedloan's balance, on average, across its managed private education loanportfolio

Recoveries are typically realized over many years as a result of the prevalentuse of long-term payment plans

While student loans are non-dischargeable in bankruptcy, the proceedings canpostpone recoveries until after borrowers emerge from bankruptcy

In 2005, Sallie Mae changed its recovery practices, leading to an increase inoverall recoveries and earlier collection of recovered amounts

Loans that defaulted in 1998-2003 had recovery rates of 7 - 14% fiveyears after default

The 2005 cohort had a recovery rate of 22.5% five years after default

Recovery experience for more recent cohorts has varied based oneconomic conditions and the characteristics of defaulted loans

Additional Information Available atwww.salliemae.com

13

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