Sallie Mae Reports Second-Quarter 2008 Results

RESTON, Va.--(Business Wire)--
SLM Corporation (NYSE:SLM), commonly known as Sallie Mae, today
reported second-quarter 2008 performance results that include strong
growth in student loan originations by the company's internal lending
brands and solid performance by the company's core student loan
businesses.

For the 2008 second quarter, "core earnings" net income totaled
$156 million, or $.27 diluted earnings per share. These results
include the effect of restructuring-related charges of $53 million
($.08 per diluted share), purchased-paper business losses of $26
million ($.05 per diluted share), and asset-backed financing
facilities fees of $109 million ($.15 per diluted share). "Core
earnings" net income from the company's lending business was $175
million in the second-quarter 2008, up from $170 million in the
year-ago period.

For the 2007 second quarter, "core earnings" net income totaled
$189 million, or $.43 diluted earnings per share.

"Our funding costs have been extraordinarily high throughout
2008," said Albert L. Lord, vice chairman and CEO. "Recent spread
narrowing is encouraging because our earnings potential in 2008 and
beyond is largely dependent on future funding costs."

Student loans originated through Sallie Mae's internal brands, the
most profitable segment of total student loan originations, were $2.7
billion in the second-quarter 2008, up 12 percent from the year-ago
quarter's $2.4 billion. Total student loan originations were $3.3
billion in the 2008 second quarter, compared to $3.6 billion in the
year-ago period, the decrease driven by the changing nature of the
company's relationships with external lending partners and a shift
from purchasing, to servicing, their loans. The company expects its
internal lending brands to represent a growing majority of total
student loan originations.

The company's managed student loan portfolio totaled $171.9
billion at June 30, 2008, compared to $153.2 billion one year ago.

Funding and liquidity improved during the 2008 second quarter: 1)
the company issued more than $7 billion in term asset-backed
securitization transactions and spreads declined significantly; 2) the
company issued $2.5 billion of senior, unsecured notes for the first
time since March 2007; and 3) the U.S. Department of Education
received Congressional authority to implement a solution to provide
liquidity for federal student loans.

Sallie Mae reports financial results on a GAAP basis and also
presents certain "core earnings" performance measures. The company's
management, equity investors, credit rating agencies and debt capital
providers use these "core earnings" measures to monitor the company's
business performance. Both a description of the "core earnings"
treatment and a full reconciliation to the GAAP income statement can
be found at:
www.salliemae.com/about/investors/stockholderinfo/earningsinfo/, click
on the Second Quarter 2008 Supplemental Earnings Disclosure.

Sallie Mae reported second-quarter 2008 GAAP net income of $266
million, or $.50 diluted earnings per share, compared to net income of
$966 million, or $1.03 diluted earnings per share, in the 2007 second
quarter. The largest difference between GAAP and "core earnings"
second-quarter 2008 earnings per share results is the net impact of
derivative accounting which, under SFAS 133, resulted in a $447
million unrealized, mark-to-market, pre-tax gain recognized in GAAP,
but not in "core earnings," results.

The GAAP provision for loan losses was $143 million, down from the
year-ago quarter's $148 million. GAAP net interest income was $403
million for the 2008 second quarter, compared to $399 million in the
second-quarter 2007. Under GAAP accounting, the provision for loan
losses and net interest income are based only on on-balance sheet
loans; the comparable "core earnings" figures are based on total
managed loans.

Presentation slides for the conference call discussed below may be
accessed on www.salliemae.com/about/investors/stockholderinfo/webcast.

The company will host an earnings conference call tomorrow, July
24 at 8 a.m. EDT. Sallie Mae executives will be on hand to discuss
various highlights of the quarter and to answer questions related to
the company's performance. Individuals interested in participating
should call the following number tomorrow, July 24, 2008, starting at
7:45 a.m. EDT: (877) 356-5689 (USA and Canada) or (706) 679-0623
(International) and use access code 53880816. The conference call will
be replayed continuously beginning at 11 a.m. EDT on Thursday, July
24, 2008, and concluding at midnight on Aug. 7, 2008. To access the
replay, please dial (800) 642-1687 (USA and Canada) or dial (706)
645-9291 (International) and use access code 53880816. In addition,
there will be a live audio Web cast of the conference call, which may
be accessed at www.salliemae.com. A replay will be available 30 to 45
minutes after the live broadcast.

This press release contains "forward-looking statements" based on
management's current expectations as of the date of this release.
These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Because such
statements inherently involve risks and uncertainties, actual results
may differ materially from those expressed or implied by such
forward-looking statements. Such risks include, among others, changes
in the terms of student loans and the educational credit marketplace
arising from the implementation of applicable laws and regulations,
and from changes in such laws and regulations, adverse results in
legal disputes, changes in the demand for educational financing or in
financing preferences of educational institutions, students and their
families, limited liquidity, increased financing costs and changes in
the general interest rate environment. For more information, see the
company's filings with the Securities and Exchange Commission,
including the forward-looking statements contained in the company's
Supplemental Financial Information Second Quarter 2008. All
information in this release is as of July 23, 2008. The Company does
not undertake any obligation to update or revise these forward-looking
statements to conform the statement to actual results or changes in
the Company's expectations.

SLM Corporation (NYSE:SLM), commonly known as Sallie Mae, is the
nation's leading provider of saving- and paying-for-college programs.
The company manages nearly $172 billion in education loans and serves
10 million student and parent customers. Through its Upromise
affiliates, the company also manages more than $19 billion in 529
college-savings plans, and is a major, private source of college
funding contributions in America with 9 million members and $425
million in member rewards. Sallie Mae and its subsidiaries offer debt
management services as well as business and technical products to a
range of business clients, including higher education institutions,
student loan guarantors and state and federal agencies. More
information is available at www.salliemae.com. SLM Corporation and its
subsidiaries are not sponsored by or agencies of the United States of
America.

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SLM CORPORATION
Supplemental Earnings Disclosure
June 30, 2008
(In millions, except per share amounts)

Quarters ended
-----------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
SELECTED FINANCIAL INFORMATION AND
RATIOS

GAAP Basis
Net income (loss) $ 266 $ (104) $ 966
Diluted earnings (loss) per common
share $ .50 $ (.28) $ 1.03
Return on assets .74% (.29)% 3.23%

"Core Earnings" Basis(1)
"Core Earnings" net income $ 156 $ 188 $ 189
"Core Earnings" diluted earnings
per common share $ .27 $ .34 $ .43
"Core Earnings" return on assets .34% .41% .45%

OTHER OPERATING STATISTICS
Average on-balance sheet student
loans $ 133,748 $ 129,341 $ 108,865
Average off-balance sheet student
loans 38,175 39,163 43,432
----------- ----------- -----------
Average Managed student loans $ 171,923 $ 168,504 $ 152,297
=========== =========== ===========

Ending on-balance sheet student
loans, net $ 134,289 $ 131,013 $ 110,626
Ending off-balance sheet student
loans, net 37,615 38,462 42,577
----------- ----------- -----------
Ending Managed student loans, net $ 171,904 $ 169,475 $ 153,203
=========== =========== ===========

Ending Managed FFELP Stafford and
Other Student Loans, net $ 51,622 $ 49,179 $ 42,865
Ending Managed FFELP Consolidation
Loans, net 89,213 90,105 85,276
Ending Managed Private Education
Loans, net 31,069 30,191 25,062
----------- ----------- -----------
Ending Managed student loans, net $ 171,904 $ 169,475 $ 153,203
=========== =========== ===========

Six months ended
-----------------------
June 30, June 30,
2008 2007
----------- -----------
(unaudited) (unaudited)
SELECTED FINANCIAL INFORMATION AND
RATIOS

GAAP Basis
Net income (loss) $ 162 $ 1,082
Diluted earnings (loss) per common
share $ .23 $ 1.82
Return on assets .23% 1.89%

"Core Earnings" Basis(1)
"Core Earnings" net income $ 344 $ 440
"Core Earnings" diluted earnings
per common share $ .62 $ .99
"Core Earnings" return on assets .38% .54%

OTHER OPERATING STATISTICS
Average on-balance sheet student
loans $ 131,544 $ 105,203
Average off-balance sheet student
loans 38,670 44,044
----------- -----------
Average Managed student loans $ 170,214 $ 149,247
=========== ===========

Ending on-balance sheet student
loans, net
Ending off-balance sheet student
loans, net
Ending Managed student loans, net

Ending Managed FFELP Stafford and
Other Student Loans, net
Ending Managed FFELP Consolidation
Loans, net
Ending Managed Private Education
Loans, net
Ending Managed student loans, net
*T

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(1) See explanation of "Core Earnings" performance measures under
"Reconciliation of 'Core Earnings' Net Income to GAAP Net
Income."
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SLM CORPORATION

Consolidated Balance Sheets

(In thousands, except per share amounts)

June 30, March 31, June 30,
2008 2008 2007
------------ ------------- ------------
(unaudited) (unaudited) (unaudited)
Assets
FFELP Stafford and Other
Student Loans (net of
allowance for losses of
$56,882; $52,238; and
$11,337, respectively) $ 43,146,711 $ 40,168,284 $ 31,503,088
FFELP Consolidation Loans (net
of allowance for losses of
$40,811; $41,759; and
$12,746, respectively) 73,171,342 73,867,639 68,109,269
Private Education Loans (net
of allowance for losses of
$970,150; $938,409; and
$427,904, respectively) 17,970,556 16,977,146 11,013,668
Other loans (net of allowance
for losses of $46,794;
$44,575; and $19,989,
respectively) 902,684 1,140,468 1,178,052
Cash and investments 7,912,882 5,318,506 4,565,606
Restricted cash and
investments 3,701,454 4,170,934 4,300,826
Retained Interest in off-
balance sheet securitized
loans 2,544,517 2,874,481 3,448,045
Goodwill and acquired
intangible assets, net 1,304,941 1,319,723 1,356,620
Other assets 12,907,154 13,335,811 7,327,108
------------ ------------- ------------
Total assets $163,562,241 $159,172,992 $132,802,282
============ ============= ============
Liabilities
Short-term borrowings $ 37,191,756 $ 38,095,928 $ 9,758,465
Long-term borrowings 117,920,836 112,485,060 114,365,577
Other liabilities 2,905,165 3,377,229 3,320,098
------------ ------------- ------------
Total liabilities 158,017,757 153,958,217 127,444,140
------------ ------------- ------------
Commitments and contingencies
Minority interest in
subsidiaries 9,480 6,608 10,081
Stockholders' equity
Preferred stock, par value
$.20 per share, 20,000 shares
authorized:
Series A: 3,300; 3,300; and
3,300 shares, respectively,
issued at stated value of
$50 per share 165,000 165,000 165,000
Series B: 4,000; 4,000; and
4,000 shares, respectively,
issued at stated value of
$100 per share 400,000 400,000 400,000
Series C: 7.25% mandatory
convertible preferred
stock: 1,150; 1,150; and 0
shares, respectively,
issued at liquidation
preference of $1,000 per
share 1,150,000 1,150,000 --
Common stock, par value $.20
per share, 1,125,000 shares
authorized: 534,010; 533,678;
and 436,095 shares,
respectively, issued 106,802 106,736 87,219
Additional paid-in capital 4,637,731 4,610,278 2,721,554
Accumulated other
comprehensive income (loss),
net of tax 61,994 (2,394) 265,388
Retained earnings 855,527 617,184 2,790,674
------------ ------------- ------------
Stockholders' equity before
treasury stock 7,377,054 7,046,804 6,429,835
Common stock held in treasury:
66,445; 66,301; and 23,477
shares, respectively 1,842,050 1,838,637 1,081,774
------------ ------------- ------------
Total stockholders' equity 5,535,004 5,208,167 5,348,061
------------ ------------- ------------
Total liabilities and
stockholders' equity $163,562,241 $159,172,992 $132,802,282
============ ============= ============
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SLM CORPORATION

Consolidated Statements of Income

(In thousands, except per share amounts)

Quarters ended
-----------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
Interest income:
FFELP Stafford and Other Student
Loans $ 497,598 $ 464,476 $ 511,300
FFELP Consolidation Loans 769,664 836,656 1,087,254
Private Education Loans 409,323 443,522 329,351
Other loans 21,355 23,344 26,453
Cash and investments 70,521 123,816 141,524
----------- ----------- -----------
Total interest income 1,768,461 1,891,814 2,095,882
Total interest expense 1,365,918 1,615,445 1,697,229
----------- ----------- -----------
Net interest income 402,543 276,369 398,653
Less: provisions for loan losses 143,015 137,311 148,200
----------- ----------- -----------
Net interest income after
provisions for loan losses 259,528 139,058 250,453
----------- ----------- -----------
Other income (loss):
Gains on student loan
securitizations -- -- --
Servicing and securitization
revenue 1,630 107,642 132,987
Losses on sales of loans and
securities, net (43,583) (34,666) (10,921)
Gains (losses) on derivative and
hedging activities, net 362,043 (272,796) 821,566
Contingency fee revenue 83,790 85,306 80,237
Collections revenue 26,365 57,239 77,092
Guarantor servicing fees 23,663 34,653 30,273
Other 108,728 93,533 89,004
----------- ----------- -----------
Total other income 562,636 70,911 1,220,238
Expenses:
Restructuring expenses 46,740 20,678 --
Operating expenses 353,688 355,648 398,800
----------- ----------- -----------
Total expenses 400,428 376,326 398,800
----------- ----------- -----------
Income (loss) before income taxes
and minority interest in net
earnings of subsidiaries 421,736 (166,357) 1,071,891
Income tax expense (benefit) 153,074 (62,488) 104,724
----------- ----------- -----------
Income (loss) before minority
interest in net earnings of
subsidiaries 268,662 (103,869) 967,167
Minority interest in net earnings
of subsidiaries 2,926 (65) 696
----------- ----------- -----------
Net income (loss) 265,736 (103,804) 966,471
Preferred stock dividends 27,391 29,025 9,156
----------- ----------- -----------
Net income (loss) attributable to
common stock $ 238,345 $ (132,829) $ 957,315
=========== =========== ===========

Basic earnings (loss) per common
share $ .51 $ (.28) $ 2.32
=========== =========== ===========
Average common shares outstanding 466,649 466,580 411,870
=========== =========== ===========

Diluted earnings (loss) per common
share $ .50 $ (.28) $ 1.03
=========== =========== ===========
Average common and common
equivalent shares outstanding 517,954 466,580 452,406
=========== =========== ===========

Dividends per common share $ -- $ -- $ --
=========== =========== ===========

Six months ended
-----------------------
June 30, June 30,
2008 2007
----------- -----------
(unaudited) (unaudited)
Interest income:
FFELP Stafford and Other Student
Loans $ 962,074 $ 962,062
FFELP Consolidation Loans 1,606,320 2,102,100
Private Education Loans 852,845 667,772
Other loans 44,699 54,426
Cash and investments 194,337 255,428
----------- -----------
Total interest income 3,660,275 4,041,788
Total interest expense 2,981,363 3,229,319
----------- -----------
Net interest income 678,912 812,469
Less: provisions for loan losses 280,326 298,530
----------- -----------
Net interest income after
provisions for loan losses 398,586 513,939
----------- -----------
Other income (loss):
Gains on student loan
securitizations -- 367,300
Servicing and securitization
revenue 109,272 384,925
Losses on sales of loans and
securities, net (78,249) (41,888)
Gains (losses) on derivative and
hedging activities, net 89,247 464,597
Contingency fee revenue 169,096 167,559
Collections revenue 83,604 142,654
Guarantor servicing fees 58,316 69,514
Other 202,261 185,437
----------- -----------
Total other income 633,547 1,740,098
Expenses:
Restructuring expenses 67,418 --
Operating expenses 709,336 754,974
----------- -----------
Total expenses 776,754 754,974
----------- -----------
Income (loss) before income taxes
and minority interest in net
earnings of subsidiaries 255,379 1,499,063
Income tax expense (benefit) 90,586 414,738
----------- -----------
Income (loss) before minority
interest in net earnings of
subsidiaries 164,793 1,084,325
Minority interest in net earnings
of subsidiaries 2,861 1,701
----------- -----------
Net income (loss) 161,932 1,082,624
Preferred stock dividends 56,416 18,249
----------- -----------
Net income (loss) attributable to
common stock $ 105,516 $1,064,375
=========== ===========

Basic earnings (loss) per common
share $ .23 $ 2.59
=========== ===========
Average common shares outstanding 466,615 411,457
=========== ===========

Diluted earnings (loss) per common
share $ .23 $ 1.82
=========== ===========
Average common and common
equivalent shares outstanding 467,316 454,139
=========== ===========

Dividends per common share $ -- $ .25
=========== ===========
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SLM CORPORATION
Segment and "Core Earnings"
Consolidated Statements of Income
(In thousands)

Quarter ended June 30, 2008
----------------------------------------------------------
Corporate Total
and "Core Adjust- Total
Lending APG Other Earnings" ments GAAP
--------- --------- -------- --------- --------- ---------
(unaudited)
Interest
income:
FFELP
Stafford
and Other
Student
Loans $524,022 $ -- $-- $524,022 $(26,424) $497,598
FFELP
Consolidation
Loans 907,669 -- -- 907,669 (138,005) 769,664
Private
Education
Loans 665,452 -- -- 665,452 (256,129) 409,323
Other
loans 21,355 -- -- 21,355 -- 21,355
Cash and
invest-
ments 80,445 -- 4,902 85,347 (14,826) 70,521
--------- --------- -------- --------- --------- ---------
Total
interest
income 2,198,943 -- 4,902 2,203,845 (435,384) 1,768,461
Total
interest
expense 1,604,872 6,933 5,074 1,616,879 (250,961) 1,365,918
--------- --------- -------- --------- --------- ---------
Net interest
income
(loss) 594,071 (6,933) (172) 586,966 (184,423) 402,543
Less:
provisions
for loan
losses 192,181 -- -- 192,181 (49,166) 143,015
--------- --------- -------- --------- --------- ---------
Net interest
income
(loss)
after
provisions
for loan
losses 401,890 (6,933) (172) 394,785 (135,257) 259,528
Contingency
fee revenue -- 83,790 -- 83,790 -- 83,790
Collections
revenue -- 27,517 -- 27,517 (1,152) 26,365
Guarantor
servicing
fees -- -- 23,663 23,663 -- 23,663
Other income 61,898 -- 45,587 107,485 321,333 428,818
--------- --------- -------- --------- --------- ---------
Total other
income 61,898 111,307 69,250 242,455 320,181 562,636
Restructuring
expenses 30,947 5,174 10,619 46,740 -- 46,740
Operating
expenses 154,505 110,340 73,871 338,716 14,972 353,688
--------- --------- -------- --------- --------- ---------
Total
expenses 185,452 115,514 84,490 385,456 14,972 400,428
--------- --------- -------- --------- --------- ---------
Income
(loss)
before
income
taxes and
minority
interest in
net
earnings of
sub-
sidiaries 278,336 (11,140) (15,412) 251,784 169,952 421,736
Income tax
expense
(benefit)
(1) 102,917 (4,050) (5,651) 93,216 59,858 153,074
Minority
interest in
net
earnings of
sub-
sidiaries -- 2,926 -- 2,926 -- 2,926
--------- --------- -------- --------- --------- ---------
Net income
(loss) $175,419 $(10,016) $(9,761) $155,642 $110,094 $265,736
========= ========= ======== ========= ========= =========
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(1) Income taxes are based on a percentage of net income before tax
for the individual reportable segment.
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SLM CORPORATION

Segment and "Core Earnings"

Consolidated Statements of Income

(In thousands)

Quarter ended March 31, 2008
--------------------------------------------------------

Corporate Total
and "Core Adjust-
Lending APG Other Earnings" ments Total GAAP
--------- ------- ------ --------- ---------- ----------
(unaudited)
Interest
income:
FFELP
Stafford
and Other
Student
Loans $494,382 $ -- $-- $494,382 $(29,906) $464,476
FFELP
Consolidation
Loans 988,486 -- -- 988,486 (151,830) 836,656
Private
Education
Loans 749,321 -- -- 749,321 (305,799) 443,522
Other loans 23,344 -- -- 23,344 -- 23,344
Cash and
investments 141,902 -- 6,267 148,169 (24,353) 123,816
--------- ------- ------ --------- ---------- ----------
Total interest
income 2,397,435 -- 6,267 2,403,702 (511,888) 1,891,814
Total interest
expense 1,824,471 6,840 5,202 1,836,513 (221,068) 1,615,445
--------- ------- ------ --------- ---------- ----------
Net interest
income (loss) 572,964 (6,840) 1,065 567,189 (290,820) 276,369
Less:
provisions
for loan
losses 181,321 -- -- 181,321 (44,010) 137,311
--------- ------- ------ --------- ---------- ----------
Net interest
income (loss)
after
provisions
for loan
losses 391,643 (6,840) 1,065 385,868 (246,810) 139,058
Contingency
fee revenue -- 85,306 -- 85,306 -- 85,306
Collections
revenue -- 56,361 -- 56,361 878 57,239
Guarantor
servicing
fees -- -- 34,653 34,653 -- 34,653
Other income
(loss) 44,345 -- 50,641 94,986 (201,273) (106,287)
--------- ------- ------ --------- ---------- ----------
Total other
income 44,345 141,667 85,294 271,306 (200,395) 70,911
Restructuring
expenses 15,550 434 4,694 20,678 -- 20,678
Operating
expenses 163,636 106,142 69,655 339,433 16,215 355,648
--------- ------- ------ --------- ---------- ----------
Total expenses 179,186 106,576 74,349 360,111 16,215 376,326
--------- ------- ------ --------- ---------- ----------
Income (loss)
before income
taxes and
minority
interest in
net earnings
of
subsidiaries 256,802 28,251 12,010 297,063 (463,420) (166,357)
Income tax
expense
(benefit)(1) 94,067 10,348 4,399 108,814 (171,302) (62,488)
Minority
interest in
net earnings
of
subsidiaries -- (65) -- (65) -- (65)
--------- ------- ------ --------- ---------- ----------
Net income
(loss) $162,735 $17,968 $7,611 $188,314 $(292,118) $(103,804)
========= ======= ====== ========= ========== ==========
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(1) Income taxes are based on a percentage of net income before tax
for the individual reportable segment.
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SLM CORPORATION

Segment and "Core Earnings"

Consolidated Statements of Income

(In thousands)

Quarter ended June 30, 2007
----------------------------------------------------------

Corporate Total
and "Core Adjust- Total
Lending APG Other Earnings" ments GAAP
--------- ------- --------- --------- ---------- ---------
(unaudited)
Interest
income:
FFELP
Stafford
and Other
Student
Loans $718,624 $ -- $-- $718,624 $(207,324) $511,300
FFELP
Consolidation
Loans 1,391,015 -- -- 1,391,015 (303,761) 1,087,254
Private
Education
Loans 692,499 -- -- 692,499 (363,148) 329,351
Other
loans 26,453 -- -- 26,453 -- 26,453
Cash and
invest-
ments 182,644 -- 7,197 189,841 (48,317) 141,524
--------- ------- --------- --------- ---------- ---------
Total
interest
income 3,011,235 -- 7,197 3,018,432 (922,550) 2,095,882
Total
interest
expense 2,371,441 6,612 5,425 2,383,478 (686,249) 1,697,229
--------- ------- --------- --------- ---------- ---------
Net interest
income
(loss) 639,794 (6,612) 1,772 634,954 (236,301) 398,653
Less:
provisions
for loan
losses 246,981 -- -- 246,981 (98,781) 148,200
--------- ------- --------- --------- ---------- ---------
Net interest
income
(loss)
after
provisions
for loan
losses 392,813 (6,612) 1,772 387,973 (137,520) 250,453
Contingency
fee revenue -- 80,233 -- 80,233 4 80,237
Collections
revenue -- 77,412 -- 77,412 (320) 77,092
Guarantor
servicing
fees -- -- 30,273 30,273 -- 30,273
Other income 59,458 -- 48,141 107,599 925,037 1,032,636
--------- ------- --------- --------- ---------- ---------
Total other
income 59,458 157,645 78,414 295,517 924,721 1,220,238
Operating
expenses 181,650 96,307 104,432 382,389 16,411 398,800
--------- ------- --------- --------- ---------- ---------
Income
(loss)
before
income
taxes and
minority
interest in
net
earnings of
sub-
sidiaries 270,621 54,726 (24,246) 301,101 770,790 1,071,891
Income tax
expense
(benefit)
(1) 100,130 20,248 (8,971) 111,407 (6,683) 104,724
Minority
interest in
net
earnings of
sub-
sidiaries -- 696 -- 696 -- 696
--------- ------- --------- --------- ---------- ---------
Net income
(loss) $170,491 $33,782 $(15,275) $188,998 $777,473 $966,471
========= ======= ========= ========= ========== =========
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(1) Income taxes are based on a percentage of net income before tax
for the individual reportable segment.
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SLM CORPORATION

Segment and "Core Earnings"

Consolidated Statements of Income

(In thousands)

Six months ended June 30, 2008
------------------------------------------------------------

Corporate Total
and "Core Adjust- Total
Lending APG Other Earnings" ments GAAP
---------- -------- -------- ---------- ---------- ---------
(unaudited)
Interest
income:
FFELP
Stafford
and
Other
Student
Loans $1,018,404 $-- $-- $1,018,404 $(56,330) $962,074
FFELP
Consolidation
Loans 1,896,155 -- -- 1,896,155 (289,835) 1,606,320
Private
Education
Loans 1,414,773 -- -- 1,414,773 (561,928) 852,845
Other
loans 44,699 -- -- 44,699 -- 44,699
Cash and
invest-
ments 222,347 -- 11,169 233,516 (39,179) 194,337
---------- -------- -------- ---------- ---------- ---------
Total
interest
income 4,596,378 -- 11,169 4,607,547 (947,272) 3,660,275
Total
interest
expense 3,429,343 13,773 10,276 3,453,392 (472,029) 2,981,363
---------- -------- -------- ---------- ---------- ---------
Net
interest
income
(loss) 1,167,035 (13,773) 893 1,154,155 (475,243) 678,912
Less:
provisions
for loan
losses 373,502 -- -- 373,502 (93,176) 280,326
---------- -------- -------- ---------- ---------- ---------
Net
interest
income
(loss)
after
provisions
for loan
losses 793,533 (13,773) 893 780,653 (382,067) 398,586
Contingency
fee
revenue -- 169,096 -- 169,096 -- 169,096
Collections
revenue -- 83,878 -- 83,878 (274) 83,604
Guarantor
servicing
fees -- -- 58,316 58,316 -- 58,316
Other
income 106,243 -- 96,228 202,471 120,060 322,531
---------- -------- -------- ---------- ---------- ---------
Total
other
income 106,243 252,974 154,544 513,761 119,786 633,547
Restructuring
expenses 46,497 5,608 15,313 67,418 -- 67,418
Operating
expenses 318,141 216,482 143,526 678,149 31,187 709,336
---------- -------- -------- ---------- ---------- ---------
Total
expenses 364,638 222,090 158,839 745,567 31,187 776,754
---------- -------- -------- ---------- ---------- ---------
Income
(loss)
before
income
taxes and
minority
interest
in net
earnings
of sub-
sidiaries 535,138 17,111 (3,402) 548,847 (293,468) 255,379
Income tax
expense
(benefit)
(1) 196,984 6,298 (1,252) 202,030 (111,444) 90,586
Minority
interest
in net
earnings
of sub-
sidiaries -- 2,861 -- 2,861 -- 2,861
---------- -------- -------- ---------- ---------- ---------
Net income
(loss) $338,154 $7,952 $(2,150) $343,956 $(182,024) $161,932
========== ======== ======== ========== ========== =========
*T

-0-
*T

(1) Income taxes are based on a percentage of net income before tax
for the individual reportable segment.
*T

-0-
*T

SLM CORPORATION

Segment and "Core Earnings"

Consolidated Statements of Income

(In thousands)

Six months ended June 30, 2007
--------------------------------------------------------------
Corporate Total
and "Core Adjust- Total
Lending APG Other Earnings" ments GAAP
---------- -------- -------- ---------- ----------- ----------
(unaudited)
Interest
income:
FFELP
Stafford
and
Other
Student
Loans $1,413,977 $-- $-- $1,413,977 $(451,915) $962,062
FFELP
Consolidation
Loans 2,722,250 -- -- 2,722,250 (620,150) 2,102,100
Private
Education
Loans 1,350,083 -- -- 1,350,083 (682,311) 667,772
Other
loans 54,426 -- -- 54,426 -- 54,426
Cash
and
invest-
ments 344,321 -- 9,332 353,653 (98,225) 255,428
---------- -------- -------- ---------- ----------- ----------
Total
interest
income 5,885,057 -- 9,332 5,894,389 (1,852,601) 4,041,788
Total
interest
expense 4,591,577 13,299 10,993 4,615,869 (1,386,550) 3,229,319
---------- -------- -------- ---------- ----------- ----------
Net
interest
income
(loss) 1,293,480 (13,299) (1,661) 1,278,520 (466,051) 812,469
Less:
provisions
for
loan
losses 444,911 -- 606 445,517 (146,987) 298,530
---------- -------- -------- ---------- ----------- ----------
Net
interest
income
(loss)
after
provisions
for loan
losses 848,569 (13,299) (2,267) 833,003 (319,064) 513,939
Contingency
fee
revenue -- 167,559 -- 167,559 -- 167,559
Collections
revenue -- 142,734 -- 142,734 (80) 142,654
Guarantor
servicing
fees -- -- 69,514 69,514 -- 69,514
Other
income 103,876 -- 99,458 203,334 1,157,037 1,360,371
---------- -------- -------- ---------- ----------- ----------
Total
other
income 103,876 310,293 168,972 583,141 1,156,957 1,740,098
Operating
ex-
penses 353,213 189,555 171,937 714,705 40,269 754,974
---------- -------- -------- ---------- ----------- ----------
Income
(loss)
before
income
taxes
and
minority
interest
in net
earnings
of
subsid-
iaries 599,232 107,439 (5,232) 701,439 797,624 1,499,063
Income
tax
expense
(bene-
fit)(1) 221,716 39,752 (1,936) 259,532 155,206 414,738
Minority
interest
in net
earnings
of
subsid-
iaries -- 1,701 -- 1,701 -- 1,701
---------- -------- -------- ---------- ----------- ----------
Net
income
(loss) $377,516 $65,986 $(3,296) $440,206 $642,418 $1,082,624
========== ======== ======== ========== =========== ==========

*T

-0-
*T

(1) Income taxes are based on a percentage of net income before tax
for the individual reportable segment.
*T

-0-
*T

SLM CORPORATION

Reconciliation of "Core Earnings" Net Income to GAAP Net Income

(In thousands, except per share amounts)

Quarters ended
-----------------------------------
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
"Core Earnings" net income(A) $ 155,642 $ 188,314 $ 188,998
"Core Earnings" adjustments:
Net impact of securitization
accounting (246,506) (79,146) (15,071)
Net impact of derivative
accounting 450,609 (363,368) 841,564
Net impact of Floor Income (18,809) (5,577) (39,246)
Net impact of acquired intangibles (15,342) (15,329) (16,457)
----------- ----------- -----------
Total "Core Earnings" adjustments
before income taxes and minority
interest in net earnings of
subsidiaries 169,952 (463,420) 770,790
Net tax effect(B) (59,858) 171,302 6,683
----------- ----------- -----------
Total "Core Earnings" adjustments 110,094 (292,118) 777,473
----------- ----------- -----------
GAAP net income (loss) $ 265,736 $ (103,804) $ 966,471
=========== =========== ===========
GAAP diluted earnings (loss) per
common share $ .50 $ (.28) $ 1.03
=========== =========== ===========
(A)"Core Earnings" diluted
earnings per common share $ .27 $ .34 $ .43
=========== =========== ===========

Six months ended
-----------------------
June 30, June 30,
2008 2007
----------- -----------
(unaudited) (unaudited)
"Core Earnings" net income(A) $ 343,956 $ 440,206
"Core Earnings" adjustments:
Net impact of securitization
accounting (325,652) 406,414
Net impact of derivative
accounting 87,241 509,840
Net impact of Floor Income (24,386) (78,267)
Net impact of acquired intangibles (30,671) (40,363)
----------- -----------
Total "Core Earnings" adjustments
before income taxes and minority
interest in net earnings of
subsidiaries (293,468) 797,624
Net tax effect(B) 111,444 (155,206)
----------- -----------
Total "Core Earnings" adjustments (182,024) 642,418
----------- -----------
GAAP net income (loss) $ 161,932 $1,082,624
=========== ===========
GAAP diluted earnings (loss) per
common share $ .23 $ 1.82
=========== ===========
(A)"Core Earnings" diluted
earnings per common share $ .62 $ .99
=========== ===========

(B)Such tax effect is based upon the Company's "Core Earnings"
effective tax rate. For the quarter and six months ended June 30,
2007, the "Core Earnings" effective tax rate is different than
GAAP primarily from the exclusion of the permanent income tax
impact of the equity forward contracts. The Company settled all of
its equity forward contracts in January 2008.
*T

"Core Earnings"

In accordance with the Rules and Regulations of the Securities and
Exchange Commission ("SEC"), we prepare financial statements in
accordance with generally accepted accounting principles in the United
States of America ("GAAP"). In addition to evaluating the Company's
GAAP-based financial information, management evaluates the Company's
business segments on a basis that, as allowed under the Financial
Accounting Standards Board's Statement of Financial Accounting
Standards ("SFAS") No. 131, "Disclosures about Segments of an
Enterprise and Related Information," differs from GAAP. We refer to
management's basis of evaluating our segment results as "Core
Earnings" presentations for each business segment and we refer to this
information in our presentations with credit rating agencies and
lenders. While "Core Earnings" are not a substitute for reported
results under GAAP, we rely on "Core Earnings" to manage each
operating segment because we believe these measures provide additional
information regarding the operational and performance indicators that
are most closely assessed by management.

Our "Core Earnings" are not defined terms within GAAP and may not
be comparable to similarly titled measures reported by other
companies. "Core Earnings" net income reflects only current period
adjustments to GAAP net income as described below. Unlike financial
accounting, there is no comprehensive, authoritative guidance for
management reporting and as a result, our management reporting is not
necessarily comparable with similar information for any other
financial institution. Our operating segments are defined by products
and services or by types of customers, and reflect the manner in which
financial information is currently evaluated by management.
Intersegment revenues and expenses are netted within the appropriate
financial statement line items consistent with the income statement
presentation provided to management. Changes in management structure
or allocation methodologies and procedures may result in changes in
reported segment financial information.

Limitations of "Core Earnings"

While GAAP provides a uniform, comprehensive basis of accounting,
for the reasons described above, management believes that "Core
Earnings" are an important additional tool for providing a more
complete understanding of the Company's results of operations.
Nevertheless, "Core Earnings" are subject to certain general and
specific limitations that investors should carefully consider. For
example, as stated above, unlike financial accounting, there is no
comprehensive, authoritative guidance for management reporting. Our
"Core Earnings" are not defined terms within GAAP and may not be
comparable to similarly titled measures reported by other companies.
Unlike GAAP, "Core Earnings" reflect only current period adjustments
to GAAP. Accordingly, the Company's "Core Earnings" presentation does
not represent a comprehensive basis of accounting. Investors,
therefore, may not compare our Company's performance with that of
other financial services companies based upon "Core Earnings." "Core
Earnings" results are only meant to supplement GAAP results by
providing additional information regarding the operational and
performance indicators that are most closely used by management, the
Company's board of directors, rating agencies and lenders to assess
performance.

Other limitations arise from the specific adjustments that
management makes to GAAP results to derive "Core Earnings" results.
For example, in reversing the unrealized gains and losses that result
from SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," on derivatives that do not qualify for "hedge treatment,"
as well as on derivatives that do qualify but are in part ineffective
because they are not perfect hedges, we focus on the long-term
economic effectiveness of those instruments relative to the underlying
hedged item and isolate the effects of interest rate volatility,
changing credit spreads and changes in our stock price on the fair
value of such instruments during the period. Under GAAP, the effects
of these factors on the fair value of the derivative instruments (but
not on the underlying hedged item) tend to show more volatility in the
short term. While presentation of our results on a "Core Earnings"
basis provides important information regarding the performance of our
Managed loan portfolio, a limitation of this presentation is that we
present the ongoing spread income on loans that have been sold to a
trust we manage. While we believe that our "Core Earnings"
presentation presents the economic substance of our Managed loan
portfolio, it understates earnings volatility from securitization
gains. Our "Core Earnings" results exclude certain Floor Income, which
is cash income, from our reported results and therefore may understate
earnings in certain periods. Management's financial planning and
valuation of operating results, however, does not take into account
Floor Income because of its inherent uncertainty, except when it is
economically hedged through Floor Income Contracts.

Pre-Tax Differences between "Core Earnings" and GAAP

Our "Core Earnings" are the primary financial performance measures
used by management to evaluate performance and to allocate resources.
Accordingly, financial information is reported to management on a
"Core Earnings" basis by reportable segment, as these are the measures
used regularly by our chief operating decision makers. Our "Core
Earnings" are used in developing our financial plans, tracking
results, and establishing corporate performance targets. Management
believes this information provides additional insight into the
financial performance of the Company's core business activities. "Core
Earnings" net income reflects only current period adjustments to GAAP
net income, as described in the more detailed discussion of the
differences between "Core Earnings" and GAAP that follows, which
includes further detail on each specific adjustment required to
reconcile our "Core Earnings" segment presentation to our GAAP
earnings.

1) Securitization Accounting: Under GAAP, certain securitization
transactions in our Lending operating segment are accounted for as
sales of assets. Under "Core Earnings" for the Lending operating
segment, we present all securitization transactions on a "Core
Earnings" basis as long-term non-recourse financings. The upfront
"gains" on sale from securitization transactions, as well as ongoing
"servicing and securitization revenue" presented in accordance with
GAAP, are excluded from "Core Earnings" and are replaced by interest
income, provisions for loan losses, and interest expense as earned or
incurred on the securitization loans. We also exclude transactions
with our off-balance sheet trusts from "Core Earnings" as they are
considered intercompany transactions on a "Core Earnings" basis.

2) Derivative Accounting: "Core Earnings" exclude periodic
unrealized gains and losses that are caused primarily by the one-sided
mark-to-market derivative valuations prescribed by SFAS No. 133 on
derivatives that do not qualify for "hedge treatment" under GAAP.
These unrealized gains and losses occur in our Lending operating
segment, and occurred in our Corporate and Other reportable segment
related to equity forward contracts for the year-ago quarters. In our
"Core Earnings" presentation, we recognize the economic effect of
these hedges, which generally results in any cash paid or received
being recognized ratably as an expense or revenue over the hedged
item's life. "Core Earnings" also exclude the gain or loss on equity
forward contracts that under SFAS No. 133, are required to be
accounted for as derivatives and are marked to market through
earnings. The Company settled all of its equity forward contracts in
January 2008.

3) Floor Income: The timing and amount (if any) of Floor Income
earned in our Lending operating segment is uncertain and in excess of
expected spreads. Therefore, we exclude such income from "Core
Earnings" when it is not economically hedged. We employ derivatives,
primarily Floor Income Contracts and futures, to economically hedge
Floor Income. As discussed above in "Derivative Accounting," these
derivatives do not qualify as effective accounting hedges, and
therefore, under GAAP, are marked to market through the "gains
(losses) on derivative and hedging activities, net" line in the
consolidated statement of income with no offsetting gain or loss
recorded for the economically hedged items. For "Core Earnings," we
reverse the fair value adjustments on the Floor Income Contracts and
futures economically hedging Floor Income and include the amortization
of net premiums received in income.

4) Acquired Intangibles: Our "Core Earnings" exclude goodwill and
intangible impairment and the amortization of acquired intangibles.

Sallie Mae
Media Contact:
Martha Holler, 703-984-5178
or
Investor Contacts:
Steve McGarry, 703-984-6746
or
Joe Fisher, 703-984-5755

Copyright Business Wire 2008