• Student Loan Originations Exceed $24 Billion in 2008
• Federal Student Loan Originations Grow 25 Percent in Quarter
• Private Student Loan Provision Increases

RESTON, Va., Jan. 21, 2009—SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today reported fourth-quarter and full-year 2008 results that reflect significant growth in federal student loan originations and increased provisions for private loan losses.

“In the midst of this historic financial environment for consumers and businesses, the federal government’s liquidity solutions continue to allow us to deliver — at a net savings to taxpayers — access to federal loans for every student who seeks one,” said Albert L. Lord, chief executive officer. “Thanks to timely action by Congress and the Departments of Education and Treasury, we increased our federal student loan originations in 2008 and continued our mission to help students and families pay for college.”

Core earnings net income was $65 million, or $.08 diluted earnings per share, in the 2008 fourth quarter. The company provided $348 million for managed private loan losses in the fourth quarter 2008, reducing the current quarter’s earnings per diluted share $.20 from the prior quarter and bringing the full-year 2008 managed private loan provision to $874 million. Also, the commercial paper/LIBOR spread, which was wider during the quarter than the historical average, reduced earnings per diluted share by $.06 in the 2008 fourth quarter compared to the prior quarter.

For the full-year 2008, core earnings net income was $526 million, or $.89 diluted earnings per share. This includes the after-tax effects of restructuring-related expenses of $57 million ($.12 diluted loss per share), purchased-paper business losses of $199 million ($.43 diluted loss per share), and a reduction of premium expense on student loans as a result of loan prepayment assumption changes of $22 million ($.05 diluted earnings per share).

Excluding restructuring-related expenses, fourth-quarter 2008 core earnings operating expenses were $270 million, a 26-percent decrease from the year-ago period, exceeding the company’s 20 percent cost reduction target. For the full-year 2008, core earnings operating expenses were $1.26 billion.

The company originated $4.8 billion in student loans in the 2008 fourth quarter and $24.2 billion in the full-year 2008. Federal student loan originations were $3.9 billion in the fourth-quarter 2008, a 25-percent increase from the year-ago quarter, and $17.9 billion in the full-year 2008.

Private student loan delinquencies increased during the fourth-quarter 2008, with 2.6 percent of traditional managed private student loans in repayment more than 90-days delinquent at Dec. 31, 2008, compared to 2.3 percent at Sept. 30, 2008.

For 2009, the company will continue to make student loans available. Funding for this lending will come from an unlimited ability to fund federal student loans under various liquidity programs implemented by the federal government and a secure source of funding for private student loans through term bank deposits.

Core earnings net interest income was $553 million in the 2008 fourth quarter. In 2008, core earnings net interest income was $2.4 billion.

Core earnings other income, which consists primarily of fees earned from guarantor servicing and collection activity, was $200 million in the fourth-quarter 2008. In 2008, core earnings other income was $778 million.

In addition to presenting certain core earnings performance measures, Sallie Mae reports financial results on a GAAP basis. The company's management, equity investors, credit rating agencies and debt capital providers use 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 here, click on the Fourth Quarter 2008 Supplemental Earnings Disclosure.

Sallie Mae reported a fourth-quarter 2008 GAAP net loss of $216 million, or $.52 diluted loss per share. These fourth-quarter 2008 results include the net impact of a $439 million unrealized, mark-to-market, pre-tax loss on certain derivative contracts that are recognized in GAAP, but not in core earnings, results.

In 2008, GAAP net loss was $213 million, including the net impact of a $552 million unrealized, mark-to-market, pre-tax loss on certain derivative contracts that are recognized in GAAP, but not in core earnings, results.

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The company will host an earnings conference call tomorrow, Jan. 22 at 8 a.m. EST. 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, Jan. 22, 2009, starting at 7:45 a.m. EST: (877) 356-5689 (USA and Canada) or (706) 679-0623 (International) and use access code 79327982. The conference call will be replayed continuously beginning at 11 a.m. EST on Thursday, Jan. 22, 2009, and concluding at midnight on Feb. 5, 2009. To access the replay, please dial (800) 642-1687 (USA and Canada) or dial (706) 645-9291 (International) and use access code 79327982. 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, general economic conditions, 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 Fourth Quarter 2008. All information in this release is as of January 21, 2009. 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.

For more information contact:
Tom Joyce (703) 984-5178 (media)
Martha Holler (703) 984-5178 (media)
Steve McGarry (703) 984-6746 (investor)
Joe Fisher (703) 984-5755 (investor)