• Loan Loss Provision Creates Net Loss in Fourth Quarter
• Originations Top $25 Billion

RESTON, Va., Jan. 23, 2008—SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today reported “core earnings” results that include a fourth-quarter 2007 net loss of $139 million, or $.36 diluted loss per share, and full-year 2007 net income of $560 million, or $1.23 diluted earnings per share.

Student loan originations totaled $5.0 billion in the 2007 fourth quarter and $25.5 billion during the full-year 2007. Student loans originated through Sallie Mae’s internal brands, the most profitable segment of total student loan originations, grew 27 percent year over year to $16.6 billion.

The company recorded a loan loss provision of $575 million on a GAAP basis, or $750 million on a “core earnings” basis, in the 2007 fourth quarter that contributed to a net loss for the quarter and reduced earnings for the year. The increase in the provision relates primarily to the actual and expected performance of the non-traditional, higher-risk portion of the company’s managed student loan portfolio.

“While there were some bright spots, we are obviously disappointed by our fourth-quarter results overall. Our cost of funds and loan loss expectations were impacted by weakening credit markets,” said Albert Lord, chief executive officer. “We faced significant distractions in 2007, but we have taken several of the necessary steps to position the company for a return to strong, quality asset and earnings growth. Our business trends point in the right direction. In 2007, a challenging year for our industry, we helped students with a record amount of financing to pay for college. In 2008 and beyond, our market leadership position will continue to grow together with the demand for higher education.”

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.

Sallie Mae reported a fourth-quarter 2007 GAAP net loss of $1.6 billion, or $3.98 diluted loss per share, including a $1.5 billion mark-to-market loss on the company’s equity forward contract, which was physically settled in full in January 2008. This compares to net income of $18 million, or $.02 diluted earnings per share, in the year-ago period.

The GAAP net loss for 2007 totaled $896 million, compared to GAAP net income of $1.2 billion in 2006. The 2007 GAAP results include principally the forward contract mark-to-market loss and private loan loss provision of $884 million.

Fourth-quarter 2007 “core earnings” net loss was $139 million, or $.36 diluted loss per share, compared to net income of $326 million, or $.74 diluted earnings per share, in the year-ago period. Driving the 2007 fourth-quarter’s loss were provisions for loan losses of $750 million. This compares to $88 million in the year-ago quarter.

For the full-year 2007, “core earnings” net income was $560 million, compared to $1.3 billion in 2006.

“Core earnings” net interest income was $612 million for the 2007 fourth quarter, compared to the year-ago quarter’s $651 million. “Core earnings” other income, which consists primarily of fees earned from guarantor servicing and collection activity, was $306 million in the fourth-quarter 2007, up from $283 million in the year-ago period.

In 2007, “core earnings” net interest income was $2.6 billion, up from $2.5 billion in 2006. “Core earnings” other income was $1.2 billion in 2007, compared to $1.1 billion in 2006.

“Core earnings” operating expenses were $388 million in the fourth-quarter 2007, compared to $328 million in the fourth-quarter 2006. “Core earnings” operating expenses were $1.4 billion in 2007 and $1.3 billion in 2006.

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 2007 Supplemental Earnings Disclosure.

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The company will host a quarterly earnings conference call and shareholder conference today at 10 a.m. EST. Sallie Mae executives will be on hand to discuss the company’s 2007 results and future outlook. Individuals interested in participating should call the following number today, Jan. 23, 2008, starting at 9:45 a.m. EST: (877) 356-5689 (USA and Canada) or (706) 679-0623 (International). The conference call will be replayed continuously beginning at 3 p.m. EST on Wednesday, Jan. 23, 2008, and concluding at midnight, Feb. 6, 2008. To access the replay, please dial (800) 642-1687 (USA and Canada) or dial (706) 645-9291 (International) and use access code 30431411. In addition, there will be a live audio Web cast of the conference, which may be accessed at www.SallieMae.com. A replay will be available immediately following the conference until midnight, Feb. 6, 2008.

This press release contains “forward-looking statements” including expectations as to future market share, the success of preferred channel originations and future results. 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, 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 2007. All information in this release is as of Jan. 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.

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For more information contact:
Tom Joyce (703) 984-5610 (media)
Martha Holler (703) 984-5178 (media)
Steve McGarry (703) 984-6746 (investor)
Joe Fisher (703) 984-5755 (investor)