RESTON, Va., April 16, 2008—SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today reported that for the first-quarter ended March 31, 2008, it delivered a record amount of student loans despite difficult economic conditions and tightened credit markets that dramatically increased the cost of funds. Under current conditions, however, loans can only be made at an economic loss. Reflecting this environment, the company is assessing how best to balance its resources and its mission to provide access for higher education.

For the 2008 first quarter, “core earnings” net income was $188 million, or $.34 diluted earnings per share. Excluding non-recurring items of $21 million of restructuring expenses and an $82 million acceleration of premium amortization expense, “core earnings” net income for the 2008 first quarter was $254 million, or $.48 diluted earnings per share. For the 2007 first quarter, “core earnings” net income was $251 million, or $.57 diluted earnings per share.

First-quarter 2008 “core earnings” provision for loan losses was $181 million. It is a decrease from the preceding quarter’s $749 million and the 2007 first quarter of $199 million. “Core earnings” net interest income was $567 million for the 2008 first quarter. For the 2007 first quarter, “core earnings” net interest income was $644 million.

“Core earnings” other income, which consists primarily of fees earned from collection activity and guarantor servicing, was $271 million in the first-quarter 2008. For the 2007 first quarter, “core earnings” other income was $288 million. First-quarter 2008 “core earnings” operating expenses were $339 million. “Core earnings” operating expenses were $365 million in the preceding quarter and $332 million in the first-quarter 2007.

The company originated more than $8.7 billion in student loans during the first-quarter 2008, up from $8.0 billion in the year-ago period. Student loans originated through Sallie Mae’s internal brands, a segment of total student loan originations, were $5.8 billion, a 21-percent increase from the 2007 first quarter. At March 31, 2008, the company’s managed student loan portfolio totaled $169.5 billion.

“Today’s environment is the most difficult we have seen in our 35-year history of student lending,” said Albert L. Lord, chief executive officer. “It has become obvious that we can only meet the enormous student credit demands we are seeing at Sallie Mae if there is a near-term, system-wide liquidity solution.”

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 here, click on the First Quarter 2008 Supplemental Earnings Disclosure.

Sallie Mae reported a first-quarter 2008 GAAP net loss of $104 million, or $.28 diluted loss per share, compared to net income of $116 million, or $.26 diluted earnings per share, in the 2007 first quarter. The largest difference between GAAP and “core earnings” first-quarter 2008 earnings per share results is the net impact of derivative accounting which, under SFAS 133, resulted in a $363 million unrealized, mark-to-market, pre-tax loss recognized in GAAP, but not in “core earnings,” results.

The GAAP provision for loan losses was $137 million, down from the preceding quarter’s $574 million and the 2007 first quarter’s $150 million. GAAP net interest income was $276 million for the 2008 first quarter, compared to $414 million in the first-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 here.

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The company will host an earnings conference call tomorrow, April 17 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, April 17, 2008, starting at 7:45 a.m. EDT: (877) 356-5689 (USA and Canada) or (706) 679-0623 (International) and use access code 42085031. The conference call will be replayed continuously beginning at 11 a.m. EDT on Thursday, April 17, 2008, and concluding at midnight on May 1, 2008. To access the replay, please dial (800) 642-1687 (USA and Canada) or dial (706) 645-9291 (International) and use access code 42085031. 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 First Quarter 2008. All information in this release is as of April 16, 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.

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