Edgar Filing: SLM CORP

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-13251

SLM Corporation

(Exact name of registrant as specified in its charter)


Delaware		52-2013874
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

300 Continental Drive, Newark, Delaware		19713
(Address of principal executive offices)		(Zip Code)

(302) 283-8000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	x		Accelerated filer	¨

Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class		Outstanding at September 30, 2012
Common stock, $.20 par value		462,158,784 shares

SLM CORPORATION

Table of Contents


Part I. Financial Information
Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	91
Item 4.	Controls and Procedures	96
PART II. Other Information
Item 1.	Legal Proceedings	97
Item 1A.	Risk Factors	97
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	98
Item 3.	Defaults Upon Senior Securities	98
Item 4.	Mine Safety Disclosures	98
Item 5.	Other Information	98
Item 6.	Exhibits	99

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

SLM CORPORATION

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share amounts)

(Unaudited)


	September 30, 2012			December 31, 2011
Assets
FFELP Loans (net of allowance for losses of $166 and $187, respectively)	$	127,747		$	138,130
Private Education Loans (net of allowance for losses of $2,196 and $2,171, respectively)		37,101			36,290
Investments
Available-for-sale		63			70
Other		1,137			1,052

Total investments		1,200			1,122
Cash and cash equivalents		3,083			2,794
Restricted cash and investments		6,331			5,873
Goodwill and acquired intangible assets, net		462			478
Other assets		8,279			8,658

Total assets	$	184,203		$	193,345

Liabilities
Short-term borrowings	$	20,457		$	29,573
Long-term borrowings		154,786			154,393
Other liabilities		4,014			4,128

Total liabilities		179,257			188,094

Commitments and contingencies
Equity
Preferred stock, par value $.20 per share, 20 million shares authorized
Series A: 3.3 million and 3.3 million shares issued, respectively, at stated value of $50 per share		165			165
Series B: 4 million and 4 million shares issued, respectively, at stated value of $100 per share		400			400
Common stock, par value $.20 per share, 1.125 billion shares authorized: 534 million and 529 million shares, issued, respectively		107			106
Additional paid-in capital		4,219			4,136
Accumulated other comprehensive loss (net of tax benefit of $5 and $8, respectively)		(8	)		(14	)
Retained earnings		1,165			770

Total SLM Corporation stockholders’ equity before treasury stock		6,048			5,563
Less: Common stock held in treasury at cost: 72 million and 20 million shares, respectively		(1,108	)		(320	)

Total SLM Corporation stockholders’ equity		4,940			5,243
Noncontrolling interest		6			8

Total equity		4,946			5,251

Total liabilities and equity	$	184,203		$	193,345

Supplemental information — assets and liabilities of consolidated variable interest entities:


	September 30, 2012		December 31, 2011
FFELP Loans	$	124,222	$	135,536
Private Education Loans		25,889		24,962
Restricted cash and investments		6,202		5,609
Other assets		2,216		2,638
Short-term borrowings		12,778		21,313
Long-term borrowings		132,738		134,533

Net assets of consolidated variable interest entities	$	13,013	$	12,899

See accompanying notes to consolidated financial statements.

SLM CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Interest income:
FFELP Loans	$	840		$	858		$	2,459		$	2,584
Private Education Loans		615			609			1,856			1,813
Other loans		4			5			13			17
Cash and investments		5			4			16			14

Total interest income		1,464			1,476			4,344			4,428
Total interest expense		645			591			1,968			1,777

Net interest income		819			885			2,376			2,651
Less: provisions for loan losses		270			409			766			1,003

Net interest income after provisions for loan losses		549			476			1,610			1,648

Other income (loss):
Losses on derivative and hedging activities, net		(233	)		(480	)		(600	)		(1,231	)
Servicing revenue		94			95			283			286
Contingency revenue		85			84			261			248
Gains on debt repurchases		44			—			102			38
Other		3			1			40			25

Total other income (loss)		(7	)		(300	)		86			(634	)

Expenses:
Salaries and benefits		122			138			369			398
Other operating expenses		122			147			374			459

Total operating expenses		244			285			743			857
Goodwill and acquired intangible assets impairment and amortization expense		5			6			14			18
Restructuring expenses		2			1			11			6

Total expenses		251			292			768			881

Income (loss) from continuing operations before income tax expense (benefit)		291			(116	)		928			133
Income tax expense (benefit)		104			(46	)		339			44

Net income (loss) from continuing operations		187			(70	)		589			89
Income from discontinued operations, net of tax expense		—			23			—			33

Net income (loss)		187			(47	)		589			122
Less: net loss attributable to noncontrolling interest		(1	)		—			(2	)		—

Net income (loss) attributable to SLM Corporation		188			(47	)		591			122
Preferred stock dividends		5			5			15			13

Net income (loss) attributable to SLM Corporation common stock	$	183		$	(52	)	$	576		$	109

Basic earnings (loss) per common share attributable to SLM Corporation:
Continuing operations	$	.39		$	(.14	)	$	1.19		$	.15
Discontinued operations		—			.04			—			.06

Total	$	.39		$	(.10	)	$	1.19		$	.21

Average common shares outstanding		464			511			483			520

Diluted earnings (loss) per common share attributable to SLM Corporation:
Continuing operations	$	.39		$	(.14	)	$	1.18		$	.15
Discontinued operations		—			.04			—			.06

Total	$	.39		$	(.10	)	$	1.18		$	.21

Average common and common equivalent shares outstanding		471			511			490			526

Dividends per common share attributable to SLM Corporation	$	.125		$	.10		$	.375		$	.20

See accompanying notes to consolidated financial statements.

SLM CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net income (loss)	$	187		$	(47	)	$	589		$	122
Other comprehensive income (loss):
Unrealized gains/(losses) on derivatives:
Unrealized hedging losses on derivatives		(3	)		—			(14	)		(6	)
Reclassification adjustments for derivative losses included in net income		6			15			22			44
Unrealized gains on investments		—			—			1			1
Income tax benefit (expense)		(1	)		(5	)		(3	)		(14	)

Other comprehensive income, net of tax		2			10			6			25

Comprehensive income (loss)		189			(37	)		595			147
Less: comprehensive loss attributable to noncontrolling interest		(1	)		—			(2	)		—

Total comprehensive income (loss) attributable to SLM Corporation	$	190		$	(37	)	$	597		$	147

See accompanying notes to consolidated financial statements.

SLM CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In millions, except share and per share amounts)

(Unaudited)


	Preferred Stock Shares		Common Stock Shares								Preferred Stock		Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
	Preferred Stock Shares		Issued		Treasury			Outstanding			Preferred Stock		Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
Balance at June 30, 2011		7,300,000		528,623,163		(10,474,334	)		518,148,829		$	565	$	106	$	4,114		$	(30	)	$	418		$	(170	)	$	5,003		$	8		$	5,011
Comprehensive income:
Net loss		—		—		—			—			—		—		—			—			(47	)		—			(47	)		—			(47	)
Other comprehensive income, net of tax		—		—		—			—			—		—		—			10			—			—			10			—			10

Total comprehensive income		—		—		—			—			—		—		—			—			—			—			(37	)		—			(37	)
Cash dividends:
Common stock ($.10 per share)		—		—		—			—			—		—		—			—			(51	)		—			(51	)		—			(51	)
Preferred stock, series A ($.87 per share)		—		—		—			—			—		—		—			—			(3	)		—			(3	)		—			(3	)
Preferred stock, series B ($.50 per share)		—		—		—			—			—		—		—			—			(2	)		—			(2	)		—			(2	)
Issuance of common shares		—		288,291		—			288,291			—		—		3			—			—			—			3			—			3
Tax benefit related to employee stock-based compensation plans		—		—		—			—			—		—		(1	)		—			—			—			(1	)		—			(1	)
Stock-based compensation expense		—		—		—			—			—		—		11			—			—			—			11			—			11
Common stock repurchased		—		—		(9,460,512	)		(9,460,512	)		—		—		—			—			—			(145	)		(145	)		—			(145	)
Shares repurchased related to employee stock-based compensation plans		—		—		(244,758	)		(244,758	)		—		—		—			—			—			(4	)		(4	)		—			(4	)

Balance at September 30, 2011		7,300,000		528,911,454		(20,179,604	)		508,731,850		$	565	$	106	$	4,127		$	(20	)	$	315		$	(319	)	$	4,774		$	8		$	4,782

Balance at June 30, 2012		7,300,000		532,672,974		(63,270,775	)		469,402,199		$	565	$	107	$	4,196		$	(10	)	$	1,040		$	(967	)	$	4,931		$	7		$	4,938
Comprehensive income:
Net income (loss)		—		—		—			—			—		—		—			—			188			—			188			(1	)		187
Other comprehensive income, net of tax		—		—		—			—			—		—		—			2			—			—			2			—			2

Total comprehensive income		—		—		—			—			—		—		—			—			—			—			190			(1	)		189
Cash dividends:
Common stock ($.125 per share)		—		—		—			—			—		—		—			—			(58	)		—			(58	)		—			(58	)
Preferred stock, series A ($.87 per share)		—		—		—			—			—		—		—			—			(3	)		—			(3	)		—			(3	)
Preferred stock, series B ($.57 per share)		—		—		—			—			—		—		—			—			(2	)		—			(2	)		—			(2	)
Issuance of common shares		—		1,654,506		—			1,654,506			—		—		17			—			—			—			17			—			17
Tax benefit related to employee stock-based compensation plans		—		—		—			—			—		—		(2	)		—			—			—			(2	)		—			(2	)
Stock-based compensation expense		—		—		—			—			—		—		8			—			—			—			8			—			8
Common stock repurchased		—		—		(7,643,999	)		(7,643,999	)		—		—		—			—			—			(121	)		(121	)		—			(121	)
Shares repurchased related to employee stock-based compensation plans		—		—		(1,253,922	)		(1,253,922	)		—		—		—			—			—			(20	)		(20	)		—			(20	)

Balance at September 30, 2012		7,300,000		534,327,480		(72,168,696	)		462,158,784		$	565	$	107	$	4,219		$	(8	)	$	1,165		$	(1,108	)	$	4,940		$	6		$	4,946

SLM CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In millions, except share and per share amounts)

(Unaudited)


	Preferred Stock Shares		Common Stock Shares									Preferred Stock		Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
	Preferred Stock Shares		Issued			Treasury			Outstanding			Preferred Stock		Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
Balance at December 31, 2010		7,300,000		595,263,474			(68,319,589	)		526,943,885		$	565	$	119		$	5,940		$	(45	)	$	309		$	(1,876	)	$	5,012		$	—		$	5,012
Comprehensive income:
Net income		—		—			—			—			—		—			—			—			122			—			122			—			122
Other comprehensive income, net of tax		—		—			—			—			—		—			—			25			—			—			25			—			25

Total comprehensive income		—		—			—			—			—		—			—			—			—			—			147			—			147
Cash dividends:
Common stock ($.20 per share)		—		—			—			—			—		—			—			—			(103	)		—			(103	)		—			(103	)
Preferred stock, series A ($2.61 per share)		—		—			—			—			—		—			—			—			(9	)		—			(9	)		—			(9	)
Preferred stock, series B ($1.07 per share)		—		—			—			—			—		—			—			—			(4	)		—			(4	)		—			(4	)
Issuance of common shares		—		3,722,349			—			3,722,349			—		1			38			—			—			—			39			—			39
Retirement of common stock in treasury		—		(70,074,369	)		70,074,369			—			—		(14	)		(1,890	)		—			—			1,904			—			—			—
Tax benefit related to employee stock-based compensation plans		—		—			—			—			—		—			(9	)		—			—			—			(9	)		—			(9	)
Stock-based compensation expense		—		—			—			—			—		—			48			—			—			—			48			—			48
Common stock repurchased		—		—			(19,054,115	)		(19,054,115	)		—		—			—			—			—			(300	)		(300	)		—			(300	)
Shares repurchased related to employee stock-based compensation plans		—		—			(2,880,269	)		(2,880,269	)		—		—			—			—			—			(47	)		(47	)		—			(47	)
Acquisition of noncontrolling interest		—		—			—			—			—		—			—			—			—			—			—			8			8

Balance at September 30, 2011		7,300,000		528,911,454			(20,179,604	)		508,731,850		$	565	$	106		$	4,127		$	(20	)	$	315		$	(319	)	$	4,774		$	8		$	4,782

Balance at December 31, 2011		7,300,000		529,075,322			(20,323,997	)		508,751,325		$	565	$	106		$	4,136		$	(14	)	$	770		$	(320	)	$	5,243		$	8		$	5,251
Comprehensive income:
Net income (loss)		—		—			—			—			—		—			—			—			591			—			591			(2	)		589
Other comprehensive income, net of tax		—		—			—			—			—		—			—			6			—			—			6			—			6

Total comprehensive income		—		—			—			—			—		—			—			—			—			—			597			(2	)		595
Cash dividends:
Common stock ($.375 per share)		—		—			—			—			—		—			—			—			(180	)		—			(180	)		—			(180	)
Preferred stock, series A ($2.61 per share)		—		—			—			—			—		—			—			—			(8	)		—			(8	)		—			(8	)
Preferred stock, series B ($1.69 per share)		—		—			—			—			—		—			—			—			(7	)		—			(7	)		—			(7	)
Restricted stock dividend		—		—			—			—			—		—			—			—			(1	)		—			(1	)		—			(1	)
Issuance of common shares		—		5,252,158			—			5,252,158			—		1			47			—			—			—			48			—			48
Tax benefit related to employee stock-based compensation plans		—		—			—			—			—		—			(5	)		—			—			—			(5	)		—			(5	)
Stock-based compensation expense		—		—			—			—			—		—			41			—			—			—			41			—			41
Common stock repurchased		—		—			(48,184,145	)		(48,184,145	)		—		—			—			—			—			(730	)		(730	)		—			(730	)
Shares repurchased related to employee stock-based compensation plans		—		—			(3,660,554	)		(3,660,554	)		—		—			—			—			—			(58	)		(58	)		—			(58	)

Balance at September 30, 2012		7,300,000		534,327,480			(72,168,696	)		462,158,784		$	565	$	107		$	4,219		$	(8	)	$	1,165		$	(1,108	)	$	4,940		$	6		$	4,946

See accompanying notes to consolidated financial statements.

SLM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Nine Months Ended September 30,
	2012			2011
Operating activities
Net income	$	589		$	122
Adjustments to reconcile net income to net cash provided by operating activities:
Gains on debt repurchases		(102	)		(38	)
Goodwill and acquired intangible assets impairment and amortization expense		14			18
Stock-based compensation expense		41			48
Unrealized losses on derivative and hedging activities		51			647
Provisions for loan losses		766			1,003
Decrease in restricted cash — other		37			43
Decrease in accrued interest receivable		204			136
(Decrease) increase in accrued interest payable		(55	)		82
Decrease in other assets		286			132
Decrease in other liabilities		(2	)		(119	)

Total adjustments		1,240			1,952

Total net cash provided by operating activities		1,829			2,074

Investing activities
Student loans acquired and originated		(5,497	)		(3,166	)
Reduction of student loans:
Installment payments, claims and other		14,167			9,672
Proceeds from sales of student loans		428			568
Other investing activities, net		(101	)		(483	)
Purchases of available-for-sale securities		(39	)		(125	)
Proceeds from sales and maturities of available-for-sale securities		56			163
Purchases of held-to-maturity and other securities		(182	)		(198	)
Proceeds from maturities of held-to-maturity and other securities		161			195
(Increase) decrease in restricted cash – variable interest entities		(496	)		435

Cash provided by investing activities — continuing operations		8,497			7,061

Cash provided by investing activities — discontinued operations		—			109

Total net cash provided by investing activities		8,497			7,170

Financing activities
Borrowings collateralized by loans in trust — issued		10,004			3,034
Borrowings collateralized by loans in trust — repaid		(11,565	)		(8,506	)
Asset-backed commercial paper conduits, net		140			(515	)
ED Conduit Program facility, net		(8,960	)		(2,517	)
Other short-term borrowings issued		23			—
Other short-term borrowings repaid		(122	)		—
Other long-term borrowings issued		3,769			1,967
Other long-term borrowings repaid		(2,952	)		(4,294	)
Other financing activities, net		224			594
Retail and other deposits, net		327			589
Common stock repurchased		(730	)		(300	)
Common stock dividends paid		(180	)		(103	)
Preferred stock dividends paid		(15	)		(13	)

Net cash used in financing activities		(10,037	)		(10,064	)

Net increase (decrease) in cash and cash equivalents		289			(820	)
Cash and cash equivalents at beginning of period		2,794			4,343

Cash and cash equivalents at end of period	$	3,083		$	3,523

Cash disbursements made (refunds received) for:
Interest	$	1,913		$	1,814

Income taxes paid	$	416		$	496

Income taxes received	$	(5	)	$	(26	)

Noncash activity:
Investing activity — Student loans and other assets acquired	$	402		$	783

Operating activity — Other assets acquired and other liabilities assumed, net	$	23		$	19

Financing activity — Borrowings assumed in acquisition of student loans and other assets	$	425		$	802

See accompanying notes to consolidated financial statements.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information at September 30, 2012 and for the three and nine months ended

September 30, 2012 and 2011 is unaudited)

1.	Significant Accounting Policies

Basis of Presentation

The accompanying unaudited, consolidated financial statements of SLM Corporation (“we,” “us,” “our,” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. The consolidated financial statements include the accounts of SLM Corporation and its majority-owned and controlled subsidiaries and those Variable Interest Entities (“VIEs”) for which we are the primary beneficiary, after eliminating the effects of intercompany accounts and transactions. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the interim periods have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results for the year ending December 31, 2012 or for any other period. These unaudited financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”).

Reclassifications

Certain reclassifications have been made to the balances as of and for the three and nine months ended September 30, 2011 to be consistent with classifications adopted for 2012, and had no effect on net income, total assets, or total liabilities.

Recently Adopted Accounting Standards

Presentation of Comprehensive Income

On January 1, 2012, we adopted Accounting Standards Update No. 2011-05, Comprehensive Income (Topic 220), “Presentation of Comprehensive Income.” The objective of this new guidance is to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. The new guidance requires all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Upon adoption we present comprehensive income and its components in a separate consolidated statement of comprehensive income on a retrospective basis for all periods presented. There was no impact on our results of operations.

Fair Value Measurement and Disclosure Requirements

On January 1, 2012, we adopted ASU No. 2011-04, Fair Value Measurement (Topic 820), “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” These amendments (1) clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements; and (2) change particular principles or requirements for measuring fair value or for disclosing information about fair value measurements. This new guidance did not have a material impact on our fair value measurements in the three and nine months ended September 30, 2012.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses

Our provisions for loan losses represent the periodic expense of maintaining an allowance sufficient to absorb incurred probable losses, net of expected recoveries, in the held-for-investment loan portfolios. The evaluation of the provisions for loan losses is inherently subjective as it requires material estimates that may be susceptible to significant changes. We believe that the allowance for loan losses is appropriate to cover probable losses incurred in the loan portfolios. We segregate our Private Education Loan portfolio into two classes of loans — traditional and non-traditional. Non-traditional loans are loans to (i) borrowers attending for-profit schools with an original Fair Isaac and Company (“FICO”) score of less than 670 and (ii) borrowers attending not-for-profit schools with an original FICO score of less than 640. The FICO score used in determining whether a loan is non-traditional is the greater of the borrower or cosigner FICO score at origination. Traditional loans are defined as all other Private Education Loans that are not classified as non-traditional.

Allowance for Loan Losses Metrics


	Allowance for Loan Losses
	Three Months Ended September 30, 2012
(Dollars in millions)	FFELP Loans			Private Education Loans			Other Loans			Total
Beginning balance	$	173		$	2,186		$	59		$	2,418
Total provision		18			252			—			270
Charge-offs⁽¹⁾		(23	)		(250	)		(6	)		(279	)
Student loan sales		(2	)		—			—			(2	)
Reclassification of interest reserve⁽²⁾		—			8			—			8

Ending balance	$	166		$	2,196		$	53		$	2,415

Allowance:
Ending balance: individually evaluated for impairment	$	—		$	1,056		$	40		$	1,096
Ending balance: collectively evaluated for impairment	$	166		$	1,140		$	13		$	1,319
Loans:
Ending balance: individually evaluated for impairment	$	—		$	7,099		$	76		$	7,175
Ending balance: collectively evaluated for impairment	$	126,441		$	33,012		$	146		$	159,599
Charge-offs as a percentage of average loans in repayment (annualized)		.10	%		3.23	%		9.58	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		.08	%		3.11	%		9.58	%
Allowance as a percentage of ending total loans		.13	%		5.48	%		23.92	%
Allowance as a percentage of ending loans in repayment		.18	%		7.09	%		23.92	%
Allowance coverage of charge-offs (annualized)		1.8			2.2			2.4
Ending total loans⁽³⁾	$	126,441		$	40,111		$	222
Average loans in repayment	$	90,898		$	30,816		$	231
Ending loans in repayment	$	90,481		$	30,972		$	222

⁽¹⁾

Charge-offs are reported net of expected recoveries. For Private Education Loans, the expected recovery amount is transferred to the receivable for partially charged-off loan balance. Charge-offs include charge-offs against the receivable for partially charged-off loans which represents the difference between what was expected to be collected and what was actually collected in the period. See “Receivable for Partially Charged-Off Private Education Loans” for further discussion.

⁽²⁾

Represents the additional allowance related to the amount of uncollectible interest reserved within interest income that is transferred in the period to the allowance for loan losses when interest is capitalized to a loan’s principal balance.

⁽³⁾

Ending total loans for Private Education Loans includes the receivable for partially charged-off loans.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)


	Allowance for Loan Losses
	Three Months Ended September 30, 2011
(Dollars in millions)	FFELP Loans			Private Education Loans			Other Loans			Total
Beginning balance	$	189		$	2,043		$	63		$	2,295
Total provision		21			384			4			409
Charge-offs⁽¹⁾		(18	)		(272	)		(11	)		(301	)
Student loan sales		(3	)		—			—			(3	)
Reclassification of interest reserve⁽²⁾		—			12			—			12

Ending balance	$	189		$	2,167		$	56		$	2,412

Allowance:
Ending balance: individually evaluated for impairment	$	—		$	618		$	46		$	664
Ending balance: collectively evaluated for impairment	$	189		$	1,549		$	10		$	1,748
Loans:
Ending balance: individually evaluated for impairment	$	—		$	4,485		$	89		$	4,574
Ending balance: collectively evaluated for impairment	$	139,130		$	34,682		$	180		$	173,992
Charge-offs as a percentage of average loans in repayment (annualized)		.07	%		3.74	%		16.95	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		.06	%		3.57	%		16.95	%
Allowance as a percentage of ending total loans		.14	%		5.53	%		20.75	%
Allowance as a percentage of ending loans in repayment		.20	%		7.49	%		20.75	%
Allowance coverage of charge-offs (annualized)		2.7			2.0			1.2
Ending total loans⁽³⁾	$	139,130		$	39,167		$	269
Average loans in repayment	$	93,961		$	28,819		$	276
Ending loans in repayment	$	93,552		$	28,922		$	269

⁽¹⁾

⁽²⁾

⁽³⁾

Ending total loans for Private Education Loans includes the receivable for partially charged-off loans.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)


	Allowance for Loan Losses
	Nine Months Ended September 30, 2012
(Dollars in millions)	FFELP Loans			Private Education Loans			Other Loans			Total
Beginning balance	$	187		$	2,171		$	69		$	2,427
Total provision		54			712			—			766
Charge-offs⁽¹⁾		(68	)		(709	)		(16	)		(793	)
Student loan sales		(7	)		—			—			(7	)
Reclassification of interest reserve⁽²⁾		—			22			—			22

Ending balance	$	166		$	2,196		$	53		$	2,415

Allowance:
Ending balance: individually evaluated for impairment	$	—		$	1,056		$	40		$	1,096
Ending balance: collectively evaluated for impairment	$	166		$	1,140		$	13		$	1,319
Loans:
Ending balance: individually evaluated for impairment	$	—		$	7,099		$	76		$	7,175
Ending balance: collectively evaluated for impairment	$	126,441		$	33,012		$	146		$	159,599
Charge-offs as a percentage of average loans in repayment (annualized)		.10	%		3.10	%		8.79	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		.08	%		2.97	%		8.79	%
Allowance as a percentage of ending total loans		.13	%		5.48	%		23.92	%
Allowance as a percentage of ending loans in repayment		.18	%		7.09	%		23.92	%
Allowance coverage of charge-offs (annualized)		1.8			2.3			2.5
Ending total loans⁽³⁾	$	126,441		$	40,111		$	222
Average loans in repayment	$	92,157		$	30,577		$	242
Ending loans in repayment	$	90,481		$	30,972		$	222

⁽¹⁾

⁽²⁾

⁽³⁾

Ending total loans for Private Education Loans includes the receivable for partially charged-off loans.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)


	Allowance for Loan Losses
	Nine Months Ended September 30, 2011
(Dollars in millions)	FFELP Loans			Private Education Loans			Other Loans			Total
Beginning balance	$	189		$	2,022		$	72		$	2,283
Total provision		67			924			12			1,003
Charge-offs⁽¹⁾		(59	)		(809	)		(28	)		(896	)
Student loan sales		(8	)		—			—			(8	)
Reclassification of interest reserve⁽²⁾		—			30			—			30

Ending balance	$	189		$	2,167		$	56		$	2,412

Allowance:
Ending balance: individually evaluated for impairment	$	—		$	618		$	46		$	664
Ending balance: collectively evaluated for impairment	$	189		$	1,549		$	10		$	1,748
Loans:
Ending balance: individually evaluated for impairment	$	—		$	4,485		$	89		$	4,574
Ending balance: collectively evaluated for impairment	$	139,130		$	34,682		$	180		$	173,992
Charge-offs as a percentage of average loans in repayment (annualized)		.08	%		3.80	%		12.93	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		.07	%		3.62	%		12.93	%
Allowance as a percentage of ending total loans		.14	%		5.53	%		20.75	%
Allowance as a percentage of ending loans in repayment		.20	%		7.49	%		20.75	%
Allowance coverage of charge-offs (annualized)		2.4			2.0			1.4
Ending total loans⁽³⁾	$	139,130		$	39,167		$	269
Average loans in repayment	$	94,589		$	28,481		$	304
Ending loans in repayment	$	93,552		$	28,922		$	269

⁽¹⁾

⁽²⁾

⁽³⁾

Ending total loans for Private Education Loans includes the receivable for partially charged-off loans.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)

Key Credit Quality Indicators

FFELP Loans are substantially insured and guaranteed as to their principal and accrued interest in the event of default; therefore, the key credit quality indicator for this portfolio is loan status. The impact of changes in loan status is incorporated quarterly into the allowance for loan losses calculation.

For Private Education Loans, the key credit quality indicators are school type, FICO scores, the existence of a cosigner, the loan status and loan seasoning. The school type/FICO score are assessed at origination and maintained through the traditional/non-traditional loan designation. The other Private Education Loan key quality indicators can change and are incorporated quarterly into the allowance for loan losses calculation. The following table highlights the principal balance (excluding the receivable for partially charged-off loans) of our Private Education Loan portfolio stratified by the key credit quality indicators.


	Private Education Loans Credit Quality Indicators
	September 30, 2012					December 31, 2011
(Dollars in millions)	Balance⁽³⁾		% of Balance			Balance⁽³⁾		% of Balance
Credit Quality Indicators:
School Type/FICO Scores:
Traditional	$	35,488		91	%	$	34,528		91	%
Non-Traditional⁽¹⁾		3,320		9			3,565		9

Total	$	38,808		100	%	$	38,093		100	%

Cosigners:
With cosigner	$	24,819		64	%	$	23,507		62	%
Without cosigner		13,989		36			14,586		38

Total	$	38,808		100	%	$	38,093		100	%

Seasoning⁽²⁾:
1-12 payments	$	7,688		20	%	$	9,246		24	%
13-24 payments		6,845		18			6,837		18
25-36 payments		5,703		15			5,677		15
37-48 payments		4,244		11			3,778		10
More than 48 payments		7,528		19			6,033		16
Not yet in repayment		6,800		17			6,522		17

Total	$	38,808		100	%	$	38,093		100	%

⁽¹⁾

Defined as loans to borrowers attending for-profit schools (with a FICO score of less than 670 at origination) and borrowers attending not-for-profit schools (with a FICO score of less than 640 at origination).

⁽²⁾

Number of months in active repayment for which a scheduled payment was due.

⁽³⁾

Balance represents gross Private Education Loans.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)

The following tables provide information regarding the loan status and aging of past due loans.


	FFELP Loan Delinquencies
	September 30, 2012						December 31, 2011
(Dollars in millions)	Balance			%			Balance			%
Loans in-school/grace/deferment⁽¹⁾	$	19,512					$	22,887
Loans in forbearance⁽²⁾		16,448						19,575
Loans in repayment and percentage of each status:
Loans current		75,085			83.0	%		77,093			81.9	%
Loans delinquent 31-60 days⁽³⁾		4,970			5.5			5,419			5.8
Loans delinquent 61-90 days⁽³⁾		2,546			2.8			3,438			3.7
Loans delinquent greater than 90 days⁽³⁾		7,880			8.7			8,231			8.6

Total FFELP Loans in repayment		90,481			100	%		94,181			100	%

Total FFELP Loans, gross		126,441						136,643
FFELP Loan unamortized premium		1,472						1,674

Total FFELP Loans		127,913						138,317
FFELP Loan allowance for losses		(166	)					(187	)

FFELP Loans, net	$	127,747					$	138,130

Percentage of FFELP Loans in repayment					71.6	%					68.9	%

Delinquencies as a percentage of FFELP Loans in repayment					17.0	%					18.1	%

FFELP Loans in forbearance as a percentage of loans in repayment and forbearance					15.4	%					17.2	%

⁽¹⁾

Loans for borrowers who may still be attending school or engaging in other permitted educational activities and are not yet required to make payments on their loans, e.g., residency periods for medical students or a grace period for bar exam preparation, as well as loans for borrowers who have requested and qualify for other permitted program deferments such as military, unemployment, or economic hardships.

⁽²⁾

Loans for borrowers who have used their allowable deferment time or do not qualify for deferment, that need additional time to obtain employment or who have temporarily ceased making full payments due to hardship or other factors.

⁽³⁾

The period of delinquency is based on the number of days scheduled payments are contractually past due.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)


	Private Education Traditional Loan Delinquencies
	September 30, 2012						December 31, 2011
(Dollars in millions)	Balance			%			Balance			%
Loans in-school/grace/deferment⁽¹⁾	$	6,234					$	5,866
Loans in forbearance⁽²⁾		898						1,195
Loans in repayment and percentage of each status:
Loans current		25,927			91.4	%		25,110			91.4	%
Loans delinquent 31-60 days⁽³⁾		784			2.8			868			3.2
Loans delinquent 61-90 days⁽³⁾		399			1.4			393			1.4
Loans delinquent greater than 90 days⁽³⁾		1,246			4.4			1,096			4.0

Total traditional loans in repayment		28,356			100	%		27,467			100	%

Total traditional loans, gross		35,488						34,528
Traditional loans unamortized discount		(744	)					(792	)

Total traditional loans		34,744						33,736
Traditional loans receivable for partially charged-off loans		762						705
Traditional loans allowance for losses		(1,634	)					(1,542	)

Traditional loans, net	$	33,872					$	32,899

Percentage of traditional loans in repayment					79.9	%					80.0	%

Delinquencies as a percentage of traditional loans in repayment					8.6	%					8.6	%

Loans in forbearance as a percentage of loans in repayment and forbearance					3.1	%					4.2	%

Loans in repayment greater than 12 months as a percentage of loans in repayment					77.8	%					73.4	%

⁽¹⁾

Deferment includes borrowers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on their loans, e.g., residency periods for medical students or a grace period for bar exam preparation.

⁽²⁾

Loans for borrowers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.

⁽³⁾

The period of delinquency is based on the number of days scheduled payments are contractually past due.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)


	Private Education Non-Traditional Loan Delinquencies
	September 30, 2012						December 31, 2011
(Dollars in millions)	Balance			%			Balance			%
Loans in-school/grace/deferment⁽¹⁾	$	566					$	656
Loans in forbearance⁽²⁾		138						191
Loans in repayment and percentage of each status:
Loans current		1,959			74.9	%		2,012			74.0	%
Loans delinquent 31-60 days⁽³⁾		170			6.5			208			7.7
Loans delinquent 61-90 days⁽³⁾		105			4.0			127			4.7
Loans delinquent greater than 90 days⁽³⁾		382			14.6			371			13.6

Total non-traditional loans in repayment		2,616			100	%		2,718			100	%

Total non-traditional loans, gross		3,320						3,565
Non-traditional loans unamortized discount		(70	)					(81	)

Total non-traditional loans		3,250						3,484
Non-traditional loans receivable for partially charged-off loans		541						536
Non-traditional loans allowance for losses		(562	)					(629	)

Non-traditional loans, net	$	3,229					$	3,391

Percentage of non-traditional loans in repayment					78.8	%					76.2	%

Delinquencies as a percentage of non-traditional loans in repayment					25.1	%					26.0	%

Loans in forbearance as a percentage of loans in repayment and forbearance					5.0	%					6.6	%

Loans in repayment greater than 12 months as a percentage of loans in repayment					68.8	%					63.0	%

⁽¹⁾

⁽²⁾

⁽³⁾

The period of delinquency is based on the number of days scheduled payments are contractually past due.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)

Receivable for Partially Charged-Off Private Education Loans

At the end of each month, for loans that are 212 days past due, we charge off the estimated loss of a defaulted loan balance. Actual recoveries are applied against the remaining loan balance that was not charged off. We refer to this remaining loan balance as the “receivable for partially charged-off loans.” If actual periodic recoveries are less than expected, the difference is immediately charged off through the allowance for loan losses with an offsetting reduction in the receivable for partially charged-off loans. If actual periodic recoveries are greater than expected, they will be reflected as a recovery through the allowance for Private Education Loan losses once the cumulative recovery amount exceeds the cumulative amount originally expected to be recovered.

The following table summarizes the activity in the receivable for partially charged-off loans.


	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in millions)	2012			2011			2012			2011
Receivable at beginning of period	$	1,277		$	1,140		$	1,241		$	1,040
Expected future recoveries of current period defaults⁽¹⁾		86			100			237			291
Recoveries⁽²⁾		(45	)		(39	)		(139	)		(115	)
Charge-offs⁽³⁾		(15	)		(9	)		(36	)		(24	)

Receivable at end of period	$	1,303		$	1,192		$	1,303		$	1,192

⁽¹⁾

Represents the difference between the loan balance and our estimate of the amount to be collected in the future.

⁽²⁾

Current period cash collections.

⁽³⁾

Represents the current period recovery shortfall — the difference between what was expected to be collected and what was actually collected. These amounts are included in the Private Education Loan total charge-offs as reported in the “Allowance for Loan Losses Metrics” tables.

Troubled Debt Restructurings

We modify the terms of loans for certain borrowers when we believe such modifications may increase the ability and willingness of a borrower to make payments and thus increase the ultimate overall amount collected on a loan. These modifications generally take the form of a forbearance, a temporary interest rate reduction or an extended repayment plan. For borrowers experiencing financial difficulty, certain Private Education Loans for which we have granted a forbearance of greater than three months, an interest rate reduction or an extended repayment plan are classified as troubled debt restructurings. Forbearance provides borrowers the ability to defer payments for a period of time, but does not result in the forgiveness of any principal or interest. While in forbearance status, interest continues to accrue and is capitalized to principal when the loan re-enters repayment status. The recorded investment of loans granted a forbearance that was classified as a troubled debt restructuring was $6.1 billion and $4.5 billion at September 30, 2012 and December 31, 2011, respectively. The recorded investment for troubled debt restructurings from loans granted interest rate reductions or extended repayment plans was $0.8 billion and $0.7 billion at September 30, 2012 and December 31, 2011, respectively.

At September 30, 2012 and December 31, 2011, all of our troubled debt restructuring loans had a related allowance recorded. The following table provides the recorded investment, unpaid principal balance and related allowance for our troubled debt restructuring loans.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)


	Troubled Debt Restructuring Loans
(Dollars in millions)	Recorded Investment⁽¹⁾		Unpaid Principal Balance		Related Allowance
September 30, 2012
Private Education Loans — Traditional	$	5,627	$	5,697	$	790
Private Education Loans — Non-Traditional		1,270		1,276		266

Total	$	6,897	$	6,973	$	1,056

December 31, 2011
Private Education Loans — Traditional	$	4,201	$	4,259	$	546
Private Education Loans — Non-Traditional		1,048		1,054		216

Total	$	5,249	$	5,313	$	762

⁽¹⁾

The recorded investment is equal to the unpaid principal balance and accrued interest receivable net of unamortized deferred fees and costs.

The following table provides the average recorded investment and interest income recognized for our troubled debt restructuring loans.


	Three Months Ended September 30,
	2012				2011
(Dollars in millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Private Education Loans — Traditional	$	5,481	$	87	$	3,234	$	51
Private Education Loans — Non-Traditional		1,274		27		863		19

Total	$	6,755	$	114	$	4,097	$	70


	Nine Months Ended September 30,
	2012				2011
(Dollars in millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Private Education Loans — Traditional	$	5,010	$	241	$	1,286	$	58
Private Education Loans — Non-Traditional		1,197		78		413		25

Total	$	6,207	$	319	$	1,699	$	83

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)

The following table provides the amount of modified loans that resulted in a troubled debt restructuring, as well as charge-offs occurring in the troubled debt restructuring portfolio. The majority of our loans that are considered troubled debt restructurings involve a temporary forbearance of payments and do not change the contractual interest rate of the loan.


	Three Months Ended September 30,
	2012				2011
(Dollars in millions)	Modified Loans⁽¹⁾		Charge- offs⁽²⁾		Modified Loans⁽¹⁾		Charge- offs⁽²⁾
Private Education Loans — Traditional	$	573	$	96	$	874	$	19
Private Education Loans — Non-Traditional		101		37		199		12

Total	$	674	$	133	$	1,073	$	31


	Nine Months Ended September 30,
	2012				2011
(Dollars in millions)	Modified Loans⁽¹⁾		Charge- offs⁽²⁾		Modified Loans⁽¹⁾		Charge- offs⁽²⁾
Private Education Loans — Traditional	$	1,783	$	244	$	3,317	$	32
Private Education Loans — Non-Traditional		346		99		784		26

Total	$	2,129	$	343	$	4,101	$	58

⁽¹⁾

Represents period ending balance of loans that have been modified during the period.

⁽²⁾

Represents loans that charged off during the period that were classified as troubled debt restructurings.

Accrued Interest Receivable

The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans greater than 90 days past due as compared to our allowance for uncollectible interest. The allowance for uncollectible interest exceeds the amount of accrued interest on our 90 days past due portfolio for all periods presented.


	Accrued Interest Receivable
(Dollars in millions)	Total		Greater Than 90 Days Past Due		Allowance for Uncollectible Interest
September 30, 2012
Private Education Loans — Traditional	$	895	$	43	$	47
Private Education Loans — Non-Traditional		120		19		25

Total	$	1,015	$	62	$	72

December 31, 2011
Private Education Loans — Traditional	$	870	$	36	$	44
Private Education Loans — Non-Traditional		148		18		28

Total	$	1,018	$	54	$	72

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.	Borrowings

The following table summarizes our borrowings.


	September 30, 2012						December 31, 2011
(Dollars in millions)	Short Term		Long Term		Total		Short Term		Long Term		Total
Unsecured borrowings:
Senior unsecured debt	$	1,230	$	16,883	$	18,113	$	1,801	$	15,199	$	17,000
Brokered deposits		737		2,570		3,307		1,733		1,956		3,689
Retail and other deposits		2,450		—		2,450		2,123		—		2,123
Other⁽¹⁾		1,554		—		1,554		1,329		—		1,329

Total unsecured borrowings		5,971		19,453		25,424		6,986		17,155		24,141

Secured borrowings:
FFELP Loan securitizations		—		106,312		106,312		—		107,905		107,905
Private Education Loan securitizations		—		19,471		19,471		—		19,297		19,297
ED Conduit Program Facility		12,778		—		12,778		21,313		—		21,313
FFELP ABCP Facility		—		4,615		4,615		—		4,445		4,445
Private Education Loan ABCP Facility		—		1,491		1,491		—		1,992		1,992
Acquisition financing⁽²⁾		—		761		761		—		916		916
FHLB-DM Facility		1,680		—		1,680		1,210		—		1,210

Total secured borrowings		14,458		132,650		147,108		22,523		134,555		157,078

Total before hedge accounting adjustments		20,429		152,103		172,532		29,509		151,710		181,219
Hedge accounting adjustments		28		2,683		2,711		64		2,683		2,747

Total	$	20,457	$	154,786	$	175,243	$	29,573	$	154,393	$	183,966

⁽¹⁾	“Other” primarily consists of the obligation to return cash collateral held related to derivative exposures.

⁽²⁾	Relates to the acquisition of $25 billion of student loans at the end of 2010.

Secured Borrowings

We currently consolidate all of our financing entities that are VIEs as a result of being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings. We consolidate the following financing VIEs:


	September 30, 2012
	Debt Outstanding						Carrying Amount of Assets Securing Debt Outstanding
(Dollars in millions)	Short Term		Long Term		Total		Loans		Cash		Other Assets		Total
Secured Borrowings — VIEs:
ED Conduit Program Facility	$	12,778	$	—	$	12,778	$	12,824	$	525	$	239	$	13,588
FFELP ABCP Facility		—		4,615		4,615		4,865		101		68		5,034
Private Education Loan ABCP Facility		—		1,491		1,491		1,991		362		53		2,406
Securitizations — FFELP Loans		—		106,312		106,312		106,533		4,857		597		111,987
Securitizations — Private Education Loans		—		19,471		19,471		23,898		357		481		24,736

Total before hedge accounting adjustments		12,778		131,889		144,667		150,111		6,202		1,438		157,751
Hedge accounting adjustments		—		849		849		—		—		778		778

Total	$	12,778	$	132,738	$	145,516	$	150,111	$	6,202	$	2,216	$	158,529

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.	Borrowings (continued)


	December 31, 2011
	Debt Outstanding						Carrying Amount of Assets Securing Debt Outstanding
(Dollars in millions)	Short Term		Long Term		Total		Loans		Cash		Other Assets		Total
Secured Borrowings — VIEs:
ED Conduit Program Facility	$	21,313	$	—	$	21,313	$	21,445	$	621	$	442	$	22,508
FFELP ABCP Facility		—		4,445		4,445		4,834