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 June 30, 2013

¨	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 June 30, 2013
Common Stock, $0.20 par value		436,188,852 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	41
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	87
Item 4.	Controls and Procedures	92
PART II. Other Information
Item 1.	Legal Proceedings	93
Item 1A.	Risk Factors	93
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	94
Item 3.	Defaults Upon Senior Securities	95
Item 4.	Mine Safety Disclosures	95
Item 5.	Other Information	95
Item 6.	Exhibits	95

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

SLM CORPORATION

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share amounts)

(Unaudited)


	June 30, 2013			December 31, 2012
Assets
FFELP Loans (net of allowance for losses of $133 and $159, respectively)	$	108,491		$	125,612
Private Education Loans (net of allowance for losses of $2,149 and $2,171 respectively)		37,116			36,934
Investments
Available-for-sale		72			72
Other		866			1,010

Total investments		938			1,082
Cash and cash equivalents		3,327			3,900
Restricted cash and investments		4,109			5,011
Goodwill and acquired intangible assets, net		440			448
Other assets		7,047			8,273

Total assets	$	161,468		$	181,260

Liabilities
Short-term borrowings	$	16,558		$	19,856
Long-term borrowings		135,879			152,401
Other liabilities		3,597			3,937

Total liabilities		156,034			176,194

Commitments and contingencies
Equity
Preferred stock, par value $0.20 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 $0.20 per share, 1.125 billion shares authorized: 544 million and 536 million shares issued, respectively		109			107
Additional paid-in capital		4,355			4,237
Accumulated other comprehensive income (loss) (net of tax (expense) benefit of $(5) and $3, respectively)		9			(6	)
Retained earnings		2,195			1,451

Total SLM Corporation stockholders’ equity before treasury stock		7,233			6,354
Less: Common stock held in treasury at cost: 108 million and 83 million shares, respectively		(1,804	)		(1,294	)

Total SLM Corporation stockholders’ equity		5,429			5,060
Noncontrolling interest		5			6

Total equity		5,434			5,066

Total liabilities and equity	$	161,468		$	181,260

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


	June 30, 2013		December 31, 2012
FFELP Loans	$	103,662	$	121,059
Private Education Loans		26,084		26,072
Restricted cash and investments		3,698		4,826
Other assets		1,841		2,312
Short-term borrowings		6,524		9,551
Long-term borrowings		116,504		131,518

Net assets of consolidated variable interest entities	$	12,257	$	13,200

See accompanying notes to consolidated financial statements.

SLM CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Interest income:
FFELP Loans	$	703		$	777		$	1,439		$	1,619
Private Education Loans		627			616			1,249			1,241
Other loans		3			4			6			9
Cash and investments		4			6			8			8

Total interest income		1,337			1,403			2,702			2,877
Total interest expense		553			656			1,123			1,322

Net interest income		784			747			1,579			1,555
Less: provisions for loan losses		201			243			442			496

Net interest income after provisions for loan losses		583			504			1,137			1,059

Other income (loss):
Gains on sales of loans and investments		251			—			307			—
Gains (losses) on derivative and hedging activities, net		18			6			(13	)		(366	)
Servicing revenue		89			88			178			178
Contingency revenue		109			87			208			176
Gains on debt repurchases		19			20			42			58
Other		24			(2	)		58			38

Total other income		510			199			780			84

Expenses:
Salaries and benefits		134			117			265			242
Other operating expenses		124			114			243			240

Total operating expenses		258			231			508			482
Goodwill and acquired intangible asset impairment and amortization expense		4			5			7			9
Restructuring and other reorganization expenses		24			3			35			7

Total expenses		286			239			550			498

Income from continuing operations, before income tax expense		807			464			1,367			645
Income tax expense		300			169			512			237

Net income from continuing operations		507			295			855			408
Income (loss) from discontinued operations, net of tax expense (benefit)		35			(4	)		33			(6	)

Net income		542			291			888			402
Less: net loss attributable to noncontrolling interest		(1	)		(1	)		(1	)		(1	)

Net income attributable to SLM Corporation		543			292			889			403
Preferred stock dividends		5			5			10			10

Net income attributable to SLM Corporation common stock	$	538		$	287		$	879		$	393

Basic earnings (loss) per common share attributable to SLM Corporation:
Continuing operations	$	1.14		$	.60		$	1.90		$	.81
Discontinued operations		.08			(.01	)		.07			(.01	)

Total	$	1.22		$	.59		$	1.97		$	.80

Average common shares outstanding		440			482			445			493

Diluted earnings (loss) per common share attributable to SLM Corporation:
Continuing operations	$	1.12		$	.60		$	1.87		$	.80
Discontinued operations		.08			(.01	)		.07			(.01	)

Total	$	1.20		$	.59		$	1.94		$	.79

Average common and common equivalent shares outstanding		448			488			453			499

Dividends per common share attributable to SLM Corporation	$	.15		$	.125		$	.30		$	.25

See accompanying notes to consolidated financial statements.

SLM CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net income	$	542		$	291		$	888		$	402
Other comprehensive income (loss):
Unrealized gains (losses) on derivatives:
Unrealized hedging gains (losses) on derivatives		22			(10	)		23			(11	)
Reclassification adjustments for derivative losses included in net income (interest expense)		2			8			5			17

Total unrealized gains (losses) on derivatives		24			(2	)		28			6
Unrealized losses on investments		(3	)		—			(4	)		—
Income tax (expense) benefit		(8	)		1			(9	)		(2	)

Other comprehensive income (loss), net of tax		13			(1	)		15			4

Comprehensive income		555			290			903			406
Less: comprehensive loss attributable to noncontrolling interest		(1	)		(1	)		(1	)		(1	)

Total comprehensive income attributable to SLM Corporation	$	556		$	291		$	904		$	407

See accompanying notes to consolidated financial statements.

SLM CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars 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 March 31, 2012		7,300,000		532,246,806		(39,084,156	)		493,162,650		$	565	$	106	$	4,182	$	(9	)	$	814		$	(620	)	$	5,038		$	8		$	5,046
Comprehensive income:
Net income (loss)		—		—		—			—			—		—		—		—			292			—			292			(1	)		291
Other comprehensive income, net of tax		—		—		—			—			—		—		—		(1	)		—			—			(1	)		—			(1	)

Total comprehensive income		—		—		—			—			—		—		—		—			—			—			291			(1	)		290
Cash dividends:
Common stock ($.125 per share)		—		—		—			—			—		—		—		—			(61	)		—			(61	)		—			(61	)
Preferred stock, series A ($.87 per share)		—		—		—			—			—		—		—		—			(3	)		—			(3	)		—			(3	)
Preferred stock, series B ($.56 per share)		—		—		—			—			—		—		—		—			(2	)		—			(2	)		—			(2	)
Issuance of common shares		—		426,168		—			426,168			—		1		4		—			—			—			5			—			5
Stock-based compensation expense		—		—		—			—			—		—		10		—			—			—			10			—			10
Common stock repurchased		—		—		(23,836,964	)		(23,836,964	)		—		—		—		—			—			(341	)		(341	)		—			(341	)
Shares repurchased related to employee stock-based compensation plans		—		—		(349,655	)		(349,655	)		—		—		—		—			—			(6	)		(6	)		—			(6	)

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

Balance at March 31, 2013		7,300,000		539,665,760		(95,455,400	)		444,210,360		$	565	$	108	$	4,291	$	(4	)	$	1,723		$	(1,535	)	$	5,148		$	6		$	5,154
Comprehensive income:
Net income (loss)		—		—		—			—			—		—		—		—			543			—			543			(1	)		542
Other comprehensive income, net of tax		—		—		—			—			—		—		—		13			—			—			13			—			13

Total comprehensive income		—		—		—			—			—		—		—		—			—			—			556			(1	)		555
Cash dividends:
Common stock ($.15 per share)		—		—		—			—			—		—		—		—			(66	)		—			(66	)		—			(66	)
Preferred stock, series A ($.87 per share)		—		—		—			—			—		—		—		—			(3	)		—			(3	)		—			(3	)
Preferred stock, series B ($.52 per share)		—		—		—			—			—		—		—		—			(2	)		—			(2	)		—			(2	)
Issuance of common shares		—		4,115,424		—			4,115,424			—		1		50		—			—			—			51			—			51
Tax benefit related to employee stock-based compensation plans		—		—		—			—			—		—		4		—			—			—			4			—			4
Stock-based compensation expense		—		—		—			—			—		—		10		—			—			—			10			—			10
Common stock repurchased		—		—		(9,096,144	)		(9,096,144	)		—		—		—		—			—			(201	)		(201	)		—			(201	)
Shares repurchased related to employee stock-based compensation plans		—		—		(3,040,788	)		(3,040,788	)		—		—		—		—			—			(68	)		(68	)		—			(68	)

Balance at June 30, 2013		7,300,000		543,781,184		(107,592,332	)		436,188,852		$	565	$	109	$	4,355	$	9		$	2,195		$	(1,804	)	$	5,429		$	5		$	5,434

See accompanying notes to consolidated financial statements.

SLM CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars 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, 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)		—		—		—			—			—		—		—			—			403			—			403			(1	)		402
Other comprehensive income, net of tax		—		—		—			—			—		—		—			4			—			—			4			—			4

Total comprehensive income		—		—		—			—			—		—		—			—			—			—			407			(1	)		406
Cash dividends:
Common stock ($.25 per share)		—		—		—			—			—		—		—			—			(123	)		—			(123	)		—			(123	)
Preferred stock, series A ($1.74 per share)		—		—		—			—			—		—		—			—			(6	)		—			(6	)		—			(6	)
Preferred stock, series B ($1.13 per share)		—		—		—			—			—		—		—			—			(4	)		—			(4	)		—			(4	)
Issuance of common shares		—		3,597,652		—			3,597,652			—		1		31			—			—			—			32			—			32
Tax benefit related to employee stock-based compensation plans		—		—		—			—			—		—		(3	)		—			—			—			(3	)		—			(3	)
Stock-based compensation expense		—		—		—			—			—		—		32			—			—			—			32			—			32
Common stock repurchased		—		—		(40,540,146	)		(40,540,146	)		—		—		—			—			—			(609	)		(609	)		—			(609	)
Shares repurchased related to employee stock-based compensation plans		—		—		(2,406,632	)		(2,406,632	)		—		—		—			—			—			(38	)		(38	)		—			(38	)

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

Balance at December 31, 2012		7,300,000		535,507,965		(82,910,021	)		452,597,944		$	565	$	107	$	4,237		$	(6	)	$	1,451		$	(1,294	)	$	5,060		$	6		$	5,066
Comprehensive income:
Net income (loss)		—		—		—			—			—		—		—			—			889			—			889			(1	)		888
Other comprehensive income, net of tax		—		—		—			—			—		—		—			15			—			—			15			—			15

Total comprehensive income		—		—		—			—			—		—		—			—			—			—			904			(1	)		903
Cash dividends:
Common stock ($.30 per share)		—		—		—			—			—		—		—			—			(134	)		—			(134	)		—			(134	)
Preferred stock, series A ($1.74 per share)		—		—		—			—			—		—		—			—			(6	)		—			(6	)		—			(6	)
Preferred stock, series B ($1.01 per share)		—		—		—			—			—		—		—			—			(4	)		—			(4	)		—			(4	)
Dividend equivalent units related to employee stock-based compensation plans		—		—		—			—			—		—		—			—			(1	)		—			(1	)		—			(1	)
Issuance of common shares		—		8,273,219		—			8,273,219			—		2		84			—			—			—			86			—			86
Tax benefit related to employee stock-based compensation plans		—		—		—			—			—		—		5			—			—			—			5			—			5
Stock-based compensation expense		—		—		—			—			—		—		29			—			—			—			29			—			29
Common stock repurchased		—		—		(19,316,948	)		(19,316,948	)		—		—		—			—			—			(400	)		(400	)		—			(400	)
Shares repurchased related to employee stock-based compensation plans		—		—		(5,365,363	)		(5,365,363	)		—		—		—			—			—			(110	)		(110	)		—			(110	)

Balance at June 30, 2013		7,300,000		543,781,184		(107,592,332	)		436,188,852		$	565	$	109	$	4,355		$	9		$	2,195		$	(1,804	)	$	5,429		$	5		$	5,434

See accompanying notes to consolidated financial statements.

SLM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

(Unaudited)


	Six Months Ended June 30,
	2013			2012
Operating activities
Net income	$	888		$	402
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations, net of tax		(33	)		6
Gains on sales of loans and investments		(307	)		—
Gains on debt repurchases		(42	)		(58	)
Goodwill and acquired intangible asset impairment and amortization expense		7			9
Stock-based compensation expense		29			32
Unrealized (gains) losses on derivative and hedging activities		(330	)		(1	)
Provisions for loan losses		442			496
(Increase) decrease in restricted cash — other		(6	)		1
(Increase) decrease in accrued interest receivable		(42	)		104
Increase in accrued interest payable		6			29
Decrease in other assets		504			32
(Decrease) increase in other liabilities		(200	)		92

Cash provided by operating activities – continuing operations		916			1,144

Cash provided by (used in) operating activities – discontinued operations		38			(6	)

Total net cash provided by operating activities		954			1,138

Investing activities
Student loans acquired and originated		(2,078	)		(3,826	)
Reduction of student loans:
Installment payments, claims and other		6,265			8,479
Proceeds from sales of student loans		707			284
Other investing activities, net		115			—
Purchases of available-for-sale securities		(24	)		(22	)
Proceeds from maturities of available-for-sale securities		20			44
Purchases of other securities		(144	)		(148	)
Proceeds from maturities of other securities		133			128
Decrease (increase) in restricted cash – variable interest entities		611			(994	)

Total net cash provided by investing activities		5,605			3,945

Financing activities
Borrowings collateralized by loans in trust — issued		6,187			6,894
Borrowings collateralized by loans in trust — repaid		(6,439	)		(6,849	)
Asset-backed commercial paper conduits, net		4,349			1,233
ED Conduit Program facility, net		(9,551	)		(5,835	)
Other short-term borrowings issued		—			23
Other short-term borrowings repaid		(893	)		(64	)
Other long-term borrowings issued		1,489			1,927
Other long-term borrowings repaid		(1,403	)		(1,782	)
Other financing activities, net		(766	)		94
Retail and other deposits, net		439			244
Common stock repurchased		(400	)		(609	)
Common stock dividends paid		(134	)		(123	)
Preferred stock dividends paid		(10	)		(10	)

Net cash used in financing activities		(7,132	)		(4,857	)

Net (decrease) increase in cash and cash equivalents		(573	)		226
Cash and cash equivalents at beginning of period		3,900			2,794

Cash and cash equivalents at end of period	$	3,327		$	3,020

Supplemental disclosures of cash flow information:
Cash disbursements made (refunds received) for:
Interest	$	1,121		$	1,276

Income taxes paid	$	282		$	310

Income taxes received	$	(18	)	$	(5	)

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

Student loans and other assets removed related to sale of Residual Interest in securitization	$	(11,802	)	$	—

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

Borrowings removed related to sale of Residual Interest in securitization	$	(12,084	)	$	—

See accompanying notes to consolidated financial statements.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information at June 30, 2013 and for the three and six months ended

June 30, 2013 and 2012 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 six months ended June 30, 2013 are not necessarily indicative of the results for the year ending December 31, 2013 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, 2012 (the “2012 Form 10-K”). Definitions for certain capitalized terms used in this document can be found in the 2012 Form 10-K.

Consolidation

In first six months of 2013, we sold Residual Interests in FFELP Loan securitization trusts to third parties. We will continue to service the student loans in the trusts under existing agreements. Prior to the sale of the Residual Interests, we had consolidated the trusts as VIEs because we had met the two criteria for consolidation. We had determined we were the primary beneficiary because (1) as servicer to the trust we had the power to direct the activities of the VIE that most significantly affected its economic performance and (2) as the residual holder of the trust, we had an obligation to absorb losses or receive benefits of the trust that could potentially be significant. Upon the sale of the Residual Interests we are no longer the residual holder, thus we determined we no longer met criterion (2) above and deconsolidated the trusts. As a result of these transactions, we removed securitization trust assets of $12.5 billion and the related liabilities of $12.1 billion from the balance sheet and recorded a $312 million gain as part of “gains on sales of loans and investments” for the six months ended June 30, 2013.

Reclassifications

Certain reclassifications have been made to the balances as of and for the three and six months ended June 30, 2012 to be consistent with classifications adopted for 2013, and had no effect on net income, total assets, or total liabilities.

Recently Adopted Accounting Standards

Accumulated Other Comprehensive Income

On January 1, 2013, we adopted Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220), “Reporting Amounts Reclassified out of Accumulated Other Comprehensive Income.” The objective of this new guidance is to improve the reporting of reclassifications out of accumulated other comprehensive income. The impact of adopting this new guidance was immaterial and there was no impact on our results of operations.

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) customers attending for-profit schools with an original Fair Isaac and Company (“FICO”) score of less than 670 and (ii) customers 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 customer 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


	Three Months Ended June 30, 2013
(Dollars in millions)	FFELP Loans			Private Education Loans			Other Loans			Total
Allowance for Loan Losses
Beginning balance	$	147		$	2,170		$	42		$	2,359
Total provision		14			187			—			201
Charge-offs⁽¹⁾		(20	)		(212	)		(7	)		(239	)
Student loan sales		(8	)		—			—			(8	)
Reclassification of interest reserve⁽²⁾		—			4			—			4

Ending balance	$	133		$	2,149		$	35		$	2,317

Allowance:
Ending balance: individually evaluated for impairment	$	—		$	1,181		$	26		$	1,207
Ending balance: collectively evaluated for impairment	$	133		$	968		$	9		$	1,110
Loans:
Ending balance: individually evaluated for impairment	$	—		$	8,416		$	57		$	8,473
Ending balance: collectively evaluated for impairment	$	107,538		$	31,601		$	96		$	139,235
Charge-offs as a percentage of average loans in repayment (annualized)		.10	%		2.69	%		17.57	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		.08	%		2.59	%		17.57	%
Allowance as a percentage of the ending total loan balance		.12	%		5.37	%		22.93	%
Allowance as a percentage of the ending loans in repayment		.17	%		6.80	%		22.93	%
Allowance coverage of charge-offs (annualized)		1.7			2.5			1.2
Ending total loans⁽³⁾	$	107,538		$	40,017		$	153
Average loans in repayment	$	81,423		$	31,618		$	161
Ending loans in repayment	$	77,063		$	31,627		$	153

⁽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 any shortfalls in 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)


	Three Months Ended June 30, 2012
(Dollars in millions)	FFELP Loans			Private Education Loans			Other Loans			Total
Allowance for Loan Losses
Beginning balance	$	180		$	2,190		$	64		$	2,434
Total provision		18			225			—			243
Charge-offs⁽¹⁾		(23	)		(235	)		(5	)		(263	)
Student loan sales		(2	)		—			—			(2	)
Reclassification of interest reserve⁽²⁾		—			6			—			6

Ending balance	$	173		$	2,186		$	59		$	2,418

Allowance:
Ending balance: individually evaluated for impairment	$	—		$	921		$	45		$	966
Ending balance: collectively evaluated for impairment	$	173		$	1,265		$	14		$	1,452
Loans:
Ending balance: individually evaluated for impairment	$	—		$	6,569		$	84		$	6,653
Ending balance: collectively evaluated for impairment	$	131,512		$	32,905		$	152		$	164,569
Charge-offs as a percentage of average loans in repayment (annualized)		.10	%		3.09	%		9.80	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		.08	%		2.96	%		9.80	%
Allowance as a percentage of the ending total loan balance		.13	%		5.54	%		24.85	%
Allowance as a percentage of the ending loans in repayment		.19	%		7.11	%		24.85	%
Allowance coverage of charge-offs (annualized)		1.8			2.3			2.5
Ending total loans⁽³⁾	$	131,512		$	39,474		$	236
Average loans in repayment	$	92,436		$	30,533		$	241
Ending loans in repayment	$	91,998		$	30,731		$	236

⁽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)


	Six Months Ended June 30, 2013
(Dollars in millions)	FFELP Loans			Private Education Loans			Other Loans			Total
Allowance for Loan Losses
Beginning balance	$	159		$	2,171		$	47		$	2,377
Total provision		30			412			—			442
Charge-offs⁽¹⁾		(42	)		(444	)		(12	)		(498	)
Student loan sales		(14	)		—			—			(14	)
Reclassification of interest reserve⁽²⁾		—			10			—			10

Ending balance	$	133		$	2,149		$	35		$	2,317

Allowance:
Ending balance: individually evaluated for impairment	$	—		$	1,181		$	26		$	1,207
Ending balance: collectively evaluated for impairment	$	133		$	968		$	9		$	1,110
Loans:
Ending balance: individually evaluated for impairment	$	—		$	8,416		$	57		$	8,473
Ending balance: collectively evaluated for impairment	$	107,538		$	31,601		$	96		$	139,235
Charge-offs as a percentage of average loans in repayment (annualized)		.10	%		2.83	%		14.11	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		.09	%		2.73	%		14.11	%
Allowance as a percentage of the ending total loan balance		.12	%		5.37	%		22.93	%
Allowance as a percentage of the ending loans in repayment		.17	%		6.80	%		22.93	%
Allowance coverage of charge-offs (annualized)		1.6			2.4			1.5
Ending total loans⁽³⁾	$	107,538		$	40,017		$	153
Average loans in repayment	$	84,323		$	31,631		$	170
Ending loans in repayment	$	77,063		$	31,627		$	153

⁽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)


	Six Months Ended June 30, 2012
(Dollars in millions)	FFELP Loans			Private Education Loans			Other Loans			Total
Allowance for Loan Losses
Beginning balance	$	187		$	2,171		$	69		$	2,427
Total provision		36			460			—			496
Charge-offs⁽¹⁾		(46	)		(459	)		(10	)		(515	)
Student loan sales		(4	)		—			—			(4	)
Reclassification of interest reserve⁽²⁾		—			14			—			14

Ending balance	$	173		$	2,186		$	59		$	2,418

Allowance:
Ending balance: individually evaluated for impairment	$	—		$	921		$	45		$	966
Ending balance: collectively evaluated for impairment	$	173		$	1,265		$	14		$	1,452
Loans:
Ending balance: individually evaluated for impairment	$	—		$	6,569		$	84		$	6,653
Ending balance: collectively evaluated for impairment	$	131,512		$	32,905		$	152		$	164,569
Charge-offs as a percentage of average loans in repayment (annualized)		.10	%		3.03	%		8.41	%
Charge-offs as a percentage of average loans in repayment and forbearance (annualized)		.08	%		2.90	%		8.41	%
Allowance as a percentage of the ending total loan balance		.13	%		5.54	%		24.85	%
Allowance as a percentage of the ending loans in repayment		.19	%		7.11	%		24.85	%
Allowance coverage of charge-offs (annualized)		1.9			2.4			2.8
Ending total loans⁽³⁾	$	131,512		$	39,474		$	236
Average loans in repayment	$	92,793		$	30,456		$	248
Ending loans in repayment	$	91,998		$	30,731		$	236

⁽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
	June 30, 2013					December 31, 2012
(Dollars in millions)	Balance⁽³⁾		% of Balance			Balance⁽³⁾		% of Balance
Credit Quality Indicators
School Type/FICO Scores:
Traditional	$	35,645		92	%	$	35,347		92	%
Non-Traditional⁽¹⁾		3,038		8			3,207		8

Total	$	38,683		100	%	$	38,554		100	%

Cosigners:
With cosigner	$	25,448		66	%	$	24,907		65	%
Without cosigner		13,235		34			13,647		35

Total	$	38,683		100	%	$	38,554		100	%

Seasoning⁽²⁾:
1-12 payments	$	7,132		19	%	$	7,371		19	%
13-24 payments		5,681		15			6,137		16
25-36 payments		5,878		15			6,037		16
37-48 payments		4,822		12			4,780		12
More than 48 payments		9,274		24			8,325		22
Not yet in repayment		5,896		15			5,904		15

Total	$	38,683		100	%	$	38,554		100	%

⁽¹⁾

Defined as loans to customers attending for-profit schools (with a FICO score of less than 670 at origination) and customers 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
	June 30, 2013						December 31, 2012
(Dollars in millions)	Balance			%			Balance			%
Loans in-school/grace/deferment⁽¹⁾	$	15,239					$	17,702
Loans in forbearance⁽²⁾		15,236						15,902
Loans in repayment and percentage of each status:
Loans current		64,801			84.1	%		75,499			83.2	%
Loans delinquent 31-60 days⁽³⁾		3,750			4.9			4,710			5.2
Loans delinquent 61-90 days⁽³⁾		2,156			2.8			2,788			3.1
Loans delinquent greater than 90 days⁽³⁾		6,356			8.2			7,734			8.5

Total FFELP Loans in repayment		77,063			100	%		90,731			100	%

Total FFELP Loans, gross		107,538						124,335
FFELP Loan unamortized premium		1,086						1,436

Total FFELP Loans		108,624						125,771
FFELP Loan allowance for losses		(133	)					(159	)

FFELP Loans, net	$	108,491					$	125,612

Percentage of FFELP Loans in repayment					71.7	%					73.0	%

Delinquencies as a percentage of FFELP Loans in repayment					15.9	%					16.8	%

FFELP Loans in forbearance as a percentage of loans in repayment and forbearance					16.5	%					14.9	%

⁽¹⁾

Loans for customers 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 customers who have requested and qualify for other permitted program deferments such as military, unemployment, or economic hardships.

⁽²⁾

Loans for customers 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
	June 30, 2013						December 31, 2012
(Dollars in millions)	Balance			%			Balance			%
Loans in-school/grace/deferment⁽¹⁾	$	5,475					$	5,421
Loans in forbearance⁽²⁾		1,015						996
Loans in repayment and percentage of each status:
Loans current		27,218			93.3	%		26,597			91.9	%
Loans delinquent 31-60 days⁽³⁾		650			2.2			837			2.9
Loans delinquent 61-90 days⁽³⁾		395			1.4			375			1.3
Loans delinquent greater than 90 days⁽³⁾		892			3.1			1,121			3.9

Total traditional loans in repayment		29,155			100	%		28,930			100	%

Total traditional loans, gross		35,645						35,347
Traditional loans unamortized discount		(673	)					(713	)

Total traditional loans		34,972						34,634
Traditional loans receivable for partially charged-off loans		800						797
Traditional loans allowance for losses		(1,629	)					(1,637	)

Traditional loans, net	$	34,143					$	33,794

Percentage of traditional loans in repayment					81.8	%					81.9	%

Delinquencies as a percentage of traditional loans in repayment					6.6	%					8.1	%

Loans in forbearance as a percentage of loans in repayment and forbearance					3.4	%					3.3	%

⁽¹⁾

Deferment includes customers 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 customers 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
	June 30, 2013						December 31, 2012
(Dollars in millions)	Balance			%			Balance			%
Loans in-school/grace/deferment⁽¹⁾	$	421					$	483
Loans in forbearance⁽²⁾		145						140
Loans in repayment and percentage of each status:
Loans current		1,978			80.1	%		1,978			76.5	%
Loans delinquent 31-60 days⁽³⁾		142			5.7			175			6.8
Loans delinquent 61-90 days⁽³⁾		100			4.0			106			4.1
Loans delinquent greater than 90 days⁽³⁾		252			10.2			325			12.6

Total non-traditional loans in repayment		2,472			100	%		2,584			100	%

Total non-traditional loans, gross		3,038						3,207
Non-traditional loans unamortized discount		(79	)					(83	)

Total non-traditional loans		2,959						3,124
Non-traditional loans receivable for partially charged-off loans		534						550
Non-traditional loans allowance for losses		(520	)					(534	)

Non-traditional loans, net	$	2,973					$	3,140

Percentage of non-traditional loans in repayment					81.4	%					80.6	%

Delinquencies as a percentage of non-traditional loans in repayment					20.0	%					23.4	%

Loans in forbearance as a percentage of loans in repayment and forbearance					5.5	%					5.1	%

⁽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 Private Education 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. Private Education Loans which defaulted between 2008 and 2012 for which we have previously charged off estimated losses have, to varying degrees, not met our post-default recovery expectations to date and may continue not to do so. According to our policy, we have been charging off these periodic shortfalls in expected recoveries against our allowance for Private Education Loan losses and the related receivable for partially charged-off Private Education Loans and we will continue to do so. There was $217 million and $141 million in allowance for Private Education Loan losses at June 30, 2013 and 2012, respectively, providing for possible additional future charge-offs related to the receivable for partially charged-off Private Education Loans.

The following table summarizes the activity in the receivable for partially charged-off Private Education Loans.


	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in millions)	2013			2012			2013			2012
Receivable at beginning of period	$	1,339		$	1,250		$	1,347		$	1,241
Expected future recoveries of current period defaults⁽¹⁾		70			82			148			151
Recoveries⁽²⁾		(54	)		(44	)		(122	)		(94	)
Charge-offs⁽³⁾		(21	)		(11	)		(39	)		(21	)

Receivable at end of period		1,334			1,277			1,334			1,277
Allowance for estimated recovery shortfalls⁽⁴⁾		(217	)		(141	)		(217	)		(141	)

Net receivable at end of period	$	1,117		$	1,136		$	1,117		$	1,136

⁽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.

⁽⁴⁾

The allowance for estimated recovery shortfalls of the receivable for partially charged-off Private Education Loans is a component of the $2.1 billion and $2.2 billion overall allowance for Private Education Loan losses as of June 30, 2013 and 2012, respectively.

Troubled Debt Restructurings (“TDRs”)

We modify the terms of loans for certain customers when we believe such modifications may increase the ability and willingness of a customer 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 customers experiencing financial difficulty, certain Private Education Loans for which we have granted either cumulative forbearance of greater than three months, an interest rate reduction or

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)

an extended repayment plan are classified as TDRs. Forbearance provides customers 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. At June 30, 2013 and December 31, 2012, the percentage of loans granted forbearance that have migrated to a TDR classification due to the extension of the original forbearance period was 48 percent and 43 percent, respectively. The unpaid principal balance of TDR loans that were in an interest rate reduction plan as of June 30, 2013 and December 31, 2012 was $1.5 billion and $1.0 billion, respectively.

At June 30, 2013 and December 31, 2012, all of our TDR loans had a related allowance recorded. The following table provides the recorded investment, unpaid principal balance and related allowance for our TDR loans.


	TDR Loans
(Dollars in millions)	Recorded Investment⁽¹⁾		Unpaid Principal Balance		Related Allowance
June 30, 2013
Private Education Loans — Traditional	$	6,728	$	6,807	$	901
Private Education Loans — Non-Traditional		1,366		1,376		280

Total	$	8,094	$	8,183	$	1,181

December 31, 2012
Private Education Loans — Traditional	$	5,999	$	6,074	$	844
Private Education Loans — Non-Traditional		1,295		1,303		282

Total	$	7,294	$	7,377	$	1,126

⁽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 TDR loans.


	Three Months Ended June 30,
	2013				2012
(Dollars in millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Private Education Loans — Traditional	$	6,718	$	100	$	5,036	$	81
Private Education Loans — Non-Traditional		1,412		27		1,206		26

Total	$	8,130	$	127	$	6,242	$	107


	Six Months Ended June 30,
	2013				2012
(Dollars in millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Private Education Loans — Traditional	$	6,524	$	196	$	4,772	$	154
Private Education Loans — Non-Traditional		1,391		54		1,158		51

Total	$	7,915	$	250	$	5,930	$	205

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)

The following table provides information regarding the loan status and aging of TDR loans that are past due.


	TDR Loan Delinquencies
	June 30, 2013					December 31, 2012
(Dollars in millions)	Balance		%			Balance		%
Loans in deferment⁽¹⁾	$	656				$	574
Loans in forbearance⁽²⁾		649					544
Loans in repayment and percentage of each status:
Loans current		5,365		78.0	%		4,619		73.8	%
Loans delinquent 31-60 days⁽³⁾		450		6.5			478		7.6
Loans delinquent 61-90 days⁽³⁾		308		4.5			254		4.1
Loans delinquent greater than 90 days⁽³⁾		755		11.0			908		14.5

Total TDR loans in repayment		6,878		100	%		6,259		100	%

Total TDR loans, gross	$	8,183				$	7,377

⁽¹⁾

Loans for customers who have requested and qualify for permitted program deferments such as military, unemployment, or economic hardships.

⁽²⁾

⁽³⁾

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

The following table provides the amount of modified loans that resulted in a TDR in the periods presented. Additionally, the table summarizes charge-offs occurring in the TDR portfolio, as well as TDRs for which a payment default occurred in the current period within 12 months of the loan first being designated as a TDR. We define payment default as 60 days past due for this disclosure. The majority of our loans that are considered TDRs involve a temporary forbearance of payments and do not change the contractual interest rate of the loan.


	Three Months Ended June 30,
	2013						2012
(Dollars in millions)	Modified Loans⁽¹⁾		Charge- Offs⁽²⁾		Payment Default		Modified Loans⁽¹⁾		Charge- Offs⁽²⁾		Payment Default
Private Education Loans — Traditional	$	491	$	84	$	159	$	554	$	82	$	376
Private Education Loans — Non-Traditional		75		31		45		104		33		124

Total	$	566	$	115	$	204	$	658	$	115	$	500


	Six Months Ended June 30,
	2013						2012
(Dollars in millions)	Modified Loans⁽¹⁾		Charge- Offs⁽²⁾		Payment Default		Modified Loans⁽¹⁾		Charge- Offs⁽²⁾		Payment Default
Private Education Loans — Traditional	$	1,036	$	181	$	375	$	1,210	$	148	$	780
Private Education Loans — Non-Traditional		165		65		101		245		62		252

Total	$	1,201	$	246	$	476	$	1,455	$	210	$	1,032

⁽¹⁾	Represents period ending balance of loans that have been modified during the period and resulted in a TDR.

⁽²⁾	Represents loans that charged off that were classified as TDRs.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.	Allowance for Loan Losses (continued)

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
June 30, 2013
Private Education Loans — Traditional	$	838	$	32	$	47
Private Education Loans — Non-Traditional		90		12		22

Total	$	928	$	44	$	69

December 31, 2012
Private Education Loans — Traditional	$	798	$	39	$	45
Private Education Loans — Non-Traditional		106		16		22

Total	$	904	$	55	$	67

3.	Borrowings

The following table summarizes our borrowings.


	June 30, 2013						December 31, 2012
(Dollars in millions)	Short Term		Long Term		Total		Short Term		Long Term		Total
Unsecured borrowings:
Senior unsecured debt	$	3,063	$	14,433	$	17,496	$	2,319	$	15,446	$	17,765
Brokered deposits		1,298		2,247		3,545		979		3,088		4,067
Retail and other deposits		3,686		—		3,686		3,247		—		3,247
Other⁽¹⁾		825		—		825		1,609		—		1,609

Total unsecured borrowings		8,872		16,680		25,552		8,154		18,534		26,688

Secured borrowings:
FFELP Loan securitizations		—		92,428		92,428		—		105,525		105,525
Private Education Loan securitizations		—		20,594		20,594		—		19,656		19,656
ED Conduit Program Facility		—		—		—		9,551		—		9,551
FFELP ABCP Facilities		6,524		2,816		9,340		—		4,154		4,154
Private Education Loan ABCP Facility		—		—		—		—		1,070		1,070
Acquisition financing⁽²⁾		—		505		505		—		673		673
FHLB-DM Facility		1,115		1,220		2,335		2,100		—		2,100

Total secured borrowings		7,639		117,563		125,202		11,651		131,078		142,729

Total before hedge accounting adjustments		16,511		134,243		150,754		19,805		149,612		169,417
Hedge accounting adjustments		47		1,636		1,683		51		2,789		2,840

Total	$	16,558	$	135,879	$	152,437	$	19,856	$	152,401	$	172,257

⁽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.

SLM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.	Borrowings (continued)

Secured Borrowings

The tables below summarize all of our financing entities that are VIEs which we consolidate as a result of being the entities’ primary beneficiary. As such, these financing VIEs are accounted for as secured borrowings. We consolidate the following financing VIEs:


	June 30, 2013
	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:
FFELP Loan securitizations	$	—	$	92,428	$	92,428	$	93,988	$	3,177	$	649	$	97,814
Private Education Loan securitizations		—		20,594		20,594		26,084		413		540		27,037
FFELP ABCP Facilities		6,524		2,816		9,340		9,674		108		176		9,958

Total before hedge accounting adjustments		6,524		115,838		122,362		129,746		3,698		1,365		134,809
Hedge accounting adjustments		—		666		666		—		—		476		476
							</