exv99w1

Exhibit 99.1


		N E W S R E L E A S E


FOR IMMEDIATE RELEASE	Media Contacts:	Investor Contacts:
	Tom Joyce	Steve McGarry
	703/984-5610	703/984-6746
	Martha Holler	Joe Fisher
	703/984-5178	703/984-5755

SALLIE MAE’S MANAGED LOAN PORTFOLIO GROWS 18 PERCENT FROM PRIOR
YEAR TO $153 BILLION IN SECOND-QUARTER 2007

Originations Through Company’s Lending Brands Grow 39 Percent

RESTON, Va., July 17, 2007 — SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today reported second-quarter 2007 earnings and performance results that include an 18-percent increase in managed student loans from the year-ago quarter, with the company’s portfolio topping $153 billion. Second-quarter 2007 preferred-channel loan originations were $3.6 billion, and loans originated through the company’s internal brands, a segment of total preferred-channel loan originations, grew 39 percent from the year-ago period to $2.4 billion.

Preferred-channel loan originations include loans originated by the company’s internal lending brands and external lending partners. Preferred-channel originations in the first half of 2007 were $11.6 billion, and internal brands originated $7.2 billion, or 62 percent, of the total.

“Our loan portfolio continues to register strong growth, and our internal brands are outpacing the market,” said C.E. Andrews, chief executive officer. “We are delivering best-in-class products and services to schools, students and families to help them access higher education.”

The company purchased $20.9 billion in education loans in the first half of 2007, a 27-percent increase from the same period last year. In the second-quarter 2007, loan purchases were $8.4 billion.

Sallie Mae reports financial results on a GAAP basis and also presents certain “core earnings” performance measures. The company’s management, equity investors, credit rating agencies and debt capital providers use these “core earnings” measures to monitor the company’s business performance.

Sallie Mae reported second-quarter 2007 GAAP net income of $966 million, or $1.03 per diluted share, compared to $724 million, or $1.52 per diluted share, in the year-ago period. Included in these GAAP results are pre-tax gains on derivative and hedging activities of $822 million in the second-quarter 2007, compared to $123 million in the year-ago quarter, and a decrease of $671 million in gains on student loan securitizations. Second-quarter 2007 GAAP diluted earnings per share were reduced by $1.21 due to the reversal of unrealized gains on dilutive outstanding equity-forward contracts as required by the GAAP diluted earnings per share calculation.

Sallie Mae

•

12061 Bluemont Way

•

Reston, Va 20190

•

www.salliemae.com

“Core earnings” net income for the second-quarter 2007 was $189 million, or $.43 per diluted share, down from $320 million, or $.72 per diluted share, in the year-ago quarter. These second-quarter 2007 results include a provision for losses of $247 million and $51 million in expenses related to the company’s previously announced acquisition. Annualized net charge-offs as a percentage of average private education loans in repayment were 3.5 percent in the second-quarter 2007, compared to 3.4 percent in the prior quarter. For the first half of 2007, “core earnings” net income was $440 million, compared to $607 million in the first half of 2006.

“Core earnings” net interest income was $635 million for the 2007 second quarter, up from the year-ago quarter’s $602 million. “Core earnings” other income, which consists primarily of fees earned from guarantor servicing and collection activity, was $296 million in the second—quarter 2007 and $583 million year-to-date, up 11 percent and 14 percent, respectively, from the year-ago periods. “Core earnings” operating expenses were $382 million in the second-quarter 2007, and $715 million for the first half of 2007.

Both a description of the “core earnings” treatment and a full reconciliation to the GAAP income statement can be found at: http://www.salliemae.com/about/investors/stockholderinfo/earningsinfo/, click on the Second Quarter 2007 Supplemental Earnings Disclosure.

Total equity for the company at June 30, 2007, was $5.3 billion, up from $4.4 billion a year ago. The company’s tangible capital at June 30, 2007, was 2.28 percent of managed assets, compared to 2.19 percent at the same time last year. The “core earnings” student loan spread was 1.79 percent in the second-quarter 2007, excluding financing fees related to the acquisition transaction.

***

This press release contains “forward-looking statements” including expectations as to future market share, the success of preferred channel originations and future results. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Because such statements inherently involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks include, among others, changes in the terms of student loans and the educational credit marketplace arising from the implementation of applicable laws and regulations, and from changes in such laws and regulations, changes in the demand for educational financing or in financing preferences of educational institutions, students and their families, and changes in the general interest rate environment. For more information, see the company’s filings with the Securities and Exchange Commission, including the forward-looking statements contained in the company’s Supplemental Financial Information Second Quarter 2007.

***

SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation’s leading provider of saving- and paying-for-college programs. The company manages $153 billion in education loans and serves nearly 10 million student and parent customers. Through its Upromise affiliates, the company also manages $18 billion in 529 college-savings plans, and 8 million members have joined Upromise to help save for college with rewards on purchases at nearly 70,000 places. Sallie Mae and its subsidiaries offer debt management services as well as business and technical products to a range of business clients, including higher education institutions, student loan guarantors and state and federal agencies. More information is available at www.salliemae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.

###

Sallie Mae

•

12061 Bluemont Way

•

Reston, Va 20190

•

www.salliemae.com

SLM CORPORATION

Supplemental Earnings Disclosure

June 30, 2007

(Dollars in millions, except earnings per share)


	Quarters ended									Six months ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2007			2007			2006			2007			2006
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)

SELECTED FINANCIAL INFORMATION AND RATIOS
GAAP Basis
Net income	$	966		$	116		$	724		$	1,082		$	875
Diluted earnings per common share⁽¹⁾	$	1.03		$	.26		$	1.52		$	1.82		$	1.96
Return on assets		3.23	%		.43	%		3.20	%		1.89	%		1.94	%
“Core Earnings” Basis⁽²⁾
“Core Earnings” net income	$	189		$	251		$	320		$	440		$	607
“Core Earnings” diluted earnings per common share⁽¹⁾	$	.43		$	.57		$	.72		$	.99		$	1.37
“Core Earnings” return on assets		.45	%		.64	%		.90	%		.54	%		.88	%
OTHER OPERATING STATISTICS
Average on-balance sheet student loans	$	108,865		$	101,499		$	80,724		$	105,203		$	81,781
Average off-balance sheet student loans		43,432			44,663			47,716			44,044			44,909

Average Managed student loans	$	152,297		$	146,162		$	128,440		$	149,247		$	126,690

Ending on-balance sheet student loans, net	$	110,626		$	104,581		$	82,279
Ending off-balance sheet student loans, net		42,577			45,380			47,865

Ending Managed student loans, net	$	153,203		$	149,961		$	130,144

Ending Managed FFELP Stafford and Other Student Loans, net	$	42,865		$	41,832		$	41,926
Ending Managed FFELP Consolidation Loans, net		85,276			83,928			69,195
Ending Managed Private Education Loans, net		25,062			24,201			19,023

Ending Managed student loans, net	$	153,203		$	149,961		$	130,144


⁽¹⁾		In December 2004, the Company adopted the Emerging Issues Task Force (“EITF”) Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share,” as it relates to the Company’s $2 billion in contingently convertible debt instruments (“Co-Cos”) issued in May 2003. EITF No. 04-8 requires the shares underlying Co-Cos to be included in diluted earnings per common share computations regardless of whether the market price trigger or the conversion price has been met, using the “if-converted” method. The impact of Co-Cos to diluted earnings per common share is as follows:


	Quarters ended									Six months ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2007			2007			2006			2007			2006
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)

Impact of Co-Cos on GAAP diluted earnings per common share	$	(.03	)	$	—	^(A)	$	(.08	)	$	(.05	)	$	(.07	)
Impact of Co-Cos on “Core Earnings” diluted earnings per common share	$	—	^(A)	$	—		$	(.01	)	$	—	^(A)	$	(.02	)


^(A)		There is no impact on diluted earnings per common share because the effect of the assumed conversion is antidilutive.

On June 25, 2007, holders of these securities were notified that the Co-Cos would be called at par on July 25, 2007, as allowed by the terms of the indenture governing the Co-Cos.


⁽²⁾		See explanation of “Core Earnings” performance measures under “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income.”

SLM CORPORATION

Consolidated Balance Sheets

(In thousands, except per share amounts)


	June 30,		March 31,		June 30,
	2007		2007		2006
	(unaudited)		(unaudited)		(unaudited)

Assets
FFELP Stafford and Other Student Loans (net of allowance for losses of $11,337; $10,192; and $6,890, respectively)	$	31,503,088	$	28,561,670	$	21,390,845
FFELP Consolidation Loans (net of allowance for losses of $12,746; $12,087; and $10,090 respectively)		68,109,269		66,170,098		54,054,932
Private Education Loans (net of allowance for losses of $427,904; $369,072; and $251,582, respectively)		11,013,668		9,849,481		6,832,843
Other loans (net of allowance for losses of $19,989; $19,803; and $15,190, respectively)		1,178,052		1,350,416		1,050,632
Cash and investments		4,565,606		6,116,168		6,204,462
Restricted cash and investments		4,300,826		3,719,020		3,489,542
Retained Interest in off-balance sheet securitized loans		3,448,045		3,643,322		3,151,855
Goodwill and acquired intangible assets, net		1,356,620		1,364,016		1,080,703
Other assets		7,327,108		6,102,275		4,650,851

Total assets	$	132,802,282	$	126,876,466	$	101,906,665


Liabilities
Short-term borrowings	$	9,758,465	$	4,428,980	$	3,801,266
Long-term borrowings		114,365,577		114,070,797		90,506,785
Other liabilities		3,320,098		3,990,878		3,229,477

Total liabilities		127,444,140		122,490,655		97,537,528

Commitments and contingencies
Minority interest in subsidiaries		10,081		9,029		9,369
Stockholders’ equity
Preferred stock, par value $.20 per share, 20,000 shares authorized; Series A: 3,300; 3,300; and 3,300 shares, respectively, issued at stated value of $50 per share; Series B: 4,000; 4,000; and 4,000 shares, respectively, issued at stated value of $100 per share		565,000		565,000		565,000
Common stock, par value $.20 per share, 1,125,000 shares authorized: 436,095; 434,587; and 430,753 shares, respectively, issued		87,219		86,918		86,151
Additional paid-in capital		2,721,554		2,638,334		2,440,565
Accumulated other comprehensive income, net of tax		265,388		300,884		370,204
Retained earnings		2,790,674		1,833,359		1,775,948

Stockholders’ equity before treasury stock		6,429,835		5,424,495		5,237,868
Common stock held in treasury: 23,477; 22,650; and 19,078 shares, respectively		1,081,774		1,047,713		878,100

Total stockholders’ equity		5,348,061		4,376,782		4,359,768

Total liabilities and stockholders’ equity	$	132,802,282	$	126,876,466	$	101,906,665

SLM CORPORATION

Consolidated Statements of Income

(In thousands, except per share amounts)


	Quarters ended									Six months ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2007			2007			2006			2007			2006
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)

Interest income:
FFELP Stafford and Other Student Loans	$	511,300		$	450,762		$	337,090		$	962,062		$	635,590
FFELP Consolidation Loans		1,087,254			1,014,846			841,591			2,102,100			1,662,926
Private Education Loans		329,351			338,421			233,696			667,772			475,049
Other loans		26,453			27,973			23,541			54,426			46,848
Cash and investments		141,524			113,904			124,954			255,428			220,764

Total interest income		2,095,882			1,945,906			1,560,872			4,041,788			3,041,177
Total interest expense		1,697,229			1,532,090			1,204,067			3,229,319			2,296,851

Net interest income		398,653			413,816			356,805			812,469			744,326
Less: provisions for losses		148,200			150,330			67,396			298,530			127,715

Net interest income after provisions for losses		250,453			263,486			289,409			513,939			616,611

Other income:
Gains on student loan securitizations		—			367,300			671,262			367,300			701,285
Servicing and securitization revenue		132,987			251,938			82,842			384,925			181,773
Losses on securities, net		(10,921	)		(30,967	)		(8,524	)		(41,888	)		(11,472	)
Gains (losses) on derivative and hedging activities, net		821,566			(356,969	)		122,719			464,597			35,980
Guarantor servicing fees		30,273			39,241			33,256			69,514			60,163
Debt management fees		80,237			87,322			90,161			167,559			181,773
Collections revenue		77,092			65,562			67,357			142,654			124,038
Other		89,004			96,433			75,081			185,437			146,457

Total other income		1,220,238			519,860			1,134,154			1,740,098			1,419,997
Operating expenses		398,800			356,174			316,602			754,974			639,911

Income before income taxes and minority interest in net earnings of subsidiaries		1,071,891			427,172			1,106,961			1,499,063			1,396,697
Income taxes		104,724			310,014			381,828			414,738			518,873

Income before minority interest in net earnings of subsidiaries		967,167			117,158			725,133			1,084,325			877,824
Minority interest in net earnings of subsidiaries		696			1,005			1,355			1,701			2,445

Net income		966,471			116,153			723,778			1,082,624			875,379
Preferred stock dividends		9,156			9,093			8,787			18,249			17,088

Net income attributable to common stock	$	957,315		$	107,060		$	714,991		$	1,064,375		$	858,291

Basic earnings per common share	$	2.32		$	.26		$	1.74		$	2.59		$	2.08

Average common shares outstanding		411,870			411,040			410,957			411,457			411,811

Diluted earnings per common share	$	1.03		$	.26		$	1.52		$	1.82		$	1.96

Average common and common equivalent shares outstanding		452,406			418,449			454,314			454,139			453,803

Dividends per common share	$	—		$	.25		$	.25		$	.25		$	.47

SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income

(In thousands)


	Quarter ended June 30, 2007
						Corporate			Total “Core					Total
	Lending		DMO			and Other			Earnings”		Adjustments			GAAP
	(unaudited)

Interest income:
FFELP Stafford and Other Student Loans	$	718,624	$	—		$	—		$	718,624	$	(207,324	)	$	511,300
FFELP Consolidation Loans		1,391,015		—			—			1,391,015		(303,761	)		1,087,254
Private Education Loans		692,499		—			—			692,499		(363,148	)		329,351
Other loans		26,453		—			—			26,453		—			26,453
Cash and investments		182,644		—			7,197			189,841		(48,317	)		141,524

Total interest income		3,011,235		—			7,197			3,018,432		(922,550	)		2,095,882
Total interest expense		2,371,441		6,612			5,425			2,383,478		(686,249	)		1,697,229

Net interest income (loss)		639,794		(6,612	)		1,772			634,954		(236,301	)		398,653
Less: provisions for losses		246,981		—			—			246,981		(98,781	)		148,200

Net interest income (loss) after provisions for losses		392,813		(6,612	)		1,772			387,973		(137,520	)		250,453
Fee income		—		80,233			30,273			110,506		4			110,510
Collections revenue		—		77,412			—			77,412		(320	)		77,092
Other income		59,458		—			48,141			107,599		925,037			1,032,636

Total other income		59,458		157,645			78,414			295,517		924,721			1,220,238
Operating expenses⁽¹⁾		181,650		96,307			104,432			382,389		16,411			398,800

Income (loss) before income taxes and minority interest in net earnings of subsidiaries		270,621		54,726			(24,246	)		301,101		770,790			1,071,891
Income tax expense (benefit)⁽²⁾		100,130		20,248			(8,971	)		111,407		(6,683	)		104,724
Minority interest in net earnings of subsidiaries		—		696			—			696		—			696

Net income (loss)	$	170,491	$	33,782		$	(15,275	)	$	188,998	$	777,473		$	966,471


⁽¹⁾		Operating expenses for the Lending, DMO, and Corporate and Other business segments include $13 million, $4 million, and $6 million, respectively, of stock option compensation expense.

⁽²⁾		Income taxes are based on a percentage of net income before tax for the individual reportable segment.


	Quarter ended March 31, 2007
						Corporate			Total “Core					Total
	Lending		DMO			and Other			Earnings”		Adjustments			GAAP
	(unaudited)

Interest income:
FFELP Stafford and Other Student Loans	$	695,353	$	—		$	—		$	695,353	$	(244,591	)	$	450,762
FFELP Consolidation Loans		1,331,235		—			—			1,331,235		(316,389	)		1,014,846
Private Education Loans		657,584		—			—			657,584		(319,163	)		338,421
Other loans		27,973		—			—			27,973		—			27,973
Cash and investments		161,677		—			2,135			163,812		(49,908	)		113,904

Total interest income		2,873,822		—			2,135			2,875,957		(930,051	)		1,945,906
Total interest expense		2,220,136		6,687			5,568			2,232,391		(700,301	)		1,532,090

Net interest income (loss)		653,686		(6,687	)		(3,433	)		643,566		(229,750	)		413,816
Less: provisions for losses		197,930		—			606			198,536		(48,206	)		150,330

Net interest income (loss) after provisions for losses		455,756		(6,687	)		(4,039	)		445,030		(181,544	)		263,486
Fee income		—		87,326			39,241			126,567		(4	)		126,563
Collections revenue		—		65,322			—			65,322		240			65,562
Other income		44,418		—			51,317			95,735		232,000			327,735

Total other income		44,418		152,648			90,558			287,624		232,236			519,860
Operating expenses⁽¹⁾		171,563		93,248			67,505			332,316		23,858			356,174

Income before income taxes and minority interest in net earnings of subsidiaries		328,611		52,713			19,014			400,338		26,834			427,172
Income tax expense⁽²⁾		121,586		19,504			7,035			148,125		161,889			310,014
Minority interest in net earnings of subsidiaries		—		1,005			—			1,005		—			1,005

Net income	$	207,025	$	32,204		$	11,979		$	251,208	$	(135,055	)	$	116,153


⁽¹⁾		Operating expenses for the Lending, DMO, and Corporate and Other business segments include $9 million, $3 million, and $4 million, respectively, of stock option compensation expense.

⁽²⁾		Income taxes are based on a percentage of net income before tax for the individual reportable segment.


	Quarter ended June 30, 2006
						Corporate			Total “Core					Total
	Lending		DMO			and Other			Earnings”		Adjustments			GAAP
	(unaudited)

Interest income:
FFELP Stafford and Other Student Loans	$	718,909	$	—		$	—		$	718,909	$	(381,819	)	$	337,090
FFELP Consolidation Loans		1,114,355		—			—			1,114,355		(272,764	)		841,591
Private Education Loans		485,429		—			—			485,429		(251,733	)		233,696
Other loans		23,541		—			—			23,541		—			23,541
Cash and investments		169,877		—			659			170,536		(45,582	)		124,954

Total interest income		2,512,111		—			659			2,512,770		(951,898	)		1,560,872
Total interest expense		1,903,523		5,466			1,345			1,910,334		(706,267	)		1,204,067

Net interest income (loss)		608,588		(5,466	)		(686	)		602,436		(245,631	)		356,805
Less: provisions for losses		60,009		—			(32	)		59,977		7,419			67,396

Net interest income (loss) after provisions for losses		548,579		(5,466	)		(654	)		542,459		(253,050	)		289,409
Fee income		—		90,161			33,256			123,417		—			123,417
Collections revenue		—		67,213			—			67,213		144			67,357
Other income		50,771		—			24,338			75,109		868,271			943,380

Total other income		50,771		157,374			57,594			265,739		868,415			1,134,154
Operating expenses⁽¹⁾		163,162		85,110			50,235			298,507		18,095			316,602

Income before income taxes and minority interest in net earnings of subsidiaries		436,188		66,798			6,705			509,691		597,270			1,106,961
Income tax expense⁽²⁾		161,391		24,715			2,480			188,586		193,242			381,828
Minority interest in net earnings of subsidiaries		—		1,355			—			1,355		—			1,355

Net income	$	274,797	$	40,728		$	4,225		$	319,750	$	404,028		$	723,778


⁽¹⁾		Operating expenses for the Lending, DMO, and Corporate and Other business segments include $8 million, $2 million, and $4 million, respectively, of stock option compensation expense.

⁽²⁾		Income taxes are based on a percentage of net income before tax for the individual reportable segment.


	Six months ended June 30, 2007
						Corporate			Total “Core					Total
	Lending		DMO			and Other			Earnings”		Adjustments			GAAP
	(unaudited)

Interest income:
FFELP Stafford and Other Student Loans	$	1,413,977	$	—		$	—		$	1,413,977	$	(451,915	)	$	962,062
FFELP Consolidation Loans		2,722,250		—			—			2,722,250		(620,150	)		2,102,100
Private Education Loans		1,350,083		—			—			1,350,083		(682,311	)		667,772
Other loans		54,426		—			—			54,426		—			54,426
Cash and investments		344,321		—			9,332			353,653		(98,225	)		255,428

Total interest income		5,885,057		—			9,332			5,894,389		(1,852,601	)		4,041,788
Total interest expense		4,591,577		13,299			10,993			4,615,869		(1,386,550	)		3,229,319

Net interest income (loss)		1,293,480		(13,299	)		(1,661	)		1,278,520		(466,051	)		812,469
Less: provisions for losses		444,911		—			606			445,517		(146,987	)		298,530

Net interest income (loss) after provisions for losses		848,569		(13,299	)		(2,267	)		833,003		(319,064	)		513,939
Fee income		—		167,559			69,514			237,073		—			237,073
Collections revenue		—		142,734			—			142,734		(80	)		142,654
Other income		103,876		—			99,458			203,334		1,157,037			1,360,371

Total other income		103,876		310,293			168,972			583,141		1,156,957			1,740,098
Operating expenses⁽¹⁾		353,213		189,555			171,937			714,705		40,269			754,974

Income (loss) before income taxes and minority interest in net earnings of subsidiaries		599,232		107,439			(5,232	)		701,439		797,624			1,499,063
Income tax expense (benefit)⁽²⁾		221,716		39,752			(1,936	)		259,532		155,206			414,738
Minority interest in net earnings of subsidiaries		—		1,701			—			1,701		—			1,701

Net income (loss)	$	377,516	$	65,986		$	(3,296	)	$	440,206	$	642,418		$	1,082,624


⁽¹⁾		Operating expenses for the Lending, DMO, and Corporate and Other business segments include $22 million, $7 million, and $10 million, respectively, of stock option compensation expense.

⁽²⁾		Income taxes are based on a percentage of net income before tax for the individual reportable segment.


	Six months ended June 30, 2006
						Corporate			Total “Core					Total
	Lending		DMO			and Other			Earnings”		Adjustments			GAAP
	(unaudited)

Interest income:
FFELP Stafford and Other Student Loans	$	1,368,660	$	—		$	—		$	1,368,660	$	(733,070	)	$	635,590
FFELP Consolidation Loans		2,142,317		—			—			2,142,317		(479,391	)		1,662,926
Private Education Loans		914,189		—			—			914,189		(439,140	)		475,049
Other loans		46,848		—			—			46,848		—			46,848
Cash and investments		300,338		—			1,982			302,320		(81,556	)		220,764

Total interest income		4,772,352		—			1,982			4,774,334		(1,733,157	)		3,041,177
Total interest expense		3,562,895		10,622			2,623			3,576,140		(1,279,289	)		2,296,851

Net interest income (loss)		1,209,457		(10,622	)		(641	)		1,198,194		(453,868	)		744,326
Less: provisions for losses		134,829		—			(13	)		134,816		(7,101	)		127,715

Net interest income (loss) after provisions for losses		1,074,628		(10,622	)		(628	)		1,063,378		(446,767	)		616,611
Fee income		—		181,773			60,163			241,936		—			241,936
Collections revenue		—		123,753			—			123,753		285			124,038
Other income		91,343		—			54,347			145,690		908,333			1,054,023

Total other income		91,343		305,526			114,510			511,379		908,618			1,419,997
Operating expenses⁽¹⁾		324,600		174,623			108,747			607,970		31,941			639,911

Income before income taxes and minority interest in net earnings of subsidiaries		841,371		120,281			5,135			966,787		429,910			1,396,697
Income tax expense⁽²⁾		311,308		44,504			1,899			357,711		161,162			518,873
Minority interest in net earnings of subsidiaries		—		2,445			—			2,445		—			2,445

Net income	$	530,063	$	73,332		$	3,236		$	606,631	$	268,748		$	875,379


⁽¹⁾		Operating expenses for the Lending, DMO, and Corporate and Other business segments include $18 million, $5 million, and $9 million, respectively, of stock option compensation expense.

⁽²⁾		Income taxes are based on a percentage of net income before tax for the individual reportable segment.

SLM CORPORATION

Reconciliation of “Core Earnings” Net Income to GAAP Net Income

(In thousands, except per share amounts)


	Quarters ended									Six months ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2007			2007			2006			2007			2006
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)

“Core Earnings” net income^(A)	$	188,998		$	251,208		$	319,750		$	440,206		$	606,631
“Core Earnings” adjustments:
Net impact of securitization accounting		(15,071	)		421,485			503,083			406,414			441,022
Net impact of derivative accounting		841,564			(331,724	)		164,678			509,840			125,861
Net impact of Floor Income		(39,246	)		(39,021	)		(52,333	)		(78,267	)		(104,902	)
Net impact of acquired intangibles^(B)		(16,457	)		(23,906	)		(18,158	)		(40,363	)		(32,071	)

Total “Core Earnings” adjustments before income taxes and minority interest in net earnings of subsidiaries		770,790			26,834			597,270			797,624			429,910
Net tax effect^(C)		6,683			(161,889	)		(193,242	)		(155,206	)		(161,162	)

Total “Core Earnings” adjustments		777,473			(135,055	)		404,028			642,418			268,748

GAAP net income	$	966,471		$	116,153		$	723,778		$	1,082,624		$	875,379

GAAP diluted earnings per common share	$	1.03		$	.26		$	1.52		$	1.82		$	1.96



^(A) “Core Earnings” diluted earnings per common share	$	.43		$	.57		$	.72		$	.99		$	1.37


^(B)		Represents goodwill and intangible impairment and the amortization of acquired intangibles.

^(C)		Such tax effect is based upon the Company’s “Core Earnings” effective tax rate for the year. The net tax effect results primarily from the exclusion of the permanent income tax impact of the equity forward contracts.

“Core Earnings”

In accordance with the Rules and Regulations of the Securities and Exchange Commission (“SEC”), we prepare financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”). In addition to evaluating the Company’s GAAP-based financial information, management evaluates the Company’s business segments on a basis that, as allowed under SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” differs from GAAP. We refer to management’s basis of evaluating our segment results as “Core Earnings” presentations for each business segment and we refer to this information in our presentations with credit rating agencies and lenders. While “Core Earnings” are not a substitute for reported results under GAAP, we rely on “Core Earnings” to manage each operating segment because we believe these measures provide additional information regarding the operational and performance indicators that are most closely assessed by management.

Our “Core Earnings” are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. “Core Earnings” net income reflects only current period adjustments to GAAP net income as described below. Unlike financial accounting, there is no comprehensive, authoritative guidance for management reporting and as a result, our management reporting is not necessarily comparable with similar information for any other financial institution. Our operating segments are defined by the products and services they offer or the types of customers they serve, and they reflect the manner in which financial information is currently evaluated by management. Intersegment revenues and expenses are netted within the appropriate financial statement line items consistent with the income statement presentation provided to

management. Changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial information. A more detailed discussion of the differences between GAAP and “Core Earnings” follows.

Limitations of “Core Earnings”

While GAAP provides a uniform, comprehensive basis of accounting, for the reasons described above, management believes that “Core Earnings” are an important additional tool for providing a more complete understanding of the Company’s results of operations. Nevertheless, “Core Earnings” are subject to certain general and specific limitations that investors should carefully consider. For example, as stated above, unlike financial accounting, there is no comprehensive, authoritative guidance for management reporting. Our “Core Earnings” are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. Unlike GAAP, “Core Earnings” reflect only current period adjustments to GAAP. Accordingly, the Company’s “Core Earnings” presentation does not represent a comprehensive basis of accounting. Investors, therefore, may not compare our Company’s performance with that of other financial services companies based upon “Core Earnings.” “Core Earnings” results are only meant to supplement GAAP results by providing additional information regarding the operational and performance indicators that are most closely used by management, the Company’s board of directors, rating agencies and lenders to assess performance.

Other limitations arise from the specific adjustments that management makes to GAAP results to derive “Core Earnings” results. For example, in reversing the unrealized gains and losses that result from SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” on derivatives that do not qualify for “hedge treatment,” as well as on derivatives that do qualify but are in part ineffective because they are not perfect hedges, we focus on the long-term economic effectiveness of those instruments relative to the underlying hedged item and isolate the effects of interest rate volatility, changing credit spreads and changes in our stock price on the fair value of such instruments during the period. Under GAAP, the effects of these factors on the fair value of the derivative instruments (but not on the underlying hedged item) tend to show more volatility in the short term. While our presentation of our results on a “Core Earnings” basis provides important information regarding the performance of our Managed portfolio, a limitation of this presentation is that we are presenting the ongoing spread income on loans that have been sold to a trust managed by us. While we believe that our “Core Earnings” presentation presents the economic substance of our Managed loan portfolio, it understates earnings volatility from securitization gains. Our “Core Earnings” results exclude certain Floor Income, which is real cash income, from our reported results and therefore may understate earnings in certain periods. Management’s financial planning and valuation of operating results, however, does not take into account Floor Income because of its inherent uncertainty, except when it is economically hedged through Floor Income Contracts.

Pre-Tax Differences between “Core Earnings” and GAAP

Our “Core Earnings” are the primary financial performance measures used by management to evaluate performance and to allocate resources. Accordingly, financial information is reported to management on a “Core Earnings” basis by reportable segment, as these are the measures used regularly by our chief operating decision maker. Our “Core Earnings” are used in developing our financial plans and tracking results, and also in establishing corporate performance targets and determining incentive compensation. Management believes this information provides additional insight into the financial performance of the Company’s core business activities. “Core Earnings” net income reflects only current period adjustments to GAAP net income, as described in the more detailed discussion of the differences between “Core Earnings” and GAAP that follows, which includes further detail on each specific adjustment required to reconcile our “Core Earnings” segment presentation to our GAAP earnings.


	1)	Securitization Accounting: Under GAAP, certain securitization transactions in our Lending operating segment are accounted for as sales of assets. Under “Core Earnings” for the Lending operating segment, we present all securitization transactions on a “Core Earnings” basis as long-term non-recourse financings. The upfront “gains” on sale from securitization transactions as well as ongoing


		“servicing and securitization revenue” presented in accordance with GAAP are excluded from “Core Earnings” and are replaced by the interest income, provisions for loan losses, and interest expense as they are earned or incurred on the securitization loans. We also exclude transactions with our off-balance sheet trusts from “Core Earnings” as they are considered intercompany transactions on a “Core Earnings” basis.


	2)	Derivative Accounting: “Core Earnings” exclude periodic unrealized gains and losses arising primarily in our Lending operating segment, and to a lesser degree in our Corporate and Other reportable segment, that are caused primarily by the one-sided mark-to-market derivative valuations prescribed by SFAS No. 133 on derivatives that do not qualify for “hedge treatment” under GAAP. In our “Core Earnings” presentation, we recognize the economic effect of these hedges, which generally results in any cash paid or received being recognized ratably as an expense or revenue over the hedged item’s life. “Core Earnings” also exclude the gain or loss on equity forward contracts that under SFAS No. 133, are required to be accounted for as derivatives and are marked-to-market through earnings.

	3)	Floor Income: The timing and amount (if any) of Floor Income earned in our Lending operating segment is uncertain and in excess of expected spreads. Therefore, we exclude such income from “Core Earnings” when it is not economically hedged. We employ derivatives, primarily Floor Income Contracts and futures, to economically hedge Floor Income. As discussed above in “Derivative Accounting,” these derivatives do not qualify as effective accounting hedges, and therefore, under GAAP, they are marked-to-market through the “gains (losses) on derivative and hedging activities, net” line on the income statement with no offsetting gain or loss recorded for the economically hedged items. For “Core Earnings,” we reverse the fair value adjustments on the Floor Income Contracts and futures economically hedging Floor Income and include the amortization of net premiums received in income.

	4)	Acquired Intangibles: Our “Core Earnings” exclude goodwill and intangible impairment and the amortization of acquired intangibles.