Sallie Mae 2001 Annual Report Download - page 10

8
Dear Fellow Shareholders: We begin this letter by paying tribute to our employees. They met
the challenge to effect 2001’s enormous changes and turned out a record performance. In the wake
of our mid-year 2000 purchase of USA Group, we expected 2001 to begin a period of stronger
growth and new direction for Sallie Mae. Those expectations proved accurate—2001 was indeed a
very good year. Our 6,000-plus employees stepped up to make it happen.
For starters, we passed a major milestone: $10 billion of preferred channel loan originations, 40 percent
above 2000. Our expanding sales force, armed with the best array of financial aid products, success-
fully added many new schools and enhanced our business with existing school customers.
We are particularly proud of our operations teams. They processed $14.5 billion of loan acquisitions
(preferred channel plus $5 billion of additional loan purchases) and implemented most of our complex
integration activities. They executed flawlessly through peak season. Their “can-do” approach kept
our spirits high during that critical period.
Our late summer peak season proved even stronger than anticipated. Confronted with record applica-
tion and disbursement activity, we blinked and decided to put customer satisfaction ahead of meeting
every self-imposed integration deadline. Our productivity goals were postponed, our cost-reduction
goals were not met—but not canceled—and we expect to deliver further efficiencies again in 2002.
Effective Integration. Sallie Mae’s successes of 2001 resulted in large part from the value inherent
in the 2000 USA Group transaction and effective integration of their activities. We believe we have
blended the talent and dedication of our new workforce. Our customers report that we passed the
most important test: They did not even notice we integrated. The merger put us into the guarantor
services and loan collection businesses—with growth potential that fits our capabilities and produces
fee income using very little balance sheet and capital. We grew USA Funds guarantees 8 percent in
2001, up from just 6 percent in 2000. We expect to step up that performance significantly in 2002.
We like the student loan collection business and will aggressively pursue market share. This business
can cut taxpayer cost dramatically. We see a challenge in reducing the more than $30 billion of stu-
dent loan paper that remains uncollected. Today, we manage only $6 billion of that total. Already
in 2002, we have strengthened ourselves for this task with the acquisitions of Pioneer Credit and
General Revenue Corporation, two highly successful student loan collection experts.
Last year, our corporate finance group effectively solidified the right side of our balance sheet. They
used 2001’s benign interest rate environment to provide lower and more stable borrowing costs for
Letter from the CEO
and President
“We expected 2001 to begin a
period of stronger growth and
new direction for Sallie Mae.
Those expectations proved
accurate—2001 was indeed
a very good year.”