Sallie Mae 2004 Annual Report Download - page 7

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LETTER FROM THE CEO & PRESIDENT
In 2004, we continued to diversify our business,
substantially increasing our income from sources
beyond the guaranteed student loan program.
SALLIE MAE 1997 SALLIE MAE TODAY
> Government-sponsored enterprise
> Wholesale buyer of student loans
> Financed in U.S. agency bond market
> Preferred channel originations totaled
approximately $4.7 billion
> Managed student loans totaling
$43.7 billion
> Fully privatized
> Retail provider of education credit and
related services
> Financed in the private capital markets
> Preferred channel originations
approach $18 billion
> Manages student loans totaling
$107.4 billion
In our core student lending business, Sallie Mae preferred
channel loan originations exceeded the government’s direct
loan program originations for the first time in 2004, with $13.7
billion in federally guaranteed loans issued, a 14 percent
increase from 2003, representing a 26 percent market share
at the end of federal fiscal year 2004. Preferred channel
loans are originated through Sallie Mae’s owned (32 percent)
or affiliated (68 percent) brands, and provide the engine for
the company’s earnings growth and market leadership in
education finance.
Our total preferred channel loan originations included
more than $4 billion of private education loans, which repre-
sents a 32 percent increase over 2003. Clearly, the govern-
ment loan programs are not meeting the needs of our higher
education population. Sallie Mae has been able to offer the
most attractive “companion” loans in the industry, as well
as stand-alone education loans for consumers who need,
or prefer, to bypass the government program.
In the process, we have moved ourselves closer to a retail
lending model and have become less dependent on the two
large bank affiliations that fueled our growth in the first half
of this decade. Our internal brands, including Sallie Mae
Education Trust, Nellie Mae, Student Loan Funding and
Academic Management Services (AMS), grew three times
faster in 2004 than the combined JPMorgan Chase/Bank One
channels. With the addition of two new brands in 2004—
Southwest Student Services and Student Loan Finance
Association—strategic partnerships with other lenders such
as AmSouth, and the largest sales force in the industry, we
are ready for the challenges and opportunities ahead.
Our sales efforts are supported by a winning formula for
our school customers, students and shareholders alike.