Sallie Mae 2005 Annual Report Download - page 3
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SLM CORPORATION ANNUAL REPORT 2005 1
Education Lending
In 2005, our portfolio of managed federal education loans
passed the $100 billion mark midway through the year, and
our total portfolio under management was nearly $123 billion
by year end.
Our preferred-channel originations increased 19 percent
to $21 billion. Our internal lending brands (Academic
Management Services, Nellie Mae, Sallie Mae Education
Trust, Southwest Student Services, Student Loan Finance
Association and Student Loan Funding) contributed 43 per-
cent of this figure. Last year, we freed ourselves from the
constraints of two major bank contractual obligations; we
charted our own course and have prospered. Our strategic
lending partners also continue to outpace the market.
With college costs rising and federal loan limits not keep-
ing pace, private education loans are the fastest-growing seg-
ment of our loan business. In 2005, we originated more than
$6 billion of private education loans. By comparison, in 1999,
we originated less than $6 billion in federal loans. Sallie Mae’s
private education loan portfolio totals more than $16 billion
and the portfolio is performing quite well as borrowers are
reaping the benefits from their investment in education.
Industry estimates show that students and parents will pay
more than $200 billion for higher education this year — less
than $70 billion will come from federal student loan pro-
grams; another $75 billion will be in the form of grants and
other types of aid. The balance will come from other sources,
including private education loans and other financing prod-
ucts. Often, families circumvent the financial aid process
entirely. For this reason, we added a direct-to-consumer
initiative, Tuition Answer, in 2005. We originated more than
To Our Shareholders:
2005 was a milestone year for Sallie Mae. It was our first year as a fully private-sector company and
we achieved historic results in each of our business lines. Thanks to the commitment and drive of our
12,000 employees, we continue to fulfill our original mission — to increase access to higher education.
With the demand for a college education soaring, Sallie Mae is positioned like no other company to serve
this market— and to continue our record of strong earnings growth.
THOMAS J. FITZPATRICK
Chief Executive Officer