Sallie Mae 2006 Annual Report Download - page 161
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9. Student Loan Securitization (Continued)
For the years ended December 31, 2006, 2005 and 2004 the Company recorded impairment charges to
the Retained Interests of $157 million, $260 million and $80 million, respectively. These impairment charges
were primarily the result of FFELP Stafford loans prepaying faster than projected through loan consolidation
($104 million, $256 million and $47 million for the years ended December 31, 2006, 2005 and 2004,
respectively), and the effect of market interest rates on the Embedded Floor Income which is part of the
Retained Interest ($53 million, $4 million and $33 million for the years ended December 31, 2006, 2005 and
2004, respectively). The level and timing of FFELP Consolidation Loan activity is highly volatile, and in
response the Company continues to revise its estimates of the effects of FFELP Consolidation Loan activity on
the Company’s Retained Interests and it may result in additional impairment recorded in future periods if
FFELP Consolidation Loan activity remains higher than projected.
F-42
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)