Sallie Mae 2006 Annual Report Download - page 65

Download and view the complete annual report

Please find page 65 of the 2006 Sallie Mae annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 215

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215

Wholesale Consolidation Loans
As discussed under “Student Loans — Student Loan Spread Analysis — “Core Earnings” Basis, we have
excluded the impact of Wholesale Consolidation Loans from our student loan spread analysis both on-balance
sheet and on a “Core Earnings” basis. The average balance of Wholesale Consolidation Loans was
$683 million for the year ended December 31, 2006. Had the Wholesale Consolidation Loan volume been
included in the “Core Earnings” basis student loan spread, it would have had no impact to the spread for the
year ended December 31, 2006. As of December 31, 2006, Wholesale Consolidation Loans totaled $3.6 billion,
or 4.5 percent, of our total Managed Consolidation Loan portfolio.
“Core Earnings” Basis Student Loan Spreads by Loan Type
The student loan spread continues to reflect the changing mix of loans in our portfolio, specifically the
shift from FFELP Stafford loans to FFELP Consolidation Loans and the higher overall growth rate in Private
Education Loans as a percentage of the total portfolio. (See “LENDING BUSINESS SEGMENT — Summary
of our Managed Student Loan Portfolio — Average Balances.”)
The following table reflects the “Core Earnings” basis student loan spreads by product, excluding the
impact of the Wholesale Consolidation Loan portfolio as discussed above, for the years ended December 31,
2006, 2005 and 2004.
2006 2005 2004
Years Ended
December 31,
FFELP Loan Spreads (“Core Earnings” Basis):
Stafford ..................................................... 1.40% 1.48% 1.73%
Consolidation................................................. 1.18 1.31 1.43
FFELP Loan Spread (“Core Earnings” Basis) ......................... 1.26 1.39 1.59
Private Education Loan Spreads (“Core Earnings” Basis):
Before provision .............................................. 5.13% 4.62% 4.22%
After provision ............................................... 3.75 3.88 2.69
64