Sallie Mae 2007 Annual Report Download - page 185

15. Other Income
The following table summarizes the components of “Other income” in the consolidated statements of
income for the years ended December 31, 2007, 2006 and 2005.
2007 2006 2005
Years Ended December 31,
Late fees and forbearance fees ......................... $135,627 $120,651 $ 97,862
Asset servicing and other transaction fees ................. 123,568 42,951 —
Loan servicing fees ................................. 26,094 47,708 59,548
Gains on sales of mortgages and other loan fees . . . ......... 10,737 15,325 18,257
Other ............................................ 89,049 111,672 97,592
Total other income .................................. $385,075 $338,307 $273,259
Late Fees and Forbearance Fees
The Company recognizes late fees and forbearance fees on student loans when earned according to the
contractual provisions of the promissory notes, as well as the Company’s expectation of collectability.
Asset Servicing and Other Transaction Fees
The Company’s Upromise subsidiary has a number of programs that encourage consumers to save for the
cost of college education. Upromise has established an affinity marketing program which is designed to
increase consumer purchases of merchant goods and services and to promote saving for college by consumers
who are members of this program. Merchant partners generally pay Upromise transaction fees based on
member purchase volume, either online or in stores depending on the contractual arrangement with the
merchant partner. A percentage of the consumer members’ purchases is set aside in an account maintained by
Upromise on the members’ behalf. The Company recognizes transaction fee revenue in accordance with Staff
Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” as marketing services focused on increasing
member purchase volume are rendered based on contractually determined rates and member purchase
volumes.
Upromise, through its wholly owned subsidiaries, Upromise Investments, Inc. (“UII”), a registered
broker-dealer, and Upromise Investment Advisors, LLC (“UIA”), provides transfer and servicing agent services
and program management associated with various 529 college-savings plans. The fees associated with the
provision of these services are recognized in accordance with SAB No. 104 based on contractually determined
rates and the net assets of the investments within the 529 college-savings plans (transfer and servicing agent/
program management fees), and the number of accounts for which Upromise provides record-keeping and
account servicing functions (an additional form of transfer and servicing agent fees).
16. Fair Values of Financial Instruments
The Company uses estimates of fair value in applying various accounting standards for its financial
statements. Under GAAP, fair value measurements are used in one of four ways:
• In the consolidated balance sheet with changes in fair value recorded in the consolidated statement of
income;
• In the consolidated balance sheet with changes in fair value recorded in the other comprehensive
income section of stockholders’ equity;
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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts, unless otherwise stated)