Sallie Mae 2007 Annual Report Download - page 79

Total Managed Basis loan provisions
2007 2006 2005
Years Ended
December 31,
Private Education Loans ...................................... $1,233 $273 $105
FFELP Stafford and Other Student Loans ......................... 121 17 21
Mortgage and consumer loans .................................. 40 13 12
Total Managed Basis provisions for loan losses ..................... $1,394 $303 $138
Provision expense for Private Education Loans was previously discussed above (see “Managed Basis
Private Education Loan Loss Allowance Discussion”).
The 2007 FFELP provision included $30 million and $44 million for on-balance sheet and Managed
student loans, respectively, related to the repeal of the Exceptional Performer program (and the resulting
increase in our Risk Sharing percentage) due to the passage of the CCRAA which was effective October 1,
2007. These amounts are additional, non-recurring provision expenses required to cumulatively increase the
allowance for loan losses for the increase in the Company’s Risk Sharing percentage related to the Company’s
loans as of September 30, 2007. The 2007 FFELP provision also included $19 million and $27 million for on-
balance sheet student loans and Managed student loans, respectively, related to the increase in our default
expectations due to an increase in recent delinquencies and charge-offs. The remaining increase over 2006
primarily relates to an increased rate of provisioning for our Risk Sharing exposure in the post CCRAA
environment, coupled with the growth of the portfolio.
The increase in provisions related to mortgage and consumer loans primarily relates to a weakening
U.S. economy and the deterioration of certain real estate markets related to our mortgage portfolio. As of
December 31, 2007, our mortgage portfolio totaled $289 million.
Total Loan Net Charge-offs
The following tables summarize the net charge-offs for all loan types on-balance sheet and on a Managed
Basis for the years ended December 31, 2007, 2006 and 2005.
Total on-balance sheet loan net charge-offs
2007 2006 2005
Years Ended
December 31,
Private Education Loans ....................................... $300 $137 $135
FFELP Stafford and Other Student Loans........................... 21 5 4
Mortgage and consumer loans ................................... 11 5 5
Total on-balance sheet loan net charge-offs ......................... $332 $147 $144
Total Managed Basis loan net charge-offs
2007 2006 2005
Years Ended
December 31,
Private Education Loans ....................................... $407 $161 $137
FFELP Stafford and Other Student Loans........................... 36 8 4
Mortgage and consumer loans ................................... 11 5 5
Total Managed loan net charge-offs ............................... $454 $174 $146
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