Sallie Mae 2008 Annual Report Download - page 151

4. Allowance for Loan Losses (Continued)
Activity in the Allowance for Private Education Loan Losses — Corrected Presentation
The following table summarizes changes in the allowance for Private Education Loan losses for the years
ended December 31, 2008, 2007 and 2006 as corrected and discussed above.
2008 2007 2006
Years Ended December 31,
Allowance at beginning of year ................ $ 1,003,963 $ 372,612 $ 250,250
Total provision .............................. 586,169 883,474 257,983
Charge-offs . ............................... (320,240) (246,343) (118,833)
Reclassification of interest reserve
(1)
.............. 38,151 — —
Balance before securitization of Private Education
Loans................................... 1,308,043 1,009,743 389,400
Reduction for securitization of Private Education
Loans................................... — (5,780) (16,788)
Allowance at end of year ..................... $ 1,308,043 $ 1,003,963 $ 372,612
Charge-offs as a percentage of average loans in
repayment ............................... 3.75% 4.14% 2.79%
Charge-offs as a percentage of average loans in
repayment and forbearance ................... 3.31% 3.72% 2.59%
Allowance as a percentage of the ending total loan
balance
(2)
................................ 5.83% 6.16% 3.55%
Allowance as a percentage of the ending loans in
repayment ............................... 11.70% 14.25% 7.68%
Allowance coverage of charge-offs ............... 4.08 4.08 3.14
Ending total loans
(2)
.......................... $22,425,640 $16,289,784 $10,492,332
Average loans in repayment .................... $ 8,533,356 $ 5,949,007 $ 4,256,780
Ending loans in repayment ..................... $11,182,053 $ 7,046,709 $ 4,851,305
(1)
Represents the additional allowance related to the amount of uncollectible interest reserved within interest income that is trans-
ferred in the period to the allowance for loan losses when interest is capitalized to a loan’s principal balance. Prior to 2008, the
interest provision was reversed in interest income and then provided for through provision within the allowance for loan loss.
For the years ended December 31, 2007 and 2006, this amount was $21 million and $12 million, respectively.
(2)
Ending total loans represents gross Private Education Loans, plus the receivable for partially charged-off loans.
F-31
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)