Sallie Mae 2008 Annual Report Download - page 193

14. Other Income
The following table summarizes the components of “other income” in the consolidated statements of
income for the years ended December 31, 2008, 2007 and 2006.
2008 2007 2006
Years Ended December 31,
Late fees and forbearance fees ......................... $142,958 $135,627 $120,651
Asset servicing and other transaction fees ................. 108,292 110,215 42,053
Loan servicing fees ................................. 26,458 26,094 47,708
Gains on sales of mortgages and other loan fees ............ 2,832 10,737 15,325
Other............................................ 111,536 102,402 112,570
Total other income .................................. $392,076 $385,075 $338,307
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 a consumer savings network which is designed to promote
college savings by consumers who are members of this program by encouraging them to purchase goods and
services from the companies that participate in the program (“Participating Companies”). Participating
Companies generally pay Upromise transaction fees based on member purchase volume, either online or in
stores depending on the contractual arrangement with the Participating Company. Typically, a percentage of
the purchase price of the consumer members’ eligible purchases with Participating Companies is set aside in
an account maintained by Upromise on the behalf of its members. 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, UII, a registered broker-dealer, and UIA, a registered
investment advisor, provides program management, transfer and servicing agent services, and administration
services for 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 which are a combination
of fees based on the net asset value of the investments within the 529 college-savings plans and the number of
accounts for which UII and UIA provide record-keeping and account servicing functions.
15. Restructuring Activities
During the fourth quarter of 2007, the Company initiated a restructuring program to reduce costs and
improve operating efficiencies in response to the impacts of the CCRAA and current challenges in the capital
markets. As part of this review the Company has refocused its lending activities, exited certain customer
relationships and product lines, and is on target to reduce its operating expenses by 20 percent by the year
ended December 31, 2009, as compared to the year ended December 31, 2007, before adjusting for growth
and other investments. In addition, in the third quarter of 2008, the Company concluded that its APG
purchased paper businesses no longer produce a strategic fit, and the Company decided to wind down these
businesses.
F-73
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)