Sallie Mae 2008 Annual Report Download - page 61

Balance % Balance % Balance %
December 31,
2008
December 31,
2007
December 31,
2006
Managed Basis Private Education
Loan Delinquencies
Loans in-school/grace/deferment
(1)
....... $13,620 $13,114 $10,826
Loans in forbearance
(2)
................ 1,562 2,391 1,181
Loans in repayment and percentage of each
status:
Loans current ..................... 18,591 89.8% 13,639 91.7% 10,633 91.3%
Loans delinquent 31-60 days
(3)
........ 866 4.2 508 3.4 472 4.0
Loans delinquent 61-90 days
(3)
........ 417 2.0 260 1.8 192 1.7
Loans delinquent greater than
90 days
(3)
...................... 838 4.0 459 3.1 346 3.0
Total Private Education Loans in
repayment...................... 20,712 100% 14,866 100% 11,643 100%
Total Private Education Loans, gross...... 35,894 30,371 23,650
Private Education Loan unamortized
discount ......................... (896) (823) (668)
Total Private Education Loans .......... 34,998 29,548 22,982
Private Education Loan receivable for
partially charged-off loans ........... 314 146 64
Private Education Loan allowance for
losses ........................... (1,813) (1,366) (458)
Private Education Loans, net ........... $33,499 $28,328 $22,588
Percentage of Private Education Loans in
repayment ....................... 57.7% 48.9% 49.2%
Delinquencies as a percentage of Private
Education Loans in repayment ........ 10.2% 8.3% 8.7%
Loans in forbearance as a percentage of
loans in repayment and forbearance .... 7.0% 13.9% 9.2%
(1)
Loans for borrowers who still may be attending school or engaging in other permitted educational activities and are not yet
required to make payments on the loans, e.g., residency periods for medical students or a grace period for bar exam preparation.
(2)
Loans for borrowers who have requested extension of grace period generally during employment transition or who have tempo-
rarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies
and procedures.
(3)
The period of delinquency is based on the number of days scheduled payments are contractually past due.
Activity in the Allowance for Private Education Loan Losses
As discussed in detail under “CRITICAL ACCOUNTING POLICIES AND ESTIMATES,” the provisions
for student loan losses represent the periodic expense of maintaining an allowance sufficient to absorb losses,
net of recoveries, incurred in the portfolio of Private Education Loans.
The Company is changing its methodology used to present charge-offs related to Private Education Loans
to more clearly reflect the expected loss. Net income, provision for loan loss expense, the net loan balance,
default rate and expected recovery rate assumptions are not impacted by this change. Based on our historic
experience, we expect to recover a portion of loans that default. This expected recovery is taken into account
in arriving at our periodic provision for loan loss expense. Previously, once a loan has been delinquent for
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