Sallie Mae 2009 Annual Report Download - page 160

4. Allowance for Loan Losses (Continued)
Allowance for Private Education Loan Losses
The following table summarizes changes in the allowance for Private Education Loan losses for the years
ended December 31, 2009, 2008 and 2007.
2009 2008 2007
Years Ended December 31,
Allowance at beginning of year ................ $ 1,308,043 $ 1,003,963 $ 372,612
Total provision .............................. 966,591 586,169 883,474
Charge-offs . ............................... (875,667) (320,240) (246,343)
Reclassification of interest reserve
(1)
.............. 44,473 38,151 —
Balance before securitization of Private Education
Loans................................... 1,443,440 1,308,043 1,009,743
Reduction for securitization of Private Education
Loans................................... — — (5,780)
Allowance at end of year
(2)
.................... $ 1,443,440 $ 1,308,043 $ 1,003,963
Charge-offs as a percentage of average loans in
repayment ............................... 7.2% 3.8% 4.1%
Charge-offs as a percentage of average loans in
repayment and forbearance ................... 6.7% 3.3% 3.7%
Allowance as a percentage of the ending total loan
balance
(3)
................................ 5.8% 5.8% 6.2%
Allowance as a percentage of the ending loans in
repayment ............................... 10.0% 11.7% 14.3%
Allowance coverage of charge-offs ............... 1.6 4.1 4.1
Ending total loans
(3)
.......................... $24,755,598 $22,425,640 $16,289,784
Average loans in repayment .................... $12,137,430 $ 8,533,356 $ 5,949,007
Ending loans in repayment ..................... $14,379,102 $11,182,053 $ 7,046,709
(1)
Represents the additional allowance related to the amount of uncollectible interest reserved within interest income that is transferred
in the period to the allowance for loan losses when interest is capitalized to a loan’s principal balance. Prior to 2008, the interest pro-
vision was reversed in interest income and then provided for through provision within the allowance for loan loss. For the year ended
December 31, 2007, this amount was $21 million.
(2)
Includes $32 million in 2009 related to the loan modification program. Prior to 2009 this program was not offered. As of
December 31, 2009, $181 million face amount of loans were currently receiving a reduction in their interest rate under this program.
(3)
Ending total loans represents gross Private Education Loans, plus the receivable for partially charged-off loans.
F-33
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)