Sallie Mae 2009 Annual Report Download - page 69

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 2009 2008 2007 2009 2008 2007
On-Balance Sheet
Years Ended December 31,
Off-Balance Sheet
Years Ended December 31,
Managed Basis
Years Ended December 31,
Activity in Allowance for Private Education Loans
Allowance at beginning of period . . $ 1,308 $ 1,004 $ 372 $ 505 $ 362 $ 86 $ 1,813 $ 1,366 $ 458
Provision for Private Education
Loan losses . ............. 967 586 884 432 288 349 1,399 874 1,233
Charge-offs . ............. (876) (320) (246) (423) (153) (79) (1,299) (473) (325)
Reclassification of interest
reserve
(1)
................ 44 38 — 10 8 — 54 46 —
Balance before securitization of
Private Education Loans . . . . . . 1,443 1,308 1,010 524 505 356 1,967 1,813 1,366
Reduction for securitization of
Private Education Loans . . . . . . — — (6) — — 6 — — —
Allowance at end of period . . . . . . $ 1,443 $ 1,308 $ 1,004 $ 524 $ 505 $ 362 $ 1,967 $ 1,813 $ 1,366
Charge-offs as a percentage of
average loans in repayment . . . . 7.2% 3.8% 4.1% 4.4% 1.9% 1.1% 6.0% 2.9% 2.5%
Charge-offs as a percentage of
average loans in repayment and
forbearance . ............. 6.7% 3.3% 3.7% 4.2% 1.6% .9% 5.6% 2.5% 2.2%
Allowance as a percentage of the
ending total loan balance
(2)
. . . . 5.8% 5.8% 6.2% 4.0% 3.7% 2.5% 5.2% 5.0% 4.5%
Allowance as a percentage of
ending loans in repayment . . . . . 10.0% 11.7% 14.2% 5.2% 5.3% 4.6% 8.1% 8.8% 9.2%
Average coverage of charge-offs . . 1.6 4.1 4.1 1.2 3.3 4.6 1.5 3.8 4.2
Ending total loans
(2)
.......... $24,755 $22,426 $16,290 $13,215 $13,782 $14,227 $37,970 $36,208 $30,517
Average loans in repayment . . . . . $12,137 $ 8,533 $ 5,949 $ 9,597 $ 8,088 $ 7,305 $21,734 $16,621 $13,254
Ending loans in repayment . . . . . . $14,379 $11,182 $ 7,047 $ 9,987 $ 9,530 $ 7,819 $24,366 $20,712 $14,866
(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 provi-
sion 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 and $27 million on an On-Balance Sheet Basis and a Managed Basis, respectively.
(2)
Ending total loans represents gross Private Education Loans, plus the receivable for partially charged-off loans.
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