Sallie Mae 2009 Annual Report Download - page 78

Total Managed Basis loan provisions
2009 2008 2007
Years Ended
December 31,
Private Education Loans ................................... $1,399 $ 874 $1,233
FFELP loans ............................................ 119 127 121
Mortgage and consumer loans ............................... 46 28 40
Total Managed Basis provisions for loan losses .................. $1,564 $1,029 $1,394
Provision expense for Private Education Loans was previously discussed above (see Private Education
Loan Losses — “Allowance for Private Education Loan Losses”).
Total Loan Charge-offs
The following tables summarize the charge-offs for all loan types on-balance sheet and on a Managed
Basis for the years ended December 31, 2009, 2008 and 2007.
Total on-balance sheet loan charge-offs
2009 2008 2007
Years Ended
December 31,
Private Education Loans ....................................... $876 $320 $246
FFELP loans ................................................ 79 58 21
Mortgage and consumer loans ................................... 35 17 11
Total on-balance sheet loan charge-offs ............................ $990 $395 $278
Total Managed Basis loan charge-offs
2009 2008 2007
Years Ended
December 31,
Private Education Loans ...................................... $1,299 $473 $325
FFELP loans .............................................. 94 79 36
Mortgage and consumer loans .................................. 35 17 11
Total Managed loan charge-offs ................................ $1,428 $569 $372
The increase in charge-offs on FFELP loans from 2007 through 2009 was primarily the result of
legislative changes occurring in 2006 (the reduction in the federal guaranty on new loans to 97 percent) and
2007 (the repeal of the Exceptional Performer designation, under which claims were paid at 99 percent). The
majority of our FFELP loans now possess a federal guaranty level on claims filed of either 97 percent or
98 percent, depending on date of disbursement. The increase in charge-offs is also due to the continued
weakening of the U.S. economy. See “Private Education Loan Losses — Allowance for Private Education
Loan Losses” above for a discussion of net charge-offs related to our Private Education Loans.
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