Sallie Mae 2010 Annual Report Download - page 155

7. Borrowings (Continued)
We currently consolidate all of our financing entities that are VIEs as a result of being the entities’
primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings. We consolidate
the following financing VIEs as of December 31, 2010 and 2009:
Short
Term
Long
Term Total Loans Cash Other Assets Total
Carrying Amount of Assets Securing Debt
Outstanding
Debt Outstanding
December 31, 2010
(Dollars in millions)
Secured Borrowings:
ED Conduit Program Facility .................. $24,484 $ — $ 24,484 $ 24,511 $ 819 $ 634 $ 25,964
ABCP borrowings . . . ...................... — 5,853 5,853 6,290 94 53 6,437
Securitizations — FFELP Loans ................. — 112,425 112,425 113,400 3,728 966 118,094
Securitizations — Private Education Loans . . ........ — 21,409 21,409 24,355 1,213 690 26,258
Indentured trusts .......................... — 1,246 1,246 1,549 129 15 1,693
Total before hedge accounting adjustments . . ........ 24,484 140,933 165,417 170,105 5,983 2,358 178,446
Hedge accounting adjustments .................. — 1,311 1,311 — — 1,348 1,348
Total . ................................ $24,484 $142,244 $166,728 $170,105 $5,983 $3,706 $179,794
Short
Term
Long
Term Total Loans Cash Other Assets Total
Carrying Amount of Assets Securing Debt
Outstanding
Debt Outstanding
December 31, 2009
(Dollars in millions)
Secured Borrowings:
ED Participation Program Facility . . . ............. $9,006 $ — $ 9,006 $ 9,397 $ 115 $ 61 $ 9,573
ED Conduit Program facility . .................. 14,314 — 14,314 14,594 478 372 15,444
ABCP borrowings . . . ...................... — 8,801 8,801 9,929 204 100 10,233
Securitizations — FFELP Loans ................. — 81,923 81,923 82,913 2,693 686 86,292
Securitizations — Private Education Loans . . ........ — 7,277 7,277 10,108 934 763 11,805
Indentured trusts .......................... 64 1,533 1,597 1,898 172 24 2,094
Total before hedge accounting adjustments . . ........ 23,384 99,534 122,918 128,839 4,596 2,006 135,441
Hedge accounting adjustments .................. — 1,479 1,479 — — 1,634 1,634
Total . ................................ $23,384 $101,013 $124,397 $128,839 $4,596 $3,640 $137,075
The Department of Education (“ED”) Funding Programs
In August 2008, ED implemented the Purchase Program and the Participation Program pursuant to
ECASLA. Under the Purchase Program, ED purchases eligible FFELP Loans at a price equal to the sum of
(i) par value, (ii) accrued interest, (iii) the one-percent origination fee paid to ED, and (iv) a fixed amount of
$75 per loan. Under the Participation Program, ED provides short-term liquidity to FFELP lenders by
purchasing participation interests in pools of FFELP Loans. FFELP lenders are charged a rate equal to the
preceding quarter commercial paper rate plus 0.50 percent on the principal amount of participation interests
outstanding. Loans eligible for the Participation or Purchase Programs are limited to FFELP Stafford or PLUS
Loans, first disbursed on or after May 1, 2008 but no later than July 1, 2010, with no ongoing borrower
benefits other than permitted rate reductions of 0.25 percent for automatic payment processing. In October
2010, we sold $20.4 billion of loans to ED and paid off $20.3 billion of advances outstanding under the
Participation Program. This program is no longer in effect and is not available as a source of funding.
Also pursuant to ECASLA, on January 15, 2009, ED published summary terms under which it will
purchase eligible FFELP Stafford and PLUS Loans from a conduit vehicle established to provide funding for
eligible student lenders (the “ED Conduit Program”). Loans eligible for the ED Conduit Program must be first
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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)