Sallie Mae 2010 Annual Report Download - page 160

8. Student Loan Securitization
We securitize our FFELP Loan and Private Education Loan assets. Prior to the adoption of new
consolidation accounting guidance on January 1, 2010, for transactions qualifying as sales, we retained a
Residual Interest and the underlying servicing rights (as we retained the servicing responsibilities), all of
which were referred to as our Retained Interest in off-balance sheet securitized loans. The Residual Interest is
the right to receive cash flows from the student loans and reserve accounts in excess of the amounts needed to
pay servicing, derivative costs (if any), other fees, and the principal and interest on the bonds backed by the
student loans. As a result of adopting new consolidation accounting guidance, we removed the $1.8 billion of
Residual Interests (associated with our previously off-balance sheet securitization trusts as of December 31,
2009) from the consolidated balance sheet (see Note 2, “Significant Accounting Policies — Consolidation” for
further details). While this accounting has changed, our economic interest in these assets remains unchanged.
Securitization Activity
The following table summarizes our securitization activity for the years ended December 31, 2010, 2009
and 2008. The securitizations in the periods presented below were accounted for as financings.
(Dollars in millions)
No. of
Transactions
Loan
Amount
Securitized
No. of
Transactions
Loan
Amount
Securitized
No. of
Transactions
Loan
Amount
Securitized
2010 2009 2008
Years Ended December 31,
Securitizations:
FFELP Stafford/PLUS Loans ..... 2 $1,965 — $ — 9 $18,546
FFELP Consolidation Loans ...... — — 3 5,339 — —
Private Education Loans ......... 3 6,186 5 11,122 — —
Total securitizations ............ 5 $8,151 8 $16,461 9 $18,546
The following table summarizes cash flows received from or paid to the previously off-balance sheet
securitization trusts during the years ended December 31, 2009 and 2008.
(Dollars in millions) 2009 2008
Years Ended
December 31,
Cash distributions from trusts related to Residual Interests .................... $477 $909
Servicing fees received
(1)
............................................ 225 246
Purchases of previously transferred financial assets for representation and warranty
violations ...................................................... (7) (37)
Reimbursements of borrower benefits
(2)
.................................. (36) (29)
Purchases of delinquent Private Education Loans from securitization trusts using
delinquent loan call option ......................................... — (172)
Purchases of loans using clean-up call option ............................. — (697)
(1) We received annual servicing fees of 90 basis points, 50 basis points and 70 basis points of the outstanding securitized loan bal-
ance related to our FFELP Stafford, FFELP Consolidation Loan and Private Education Loan securitizations, respectively.
(2) Under the terms of the securitizations, the transaction documents require that we reimburse the trusts for any borrower benefits
afforded the borrowers of the underlying securitized loans.
F-57
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)