Sallie Mae 2011 Annual Report Download - page 137

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Student Loans (Continued)
The following table shows the assets and liabilities that were acquired and consolidated on our balance sheet
at fair value on December 31, 2010.
(Dollars in millions)
Acquisition on
December 31, 2010
FFELP Stafford Loans ................................................. $11,121
FFELP Consolidation Loans ............................................ 14,262
Loan fair value discount ............................................... (494)
FFELP Loans ........................................................ 24,889
Restricted cash ....................................................... 749
Other assets ......................................................... 446
Total assets ......................................................... $26,084
Long-term borrowings — FFELP trusts ................................... $25,609
Long-term borrowings — acquisition financing ............................. 1,064
Long-term borrowings fair value discount ................................. (659)
Long-term borrowings ................................................. 26,014
Other liabilities ...................................................... 70
Total liabilities ....................................................... $26,084
Certain Collection Tools
Forbearance involves granting the borrower a temporary cessation of payments (or temporary acceptance of
smaller than scheduled payments) for a specified period of time. Using forbearance extends the original term of
the loan. Forbearance does not grant any reduction in the total repayment obligation (principal or interest). While
in forbearance status, interest continues to accrue and is capitalized to principal when the loan re-enters
repayment status. Our forbearance policies include limits on the number of forbearance months granted
consecutively and the total number of forbearance months granted over the life of the loan. In some instances, we
require good-faith payments before granting forbearance. Exceptions to forbearance policies are permitted when
such exceptions are judged to increase the likelihood of collection of the loan. Forbearance as a collection tool is
used most effectively when applied based on a borrower’s unique situation, including historical information and
judgments. We leverage updated borrower information and other decision support tools to best determine who
will be granted forbearance based on our expectations as to a borrower’s ability and willingness to repay their
obligation. This strategy is aimed at mitigating the overall risk of the portfolio as well as encouraging cash
resolution of delinquent loans.
Forbearance may be granted to borrowers who are exiting their grace period to provide additional time to
obtain employment and income to support their obligations, or to current borrowers who are faced with a
hardship and request forbearance time to provide temporary payment relief. In these circumstances, a borrower’s
loan is placed into a forbearance status in limited monthly increments and is reflected in the forbearance status at
month-end during this time. At the end of the granted forbearance period, the borrower will enter repayment
status as current and is expected to begin making scheduled monthly payments on a go-forward basis.
Forbearance may also be granted to borrowers who are delinquent in their payments. In these circumstances,
the forbearance cures the delinquency and the borrower is returned to a current repayment status. In more limited
instances, delinquent borrowers will also be granted additional forbearance time.
F-28