Sallie Mae 2011 Annual Report Download - page 146

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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. Allowance for Loan Losses (Continued)
The following table summarizes the activity in the receivable for partially charged-off loans.
Years Ended December 31,
(Dollars in millions) 2011 2010 2009
Receivable at beginning of period ................................ $1,040 $ 499 $222
Expected future recoveries of current period defaults(1) ............... 391 459 324
Recoveries(2) ................................................ (155) (104) (43)
Charge-offs(3) ................................................ (35) (43) (4)
Consolidation of securitization trusts(4) ............................ — 229 —
Receivable at end of period ..................................... $1,241 $1,040 $499
(1) Remaining loan balance expected to be collected from contractual loan balances partially charged-off during the period. This is the
difference between the defaulted loan balance and the amount of the defaulted loan balance that was charged off.
(2) Current period cash collections.
(3) Represents the current period recovery shortfall – the difference between what was expected to be collected and what was actually
collected.
(4) Upon the adoption of the new consolidation accounting guidance on January 1, 2010, we consolidated all of our off-balance sheet
securitization trusts.
Troubled Debt Restructurings
We modify the terms of loans for certain borrowers when we believe such modifications may increase the
ability and willingness of a borrower to make payments and thus increase the ultimate overall amount collected
on a loan. These modifications generally take the form of a forbearance, a temporary interest rate reduction or an
extended repayment plan. For borrowers experiencing financial difficulty, certain Private Education Loans for
which we have granted either a forbearance of greater than three months, an interest rate reduction or an extended
repayment plan are classified as troubled debt restructurings. Forbearance provides borrowers the ability to defer
payments for a period of time, but does not result in the forgiveness of any principal or interest. While in
forbearance status, interest continues to accrue and is capitalized to principal when the loan re-enters repayment
status. The recorded investment of loans granted a forbearance that was classified as a troubled debt restructuring
was $4.5 billion at December 30, 2011. The recorded investment for troubled debt restructurings from loans
granted interest rate reductions or extended repayment plans was $0.7 billion and $0.4 billion at December 31,
2011 and 2010, respectively.
F-37