Sallie Mae 2011 Annual Report Download - page 53

administration services for our various 529 college-savings plans. Assets under administration in our 529 college
savings plans totaled $37.5 billion as of December 31, 2011, a 9 percent increase from 2010. Campus Solutions
revenue is earned from our Campus Solutions business whose services include comprehensive transaction
processing solutions and associated technology that we provide to college financial aid offices and students to
streamline the financial aid process.
The following table presents the outstanding inventory of contingent collections receivables that our
Business Services segment will collect on behalf of others. We expect the inventory of contingent collections
receivables to decline over time as a result of the elimination of FFELP.
December 31,
(Dollars in millions) 2011 2010 2009
Contingency:
Student loans ................................. $11,553 $10,362 $ 8,762
Other ........................................ 2,017 1,730 1,262
Total .......................................... $13,570 $12,092 $10,024
Other Business Services revenue is primarily transaction fees that are earned in conjunction with our
rewards program from participating companies based on member purchase activity, either online or in stores,
depending on the contractual arrangement with the participating company. Typically, a percentage of the
purchase price of the consumer members’ eligible purchases with participating companies is set aside in an
account maintained by us on behalf of our members. In fourth quarter 2011, we terminated our credit card
affiliation program with a third-party bank and concurrently entered into an affiliation program with a new bank.
In terminating the old program we recognized a $25 million gain which primarily represented prior cash
advances we received that were previously recorded as deferred revenue.
Revenues related to services performed on FFELP Loans accounted for 76 percent, 78 percent and 79
percent of total segment revenues for the years ended December 31, 2011, 2010 and 2009, respectively.
In 2011, we launched Sallie Mae Insurance Services, which offers directly to college students and higher
education institutions tuition, renters’ and student health insurance. We also include a Tuition Insurance Benefit
with our Smart Option Student Loan.
On September 1, 2011, we acquired SC Services & Associates, Inc., a provider of collections services to
local governments and courts. This acquisition enhances and complements our other contingency collection
businesses.
Operating Expenses — Business Services Segment
For the years ended December 31, 2011, 2010 and 2009, operating expenses for the Business Services
segment totaled $482 million, $500 million and $440 million, respectively.
2011 versus 2010
Operating expenses for 2011 decreased from 2010, primarily as a result of our cost cutting initiatives.
Included in operating expenses for the year ended December 31, 2011 is approximately $33 million in third-party
servicing costs associated with our acquisition of $25 billion of existing FFELP Loans at the end of 2010. During
third-quarter 2011, we began transitioning these loans to our own servicing platform and completed the transfer
in October 2011. With the portfolio fully transitioned, the servicing costs associated with these loans will be
significantly less in 2012.
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