Sallie Mae 2015 Annual Report Download - page 102

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, unless otherwise noted)
F-12
1. Organization and Business
SLM Corporation (“Sallie Mae,” “SLM,” the “Company,” “we” or “us”) is a holding company that operates through a
number of subsidiaries. Its predecessor was formed in 1972 as the Student Loan Marketing Association, a federally chartered
government-sponsored enterprise (the “GSE”), with the goal of furthering access to higher education by providing liquidity to
the education loan marketplace. Under privatization legislation passed in 1997, we incorporated SLM Corporation as a
Delaware corporation with the GSE as a subsidiary and on December 29, 2004, we terminated the federal charter and dissolved
the GSE.
Our primary business is to originate and service loans we make to students and their families to finance the cost of their
education. We use “Private Education Loans” to mean education loans to students or their families that are not made, insured or
guaranteed by any state or federal government. Private Education Loans do not include loans insured or guaranteed under the
previously existing Federal Family Education Loan Program (“FFELP”). The core of our marketing strategy is to generate
Private Education Loan originations by promoting our products on campuses through the financial aid offices as well as
through online and direct marketing to students and their families. Since the beginning of 2006, virtually all of our Private
Education Loans have been originated and funded by Sallie Mae Bank (the “Bank”), a Utah industrial bank subsidiary, which is
regulated by the Utah Department of Financial Institutions (“UDFI”), the Federal Deposit Insurance Corporation (“FDIC”) and
the Consumer Financial Protection Bureau ("CFPB"). We also operate Upromise, Inc. (“Upromise”), a consumer savings
network that provides financial rewards on everyday purchases to help families save for college.
On April 30, 2014, we completed our plan to legally separate into two distinct publicly traded entities: an education loan
management, servicing and asset recovery business, named Navient Corporation (“Navient”); and a consumer banking
business, named SLM Corporation. The separation of Navient from SLM Corporation (the “Spin-Off”) was preceded by an
internal corporate reorganization, which was the first step to separate the education loan management, servicing and asset
recovery business from the consumer banking business. As a result of a holding company merger under Section 251(g) of the
Delaware General Corporation Law, which is referred to herein as the “SLM Merger,” all of the shares of then existing SLM
Corporation’s common stock were converted, on a 1-to-1 basis, into shares of common stock of New BLC Corporation, a
newly formed company that was a subsidiary of pre-Spin-Off SLM Corporation (“pre-Spin-Off SLM”), and, pursuant to the
SLM Merger, New BLC Corporation replaced then existing SLM Corporation as the publicly traded registrant and changed its
name to SLM Corporation. As part of the internal corporate reorganization, the assets and liabilities associated with the
education loan management, servicing and asset recovery business were transferred to Navient, and those assets and liabilities
associated with the consumer banking business remained with or were transferred to the newly constituted SLM Corporation.
The separation and distribution were accounted for on a substantially tax-free basis.