Sallie Mae 2015 Annual Report Download - page 158

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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
F-68
21. Concentrations of Risk
Our business is primarily focused in providing and/or servicing to help students and their families save, plan and pay for
college. We primarily originate, service and/or collect loans made to students and their families to finance the cost of their
education. We provide funding, delivery and servicing support for education loans in the United States through our Private
Education Loan programs. Because of this concentration in one industry, we are exposed to credit, legislative, operational,
regulatory, and liquidity risks associated with the student loan industry.
Concentration Risk in the Revenues Associated with Private Education Loans
We compete in the Private Education Loan market with banks and other consumer lending institutions, some with strong
consumer brand name recognition and greater financial resources. We compete based on our products, origination capability
and customer service. To the extent our competitors compete aggressively or more effectively, we could lose market share to
them or subject our existing loans to refinancing risk. Our product offerings may not prove to be profitable and may result in
higher than expected losses.
We are a leading provider of saving- and paying-for-college products and programs. This concentration gives us a
competitive advantage in the marketplace. This concentration also creates risks in our business, particularly in light of our
concentrations as a Private Education Loan lender. If population demographics result in a decrease in college-age individuals, if
demand for higher education decreases, if the cost of attendance of higher education decreases, if public resistance to higher
education costs strengthens, or if the demand for higher education loans decreases, our consumer lending business could be
negatively affected. In addition, the federal government, through the Direct Student Loan Program ("DSLP"), poses significant
competition to our private credit loan products. If loan limits under the DSLP increase, DSLP loans could be more widely
available to students and their families and DSLP loans could increase, resulting in further decreases in the size of the Private
Education Loan market and demand for our Private Education Loan products.