RESTON, Va., Dec. 31, 2007—SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today announced that it has closed the public offerings of its common stock and mandatory convertible preferred stock, series C, resulting in total net proceeds of approximately $2.9 billion.

The company sold 101,781,170 shares of its common stock at a price of $19.65 per share and 1,000,000 shares of its 7.25% mandatory convertible preferred stock, series C. Each share of mandatory convertible preferred stock, series C, has a $1,000 liquidation preference and is subject to mandatory conversion on December 15, 2010, into between 41.7188 and 50.8906 shares of the company’s common stock, unless previously converted at the option of the holder. UBS Investment Bank and Citi acted as joint book-running managers for the offerings.

Sallie Mae intends to use approximately $2.0 billion of the net proceeds to settle its outstanding equity forward contract with Citibank and repurchase the 44,039,890 shares of common stock deliverable to Sallie Mae under the contract. The company and Citibank have agreed to physically settle the contract, and the company has paid Citibank approximately $1.1 billion, the difference between the contract purchase price and the previous market closing price on the 44 million shares. Consequently, the common shares outstanding on the company’s year-end balance sheet will reflect the shares issued in the public offerings and the physical settlement of the equity forward contract. The company will pay Citibank the remaining balance due under the contract in early January 2008.

The remaining proceeds from the public offerings will be used for general corporate purposes.

Shelf registration statements relating to the shares of common stock and the shares of mandatory convertible preferred stock have previously been filed with, and have been declared effective by, the Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. Any offer will be made only by means of a prospectus, including a prospectus supplement, forming a part of the related effective registration statements. 

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This press release contains “forward-looking statements” including expectations as to future market share, the success of preferred channel originations and future results. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Because such statements inherently involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks include, among others, changes in the terms of student loans and the educational credit marketplace arising from the implementation of applicable laws and regulations, and from changes in such laws and regulations, adverse results in legal disputes, changes in the demand for educational financing or in financing preferences of educational institutions, students and their families, and changes in the general interest rate environment. For more information, see the company’s filings with the Securities and Exchange Commission, including the preliminary prospectus supplements relating to the proposed offerings. All information in this release is as of Dec. 31, 2007. The Company does not undertake any obligation to update or revise these forward looking statements to conform the statement to actual results or changes in the Company’s expectations. 

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For more information contact:
Martha Holler (703) 984-5178 (media)
Steve McGarry (703) 984-6746 (investors)