New features help Sallie Mae's Smart Option Student Loan customers save more than ever

RESTON, Va., May 4, 2010—Sallie Mae, the nation’s leading saving, planning, and paying for college company, today announced new enhancements to its Smart Option Student Loan that make it even more rewarding for students to pay a little now to save a lot later. Sallie Mae is leading the market to cut interest rates on its Smart Option Student Loans. Starting May 10, rates on new Smart Option Student Loans will range between 2.88 percent and 10.25 percent, based on today’s LIBOR index. In addition, Sallie Mae will eliminate disbursement fees.

“Sallie Mae’s Smart Option Loan is a favorable option for families who need to fill the gap in their college funding,” says Scott M. Kahan, Certified Financial Planner practitioner and president of the wealth management firm Financial Asset Management Corp. in New York City. “By paying the interest while in school, families can save a lot of money and pay off their debt much sooner. This goes a long way in managing your finances responsibly.”

With Sallie Mae’s Smart Option Student Loan, students pay interest while in school, graduate with less debt, and pay off their loans faster, saving more than 50 percent in finance charges over the life of their loan. A typical freshman borrowing $10,000 makes payments of principal and interest for only seven years after graduation rather than 15 years. The customer saves approximately $8,800—compared to other private student loan alternatives in which no payments are made until after graduation.

“Keeping up with interest on my student loans out of pocket may not seem like much, but every bit counts and will save me money after graduation,” says Felicia Corcoran, a sophomore from Middleboro, Mass., who attends the Massachusetts College of Pharmacy. “I’m also participating in the Upromise program through Sallie Mae. This program is basically a free way to earn more money for college. What’s not to love?”

Also new for the coming academic year is Sallie Mae’s Smart Reward that allows Smart Option Student Loan customers to earn back 2 percent of their scheduled in-school interest payments simply for making their payments on time. The new Smart Reward will be deposited each month into the customer’s Upromise account, where it can be applied toward the balance of the loan, transferred to a Sallie Mae High-Yield Savings Account or withdrawn by check. Customers who sign up to make recurring monthly payments by automatic-debit receive a .25-percentage interest rate reduction and save even more.

Other enhancements to the Smart Option Student Loan include a faster release for a parent or other cosigner from the loan. Customers who make on-time payments of principal and interest for 12 months after graduation may apply to have the loan transferred solely to their names. In addition, earlier this year Sallie Mae incorporated loan forgiveness in the event of death or permanent and total disability of the primary borrower into the Smart Option Student Loan. According to industry experts, Sallie Mae is the first national private loan provider to offer this safeguard for private education loans.

In addition, loan terms are clearer than ever. Customers receive easy-to-read disclosures when they apply, when they are approved, and upon acceptance of the loan. Students have 30 days to shop around for rates before accepting an offer and have three days after accepting the loan to cancel.

“Our experience shows that our student customers are successfully managing their monthly payments,” said Joe DePaulo, executive vice president, Sallie Mae. “In fact, customers who selected Sallie Mae’s Smart Option Student Loan over the last year and continue to make on-time payments are on track to save an estimated $1.1 billion in total over the life of their loans. As the economy improves, we are pleased to pass additional savings on to students and families and encourage them to borrow smart.”

Sallie Mae recommends private student loans to help bridge the college financing gap after exploring scholarships, grants and federal student loans. For more information, visitwww.SallieMae.com/loansmart.

For more information contact:

Patricia Nash Christel(703) 984-5382

Erica Eriksdotter(703) 984-5628

SLM Corporation(NYSE:SLM), commonly known as Sallie Mae, is the nation’s leading saving, planning and paying for education company. Sallie Mae’s saving programs, planning resources and financing options have helped more than 31 million people make the investment in higher education. Through its subsidiaries, the company manages $182 billion in education loans and serves 10 million student and parent customers. In addition, the company’s Upromise program has enabled 12 million members to earn more than $525 million in rewards to help pay for college. Its Upromise affiliates also manage more than $25 billion in 529 college-savings plans. Sallie Mae offers services to a range of institutional clients, including colleges and universities, student loan guarantors and state and federal agencies. More information is available atwww.SallieMae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.