Sallie Mae to Acquire Student Loan Finance Association

RESTON, Va., Sept. 23 /PRNewswire-FirstCall/ — SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today announced its intent to purchase both the secondary market and related businesses of Education Assistance Foundation (EAF) and its affiliate, Student Loan Finance Association. Student Loan Finance Association is a Northwest regional leader in education loan funding and acquisition. The transaction includes Student Loan Finance Association's $1.6 billion loan portfolio and an origination franchise that generates $50 million of student loan volume annually. As part of the agreement, Sallie Mae will offer employment to nearly all of EAF's 150 employees; however, a small staff will remain at EAF to run its charitable programs.

EAF and its affiliates are charitable, non-profit corporations based in Seattle, Wash. Proceeds from the sale will make EAF one of the largest philanthropies in the Northwest dedicated to increasing access to higher education.

"Since Student Loan Finance Association's inception, we have been dedicated to promoting access to higher education for the students and families of the Northwest," said Ned Lange, chairman of the board, EAF. "With this transaction, we will provide more services to the community and create an important new resource through EAF."

Student Loan Finance Association and its subsidiaries, Washington Student Loan Finance Association, Idaho Student Loan Finance Association, and Oregon Student Loan Association, are key participants in the secondary market for federal student loans, and growing providers of student loans and related services for students, families and schools throughout the Northwest.

"Student Loan Finance Association is a terrific strategic fit with Sallie Mae," said June McCormack, executive vice president, Sallie Mae. "This transaction complements our efforts to enhance Sallie Mae's products and services for our clients in the West."

Ralph Kosanovich, president and chief executive officer, Student Loan Finance Association, said the transaction will enable the organization to deliver best-in-class products and support. "The combination of our local expertise and presence, along with Sallie Mae's resources, will result in superior service for our students, families and school customers," he said. Kosanovich added that Student Loan Finance Association and Sallie Mae share the mission of making education widely accessible.

The transaction, which is subject to regulatory review, is expected to close in two phases. The first of these includes the acquisition of approximately $250 million of the Student Loan Finance Association portfolio. The second phase, to follow six months later, incorporates the balance of the portfolio. At that time, the business operations of Student Loan Finance Association will become a subsidiary of SLM Corporation, retaining its own brand and identity. Kosanovich will continue to lead the organization, overseeing its growth and financial and operational performance. The acquisition is not expected to have any impact on Sallie Mae's current year earnings and is projected to be modestly accretive beginning in 2005.

In a separate transaction, Northwest Education Loan Association (NELA), a non-profit regional guarantor, is entering into an affiliation with USA Funds, which is another non-profit and the nation's leading education-loan guarantor. Sallie Mae today provides software and IT support to NELA. After the transaction is complete, NELA will contract additional services to Sallie Mae, and will continue to provide guarantor services to students, families, and educational institutions of the West.

SLM Corporation, commonly known as Sallie Mae, is the nation's leading provider of education funding, managing nearly $95 billion in student loans for more than 7 million borrowers. The company primarily provides federally guaranteed student loans originated under the Federal Family Education Loan Program (FFELP), and offers comprehensive information and resources to guide students, parents and guidance professionals through the financial aid process. Sallie Mae was established in 1973 as a government- sponsored enterprise (GSE) called the Student Loan Marketing Association, and began the privatization process in 1997. Since then, the parent company name has changed, most recently to SLM Corporation. Through its specialized subsidiaries and divisions, Sallie Mae also provides an array of consumer credit loans, including those for lifelong learning and K-12 education, and business and technical products and services for colleges and universities. More information is available at www.salliemae.com. SLM Corporation and its subsidiaries, other than the Student Loan Marketing Association, are not sponsored by or agencies of the United States.

Student Loan Finance Association has been providing financial access to education for more than 22 years. Student Loan Finance Association is a not- for-profit company that promotes access to higher education. The company and its subsidiaries, Washington Student Loan Finance Association, Oregon Student Loan Finance Association and Idaho Student Loan Finance Association, participate in the Federal Family Education Loan Program (FFELP) by purchasing student loan portfolios from commercial lenders and holding those loans throughout the repayment period. Student Loan Finance Association offers programs with flexible repayment options, loan consolidation and money-saving borrower benefits to make student loan repayment more affordable. Student Loan Finance Association and its subsidiaries provide financial aid assistance, support services and information to students, families, schools and lenders throughout the Pacific Northwest. More information can be found at www.slfaloan.com.

Statements in this release referring to expectations as to future earnings and operations, and other future developments are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks, uncertainties and other factors that may cause the actual results to differ materially from such forward- looking statements. Such factors include, among others, the ability to successfully integrate operations, the impact of competitors' responses, changes in 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, and changes in the demand for educational financing or in financing preferences of educational institutions, students and their families.