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Frequently
Asked Questions
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Transaction
Q.
How will Sallie Mae’s recent agreement to be purchased by an
investor
group led by J.C. Flowers & Co. impact
students?
A.
We
anticipate that students will experience no change at all. We will continue
to
offer the same best-in-class products and services to students and schools.
We
will continue to originate student loans under our internal brands and will
remain headquartered in Reston, Va. Moving forward, we intend to increase
our
investment in the development of products that help students save for college
and manage their student loan debt.
JPMorgan
Chase and Bank of America (which are both partners in the buyout, along with
lead purchaser J.C. Flowers & Co.) will continue to operate their
independent student lending businesses, competing head-to-head with Sallie
Mae.
The
new
private-sector investment by all companies involved in this transaction will
increase marketplace competition, providing students, families and schools
with
the most affordable and comprehensive choices.
Further,
Sallie Mae will continue to be subject to oversight by Congress and the
Department of Education, as well as all applicable federal and state laws
including the Higher Education Act. Following
the closing, Sallie Mae will continue to have publicly traded debt securities
and as a result will continue comprehensive financial reporting about its
business, financial condition and results of operations.
In
addition, the FDIC will continue to have oversight of the Sallie Mae
Bank.
Q.
How will the products and services offered to students, schools and lenders
be
impacted?
A.
The
products and services you expect to receive from Sallie Mae for the 2007-08
academic year (including federal and private loan offerings) will not change.
In
addition, no changes are planned to existing borrower benefit programs during
the 2007-08 academic year.
Q:
What are the details of the transaction?
A.
An
investor group led by J.C. Flowers & Co. has signed a definitive agreement
to purchase Sallie Mae for approximately $25 billon or $60.00 per share of
common stock. When the transaction is complete, J.C. Flowers along with
private-equity firm Friedman Fleischer & Lowe will invest approximately $4.4
billion and own 50.2 percent, and Bank of America (NYSE: BAC) and JPMorgan
Chase
(NYSE: JPM) each will invest approximately $2.2 billion and each will own
24.9
percent. Sallie Mae’s board has approved the agreement and recommended that its
shareholders approve the agreement.
Upon
closing, Sallie Mae’s current management is expected to continue to lead the
company, ensuring that it will continue to adhere to the New York Attorney
General’s Student Loan Code of Conduct, which Sallie Mae adopted April 11.
Sallie Mae will continue to originate student loans under its internal brands
and will remain headquartered in Reston, Va.
Q.
Given that you will be acquired by a group that includes Bank of America
and
Chase, why would I need to keep all of these lenders on my lender
list?
A.
Bank of
America and Chase are strategic investment partners in this agreement, along
with lead purchaser J.C. Flowers & Co. There are no plans to integrate
Sallie Mae’s student lending business with the existing lending functions at
Bank of America or Chase. In fact, each company will continue to compete
with
one another in the marketplace, offering separate products, services and
benefits to schools and students.
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Proprietary & Confidential
For Internal Use
Only
Not for Distribution |
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Frequently
Asked Questions
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Q.
Will this transaction increase the cost of student loans or reduce competition
among lenders?
A.
No.
Sallie Mae believes in and is committed to open competition in the student
loan
market, which results in the best price, service and value for students,
families and schools. We will continue to originate student loans for our
internal and affiliated brands.
Chase
and
Bank of America are investors
in this
transaction, and will maintain their independent student lending businesses,
with their own independent
management teams who will continuing to provide students and schools with
an
array of competitive choices.
Q.
Will there be less oversight because the company will be
private?
A.
No.
Sallie Mae will continue to be regulated by the U.S. Department of Education
and
subject to Congressional oversight. Sallie Mae will continue to participate
in
the Federal Family Education Loan program, and be subject to all applicable
federal and state laws, including the Higher Education Act.
Q.
How will this transaction impact existing contracts with third parties
(servicing, collections, and others)?
A.
We do
not expect this transaction to impact existing contracts. We intend to continue
operating with current contracts in place.
Q.
How will the transaction impact Sallie Mae’s philanthropic
goals?
A.
Sallie
Mae’s commitment to philanthropy, charitable giving, and increasing access to
higher education for underserved student populations is expected to continue.
As
a result of Sallie Mae acquisitions over the last eight years, nearly $2
billion
has been generated for higher education philanthropy programs to increase
access
to higher education. Under the new owners, Sallie Mae expects to work with
independent foundations to continue its investment in need-based scholarship
grants and financial literacy to students.
Sallie
Mae
has a strong history of funding foundations that support academic preparation,
financial literacy, and college access, with particular emphasis on lower-income
families, students from underrepresented groups and the institutions that
serve
them.
In
particular, The Sallie Mae Fund, a charitable organization sponsored by Sallie
Mae, achieves its mission—increasing access to higher education—by supporting
programs and initiatives that help open doors to higher education, prepare
families for their college investment, and bridge the gap when no one else
can.
The Sallie Mae Fund has contributed more than $100 million over the past
five
years in scholarships and information programs.
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Proprietary & Confidential
For Internal Use
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Not for Distribution |
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IMPORTANT
ADDITIONAL INFORMATION REGARDING THE MERGER WILL BE FILED WITH THE
SEC:
In
connection with the proposed merger, the Company will file a proxy statement
with the Securities and Exchange Commission (the “SEC”). INVESTORS AND SECURITY
HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE
PARTIES
TO THE MERGER. Investors and security holders may obtain a free copy of
the
proxy statement (when available) and other relevant documents filed with
the SEC
from the SEC’s website at http://www.sec.gov. The Company's security holders and
other interested parties will also be able to obtain, without charge, a
copy of
the proxy statement and other relevant documents (when available) by directing
a
request by mail or telephone to Investor Relations, SLM Corporation, 12061
Bluemont Way, Reston, Va. 20190, telephone (703) 984-6746, or from the
Company’s
Web site, http://www.salliemae.com.
The
Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation
of
proxies from the Company’s shareholders with respect to the Merger. Information
about the Company’s directors and executive officers and their ownership of the
Company’s common stock is set forth in the proxy statement for the Company’s
2007 Annual Meeting of Shareholders, which was filed with the SEC on April
9,
2007. Shareholders and investors may obtain additional information regarding
the
interests of the Company and its directors and executive officers in the
Merger,
which may be different than those of the Company’s shareholders generally, by
reading the proxy statement and other relevant documents regarding the
Merger,
which will be filed with the SEC.