Sallie Mae to Acquire Upromise

SLM Corporation, commonly known as Sallie Mae, announced today that it has signed a purchase agreement to acquire Upromise Inc., pending regulatory approvals. When completed, the transaction will unite the nation’s leading paying-for-college company with the nation’s leading saving-for-college company.

Sallie Mae, America’s leading education finance company, has 10 million borrowing customers. Upromise’s popular rewards service — one of the largest rewards marketing coalitions in the U.S. — has more than 7 million members who have joined Upromise to save for college when they and their families buy gas or groceries, dine out, or purchase other goods and services from more than 450 participating companies.

Upromise is also the largest administrator of direct-to-consumer 529 college savings plans, administering nearly 1 million college savings accounts and over $10 billion in assets with tax-advantaged 529 investment options through partnerships Leading Paying-For-College Company Combines with seven states. Upromise offers its rewards service members the opportunity to link their Upromise account to a participating 529 plan so that their savings can be transferred automatically into their plan on a periodic basis.

Launched in 2001, Upromise has achieved these milestones in just five years, and expects to grow its membership base for retail savings and 529 plans in excess of 30 percent annually over the next five years.

Together, Sallie Mae and Upromise will offer parents and students a comprehensive financial package to access college — including a broad range of investment options, financial aid information, college savings and student loan solutions.

“Upromise’s savings plans, when linked with the purchasing power of their rewards program, provide tremendous incentives to help save for a college education,” said Tim Fitzpatrick, CEO, Sallie Mae. “We are truly excited about this new acquisition. This complements our mission to improve access to higher education, and our leadership position in providing financing solutions to families and students. The opportunities to expand college savings through our customer relationships are extraordinary. In partnering with Upromise, we will be able to help families get a jumpstart on saving for college.”

“Joining with Sallie Mae allows us to offer families a range of new services and advice that will help them realize the dream of college,” said Tom Anderson, CEO, Upromise. “It will also allow Upromise to extend our relationship with families through college and beyond. Sallie Mae’s work with 6,000 colleges and universities, as well as America’s leading scholarship organizations, creates partnership opportunities that Upromise could never achieve on its own.”

Under the terms of the transaction, Upromise will become a wholly owned subsidiary of SLM Corporation. Upromise, which employs approximately 250 individuals, will retain its separate brand identity, management team and operations in Needham, Mass. The acquisition will be accretive immediately, although the impact on Sallie Mae’s 2006 and 2007 earnings per share will not be material.