(The following is a reformatted version of a press release and attached letter from by J.C. Flowers & Co., received via electronic mail.)

October 15, 2007

Investor Group Offers to Terminate Merger Agreement

Files Answer and Counterclaims to Sallie Mae Lawsuit

NEW YORK, NY, October 15, 2007 - J.C. Flowers & Co., on behalf of itself and its partners Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM) released a letter sent today to Vice Chancellor Leo E. Strine, Jr. of the Delaware Chancery Court offering to terminate the Merger Agreement with SLM Corporation (NYSE: SLM), commonly known as Sallie Mae. The Investor Group also filed its Answer and Counterclaims in Sallie Mae's lawsuit, which explain why Sallie Mae has suffered a "Material Adverse Effect" as defined by the Merger Agreement.

The Investor Group's letter to Vice Chancellor Strine was sent in response to a letter that Sallie Mae sent to the court on Friday, October 12, 2007, asking the court to schedule an expedited trial. Sallie Mae sent its letter to the court the day after Sallie Mae's Chairman Al Lord told the company's shareholders that an expedited trial was unnecessary because the company was "not in any kind of difficulty." In today's letter, the Investor Group offered to terminate the Merger Agreement in response to Sallie Mae's assertion on Friday that the Merger Agreement is impeding Sallie Mae's ability to run its business. The letter explains that by entering into an agreement to terminate the Merger Agreement, Sallie Mae would be free from the restrictions that it is complaining about.

The Investor Group also filed its Answer and Counterclaims with the Delaware Chancery Court. In its filing, the Investor Group asks the Court to declare that it is not obligated to proceed to closing under the Merger Agreement because, among other reasons:

* In the Merger Agreement, Sallie Mae agreed that the full impact of any legislative changes relating to the student lending industry that are "in the aggregate more adverse" to the company than the Bush Budget Proposal counts in determining whether there has been a Material Adverse Effect.

* Since Sallie Mae is the largest education finance company and approximately 84% of Sallie Mae's loan portfolio consists of federally subsidized loans, Sallie Mae is the single largest beneficiary of federal subsidies and suffers the largest economic impact as a result of the recent enactment of the College Cost Reduction Act.

* According to the Congressional Budget Office, the College Cost Reduction Act will cut subsidies to the student loan industry by $22.32 billion on a present value basis over the next five years. The cuts imposed by the College Cost Reduction Act are much more severe than the $15.5 billion of cuts proposed in the Bush Budget Proposal. Sallie Mae, in its complaint, admitted that the new legislation is more adverse to the company than the Bush Proposal.

* Under the terms of the Merger Agreement, if something in the aggregate more adverse than the Bush Budget proposal is signed into law, then the entirety of the impact of that new law must be included in evaluating whether there has been a Material Adverse Effect.

* According to the Investor Group's projections, the College Cost Reduction Act will cut Sallie Mae's core net income by approximately $316 million, or 15.2%, in 2009, rising to a reduction of approximately $595 million, or 23.5%, in 2012 as compared to what it would have been if no legislation had been enacted.

* The net result of the College Cost Reduction Act is that Sallie Mae will suffer a 'material' reduction in future income that is considerably more severe than if the Bush Budget Proposal were enacted.

* Sallie Mae also agreed in the Merger Agreement that changes in credit markets that disproportionately impact the company relative to similarly sized financial services companies like banks would count in determining whether there has been a Material Adverse Effect. Sallie Mae has been disproportionately affected by the recent credit market collapse because, unlike banks that can accept deposits, Sallie Mae is acutely dependent on the wholesale credit markets to finance its operations.

* The new legislation and the changes in conditions in the credit markets that disproportionately affect Sallie Mae each independently give rise to a Material Adverse Effect under the Material Adverse Effect definition in the Merger Agreement.

Below is today's letter to Vice Chancellor Leo E. Strine, Jr., and attached is the Investor Group's Answer and Counterclaims filed today in the Delaware Chancery Court.

Media Contact: Stephanie Cutter 202-528-0143 or Stephanie@CutterMediaGroup.Com <mailto:Stephanie@CutterMediaGroup.Com>

________________________________________________________________________

Young Conaway Stargatt & Taylor, LLP

October 15, 2007

The Honorable Leo E. Strine, Jr.

The Court of Chancery of the State of Delaware

500 N. King Street

Wilmington, Delaware 19801

Re: SLM Corp. v. J.C. Flowers II, L.P., et al., C.A. No. 3279-VCS

Dear Vice Chancellor Strine:

We are counsel to J.C. Flowers II L.P., Bank of America, N.A., JPMorgan Chase Bank, N.A, Mustang Holding Company Inc. and Mustang Merger Sub, Inc. (collectively, the "Buying Group"), defendants in the above-captioned action which, in essence, alleges that the Buying Group breached its obligation to acquire plaintiff SLM Corporation ("Sallie Mae" or the "Company") for $60 per share in cash. The Buying Group today filed its Answer and Counterclaims, which explain why Sallie Mae has suffered a "Material Adverse Effect" within the meaning of the term as it is specifically defined in the Merger Agreement. As a result of this, among other things, if the conditions to closing were to be measured today, the Buying Group would not be obligated to consummate the merger. The Buying Group has not repudiated the Merger Agreement and continues to abide by its terms. A copy of the Answer and Counterclaims is enclosed for the Court's convenience.

We write in response to Sallie Mae's October 12, 2007 letter requesting an expedited trial. The premise of the request is that Sallie Mae is in an "untenable position" because, on the one hand, the Buying Group is refusing to proceed to consummate the merger and, on the other hand, the terms of the Merger Agreement are preventing Sallie Mae from "exercising control of its business." As explained below, the premise of Sallie Mae's claim is not true.

Nevertheless, the Buying Group is prepared to eliminate any concern that Sallie Mae has by entering into an agreement to terminate the Merger Agreement and thereby free Sallie Mae from the covenants and other restrictions of which it complains. The termination would be by mutual agreement on a without prejudice basis to either party, i.e., Sallie Mae would preserve its claim that the Buying Group is in breach and has repudiated its obligations, and the Buying Group would preserve its defense to those claims and its own claims against Sallie Mae, including the defense that, if measured today, Sallie Mae has suffered a Material Adverse Effect in its business and the defense that the conditions to closing have not been satisfied.

In light of this offer, there is no need for extraordinary expedition of Sallie Mae's claim for the payment of a $900 million termination fee, a claim that the Buying Group believes to be without merit. See Gomi Investors, LLC v. Schimmel Holdings Inc., Civ. A. No. 2278-N, 2006 WL 2304035, at *1, Chandler, C. (Del. Ch. July 27, 2006) (denying motion for expedited proceedings on a declaratory judgment claim in part because any injury plaintiffs suffered could be adequately compensated by money damages).

For the record, we do want to respond briefly to Sallie Mae's assertion that the Buying Group has impeded Sallie Mae's ability to run its business. The claim is not true. Indeed, at Sallie Mae's October 11, 2007 shareholder meeting, Sallie Mae's Chairman, Al Lord, was specifically asked why Sallie Mae had not asked for expedited treatment of this suit when it was filed on October 8. He responded:

My understanding of this is that somebody has got to be, you know, an emergency ward emergency, not an injured shareholder. There is no question that with the economics of the transaction skewed the way they are based on the direction we were headed that current shareholders are harmed, and the current shareholders were harmed when they announced the MAC in July. Shareholders have been in and out and - of this stock at various prices and there is no question harm has transpired. But the company is not in any kind of difficulty and I don't think anybody else is in the kind of difficulty I understand it would take to get a judge to move more quickly than judges normally move, unfortunately. (Emphasis added.)

Notwithstanding Mr. Lord's statement to the contrary, Sallie Mae offers three justifications for its newly found sense of urgency. None of them has merit:

* The first claim is that JPMorgan Chase and Bank of America have impeded Sallie Mae's ability to access the asset-backed securitization market. The facts are otherwise. The very day Sallie Mae sued JPMorgan Chase and Bank of America, Sallie Mae contacted the two banks and indicated that it wanted to go forward with an asset backed securitization pursuant to an agreement (separate from the Merger Agreement) that gave the banks the right to have a "first look" at these types of offerings. JPMorgan and Bank of America agreed to go forward with the offering, notwithstanding the litigation, and requested only that Sallie Mae agree that no party would use the offering as a basis for prejudicing any other party's rights in the litigation. Sallie Mae refused to agree to this straightforward "no harm, no foul" agreement and determined to go forward with the offering with other institutions. Sallie Mae also informed the banks that it did not believe it was any longer obligated to offer the two banks the opportunity to underwrite any additional offerings. In sum, assuming Sallie Mae suffered any delay in reaching the markets, that delay was self-imposed.

* The second claim is that the Buying Group has refused to consent to a management incentive compensation plan. Again, that is not true. On August 30, 2007, Sallie Mae was told by JC Flowers that the Buying Group consented to the plan. Sallie Mae did not complain to the Buying Group directly that it had not received written confirmation; that complaint was made in its letter to the Court. Written confirmation of that consent has now been provided to Sallie Mae.

* The third claim is that Sallie Mae faces prospective harm because it is obligated to provide sensitive financial information to JPMorgan Chase and Bank of America, both of which have business units that compete with Sallie Mae in the student lending market. Again, the claim is false. Both banks have in place strict protocols to "firewall" off such information from their student lending businesses. Moreover, under the Sherman Act, JPMorgan Chase and Bank of America are barred from using confidential information that they acquired from Sallie Mae for anticompetitive purposes. Finally, as Sallie Mae knows, in order to obtain antitrust clearance from the United States Department of Justice, Sallie Mae, JC Flowers, JPMorgan Chase and Bank of America entered into a written agreement requiring the banks to erect comprehensive "firewalls" that would ensure that any confidential information provided by Sallie Mae would not be misused.

* * *

In light of all of the foregoing, we do not believe that an expedited trial of the sort that Sallie Mae appears to be contemplating - which would, as a practical matter, truncate our ability to get full discovery - is necessary. All of the immediate relief that Sallie Mae claims to need is available to it if it agrees to terminate the Merger Agreement without prejudice to the claims and defenses of either side. We are, of course, prepared to discuss an orderly and appropriate schedule that accommodates all parties' legitimate needs and allows for this matter to be resolved efficiently at a status conference. Our preference would be for the Court to hold the conference in person.

Respectfully,

David C. McBride

(jkt)NY

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Last Updated: October 15, 2007 10:56 EDT