SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
THE STUDENT LOAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 16-1427135
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
99 GARNSEY ROAD 14534
PITTSFORD, NEW YORK (Zip Code)
(Address of principal executive offices)
(716) 248-7187
(Registrant's telephone number, including area code)
------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
On May 8, 1998, there were 20,000,000 shares of The Student Loan
Corporation's Common Stock outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
THE STUDENT LOAN CORPORATION
STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
Three months ended
March 31,
-------------------
1998 1997
-------- --------
REVENUE
Interest income $156,835 $142,779
Interest expense 111,451 98,050
-------- --------
Net interest income 45,384 44,729
Provision for loan losses 788 705
-------- --------
Net interest income after provision for loan losses 44,596 44,024
Fee and other income 362 22
-------- --------
Total revenue, net $ 44,958 $ 44,046
-------- --------
OPERATING EXPENSES
Salaries and employee benefits $ 8,930 $ 7,562
Other expenses 7,819 8,559
-------- --------
Total operating expenses $ 16,749 $ 16,121
-------- --------
Income before income taxes $ 28,209 $ 27,925
Income taxes 11,403 11,110
-------- --------
NET INCOME $ 16,806 $ 16,815
======== ========
NET INCOME - Core (excluding floor income) $ 16,692 $ 16,496
======== ========
NET INCOME - Floor $ 114 $ 319
======== ========
DIVIDENDS DECLARED $ 3,000 $ 2,400
======== ========
BASIC AND DILUTED EARNINGS PER COMMON SHARE
(based on 20 million average shares outstanding)
Net income - Core $ 0.83 $ 0.82
Net income - Floor $ 0.01 $ 0.02
-------- --------
Net income $ 0.84 $ 0.84
======== ========
DIVIDENDS DECLARED PER COMMON SHARE $ 0.15 $ 0.12
======== ========
OPERATING RATIOS
Net interest margin 2.33% 2.54%
Net interest margin - Core 2.32% 2.51%
Operating expenses as a percentage of
average insured student loans 0.86% 0.92%
See accompanying notes to financial statements.
2
<PAGE>
THE STUDENT LOAN CORPORATION
BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
1998 1997
---------- ----------
ASSETS
Insured student loans $7,975,540 $7,625,157
Allowance for loan losses 2,191 2,014
---------- ----------
Insured student loans, net 7,973,349 7,623,143
Cash 263 2,108
Deferred tax benefits 40,500 41,581
Other assets 220,882 207,118
---------- ----------
Total Assets $8,234,994 $7,873,950
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings $5,129,974 $5,696,605
Long-term notes 2,530,000 1,610,000
Payable to principal stockholder 16,140 17,063
Restructuring liabilities 17,692 17,724
Other liabilities 124,260 129,436
---------- ----------
Total Liabilities 7,818,066 7,470,828
---------- ----------
Common stock 200 200
Additional paid-in capital 134,380 134,380
Retained earnings 282,348 268,542
---------- ----------
Total Stockholders' Equity 416,928 403,122
---------- ----------
Total Liabilities and Stockholders' Equity $8,234,994 $7,873,950
========== ==========
AVERAGE INSURED STUDENT LOANS $7,912,095 $7,269,249
(year-to-date) ========== ==========
See accompanying notes to financial statements.
3
<PAGE>
THE STUDENT LOAN CORPORATION
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three months ended
March 31,
-------------------
1998 1997
-------- --------
Cash flows from operating activities:
Net income $ 16,806 $ 16,815
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 1,314 1,375
Provision for loan losses 788 705
Deferred tax provision 1,081 1,423
Increase in accrued interest receivable (10,780) (11,901)
Increase in other assets (2,758) (5,724)
Decrease in other liabilities (6,131) (26,744)
-------- --------
Net cash provided by (used in) operating activities 320 (24,051)
-------- --------
Cash flows from investing activities:
Disbursements of loans (609,855) (520,681)
Repayment of loans 240,925 217,634
Sale of loans, net of purchases 16,622 11,022
Capital expenditures on furniture and equipment (226) (961)
-------- --------
Net cash used in investing activities (352,534) (292,986)
-------- --------
Cash flows from financing activities:
Net increase (decrease) in borrowings with
original maturities of one year or less (566,631) 284,188
Proceeds from long-term borrowings 920,000 35,000
Dividends paid to stockholders (3,000) (2,400)
-------- --------
Net cash provided by financing activities 350,369 316,788
-------- --------
Net decrease in cash (1,845) (249)
Cash - beginning of period 2,108 567
-------- --------
Cash - end of period $ 263 $ 318
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the periods for:
Interest $102,625 $112,224
Income taxes $ 7,308 $ 3
See accompanying notes to financial statements.
4
<PAGE>
THE STUDENT LOAN CORPORATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL INFORMATION
The financial information of The Student Loan Corporation (the
"Company") as of March 31, 1998 and for the three-month periods ended
March 31, 1998 and March 31, 1997 include all adjustments (consisting of
normal recurring accruals) which, in the opinion of management, are
necessary to state the Company's financial position and results of
operations in accordance with generally accepted accounting principles.
Certain amounts in the prior period's financial statements have been
reclassified to conform with the current period's presentation. Such
reclassification had no effect on the results of operations as
previously reported.
DEFINITIONS
Core net income represents net income excluding floor income,
attributable to the fixed minimum interest rates on certain loans in the
Company's portfolio.
2. COMMITMENTS AND CONTINGENCIES
REGULATORY IMPACTS
Provisions of the Higher Education Act (the "Act") adopted in 1993
included increased costs and reduced interest payments to lenders
participating in the Federal Family Education Loan ("FFEL") program and
the introduction of a competitor program, the Federal Direct Student
Loan program. The impact of these provisions on the Company's future
originations is dependent on such factors as the ultimate success of
direct lending and the relative size of the FFEL program in the years to
come. The legislative changes have reduced the net interest margin of
the guaranteed student loan portfolio from pre-1994 levels. The 1993
provisions of the Act also change the interest rate on most new FFEL
program disbursements made on or after July 1, 1998 to the 10-year
Treasury Bill rate plus 1%, resetting annually, although legislation
that would amend this provision is pending. The Administration has
proposed maintaining the current 91-day Treasury Bill index, but
reducing the interest rate paid by borrowers for most loans originated
after June 30, 1998 by 0.80% from the current rate. Current
congressional proposals call for the 0.80% interest rate reduction to be
borne 0.30% by lenders and 0.50% by the Federal Government in the form
of interest subsidies. Resolution of this issue may not occur for many
months. However, if no Congressional action is taken, the 10-year plus
1% formula will take effect for loans disbursed on or after July 1,
1998. This rate would result in materially lower yields on new loans
made by the Company compared to yields from loans made at the current
rate.
In addition, there can be no assurance that the provisions of the Higher
Education Act will be reauthorized prior to its expiration on September
30, 1998. In addition, provisions of the Act may be amended by Congress
at any time prior to that date, possibly resulting in further reductions
in FFEL program loan subsidies in the form of increased risk sharing
costs and
5
<PAGE>
reduced interest margins. Any such amendment, or the failure to
reauthorize the Act in 1998, could have a material adverse effect on the
Company's business and prospects.
3. RESTRUCTURING PLAN
In the fourth quarter of 1997, the Company announced a restructuring
plan which will realign its business and processing structure, involving
the outsourcing of a significant part of its operations to subsidiaries
of Citicorp over the next nine to twelve months, allowing the Company to
take advantage of the larger economies of scale and more global
operating systems configurations being employed by Citibank. The Company
expects the restructuring to substantially impact all of its
approximately 800 Pittsford-based employees over the next 9-12 months.
In connection with this plan, the Company incurred a $20.5 million
pre-tax charge in 1997, including $16.2 million in severance benefits,
$2.8 million in furniture and equipment write-downs and $1.5 million in
other costs. Additional costs, which did not qualify for recognition in
the initial $20.5 million charge, will be expensed as incurred in the
implementation of the restructuring plan over the next 12 months. These
costs are not expected to be material.
A reserve in the amount of $17.7 million was recorded as of December 31,
1997, which represented the liability for future cash outflows
associated with the charge, less the $2.8 million furniture and
equipment write-downs. Effectively no amounts of the $17.7 million
reserve were expended and no staff reductions occurred during the first
quarter of 1998. The restructuring program is expected to be
substantially complete within the next twelve months.
4. RELATED PARTY TRANSACTIONS
Citibank (New York State) ("CNYS"), a subsidiary of Citicorp, owns 80%
of the outstanding common stock of the Company. A number of significant
transactions are carried out between the Company on the one hand and
Citicorp and its affiliates on the other hand. At March 31, 1998, the
Company had outstanding short-term borrowings of $5.1 billion and
long-term borrowings of $2.5 billion with CNYS, compared to short-term
and long-term borrowings of $5.7 billion and $1.6 billion, respectively,
with CNYS at December 31, 1997. The amounts classified as short-term
debt as of March 31, 1998 and December 31, 1997 included $1.4 billion of
debt originally issued as long-term that, as of these dates, matures
within 12 months. For the three-month period ended March 31, 1998, the
Company incurred $111.5 million in interest expense payable to CNYS and
its affiliates, compared to $83.9 million in interest expenses payable
to CNYS and its affiliates for the same period in 1997. In addition,
Citicorp and its subsidiaries engage in other transactions and servicing
activities, including cash management, data processing, income tax
payments, employee benefits and facilities management, with the Company.
Management believes that the terms of these transactions are, in the
aggregate, no less favorable to the Company than those which could be
obtained from unaffiliated parties.
On April 5, 1998, Citicorp, the parent corporation of CNYS, agreed to
merge with Travelers Group Inc., subject to customary closing conditions
including approvals of stockholders and regulators. Compliance with the
merger agreement and regulatory and legal requirements applicable to the
merger are not expected to have any material effect on the Company.
5. INTEREST RATE SWAP AGREEMENTS
The Company, from time to time, enters into interest rate swap
agreements with related and third parties solely to hedge interest rate
exposure on certain interest bearing liabilities. The swap agreements
are intended to reduce the risk caused by differences between borrowing
and lending rates. Entering into swap agreements to pay interest based
on the interest rate characteristics of the Company's assets and to
receive interest based on the characteristics of the Company's
6
<PAGE>
liabilities effectively limits the risk of the potential interest rate
variability. The counterparty for all interest rate swap agreements
outstanding at March 31, 1998 was either CNYS, the majority stockholder,
or one of its affiliates.
Interest rate swap agreements with a carrying value of $0.3 million,
representing accrued interest payable, were determined to have an
estimated fair value of $0.4 million payable at March 31, 1998. At
December 31, 1997, interest rate swap agreements with a carrying value
of $0.4 million of interest payable had an estimated fair value of $0.6
million payable. The fair values were based on approximate values
obtained from Citibank, N.A., an affiliate of CNYS and the Company's
dealer in these financial instruments, and represent the estimated
amounts which would be payable upon termination of the agreements. Fair
values vary from period to period based on changes in such factors as
LIBOR and Treasury Bill interest rates and the timing of contractual
settlements. The aggregate notional principal amounts outstanding at
March 31, 1998 and December 31, 1997 totaled $2.8 billion and $2.2
billion, respectively.
6. SHORT AND LONG-TERM BORROWINGS
Effective March 1, 1998, an amendment to the existing Omnibus Credit
Agreement with CNYS increased the maximum allowable credit limit
available to the Company to $10 billion. In the first quarter of 1998,
$0.9 billion in new long-term borrowings was made and $0.6 billion of
borrowings with original maturities of one year or less was repaid.
Short-term borrowings at March 31, 1998 include $1.4 billion of original
long-term borrowings that will mature within a year, which is consistent
with the amount and presentation of long-term borrowings which had been
reclassified to short-term as of December 31, 1997.
7. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Effective January 1, 1998 the Company adopted the remaining provisions
of Statement of Financial Accounting Standards (SFAS) No. 125,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities." Adoption of the standard had no effect
on the Company's financial statements or financial condition.
Also, effective January 1, 1998 the Company adopted the provisions of
SFAS No. 130, "Reporting Comprehensive Income," which addresses the
manner in which certain adjustments to stockholders' equity are
displayed in the financial statements. The new standard had no effect on
the Company's financial statements.
Also, during the first quarter of 1998, the Company reviewed the
requirements of SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which will be adopted by the
Company during 1998, but is not required to be applied to interim
periods in the initial year of its application. The new standard is not
expected to require any significant changes in the Company's reporting.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESTRUCTURING PLAN
In the fourth quarter of 1997, the Company announced a restructuring plan which
will realign its business and processing structure, involving the outsourcing of
a significant part of its operations to subsidiaries of Citicorp over the next
nine to twelve months, allowing the Company to take advantage of the larger
economies of scale and more global operating systems configurations being
employed by Citibank. The Company expects the restructuring to substantially
impact all of its approximately 800 Pittsford-based employees over the next 9-12
months.
In connection with this plan, the Company incurred a $20.5 million pre-tax
charge in 1997, including $16.2 million in severance benefits, $2.8 million in
furniture and equipment write-downs and $1.5 million in other costs. Additional
costs, which did not qualify for recognition in the initial $20.5 million
charge, will be expensed as incurred in the implementation of the restructuring
plan over the next 12 months. These costs are not expected to be material.
A reserve in the amount of $17.7 million was recorded as of December 31, 1997,
which represented the liability for future cash outflows associated with the
charge, less the $2.8 million furniture and equipment write-downs. Effectively
no amounts of the $17.7 million reserve were expended and no staff reductions
occurred during the first quarter of 1998. The restructuring program is expected
to be substantially complete within the next twelve months.
FINANCIAL CONDITION
During the three months ended March 31, 1998, the net insured student loan
portfolio of The Student Loan Corporation (the "Company") grew by $350.2 million
(5%) from the balance at December 31, 1997. This growth was the result of loan
disbursements totaling $609.9 million in the first three months of 1998,
partially offset by $240.9 million in loan reductions (attributable to
repayments and claims paid by guarantors), loan sales net of loan purchases of
$16.6 million and other adjustments of $2.2 million. This compares to loan
disbursements of $520.7 million, loan reductions of $217.6 million, loan sales
net of loan purchases of $11.0 million, and other adjustments of $1.7 million in
the first three months of 1997.
The Company's new loan disbursements of $609.9 million made in the first three
months of 1998 were $89.2 million (17%) more than those made in the same period
of 1997. This increase is attributable primarily to new Federal Family Education
Loan ("FFEL") program disbursements of $547.1 million in the first three months
of 1998 compared to $484.5 million during the same period of 1997. This increase
of $62.6 million (13%) in FFEL program disbursements does not include
originations made under the Federal Loan Consolidation program, which, due to a
change in Federal regulations in the fourth quarter of 1997, now permits the
Company to consolidate Federal Direct Student Loans. The Company launched an
initiative to provide this expanded consolidation loan product in late 1997. As
a result, consolidation loan originations overall for the first quarter of 1998
have increased $27 million (74%) compared to the same period of 1997.
The increase in loan disbursements occurred despite competition from the Federal
Direct Student Loan ("FDSL") program also maintained by the Department of
Education. Although the proportion of FDSL program disbursements to total
Federally insured student loans nationally has remained consistent for the last
few years, an increase in FDSL program lending could lead to
8
<PAGE>
declines in the Company's FFEL program disbursements, which could adversely
affect the Company's future net income.
During the first three months of 1998, the Company made $102.6 million in
interest payments, principally to CNYS or one of its affiliates, compared to
$112.2 million paid in the same period in 1997. The difference is due to changes
in both the size of the borrowings and interest rates, as well as timing of
interest payments. The Company paid $7,308 thousand in income taxes during the
first three months of 1998, compared to $3 thousand for the same period last
year. The difference in the amount of taxes paid is primarily due to a timing
difference in making intercompany tax payments, and does not reflect any
significant changes in applicable income tax rates.
Other assets increased $13.8 million (7%) from the December 31, 1997 level,
principally as a result of additional interest receivable attributable to the
growth in the student loan portfolio and timing of interest receipts.
Effective March 1, 1998, an amendment to the existing Omnibus Credit Agreement
with CNYS increased the maximum allowable credit limit available to the Company
to $10 billion. In the first quarter of 1998, $0.9 billion in new long-term
borrowings was made and $0.6 billion of borrowings with original maturity of one
year or less was repaid. Short-term borrowings at March 31, 1998 include $1.4
billion of original long-term borrowings that will mature within a year, which
is consistent with the amount as of December 31, 1997.
On April 5, 1998, Citicorp, the parent corporation of CNYS, agreed to merge with
Travelers Group Inc., subject to customary closing conditions including
approvals of stockholders and regulators. Compliance with the merger agreement
and regulatory and legal requirements applicable to the merger are not expected
to have any material effect on the Company.
The Company recognizes that the arrival of the Year 2000 poses a unique
worldwide challenge to the ability of all systems to recognize the date change
from December 31, 1999 to January 1, 2000 and, like other companies, has
assessed and is repairing its computer applications and business processes to
provide for their continuing functionality. The Company is also assessing the
readiness of external entities with which it interacts. A process of inventory,
scoping and analysis, modification, testing and certification, and
implementation is underway, funded from a combination of reprioritization of
technology initiatives and incremental costs. The Company does not anticipate
that the related overall costs will be material to any single year or quarter.
The Company expects to incur approximately $2.4 million of Year 2000-related
costs in 1998, of which $0.6 million were recorded in the first quarter of 1998,
and expects to incur approximately $1.9 million in 1999.
The Company paid a quarterly dividend of $0.15 per common share on March 2,
1998. The Board of Directors has declared a regular quarterly dividend on the
Company's common stock of $0.15 per share to be paid on June 1, 1998 to
stockholders of record on May 15, 1998.
RESULTS OF OPERATIONS
Quarter Ended March 31, 1998
Net income was $16.8 million ($0.84 basic earnings per share) for the first
quarter of 1998. This was equal to net income for the first quarter of 1997. A
moderate increase in net interest income was offset by the effects of higher
operating costs and taxes and reduced floor income.
9
<PAGE>
The net interest margin for the first quarter of 1998 was 2.33%, 0.21% lower
than the 2.54% margin for the first quarter of 1997. The decline in the margin
was partly attributed to the continuing wide spreads between the 91-day Treasury
Bill rate (the base rate for most of the Company's interest-earning assets) and
other short-term money market rates upon which the Company's funding is based.
If this relationship continues, net interest margin in future quarters will be
similarly affected. Additionally, the March 31, 1998 loan portfolio included a
greater proportion of loans originated after July 1, 1995, which carry lower
in-school yields than loans originated prior to that date.
First quarter 1998 net income was also affected by higher salary and employee
benefit costs related to more direct staff hired to meet the needs of the
Company's enhanced loan consolidation program and other initiatives. Operating
expenses overall for the first quarter were up $0.6 million (4%) from the same
period last year. However, operating expenses as a percentage of average insured
student loans improved 0.06% to 0.86% from the first quarter of 1997 expense
ratio of 0.92%. The decrease in the expense ratio is primarily attributable to
productivity improvements and decreased marketing expenses compared to the first
quarter of 1997, when the Company's CitiAssist product was launched.
The provision for loan losses was $0.1 million (12%) higher for the first
quarter of 1998 than that recorded for the same period last year. This increase
reflects the risk sharing loss estimates on greater potential future default
claims (as a result of growth in the portion of the portfolio that is subject to
the 2% risk sharing provisions of the Omnibus Budget Reconciliation Act of
1993).
INCOME TAXES
The Company's effective tax rate was approximately 40.4% for the first three
months of 1998, compared to 39.8% for the same period in 1997.
REGULATORY IMPACTS
Provisions of the Higher Education Act ("the Act") adopted in 1993 included
increased costs and reduced interest payments to lenders participating in the
FFEL program and the introduction of a competitor program, the FDSL program. The
impact of these provisions on the Company's future originations is dependent on
such factors as the ultimate success of direct lending and the relative size of
the FFEL program in the years to come. The legislative changes have reduced the
net interest margin of the guaranteed student loan portfolio from pre-1994
levels. The 1993 provisions of the Act also change the interest rate on most new
FFEL program disbursements made on or after July 1, 1998 to the 10-year Treasury
Bill rate plus 1%, resetting annually, although legislation that would amend
this provision is pending. The Administration has proposed maintaining the
current 91-day Treasury Bill index, but reducing the interest rate paid by
borrowers for most loans originated after June 30, 1998 by 0.80% from the
current rate. Current congressional proposals call for the 0.80% interest rate
reduction to be borne 0.30% by lenders and 0.50% by the Federal Government in
the form of interest subsidies. Resolution of this issue may not occur for many
months. However, if no Congressional action is taken, the 10-year plus 1%
formula will take effect for loans disbursed on or after July 1, 1998. This rate
would result in materially lower yields on new loans made by the Company
compared to yields from loans made at the current rate.
In addition, there can be no assurance that the provisions of the Higher
Education Act will be reauthorized prior to its expiration on September 30,
1998.
10
<PAGE>
In addition, provisions of the Act may be amended by Congress at any time prior
to that date, possibly resulting in further reductions in FFEL program loan
subsidies in the form of increased risk sharing costs and reduced interest
margins. Any such amendment, or the failure to reauthorize the Act in 1998,
could have a material adverse effect on the Company's business and prospects.
Since 1994, the Company has aggressively pursued both new and existing marketing
programs, expanded its guarantor relationships and sought new ways to meet the
education finance needs of schools and students, including the implementation of
loan programs, such as the Company's CitiAssist product, that are not dependent
on Federal funding, guarantees and authorization.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
10.8(f)Amendment to the Omnibus Credit Agreement, dated March 1, 1997
between the Company and Citibank (New York State)
27 Financial Data Schedule
(b) Reports on Form 8-K: none.
12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 11, 1998
The Student Loan Corporation
By /s/ Yiannis Zographakis
--------------------------
Yiannis Zographakis
Vice President and
Chief Financial Officer
13
Exhibit 10.8(f)
To: Citibank (New York State)
99 Garnsey Road
Pittsford, New York 14534
Attention: Bernard F. Zimmer
From: Brad Svalberg
The Student Loan Corporation
Re: Increasing Maximum of Omnibus Credit Agreement to $10 Billion
Date: February 26, 1998
Pursuant to Part I., Paragraph 1a. of the Omnibus Credit Agreement dated
March 1, 1997 as amended, The Student Loan Corporation and Citibank (New
York State) agree to expand the maximum allowable advances under the
Omnibus Credit Agreement to $10 billion.
THE STUDENT LOAN CORPORATION
BY: ___________________________________
CITIBANK (NEW YORK STATE)
BY: ___________________________________
cc: Robert Coffin, The Student Loan Corporation General Counsel
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STUDENT
LOAN CORPORATION CURRENT REPORT ON FORM 10-Q FOR THE THREE MONTH PERIOD ENDED
MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
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<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
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<ALLOWANCES> 2,191
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<COMMON> 200
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<TOTAL-LIABILITY-AND-EQUITY> 8,234,994
<SALES> 157,197
<TOTAL-REVENUES> 157,197
<CGS> 0
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<OTHER-EXPENSES> 0
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