EXHIBIT 10.23 EMPLOYMENT AGREEMENT

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Exhibit 10.23

EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and between Thomas J. Fitzpatrick, a resident of the Commonwealth of Virginia ("Executive"), and SLM Corporation, a corporation organized and existing under the laws of the State of Delaware ("Company").

        WHEREAS, Mr. Albert L. Lord has expressed his wishes to retire as Chief Executive Officer of the Company; and

        WHEREAS, the Board of Directors of the Company ("Board of Directors") has observed the performance of Executive in increasing responsibilities over the past seven years, as Executive Vice President for private credit lending, as President and Chief Marketing Officer and most recently as President and Chief Operating Officer; and

        WHEREAS, Executive has exceeded the performance expectations set for him in each of his roles and has exhibited the leadership and competence necessary for the President and Chief Executive Officer position; and

        WHEREAS, the Board of Directors wishes to retain Executive and obtain his commitment to serve as President and Chief Executive Officer of the Company on the terms set forth herein;

        NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and intending to be legally bound, the parties, subject to the terms and conditions set forth herein, agree as follows:

        1.     2002 Employment Agreement. This Agreement supersedes the employment agreement entered into by and between Executive and the Company dated January 1, 2002, (the "2002 Employment Agreement"), with the following exception: the provisions of the 2002 Employment Agreement with respect to stock-based compensation, (i.e. Sections 6, 7, and 8), survive and remain in force with respect to stock-based compensation awarded pursuant to the 2002 Employment Agreement, except that: (i) the events upon which vesting and exercisability of such stock-based compensation is forfeited or accelerated (death, Disability, termination of employment by the Company Without Cause or for Cause, termination of employment by Executive for Good Reason, and Change in Control) shall be as defined in this Agreement; and (ii) the provision with respect to the Distribution of Vested Stock Units (section 7.3) shall be superseded by Section 8.3 of this Agreement.

        2.     Employment and Term. Executive hereby agrees to be employed beginning June 1, 2005 as President and Chief Executive Officer of the Company and the Company hereby agrees to retain Executive as President and Chief Executive Officer. Executive's employment under this Agreement may be maintained through Sallie Mae, Inc. ("Sallie Mae") or another wholly owned subsidiary of the Company used to employ Company executives, and in such case any reference in this Agreement to employment or termination of employment with the Company shall be deemed to include employment or termination of employment with Sallie Mae or such other subsidiary. The term of Executive's employment as President and Chief Executive Officer under this Agreement (the "Term") shall be the period commencing on June 1, 2005 and ending on May 31, 2008. The Term may be extended for two additional one-year terms provided that both parties to the Agreement elect to do so under the Confirmation of Extension process set forth in Section 29.

        3.     Duties. During the Term, Executive shall have the titles of President and Chief Executive Officer of the Company and President and Chief Executive Officer of Sallie Mae. Executive agrees to assume such duties and responsibilities as may be reasonably assigned to Executive from time to time

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by the Board of Directors, including as President and Chief Executive Officer of other Company subsidiaries.

        4.     Other Business Activities. Executive shall serve the Company faithfully and to the best of his ability with due loyalty and care and shall devote his full time, attention, skill and efforts to the performance of the duties required by or appropriate for his position as President and Chief Executive Officer. In furtherance of the foregoing, and not by way of limitation, for so long as he remains President and Chief Executive Officer of the Company, Executive shall not directly or indirectly engage in any other business activities or pursuits, except for (a) those arising from positions held as of March 17, 2005 as a director or otherwise with charitable or business organizations, as identified by Executive to the Board of Directors, and (b) with prior notice to the Chairman of the Board of Directors (or, in the case Executive then serves as Chairman, to the Nominations and Governance Committee of the Board of Directors), activities in connection with (i) service as a volunteer, officer or director or in a similar capacity of any charitable or civic organization, (ii) managing personal investments, and (iii) serving as a director, executor, trustee or in another similar fiduciary capacity for a non-commercial entity; provided, however, that any such activities do not materially interfere with Executive's performance of his responsibilities and obligations pursuant to this Agreement. Executive may engage in any other business activity or pursuit, directly or indirectly, including serving as a director for any commercial entity, with approval of the Board of Directors.

        5.     Base Salary. The Company shall pay Executive a salary at the annual rate of $750,000 (the "Base Salary"). The Base Salary shall be inclusive of all applicable income, Social Security and other taxes and charges which are required by law or requested to be withheld by Executive and which shall be withheld and paid in accordance with the Company's normal payroll practice for its similarly situated executives as in effect from time to time. The Compensation and Personnel Committee of the Board of Directors (the "Compensation Committee") in its discretion may review Executive's salary for purposes of determining whether to pay a salary in excess of Base Salary during the Term, but shall have no obligation to increase Executive's Base Salary based upon any such review.

        6.     Annual Incentive Compensation. Executive shall participate in the Company's annual incentive compensation program(s) for executive officers as provided in the SLM Corporation Incentive Plan as such may be amended from time to time (the "Incentive Plan"), subject to the limitations and conditions set forth therein or in any successor plan. For the 2005 bonus plan, Executive shall be eligible for a bonus equal to up to three and one-half (3.5) times his salary at the rate paid for 2005 prior to June 1, 2005, pro-rated for the portion of the year he serves as President and Chief Operating Officer, and for a bonus equal to up to four (4) times his Base Salary, pro-rated for the portion of the year he serves as President and Chief Executive Officer.

        7.     Stock Options. Executive shall be granted stock options under which he may purchase up to a total of two million, three hundred thousand (2,300,000) shares of Company common stock (the "Stock Options") subject to the terms and conditions set forth in this Agreement and, to the extent not inconsistent with this Agreement, to the terms and conditions of stock options provided generally to Company executive officers. The Stock Options shall not qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

        7.1.  Grants of Stock Options. The parties acknowledge that the Stock Options include options to purchase one million (1,000,000) shares that were granted on March 17, 2005 (the "March 2005 Stock Options"). The remainder of the Stock Options (that is, options to purchase one million, three hundred thousand (1,300,000) shares) shall be granted as follows: options to purchase one million (1,000,000) shares shall be granted in January 2006 (the "January 2006 Stock Options") and options to purchase three hundred thousand (300,000) shares shall be granted in January 2007 (the "January 2007 Stock Options"), provided only that Executive remains employed pursuant to this Agreement through each respective date of grant. The Stock Options shall have an exercise

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price equal to the fair market value of the Company's common stock as of their respective dates of grant (which was $49.88 as to the March 2005 Stock Options). For purposes of this Agreement and the Stock Options, the "fair market value" of the Company's common stock shall be the closing sales price of the stock on that day. For purposes of this Agreement, the term "Continuously Employed" means that Executive remains continuously employed by the Company pursuant to this Agreement from June 1, 2005 through May 31, 2008 as President and Chief Executive Officer and, to the extent applicable, through the date of Executive's termination of employment during or upon conclusion of the First-Year Extension or the Second-Year Extension.

        7.2.  The March 2005 Stock Options. The March 2005 Stock Options shall be subject to the following provisions:

        (a)   If and to the extent that the Price Performance Goals (as defined in Section 9) applicable to the March 2005 Stock Options are satisfied and provided, in each case, that Executive remains Continuously Employed through such respective vesting date:

(i)

The first one-third of the March 2005 Stock Options shall become vested and exercisable on the later of the date the Price Performance Goals (as defined in Section 9) are satisfied with respect to such Stock Options and May 31, 2008; and

(ii)

The remaining two-thirds of the March 2005 Stock Options shall become vested on the later of the date the Price Performance Goals are satisfied with respect to such Stock Options and May 31, 2008 and shall become exercisable on the later of the date the Price Performance Goals are satisfied with respect to such Stock Options and May 31, 2009.

        (b)   If and to the extent that the Price Performance Goals (as defined in Section 9) applicable to the March 2005 Stock Options are not satisfied while Executive remains Continuously Employed, the March 2005 Stock Options shall become fully vested (but not exercisable) on May 31, 2010 provided that Executive remains Continuously Employed through such vesting date, and thereafter shall become exercisable on March 17, 2013.

        7.3   The January 2006 Stock Options and January 2007 Stock Options. The January 2006 Stock Options and January 2007 Stock Options shall be subject to the following provisions.

        (a)   If and to the extent that the Price Performance Goals (as defined in Section 9) applicable to the January 2006 Stock Options are satisfied and provided, in each case, that Executive remains Continuously Employed through such respective vesting date:

(i)

The first one-third of the January 2006 Stock Options shall become vested and exercisable on the later of the date the Price Performance Goals (as defined in Section 9) are satisfied with respect to such Stock Options and May 31, 2008; and

(ii)

The remaining two-thirds of the January 2006 Stock Options shall become vested on the later of the date the Price Performance Goals are satisfied with respect to such Stock Options and May 31, 2008 and shall become exercisable on the later of the date the Price Performance Goals are satisfied with respect to such Stock Options and May 31, 2009.

        (b)   If and to the extent that the Price Performance Goal (as defined in Section 9) applicable to the January 2007 Stock Options is satisfied and provided that Executive remains Continuously Employed through the vesting date, all of the January 2007 Stock Options shall become vested on the later of the date the Price Performance Goal is satisfied with respect to such Stock Options and May 31, 2008 and shall become exercisable on May 31, 2009.

        (c)   If and to the extent that the Price Performance Goals (as defined in Section 9) applicable to the January 2006 Stock Options and the January 2007 Stock Options have not been satisfied by

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May 31, 2010, the January 2006 Stock Options and the January 2007 Stock Options shall be forfeited.

        (d)   The Company retains the discretion to grant the January 2006 Stock Options and the January 2007 Stock Options with a provision that such Stock Options will become exercisable on the later of satisfaction of the applicable Price Performance Goals and a date certain (which date may be after the Term of this Agreement) if such vesting provision is determined by the Compensation and Personnel Committee of the Board to be necessary in order for the Company to obtain fixed accounting with respect to such stock options prior to the Company's implementation of Statement of Financial Accounting Standards No 123 (revised 2004) (Statement No. 123R).

        7.4.  Additional Terms Applicable to the Stock Options. In addition to the provisions set forth in Sections 7.2 and 7.3 above, the Stock Options shall be subject to the following provisions:

        (a)   The Stock Options shall earlier become fully vested and exercisable (to the extent not already vested and/or exercisable pursuant to Section 7.2 or Section 7.3) upon Executive's termination of employment on account of death or Disability, termination of employment by Company Without Cause, termination of employment by Executive For Good Reason, or upon a Change in Control, as each such term is defined in Section 13.

        (b)   Unless otherwise vested pursuant to Section 7.2, 7.3 and/or 7.4(a), the Stock Options shall be forfeited and shall immediately expire and terminate if and to the extent the Stock Options have not vested on or before the date Executive terminates his employment Without Good Reason.

        (c)   Notwithstanding any other provision allowing for the exercisability of the Stock Options, any of the Chairman of the Board of Directors (or, in the case Executive then serves as Chairman, the Lead Independent Director), the chief accounting officer, the chief financial officer and the general counsel of the Company (any such person, an "Authorized Officer") each may provide written notice that at any time (including after a notice of exercise has been delivered) and from time to time that Executive's right to exercise any Stock Options may be suspended pending a determination by the Compensation and Personnel Committee as to whether Executive has committed an act of Misconduct (as defined in Section 13.4(a)). Notwithstanding anything to the contrary in this Agreement or the Stock Options and regardless of whether the Stock Options have theretofore become vested or exercisable, if the Board of Directors determines that Executive has committed an act of Misconduct Executive shall forfeit and not be entitled to exercise any Stock Options granted to Executive pursuant to this Agreement and Executive shall repay to the Company any gross profits realized from the exercise of Stock Options within one year prior to the date of Misconduct.

        (d)   To the extent that the Stock Options have not been forfeited or exercised, the Stock Options shall expire on the earlier of (i) the tenth anniversary of the date of their grant, the first anniversary of Executive's termination of employment on account of death or Disability (as defined in Section 13.1) or (iii) the date Executive's employment is terminated for Cause (as defined in Section 13.4).

        (e)   Executive shall not be entitled to receive replacement options upon exercising any of the Stock Options granted pursuant to this Section 7.

        8.     Restricted Stock Units. Executive shall be granted restricted stock units representing the right to acquire up to a total of two hundred thousand (200,000) shares of Company common stock (the "Stock Units") subject to the terms and conditions set forth in this Agreement and, to the extent not inconsistent with this Agreement, to the terms and conditions of restricted stock units provided generally to Company executive officers. The Stock Units represent an unfunded and unsecured

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obligation of the Company and shall not be transferable and shall not be pledged, assigned or otherwise alienated.

        8.1.  Grants of Stock Units. Stock units representing ninety thousand (90,000) shares) (the "2005 Stock Units") shall be granted on June 1, 2005. Stock Units representing one hundred thousand (100,000) shares (the "2006 Stock Units") shall be granted in January 2006 and the remainder of the Stock Units (the "2007 Stock Units") shall be granted in January 2007, in each case provided only that Executive remains employed pursuant to this Agreement through such respective date of grant.

        8.2.  Vesting. Subject to acceleration of vesting provisions provided for below, the Stock Units shall be forfeited and shall immediately expire and terminate if they have not vested on or before the date Executive's employment terminates. Subject to the preceding sentence, the 2005 Stock Units and 2007 Stock Units shall become vested (but shall not be converted to common stock and shall not be distributed to Executive except as provided in Section 8.3), upon the earlier of (a) May 31, 2008, or (b) Executive's termination of employment on account of death or Disability, termination of employment by Company Without Cause, termination of employment by Executive For Good Reason, or upon a Change in Control, as each such term is defined in Section 13 and the 2006 Stock Units shall become vested (but shall not be converted to common stock and shall not be distributed to Executive except as provided in Section 8.3), upon the earlier of (a) May 31, 2009, or (b) Executive's termination of employment on account of death or Disability, termination of employment by Company Without Cause, termination of employment by Executive For Good Reason, or upon a Change in Control, as each such term is defined in Section 13; provided, in each case, that Executive remains Continuously Employed through such respective vesting date.

        8.3.  Distribution of Vested Stock Units. To the extent that they have not theretofore been forfeited, Stock Units that have vested pursuant to Section 8.2 and Stock Units granted pursuant to Section 7 of the 2002 Employment Agreement shall be converted to shares of Common Stock and shall be delivered to Executive upon the later of: (i) January 1 of the first year following the year in which Executive ceases to serve as a "covered employee" (as such term is defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")); and (ii) the earlier of (x) Executive's death or Disability, (y) 6 months after Executive's "separation from service" with the Company (as such term is defined in Section 409A of the Code) and (z) a Change in Control.

        9.     Stock Price Performance and Other Terms of Stock-Based Compensation.

        9.1.  Price Performance Goals. The term "Price Performance Goals" in reference to the Stock Options shall mean:

        (a)   with respect to one-third of the shares of common stock subject to the March 2005 Stock Options (that is, options for 333,333 shares), the Company's stock price obtaining a closing price for five consecutive trading days after the grant date that is at least twenty-five percent (25%) higher than the exercise price of the March 2005 Stock Options (i.e., that is equal to or greater than $62.35 per share); with respect to an additional one-third of the shares subject to the March 2005 Stock Options (that is, options for 333,333 shares), the Company's stock price obtaining a closing price for five consecutive trading days after the grant date that is at least thirty-three percent (33%) higher than the exercise price of the March 2005 Stock Options (i.e., that is equal to or greater than $66.34 per share); with respect to an additional one-third of the shares subject to the March 2005 Stock Options (that is, options for 333,334 shares), the Company's stock price obtaining a closing price for five consecutive trading days after the grant date that is at least fifty percent (50%) higher than the exercise price of the March 2005 Stock Options (i.e., that is equal to or greater than $74.82 per share); and

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        (b)   with respect to one-third of the shares of common stock subject to the January 2006 Stock Options (that is, options for 333,333 shares), the Company's stock price obtaining a closing price for five consecutive trading days after the grant date that is at least twenty-five percent (25%) higher than the exercise price of the January 2006 Stock Options; with respect to an additional one-third of the shares subject to the January 2006 Stock Options (that is, options for 333,333 shares), the Company's stock price obtaining a closing price for five consecutive trading days after the grant date that is at least thirty-three percent (33%) higher than the exercise price of the January 2006 Stock Options; with respect to an additional one-third of the shares subject to the January 2006 Stock Options (that is, options for 333,334 shares), the Company's stock price obtaining a closing price for five consecutive trading days after the grant date that is at least fifty percent (50%) higher than the exercise price of the January 2006 Stock Options; and

        (c)   with respect to the January 2007 Stock Options, the Company's stock price obtaining a closing price for five consecutive trading days after the grant date that is at least twenty-five percent (25%) higher than the exercise price of the January 2007 Stock Options.

        9.2.  Anti-Dilution Adjustments. The number and type of shares or other property subject to the Stock Options and the Stock Units, the exercise price of the Stock Options and the stock prices set forth as the Price Performance Goals shall be appropriately and proportionately adjusted by the Compensation Committee if the class of securities which are subject to the Stock Options and the Stock Units are (i) exchanged for or converted into cash, property or a different number or kind of shares or securities as a result of a reorganization, merger, consolidation, recapitalization, restructuring or reclassification, or (ii) if the number of securities of the class of securities then subject to the Stock Options and the Stock Units are increased or decreased or if cash, property or shares or securities are distributed in respect of such subject securities as a result of a dividend (other than a regular, quarterly cash dividend) or other distribution, stock split, reverse stock split, spin-off or the like.

        9.3.  Tax Withholding. Executive shall pay in cash or make other arrangements satisfactory to the Compensation Committee for the satisfaction of any withholding tax obligations that arise by reason of exercise of the Stock Options or conversion of the Stock Units. The Company shall not be required to issue shares of common stock or to recognize the disposition of such shares until such obligations are satisfied.

        9.4.  Dividends shall accrue on the Stock Units at the same time and in the same amount as dividends are declared on the Company's common stock and such an accrual shall be credited to the benefit of Executive in the form of additional Stock Units and shall be distributed in the form of shares of the Company's common stock at the same time as shares of common stock is issued in satisfaction of the Stock Units to which they relate.

        10.   Other Benefits.

        (a)   Pension Plans. Executive shall be entitled to participate in all tax-qualified and non-tax-qualified pension plans maintained or contributed to by the Company or for the benefit of its executives, including without limitation, the Sallie Mae Cash Account Retirement Plan and the Sallie Mae Supplemental Cash Account Retirement Plan (collectively, the "Company Pension Plans"), in accordance with the terms of such Company Pension Plans as they may be amended from time to time in the discretion of the Company; provided however, that on or following Executive's termination of employment for any reason other than termination by Company for Cause as defined in Section 13.4, Executive shall be entitled to the supplemental retirement benefit equal to the amount, if any, by which (i) the Target Benefit Amount (as such term is defined below), exceeds (ii) the actuarial equivalent life annuity benefit, if any, that would be payable following such termination event under the Company Pension Plans, determined in accordance with the actuarial assumptions then used on such termination event under the Company Pension

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Plans to calculate the equivalent life annuity and assuming that Executive commenced benefit distributions under the Company Pension Plans at the same date. For purposes of this Agreement, the "Target Benefit Amount" equals a single life annuity of $300,000 payable to Executive commencing at age 60 following continuous service with the Company from the date of this Agreement through age 60, except that if Executive's employment terminates Without Cause or For Good Reason (as defined in Section 13.2) the Target Benefit Amount shall be as provided in Section 13.2(c) or, if such termination occurs during the Term of this Agreement but within 24 months following a Change in Control, as provided in Section 13.3(c), or if Executive's employment otherwise terminates before or after age 60, the Target Benefit Amount shall be adjusted as provided for in the schedule attached hereto as Schedule A. The Target Benefit Amount is payable at the same time and in the same manner as Executive elects under the Sallie Mae Supplemental Cash Account Retirement Plan.

        (b)   Medical Insurance. During the Term of this Agreement and for as long as Executive remains employed under this Agreement during the Term, Executive shall be entitled to participate in any medical and dental insurance plans generally available to the senior management of the Company, as such plans may be in effect from time to time. After termination of Executive's employment with the Company, other than on account of termination by Company for Cause or by Executive Without Good Reason (as such terms are defined in Section 13.4) but including termination of employment upon expiration of the Term, Executive and his eligible dependents or survivors shall be entitled to continue to participate in such plans on the terms generally applied to actively employed senior management of the Company, including any employee cost-sharing provisions, for the greater of the number of months remaining in the Term (including any extensions of the Term which the parties have confirmed pursuant to Section 29) at the time of Executive's termination of employment and one year. To the extent the terms and conditions of the aforesaid plans do not permit participation by Executive, his dependents, or his survivors, the Company shall arrange to provide Executive, his dependents, or his survivors with the after-tax economic equivalent of such continued coverage; provided that no payments pursuant to this sentence shall be paid until the earlier of (i) Executive's death or Disability and (ii) 6 months after Executive's "separation from service" with the Company (as such term is defined in Section 409A of the Code). After the termination of his employment with the Company, Executive shall cease to be covered under the foregoing medical and/or dental insurance plans if he obtains coverage under other medical and/or dental insurance plans; provided, however, that if the coverage under the new medical and/or dental insurance plans is less than under the foregoing plans, the Company shall provide Executive with a cash payment in an amount necessary for Executive to obtain coverage comparable to that provided under the foregoing plans or may at its option continue to provide for coverage under the Company's plans.

        (c)   Othe