SLM Corporation Incentive Plan Stock Option Agreement Net-Settled, Performance Vested Options

A.

Option Grant . Net-Settled Stock Options (the “Options”) to purchase a total of ___ shares of Common Stock, par value $.20, of SLM Corporation (the “Corporation”) are hereby granted to ___subject in all respects to the terms and provisions of the SLM Corporation Incentive Plan (the “Plan”), which is incorporated herein by reference, and this Stock Option Agreement (the “Agreement”). Certain capitalized terms not otherwise defined herein are defined in the Plan. In the event of any conflict between the provisions of this Agreement and the provisions of the Plan, the terms of the Plan control, except as expressly stated otherwise herein. The Options are non-qualified stock options and are not intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended, and will be interpreted accordingly.

B.

Option Price . The purchase price per share is $11.21 dollars (the ”Option Price”).

C.

Grant Date . The date of grant of these Options is January 29, 2009 (the “Grant Date”).

D.

Vesting; Exercisability . The Options are not vested as of the Grant Date. One-third of the Options will vest upon the later of the first anniversary of the Grant Date and the date that the Corporation announces its 2009 fiscal year results, based on the extent to which the “core earnings” net income target established under the 2009 business plan is achieved, using the vesting schedule set forth below; one-third of the Options will vest upon the later of the second anniversary of the Grant Date and the date that the Corporation announces its 2010 fiscal year results, based on the extent to which the “core earnings” net income target established under the 2010 business plan is achieved, using the vesting schedule set forth below; and one-third of the Options will vest upon the later of the third anniversary of the Grant Date and the date that the Corporation announces its 2011 fiscal year results, based on the extent to which the “core earnings” net income target established under the 2011 business plan is achieved, using the vesting schedule set forth below. After each annual determination of the level of achievement of the “core earnings” net income target and the extent of vesting of each one-third of the Options, any remaining unvested Options of the one-third of Options eligible for vesting in that year will be forfeited and cancelled.

Vesting schedule for each year as follows:

Achievement of

Plan

"Core Earnings"

Net Income

Vesting

100

%

95

%

90

%

85

%

80

%

75

%

70

%

65

%

60

%

55

%

50

%

0

%

•

Upon termination of employment for any reason, other than death, Disability or Involuntary Termination, or as provided in the SLM Corporation Change in Control Severance Plan for Senior Officers any unvested Options will not vest and will be canceled.

•

Upon termination of employment for Misconduct, any Options, vested or unvested, are forfeited.

•

Upon termination for death or Disability, vested Options (taking into account any vesting acceleration set forth above) are exercisable until the earlier of: (1) the Expiration Date; or (2) one year from the date of termination.

•

Upon termination of employment for all reasons except death or Disability, vested Options (taking into account any vesting acceleration set forth above) are exercisable until the earlier of: (1) the Expiration Date; or (2) three months from the date of termination.

exercise of all or part of the Options, the Optionee shall receive from the Corporation the number of shares of Common Stock resulting from the following formula: the total number of Options exercised less the sum of “Shares for the Option Cost” and “Shares for Taxes”, rounded up to the nearest whole share. “Shares for the Option Cost” equals the Option Price multiplied by the number of Options exercised divided by the fair market value of SLM common stock at the time of exercise. “Shares for Taxes” equals the tax liability (the statutory withholding maximum) divided by the fair market value of SLM common stock at the time of exercise. Optionee shall receive cash for any resulting fractional share amount. As a condition to the issuance of shares of Common Stock of the Corporation pursuant to these Options, the Optionee agrees to remit to the Corporation (through the procedure described in this paragraph) at the time of any exercise of these Options any taxes required to be withheld by the Corporation under federal, state, or local law as a result of the exercise of these Options.

H.

Vesting Upon Change In Control . Notwithstanding anything to the contrary in this Agreement, in the event of a Change of Control Transaction involving a merger, consolidation or reorganization and in which the Corporation is not the Surviving Corporation, if the terms of such transaction do not provide for the Surviving Corporation to adopt and assume the Options (with any appropriate adjustment to the number and type of shares subject to such Options), the Options shall become 100 percent vested and (if applicable) exercisable and shall be settled and (if applicable) exercised in full as of the time immediately prior to the consummation of such Change of Control Transaction.

In the event that, as a result of the Options becoming exercisable in connection with a Change in Control, any state, local or federal taxing authority imposes any taxes on the Optionee that would not be imposed but for the occurrence of a Change in Control, including any excise tax under Section 4999 of the Internal Revenue Code and any successor or co