|UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|----------------------------------------------------------------------

|FORM 10-Q
|---------

X    Quarterly Report Pursuant to Section 13 or 15(d)
ofThe Securities Exchange Act of 1934

For the quarterly period ended June 30,
2004

or

    Transition Report Pursuant to Section 13 or 15(d)
ofThe Securities Exchange Act of 1934

For the transition period from    to

Commission File Number: 1-11616

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)                
|                                              
|750 Washington Blvd.                           | 06901                                     
|Stamford, Connecticut                          | (Zip Code)                                
|(Address of principal executive
      offices)

|(203) 975-6237(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

Indicate by check mark
whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).

Yes X       No

On July 26, 2004,
there were 20,000,000 shares of The Student Loan Corporation's Common Stock
outstanding.

Available on the World Wide Web at studentloan.com

Form 10-Q

|Part I                                                                                                                                                                | Financial Information | Page                                                                                                                                                                                       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                     
|                                                                                                                                                                      | Item 1 -              | Financial Statements                                                                                                                                                                       
|                                                                                                                                                                     
|                                                                                                                                                                      |                       | Statement of Income (Unaudited) for the Three- and Six-Month Periods         Ended June 30, 2004 and 2003...............................................................................   
|                                                                                                                                                                     
|                                                                                                                                                                      |                       | Balance Sheet as of June 30, 2004 (Unaudited)         and December 31, 2003 (Audited)............................................................................                          
|                                                                                                                                                                     
|                                                                                                                                                                      |                       | Statement of Cash Flows (Unaudited) for the Six-Month Periods Ended         June 30, 2004 and 2003.........................................................................................
|                                                                                                                                                                     
|                                                                                                                                                                      |                       | Statement of Changes in Stockholders' Equity (Unaudited) for the         Six-Month Periods Ended June 30, 2004 and 2003..........................................                          
|                                                                                                                                                                     
|                                                                                                                                                                      |                       | Notes to Financial Statements (Unaudited).................................................................                                                                                 
|                                                                                                                                                                     
|                                                                                                                                                                      | Item 2 -              | Management's Discussion and Analysis of Financial Condition         and Results of Operations........................................................................................      
|                                                                                                                                                                     
|                                                                                                                                                                      | Item 3 -              | Quantitative and Qualitative Discussion About Market Risk...........................................                                                                                       
|                                                                                                                                                                     
|                                                                                                                                                                      | Item 4 -              | Controls and Procedures....................................................................................................                                                                
|                                                                                                                                                                     
|Part II                                                                                                                                                               | Other Information     |                                                                                                                                                                                            
|                                                                                                                                                                     
|                                                                                                                                                                      | Item 4 -              | Submission of Matters to a Vote of Security Holders......................................................                                                                                  
|                                                                                                                                                                     
|                                                                                                                                                                      | Item 6 -              | Exhibits and Reports on Form 8-K...................................................................................                                                                        
|                                                                                                                                                                     
|Signature............................................................................................................................................................ | 28                   
|                                                                                                                                                                     
|Exhibit Index......................................................................................................................................................   | 29                   
|                                                                                                                                                                     

2

|PART I. FINANCIAL INFORMATION
|-----------------------------
|                             
|Item 1. Financial Statements 

|                                                                                                                                                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|THE STUDENT LOAN CORPORATION
                                                      STATEMENT OF INCOME
                                        (Dollars in thousands, except per share amounts)
                                                          (Unaudited)

|                                                      | Three months ended      | Six months ended      
|----------------------------------------------------- | ----------------------- | ----------------------
|                                                      | June 30,                | June 30,              
|                                                      | 2004             2003   | 2004             2003 
|
|Interest income                                       | $218,524      $207,406  | $425,162      $425,566
|Interest expense                                      | 76,978      100,439     | 152,564      197,466  
|Net interest income                                   | 141,546        106,967  | 272,598        228,100
|Less: provision for loan losses                       | (3,061)     (4,519)     | (5,296)      (7,402)  
|Net interest income after provision for loan losses   | 138,485        102,448  | 267,302        220,698
|Fee and other income                                  | 5,159      3,718        | 19,205     8,922      
|Total revenue, net                                    | 143,644      106,166    | 286,507    229,620    
|                                                     
|
|Salaries and employee benefits                        | 8,466            6,984  | 15,976          13,899
|Other expenses                                        | 20,836      22,587      | 42,080     41,583     
|Total operating expenses                              | 29,302      29,571      | 58,056     55,482     
|Income before income taxes                            | 114,342          76,595 | 228,451        174,138
|Income taxes                                          | 44,676      30,490      | 85,925     66,506     
|$69,666      $46,105                                  | $142,526   $107,632    
|                                                     
|$18,000      $15,400                                  | $  36,000      $30,800 
|                                                     
|
|(based on 20 million average shares outstanding)      | $ 3.48      $ 2.31      | $ 7.13      $ 5.38    
|                                                     
|$ 0.90      $ 0.77                                    | $ 1.80      $ 1.54     
|                                                     
|
|Net interest margin                                   | 2.35%           1.94%   | 2.29%           2.12% 
|Operating expenses as a percentage of average student |                         |                       
|loans                                                 | 0.49%           0.54%   | 0.49%           0.51% 
|Return on Average Equity                              | 27.54%         22.09%   | 29.00%         26.72% 
|                                                     

See accompanying notes to financial statements.

3

|THE STUDENT LOAN CORPORATION
|----------------------------
|BALANCE SHEET               
|(Dollars in thousands)      
|                            
|                            

|                                                                       | June 30,       | December 31,
|---------------------------------------------------------------------- | -------------- | ------------
|                                                                       | 2004           | 2003        
|                                                                       | (Unaudited)    | (Audited)   
|
|Student loans                                                          | $ 21,080,217   | $ 20,285,596
|Less: allowance for loan losses                                        | (5,546)        | (4,835)     
|Student loans, net                                                     | 21,074,671     | 20,280,761  
|Loans held for sale                                                    | 3,497,031      | 2,939,756   
|Cash                                                                   | 1,294          | 476         
|Other assets                                                           | 491,069        | 482,913     
|                                                                      
|$ 25,064,065                                                           | $
  23,703,906
|                                                                      
|                                                                      
|
|Short-term borrowings                                                  | $ 14,938,600   | $ 9,973,100 
|Long-term borrowings                                                   | 8,700,000      | 12,350,000  
|Payable to principal stockholder                                       | 4,218          | 4,897       
|Deferred income taxes                                                  | 152,911        | 129,376     
|Other liabilities                                                      | 223,675        | 315,209     
|                                                                      
|Total
      Liabilities                                                | 24,019,404     | 22,772,582  
|                                                                      
|Common stock, $.01 par value;
      authorized 50,000,000             
|shares; 20,000,000
      shares issued and outstanding                 | 200            | 200         
|Additional paid-in capital                                             | 138,903        | 135,934     
|Retained earnings                                                      | 893,272        | 786,746     
|Accumulated other changes in equity
      from nonowner        sources | 12,286         | 8,444       
|                                                                      
|Total Stockholders'
      Equity                                       | 1,044,661      | 931,324     
|                                                                      
|$ 25,064,065                                                           | $ 23,703,906  
|                                                                      
|                                                                      
|$ 23,955,319                                                           | $ 22,274,671  
|(year-to-date)                                                        
|                                                                      

See accompanying notes to financial statements.

4

|THE STUDENT LOAN
  CORPORATION                                        
|----------------------------------------------------------------------
|STATEMENT OF CASH FLOWS                                               
|(Dollars in thousands)                                                
|(Unaudited)                                           Six months ended

|                                                              | June 30,     
|------------------------------------------------------------- | -------------
|                                                              | 2004         
|Cash flows from operating activities:                        
|Net income                                                    | $   142,526  
|Adjustments to reconcile net income to                       
|net cash from operating
    activities:                      
|Depreciation and amortization                                 | 54,283       
|Provision for loan losses                                     | 5,296        
|Deferred tax provision                                        | 21,275       
|Gain on sale of loan assets                                   | (9,988)      
|Redemption of junior note                                     | -            
|(Increase) in accrued interest receivable                     | (6,296)      
|Decrease in other assets                                      | 14,857       
|(Decrease) in other liabilities                               | (88,511)     
|Net cash provided by operating activities                     | 133,442      
|                                                             
|Cash flows from investing activities:                        
|Disbursements of loans                                        | (1,443,340)  
|Loan portfolio purchases                                      | (1,606,725)  
|Loan purchases held for
    sale                              | (588,670)    
|Loan reductions                                               | 1,730,381    
|Net (increase) in loan origination and purchase costs         | (114,366)    
|Proceeds from loans sold                                      | 626,739      
|Capital expenditures on equipment
      and computer software | (16,143)     
|Net cash used in investing activities                         | (1,412,124)  
|                                                             
|Cash flows from financing activities:                        
|Net increase/(decrease) in borrowings
      with original    
|maturities of one
      year or less                          | 4,115,500    
|Proceeds from long-term
    borrowings                        | -            
|Repayments of long-term borrowings                            | (2,800,000)  
|Dividends paid to stockholders                                | (36,000)     
|Net cash provided by financing activities                     | 1,279,500    
|                                                             
|Net increase/(decrease) in cash                               | 818          
|Cash - beginning of period                                    | 476          
|                                                             
|Cash - end of period                                          | $       1,294
|                                                             
|Supplemental disclosure:                                     
|Cash paid for:                                               
|Interest                                                      | $   216,589  
|Income taxes
      paid, net                                  | $     56,097 

See accompanying notes to financial statements.

5

|THE STUDENT LOAN
  CORPORATION                  
|------------------------------------------------
|STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY    
|(Dollars in thousands, except per share amounts)
|(Unaudited)                                     
|                                                
|                                                
|                                                

|                                                                       | Six months ended
|---------------------------------------------------------------------- | ----------------
|                                                                       | June 30,        
|                                                                       | 2004            
|COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL                           
|Balance, beginning of period                                           | $   136,134     
|Other                                                                  | 2,969           
|Balance, end of period                                                 | $   139,103     
|                                                                      
|RETAINED EARNINGS                                                     
|Balance, beginning of period                                           | $   786,746     
|Net income                                                             | 142,526         
|Common dividends declared, $1.80
      per common share in 2004;       |                 
|$1.54 per common share in 2003                                         | (36,000)        
|Balance, end of period                                                 | $   893,272     
|                                                                      
|ACCUMULATED OTHER CHANGES IN EQUITY FROM NONOWNER
      SOURCES       
|Balance, beginning of period                                           | $       8,444   
|Net change in cash flow hedges,
      net of taxes of $300 in 2004 and |                 
|$3,881 in 2003                                                         | 433             
|Net change in unrealized gains on investment securities,               |                 
|net of taxes of $1,960 in 2004 and $4,097 in 2003                      | 3,409           
|Balance, end of period                                                 | $     12,286    
|                                                                      
|TOTAL STOCKHOLDERS' EQUITY                                             | $1,044,661      
|                                                                      
|SUMMARY OF CHANGES IN EQUITY FROM NONOWNER SOURCES                    
|Net income                                                             | $   142,526     
|Changes in equity from nonowner sources, net of taxes                  | 3,842           
|Total changes in equity from nonowner sources                          | $   146,368     

See accompanying notes to financial
statements.

6

THE STUDENT LOAN CORPORATIONNotes to Financial Statements
(Unaudited)June 30, 2004

1.       Significant
Accounting Policies

Interim
Financial Information

| | The financial information of The Student Loan Corporation (the Company) as of June 30, 2004 and for the three- and six-month
         periods ended June 30, 2004 and 2003 is unaudited and includes all adjustments (consisting of normal recurring accruals)
         which, in the opinion of management, are necessary to state fairly the Company's financial position and results of
         operations in conformity with accounting principles generally accepted in the United States of America.   The results for
         the three- and six-month periods ended June 30, 2004 may not be indicative of the results for the full year ended December
         31, 2004.  The accompanying financial statements should be read in conjunction with the financial statements and related
         notes included in the Company's 2003 Annual Report and Form 10-K.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Certain amounts in the prior year's financial statements have been reclassified to conform with the current year's
         presentation.  Such reclassifications had no effect on the results of operations as previously reported.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Use of Estimates

| | The preparation of the financial statements requires management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities, disclosure of contingent assets and liabilities at the balance sheet date and the
         reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue Recognition

| | Revenues, which include net interest, fees and gains on loans securitized, if any, are recognized as they are earned.
         Interest income may include special allowance payments made by the federal government as
         prescribed under the Federal Higher Education Act of 1965, as amended (the Act).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Federal Family Education Loan (FFEL) Program premiums and discounts on loan portfolio purchases and loan origination and
         lender costs paid on disbursements are deferred and amortized to interest income on a level yield basis over the expected
         weighted average life of the student loans in those portfolios on a pool basis.  Deferred costs for CitiAssist Loans are
         amortized over contractual life on an individual loan by loan basis.  The expected weighted average life of FFEL Program
         loans is determined by analyzing market and borrower interest rates, customer prepayments and guarantor payments received
         through the claims process.  Expected life, which is initially determined and may be subsequently revised, may be different
         from one portfolio to another based upon loan type, year of origination or purchase or other factors.  Therefore, different
         lives are used for different portfolio types based upon these underlying loan characteristics and historical performance.
         The expected weighted average lives of these loans are reviewed periodically and compared to actual loan run off.  If the
         actual loan run off is different from the anticipated prepayments reflected in the amortization tables, the Company makes a
         current period adjustment to interest income to arrive at the investment balance that would have been remaining had the new
         effective yield been applied since loan inception and the amortization rates for future periods are appropriately adjusted.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

Allowance for Loan Losses

| | Allowance for loan losses provides a reserve for estimated losses on: (1) certain portions of the FFEL Program loan
         portfolio under the risk-sharing provisions of the Act, which generally provide for lender risk-sharing of 2% of the
         principal and accrued interest on default claims paid with the Company to be reimbursed for losses that exceed that portion of the claimed amount and (2) the CitiAssist Loan portfolio, after taking into consideration
         the risk-sharing provisions of the credit risk insurance obtained from third parties, if any, and/or other risk-sharing
         agreements with third parties.  Amounts of estimated potential future losses are expensed currently and actual losses are
         charged off against the reserve as they occur.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During 2003, the Company was designated as an Exceptional Performer by the U.S. Department of Education (the Department) in
         recognition of its exceptional level of performance in servicing FFEL Program loans.  As a result of this designation, the
         Company receives 100% reimbursement on all eligible FFEL Program default claims filed for reimbursement after December 31,
         2003 on loans that are serviced by the Company, and the Company is not subject to the 2% risk-sharing loss for eligible
         claims filed after that date.  Similarly, in the second quarter of 2004, third party servicers for $3.2 billion of the
         Company's repayment portfolio received the Exceptional Performer designation, and therefore the Company is not subject to
         the 2% risk-sharing loss for eligible claims filed on that portion of its externally serviced portfolio and the Company is now eligible for 100% reimbursement
on these claims.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The allowance is based on estimates of probable losses inherent in the Company's CitiAssist Loan portfolio and portions of
         its FFEL Program loan portfolio as loans become delinquent by one day or more.  These losses are determined through various
         statistical means, including migration analyses, in which historical delinquency and credit loss experience is applied to
         the current aging of the portfolio and is reflective of current trends and conditions.   Actual losses, including those that
         arise from claims with guarantors and private insurers, are charged against the allowance as they occur.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Student Loan
Securitizations

| | The Company accounts for its securitization transactions in accordance with the provisions of Statement of Financial
         Accounting Standards (SFAS) No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
         Liabilities, a replacement of FASB Statement No. 125".  Under the Company's program to securitize student loans, the loans
         are removed from the financial statements of the Company and ultimately sold to an independent trust.  In turn, the trust
         sells securities, backed by the student loan assets, to outside investors.  Since the securitizations meet the SFAS No. 140
         criteria for sale recognition, and the trust qualifies as a qualifying special purpose entity (QSPE), gains or losses on the
         sale of the student loans are recorded at the time of securitization and the financial statements of the trust are not
         consolidated with those of the Company.  Gains or losses are reflective of the difference between the carrying value of the
         assets sold to the trust and the fair value of the assets received, which are composed of cash proceeds and the interests
         retained in the loans securitized.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The retained interests from securitizations are accounted for as investments in available-for-sale securities and are
         included in other assets.  The retained interests are carried at their estimated fair value at the balance sheet date.
         Changes in fair value are recorded net of applicable income taxes in accumulated other changes in equity from nonowner
         sources.  Interest earned on the retained interest is recorded on the effective yield basis.  Changes in expected future
         cash flows are reflected in the yield on a prospective basis.  The retained interest is regularly reviewed for impairment,
         and other-than-temporary impairment, if any, is recognized as a charge to earnings when identified.  The initial value of
         the retained interest is determined by allocating the carrying value of the loans securitized between assets sold and the
         interest retained based on their relative fair values at the securitization date.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

| | Initial and subsequent measurements of the fair value of the retained interest are performed using a discounted cash flow model.
| | --------------------------------------------------------------------------------------------------------------------------------

Loans
Held for Sale

| | Loans held for sale are primarily those loans originated or purchased by the Company for future securitization and are
         recorded at the lower of cost, including principal and deferred costs, or market value.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Hedging Transactions

| | The Company manages its exposure to market interest rates by entering into interest rate swap agreements on portions of its
         portfolio.  The Company accounts for its interest rate swap agreements in accordance with the provisions of SFAS No. 133,
         "Accounting for Derivative Instruments and Hedging Activities", as amended, which requires that all derivatives be recorded
         at fair value on the balance sheet.   Fair value is determined by discounting the cash flows using market interest rates
         through the contractual maturity dates.   These derivatives, which have been designated and are effective as cash flow
         hedges, are recorded as either other assets or other liabilities, depending on whether the fair value of the derivative is a
         net gain or a net loss.  The hedge relationship is formally documented at inception detailing the risk management objective,
         the risk being hedged and how effectiveness is assessed.  To the extent these derivatives are not effective, changes in
         their fair values representing the ineffectiveness are included in other revenue as incurred.  To the extent the derivatives
         are effective and exactly match the variability of the cash flow being hedged, changes in their fair values are not
         reflected in current earnings, but are recorded net of taxes in the accumulated other changes in equity from nonowner
         sources component of stockholders' equity.  These changes in fair value will be included in earnings of future periods when
         earnings are also affected by the variability of the hedged cash flows.  Accrued interest receivable or payable related to
         the interest rate swap agreements is recorded in interest expense.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.       New Accounting Standards

| | On January 1, 2004, the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 46, "Consolidation of
         Variable Interest Entities (revised December 2003)" (FIN 46-R), which includes substantial changes from the original FIN
         46.  Included in these changes, the calculation of expected losses and expected residual returns has been altered to reduce
         the impact of decision maker and guarantor fees in the calculation of expected residual returns and expected losses.  In
         addition, the definition of a variable interest has been changed in the revised guidance.   FIN 46-R changes the method of
         determining whether certain entities, including securitization entities, should be included in consolidated financial
         statements.    An entity is subject to FIN 46 and is called a VIE if it has:  (1) equity that is insufficient to permit the
         entity to finance its activities without additional subordinated financial support from other parties, or (2) equity
         investors that cannot make significant decisions about the entity's operations, or that do not absorb the expected losses or
         receive the expected returns of the entity.  A VIE is consolidated by its primary beneficiary, which is the party involved
         with the VIE that absorbs a majority of the expected losses, receives a majority of the expected residual returns, or both.
         Certain entities, including transferors to QSPEs meeting the reporting requirements of SFAS No. 140, are specifically
         exempted from the scope of FIN 46.  Since the Company's securitizations use trust arrangements that meet the QSPE conditions
         of SFAS No. 140, its QSPE's financial statements are not consolidated with the financial statements of the Company.  The
         Company has no other structures that qualify as VIEs. The provisions of FIN 46 applied immediately to variable interest
         entities (VIEs) created after January 31, 2003, and to VIEs in which an enterprise obtains an interest after that date.  In
         October 2003, the FASB announced that the effective date of FIN 46 was deferred from July 1, 2003 to periods ending after
         December 31, 2003 for VIEs created prior to February 1, 2003.  The Company elected to adopt the provisions of FIN 46 in the
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

| | third quarter of 2003.  The impact of the adoption of FIN 46-R was not material to the Company's financial condition or
         results of operations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | On March 31, 2004, the FASB ratified EITF Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its
         Application to Certain Investments," which provides guidance on recognizing other-than-temporary impairments on certain
         investments.  The Issue applies to other-than-temporary impairment evaluations for investments accounted for under
         Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", as
         well as nonmarketable equity securities accounted for under the cost method, and is effective for reporting periods
         beginning after June 15, 2004.  The adoption of EITF Issue No. 03-1 is not expected to have a material effect on the
         Company's financial condition or results of operations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.       Loans

| | Loans consist of FFEL Program guaranteed student loans authorized by the Department under the Act, as well as CitiAssist
         Loans originated through an alternative student loan program and insured by private third-party insurers.  At June 30, 2004,
         the Company's FFEL Program loan portfolio was composed of $9.6 billion of Federal Stafford, $10.1 billion of Federal
         Consolidation, $3.6 billion of CitiAssist, and  $0.8  billion of other federally guaranteed loans, primarily Federal Parent
         Loans to Undergraduate Students (PLUS), and also includes deferred costs of $0.5 billion.  At December 31, 2003, the Company's
         FFEL Program loan portfolio was composed of $9.5 billion of Federal Stafford, $9.4 billion of Federal Consolidation, $2.6
         billion of CitiAssist, and  $1.2 billion of other federally guaranteed loans, primarily PLUS, and also includes deferred
         costs of $0.5 billion.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Included in the Federal Consolidation loan amounts above is an inventory of student loans held for sale of $3.5 billion.
| | ------------------------------------------------------------------------------------------------------------------------

4.       Related Party
Transactions

| | Citibank, N.A. (CBNA), an indirect wholly owned subsidiary of Citigroup Inc., owns 80% of the outstanding common stock of
         the Company.  A number of significant transactions are carried out between the Company and Citigroup and its affiliates.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's loan portfolio primarily consists of student loans originated under the FFEL Program through a trust agreement
         with CBNA.  The majority of the Company's loan originations and servicing is performed through the provisions of
         intercompany agreements with affiliates of Citigroup.  Expenses related to these agreements were $7.2 million and $7.0
         million for the three-month periods ended June 30, 2004 and 2003, respectively.  For the six-month periods ended June 30,
         2004 and 2003, the expenses related to these agreements were $14.5 million and $14.4 million, respectively.   In addition,
         the Company recorded loan origination and servicing revenue of $1.1 million and $1.3 million for the three-month periods
         ended June 30, 2004 and 2003, respectively, for work performed by the Company on CitiAssist Loans held by the Company's
         majority shareholder prior to purchase by the Company.  For the six-month periods ending June 30, 2004 and 2003, the Company
         recorded loan origination and servicing revenue of $4.4 million and $4.1 million, respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company had outstanding short- and long-term unsecured borrowings with CBNA, pursuant to the terms of an Omnibus Credit
Agreement, of $14.9 billion and $8.7 billion, respectively, at June 30, 2004 and $10.0 billion and $12.4 billion, respectively, at
December 31, 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At June 30, 2004 and 2003, the Company's outstanding borrowings had contracted weighted average interest rates of 1.4% and
         1.8%, respectively, based on LIBOR at the time the borrowings were established or rates reset.  For the three-month periods
         ended June 30, 2004 and 2003, the Company incurred $76.0 million and $96.0 million,
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

| | respectively, in interest expense payable to its majority shareholder related to these borrowings.  For the six-month periods ending June 30, 2004 and 2003,
         the Company incurred $151.1 million and $189.4 million, respectively, in interest expense.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company has a number of interest rate swap agreements outstanding with a subsidiary of Citigroup.
At June 30, 2004, the agreements had notional amounts totaling $1.6 billion and remaining contractual terms of between one and six months.  For
         the three-month periods ended June 30, 2004 and 2003, the Company realized $1.0 million and $4.4 million, respectively, in
         interest expense related to these swap agreements.  For the six-month periods ending June 30, 2004 and 2003, the Company
         realized $1.5 million and $8.1 million, respectively, in swap-related interest expense.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In addition, Citigroup and its subsidiaries engage in other transactions and servicing activities with the Company,
         including cash management, data processing, income tax payments, loan servicing, employee benefits, payroll administration
         and facilities management.  Also, certain of the Company's employees perform services on behalf of other Citigroup entities,
         which are unrelated to the business of education financing, and for which the Company receives compensation.  Management
         believes that the terms under which these transactions and services are provided are, in the aggregate, no less favorable to
         the Company than those that could be obtained from third parties.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.       Interest Rate
Swap Agreements

| | The Company's overall risk management strategy includes utilizing interest rate swap agreements to manage its exposure to
         interest rate variability between the rates paid on its borrowings (based on LIBOR)  and received on its loan assets (based
         either on the 91-day Treasury Bill rate or the 90-day Commercial Paper rate), defined as basis risk.  In order to reduce
         this basis risk, the Company has entered into interest rate swap agreements on portions of its portfolio.  Management
         expects the Company's hedge program to be effective in offsetting changes in cash flows for the risk being hedged.  The
         program is in compliance with the hedge accounting requirements of SFAS No. 133, as amended.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At June 30, 2004, the Company had a number of interest rate swap agreements outstanding with CBNA to receive payments based
         on LIBOR and make payments based on the 91-day Treasury Bill rate.   These agreements, which have been designated and are
         effective as cash flow hedges, had notional amounts totaling $1.6 billion and $3.0 billion at June 30, 2004 and December 31,
         2003, respectively.  At June 30, 2004, the contractual terms remaining on these agreements were for periods of between one and six months.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The fair value of the swaps at June 30, 2004 and December 31, 2003 were liabilities of $0.9 million and $1.6 million,
         respectively, and are reflected in other liabilities on the balance sheet with corresponding amounts, net of taxes of $0.3
         million and $0.6 million, respectively, reflected in the accumulated other changes in equity from nonowner sources component
         of stockholders' equity.  Substantially all of the June 30, 2004 balance in accumulated other changes in equity from
         nonowner sources is expected to be reclassified into earnings within the next twelve months.   No amounts have been excluded
         from the assessment of effectiveness and no hedge ineffectiveness has been recognized in earnings pursuant to these swap
         agreements. Net amounts reclassified from accumulated other changes in equity from nonowner sources are reported in interest
         expense.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

| | Accumulated
other changes in equity from nonowner sources from cash flow hedges, net of
taxes, are summarized as follows:
| | -------------------------------------------------------------------------------------------------------------------------

|                       | Three-month period ended | Six-month period ended
|---------------------- | ------------------------ | ----------------------
|                       | June 30,                 | June 30,              
|(Dollars in thousands) | 2004                     | 2003                  
|                       |                          |                       

|Balance at beginning of year                                                                                                                                                                                                                                                                                                                                                                                                                                               | $(563)   | $(3,777) | $(959)   | $(7,010)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | -------- | -------- | --------
|Net unrealized (loss) gain from   cash flow hedges                                                                                                                                                                                                                                                                                                                                                                                                                         | (563)(1) | (334)(2) | (442)(1) | 707(2)  
|Net amounts reclassified to   earnings                                                                                                                                                                                                                                                                                                                                                                                                                                     | 600(3)   | 2674(4)  | 875(3)   | 4,866(4)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |          |          |          |         
|Ending balance                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $(526)   | $(1,437) | $(526)   | $(1,437)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(1)      Amounts are net of taxes of ($388) and ($303) for the three- and six-month  periods, respectively.
            (2)      Amounts are net of taxes of ($221) and $666 for the three- and six-month periods, respectively.
            (3)      Amounts are net of taxes of $412 and $604 for the three- and six-month periods, respectively.
            (4)      Amounts are net of taxes of $1,767 and $3,215 for the three- and six-month periods, respectively.

6.      Commitments and
Contingencies

| | In the ordinary course of business, the Company is involved in various litigation proceedings incidental to and typical of
         the business in which it is engaged.  In the opinion of the Company's management, the ultimate resolution of these
         proceedings would not be likely to have a material adverse effect on the results of the Company's operations, financial
         condition or liquidity.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.      Student Loan
Securitization

| | In 2002, the Company commenced a program to securitize certain portfolios of FFEL Program student loan assets.  The Company
         accounts for its securitization transactions in accordance with the provisions of SFAS No. 140.  Under the Company's program
         to securitize student loans, the loans are removed from the financial statements of the Company and ultimately sold to an
         independent trust.  In turn, the trust sells debt securities, backed by the student loan assets, to outside investors.
         During 2003 and the first six months of 2004, the Company did not enter into any new securitizations.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At June 30, 2004 and December 31, 2003, approximately $399.2 million and $414.5 million, respectively, of student loan
         assets were held by the trust. At June 30, 2004 and December 31, 2003, the Company had retained interests in the assets
         securitized of approximately $33.6 million and $28.7 million, respectively, recorded at fair value. The $4.9 million
         increase in the fair value of the retained interest for the six-month period ended June 30, 2004 was composed of interest income
         of $7.1 million accreted in the first six months of 2004 and a $5.4 million change in the cash flow estimate, partially
         offset by $7.6 million in cash received from the trust.  Of the $7.1 million decrease in fair value for the three-month
         period ended June 30, 2004, compared to the March 31, 2004 balance, $7.6 million was due to cash received from the trust and
         $2.8 million was due to a reduction in the cash flow estimate, partially offset by interest accretion of $3.3 million.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company accounts for the retained interests as investments in available-for-sale securities and records them in other
         assets in the financial statements.  At June 30, 2004, the Company had an unrealized holding gain on its retained interests
         of $12.8 million (net of taxes of $8.2 million), recorded in accumulated other changes in equity
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

| | from nonowner sources.
| | ----------------------

| | After securitization, the Company continues to provide servicing for the loans sold to the trust.  As a result, the Company
         earns administrative and servicing fees on the securitized portfolio. Failure to service the loans in accordance with
         contractual obligations could lead to a termination of the servicing rights and the loss of future servicing revenue.  For
         each of the quarters ended June 30, 2004 and 2003, the Company received cash flows of $0.1 million for loan servicing and
         administrative fees as the master servicer.  For the first six months of 2004 and 2003, the Company received cash flows of
         $0.2 million and $0.3 million, respectively, for loan servicing and administrative fees.  As a result, the Company considers
         both the securitized and unsecuritized student loans to be part of the business it manages.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | There were no receivables due from the trust or payables due to the trust either at June 30, 2004 or  June 30, 2003.  During
         the three- and six-month periods ended June 30, 2004, the trust paid note interest of $1.2 million and $2.4 million,
         respectively, to third party investors, compared to $1.5 million and $3.0 million for the corresponding three- and six-month
         periods of 2003.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As required by SFAS No. 140,  the effect of two negative  changes in each of the key  assumptions  used to determine  the fair
         value of the retained  interest is disclosed  below.  The negative  effect of the change in each assumption must be calculated
         independently,  holding all other  assumptions  constant.  Because the key assumptions may not be independent,  the net effect
         of simultaneous adverse changes in the key assumptions may be different from the sum of the individual effects shown below.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
key assumptions used to value the retained interests were as follows:

|                                                     | June 30, 2004 | December 31, 2003
|---------------------------------------------------- | ------------- | -----------------
|                                                     |               |                  
|Discount rate                                        | 10.0%         | 7.0%             
|Constant prepayment rate                             | 4.0%          | 3.0%             
|Anticipated net credit losses                        | 0.10%         | 0.24%            
|Basis spread between LIBOR and Commercial Paper rate | 0.10%         | 0.18%            
|                                                     |               |                  

| | The change in the discount rate assumption was a result of the increased variability of cash flows.   Management believes that
         the June 30, 2004 discount rate is comparable with that used in the industry.  Changes to prepayment rate, net credit losses
         and basis spread assumptions were made in consideration of actual results.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

| | The
sensitivities of the fair value of the retained interests to adverse changes in
the key assumptions were as follows:
| | ------------------------------------------------------------------------------------------------------------------------

|(Dollars in thousands)               | June 30, 2004             | December 31, 2003        
|------------------------------------ | ------------------------- | -------------------------
|                                     |                           |                          
|Carrying value of retained interests | $                33,597   | $                28,672  
|                                     |                           |                          
|Discount rate                        | 10.0%                     | 7.0%                     
|+10%                                 | $                (938.6)  | $                (818.7) 
|+20%                                 | $             (1,812.2)   | $             (1,589.6)  
|                                    
|Constant prepayment rate             | 4.0%                      | 3.0%                     
|+10%                                 | $                (280.4)  | $                (209.6) 
|+20%                                 | $                (555.3)  | $                (409.1) 
|                                    
|Anticipated net credit losses        | 0.10%                     | 0.24%                    
|+10%                                 | $                  (92.1) | $                  (42.8)
|+20%                                 | $                (188.5)  | $                  (85.8)
|                                    
|Basis spread increase                | 0.10%                     | 0.18%                    
|+10%                                 | $                (197.8)  | $                (600.1) 
|+20%                                 | $                (395.6)  | $             (1,200.3)  
|                                     |                           |                          

| | These
estimates and assumptions are subject to change and, therefore, the fair values
of the retained interests as presented in the financial statements are subject
to possible impairment and may not be fully recoverable.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8.      Fee and Other Income

| | For the three- and six-month periods ended June 30, 2004, gains of $1.9 million and $10.0 million, respectively, were
         recorded in fee and other income as a result of sales of student loan portfolios to third parties.  Portfolios of $92
         million were sold in the second quarter of 2004, bringing year-to-date sales for 2004 to $617 million. Portfolio sales and corresponding gains for 2003 were immaterial.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9.      Future
Application of Accounting Standards

| | On December 12, 2003, the American Institute of Certified Public Accountants (AICPA) issued Statement of Position No. 03-3,
         "Accounting for Certain Loans or Debt Securities Acquired in a Transfer" (SOP 03-3).  SOP 03-3 is effective for loans
         acquired in fiscal years beginning after December 15, 2004.  SOP 03-3 requires loans to be recorded at fair value and
         prohibits carrying over valuation allowances in the initial accounting for all loans acquired in a transfer that have
         evidence of deterioration in credit quality since origination, when it is probable that the investor will be unable to
         collect all contractual cash flows.  Loans carried at fair value, mortgage loans held for sale, loans originated by the
         entity, and loans to borrowers in good standing under revolving credit agreements are excluded from the scope of SOP 03-3.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SOP 03-3 limits the yield that may be accreted to the excess of the undiscounted expected cash flows over the investor's
         initial investment in the loan.  The excess of the contractual cash flows over expected cash flows may not be recognized as
         an adjustment of yield. Subsequent increases in cash flows expected to be collected are recognized prospectively through an
         adjustment of the loan's yield over its remaining life.  Decreases in expected cash flows are recognized as impairment.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Critical
Accounting Policies

| | There were no material changes to the Company's critical accounting policies during the second quarter of 2004.  The Company
         considers its accounting policies on revenue recognition, allowance for loan losses, student loan securitizations, and
         hedging transactions to be its critical accounting policies.  For a description of these and other significant accounting
         policies, see Notes 1, 4 and 7 to the financial statements or see the Company's 2003 Annual Report and Form 10-K.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

New Accounting Standards

| | On January 1, 2004, the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 46, "Consolidation of
         Variable Interest Entities (revised December 2003)" (FIN 46-R), which includes substantial changes from the original FIN
         46.  Included in these changes, the calculation of expected losses and expected residual returns has been altered to reduce
         the impact of decision maker and guarantor fees in the calculation of expected residual returns and expected losses.  In
         addition, the definition of a variable interest has been changed in the revised guidance.   FIN 46-R changes the method of
         determining whether certain entities, including securitization entities, should be included in consolidated financial
         statements.    An entity is subject to FIN 46 and is called a VIE if it has:  (1) equity that is insufficient to permit the
         entity to finance its activities without additional subordinated financial support from other parties, or (2) equity
         investors that cannot make significant decisions about the entity's operations, or that do not absorb the expected losses or
         receive the expected returns of the entity.  A VIE is consolidated by its primary beneficiary, which is the party involved
         with the VIE that absorbs a majority of the expected losses, receives a majority of the expected residual returns, or both.
         Certain entities, including transferors to qualifying special-purpose entities (QSPEs) meeting the reporting requirements of
         SFAS No. 140, are specifically exempted from the scope of FIN 46.  Since the Company's securitizations use trust
         arrangements that meet the QSPE conditions of SFAS No. 140, its QSPE's financial statements are not consolidated with the
         financial statements of the Company.  The Company has no other structures that qualify as VIEs. The provisions of FIN 46
         applied immediately to variable interest entities (VIEs) created after January 31, 2003, and to VIEs in which an enterprise
         obtains an interest after that date.  In October 2003, the FASB announced that the effective date of FIN 46 was deferred
         from July 1, 2003 to periods ending after December 31, 2003 for VIEs created prior to February 1, 2003.  The Company elected
         to adopt the provisions of FIN 46 in the third quarter of 2003.  The impact of the adoption of FIN 46-R was not material
         to the Company's financial condition or results of operations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On March 31, 2004, the FASB ratified EITF Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its
         Application to Certain Investments," which provides guidance on recognizing other-than-temporary impairments on certain
         investments.   The Issue applies to other-than-temporary impairment evaluations for investments accounted for under
         Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities," as
         well as nonmarketable equity securities accounted for under the cost method, and is effective for reporting periods
         beginning after June 15, 2004.  The adoption of EITF Issue No. 03-1 is not expected to have a material effect on the
         Company's financial condition or results of operations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Management Summary

| | The earnings of the Company are primarily dependent on the size of its net interest income, which is the difference between
         the interest received on its loan assets (based on either the 91-day Treasury Bill rate or the 90-day Commercial Paper rate)
         and the interest paid on its borrowings (based on LIBOR).  Net interest income may be impacted by the current interest rate
         environment and, especially, by uneven interest rate shifts between the 91-day
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

| | Treasury Bill rate and LIBOR.  The Company
         manages these risks by entering into interest rate swap agreements on portions of its portfolio and regularly monitoring and
         acting upon fluctuations in the interest rate curves. In declining short-term rate environments, net interest income may
         also be significantly impacted by floor income, which is generated when the Company's cost of funds declines while borrower
         and government subsidized interest rates remain fixed at the annual reset rate, yielding net interest income in excess of
         the minimum expected spread.  Also, although the rate at which borrowers pay interest on Federal Consolidation Loans is
         generally fixed and is not subject to the annual reset provisions, a decline in the Company's cost of funds during the term
         of such loans could contribute to floor income. In recent years, the growth in net interest income has been primarily
         attributable to portfolio growth and increases in floor income.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Floor income will decline in periods of increasing interest rates.  A gradual increase in the current interest  rate curve
         is forecasted.  Management expects that this interest rate increase will result in reduced floor income in 2004 and future
         years. The Company has entered into loan commitments at implied current forward rates that lock in floor income on a portion
         of the portfolio for periods of up to one year.   See the definition of floor income in Special Allowance and Floor Income
         on page 22.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In addition to floor income and portfolio growth, the Company's earnings can also be impacted by the number and size of
         securitizations, loan servicing costs, and the results of the Company's hedging activities. Other factors that may impact
         earnings are applicable laws and regulations, prepayment rates on student loans including those resulting from student loan
         consolidations, financing options available to students and their parents and competitors' initiatives.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Certain of the above statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act.
SeeForward-Looking Statements on page 23.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financial Condition

| | Citibank, N.A. (CBNA), an indirect wholly owned subsidiary of Citigroup, Inc. (Citigroup), owns 80% of the outstanding
         common stock of the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At June 30, 2004, the Company's student loan assets were composed of a $21.1 billion portfolio of loans held and a $3.5
         billion inventory of loans held for sale.  The combined $24.6 billion of loan assets, composed primarily of loans
         originated under the Federal Family Education Loan (FFEL) Program, increased by $1.4 billion (6%) from $23.2 billion at
         December 31, 2003.  This growth was attributable to FFEL Program loan disbursements totaling $1,443 million and loan
         purchases of $2,195 million in the first six months of 2004, and other additions of $71 million, partially offset by $1,730 million in loan reductions
         (attributable primarily to borrower principal payments, loan consolidations and claims paid by guarantors), and loan portfolio
         sales of $627 million.  During the first six months of 2003, the Company had FFEL
         Program loan disbursements of $1,241 million, loan purchases of $2,212 million, other additions of $32 million, and loan reductions of $1,746 million.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During the first six months of 2004, the Company recorded a pretax gain of $10 million on the sale of student loans of $617
         million, including associated deferred costs.  Loan sales were immaterial in the first six months of 2003.  During the
         second quarter of 2004, the sale of student loans of $92 million, including associated deferred costs, resulted in a pretax
         gain of $2 million.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

Loan Activity

| | The
Companys loan disbursements and loan commitments to finance education for
the three- and six- month periods ending June 30 are presented below:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------

|                      | Three-month periods | Six-month periods
|--------------------- | ------------------- | -----------------
|(Dollars in millions) | 2004                | 2003             
|                      |                     |                  

|FFEL Program Stafford and PLUS Loan     disbursements | $369 | $328 | $1,443 | $1,241
|----------------------------------------------------- | ---- | ---- | ------ | ------
|CitiAssist Loans under commitments to     purchase*   | 105  | 90   | 570    | 467   
|                                                      |      |      |        |       
|Total loan disbursements and commitments              | $474 | $418 | $2,013 | $1,708
|                                                      |      |      |        |       

*
These disbursements are originated and disbursed by CBNA and are committed by the Company for future             purchase.

| | The $202 million increase in loan disbursements for the first six months of 2004, compared to the same period last year, is
         primarily attributable to ongoing sales initiatives and electronic commerce.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In order to comply with certain regulatory requirements, CitiAssist Loans are originated by CBNA through an intercompany
         agreement.  Following full disbursement, the Company purchases all qualified CitiAssist Loans at CBNA's carrying value at
         the time of purchase, plus contractual costs.  CitiAssist Loans are originated through an alternative loan program and do not
         carry federal government guarantees.  In addition to the loan procurement activities described in the table below, as of
         June 30, 2004, CBNA had CitiAssist Loans with a principal balance of $88 million available for purchase by the Company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys secondary market and other loan procurement activities for the
three- and six-month periods ended June 30 are presented in the table below:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|                      | Three-month periods | Six-month periods
|--------------------- | ------------------- | -----------------
|(Dollars in millions) | 2004                | 2003             
|                      |                     |                  

|FFEL Program Consolidation Loan volume | $   320 | $304 | $   968 | $1,330
|-------------------------------------- | ------- | ---- | ------- | ------
|CitiAssist Loan purchases              | 621     | 506  | 990     | 812   
|Other loan purchases                   | 150     | 38   | 237     | 70    
|                                       |         |      |         |       
|Total loan purchases                   | $1,091  | $848 | $2,195  | $2,212
|                                       |         |      |         |       

| | From time to time, the Company makes student loan purchases.  For the first six months of 2004, the Company's loan purchases
         were $2,195 million, a decrease of $17 million compared to the same period last year.   The decrease in loan purchases is
         primarily attributable to a decrease in Consolidation Loan volume, partially offset by increases in CitiAssist and other
         loan purchases.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Federal Consolidation Loans were purchased primarily for the Company's available for sale inventory, which was
         established to create a portfolio of loans held for future securitization.  The size of the available for sale
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17

| | portfolio is dependent upon the needs of the securitization program.  The Company's participation in securitization and
         secondary market loan activities is dependent upon market conditions.  Of the Consolidation Loan volume presented in the
         table above, $389 million and $448 million for the first six months of 2004 and 2003, respectively, were consolidations of
         federally guaranteed student loans already held in the Company's loan portfolios.   For the first six months of 2004, the
         Company's student loan purchases included $1,607 million purchased for its portfolio and $588 million purchased for its
         resale inventory.  During the six month period ended June 30, 2003, the Company purchased $1,538 million of student loans
         for its portfolio and $674 million for its resale inventory.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Securitization Activity and Off Balance Sheet Transactions

| | In 2002, the Company commenced a program to securitize certain portfolios of FFEL Program student loan assets.
         Securitization is a process in which loans are removed from the financial statements of the Company and ultimately sold to
         an independent trust that was established for that purpose.  In turn, the trust sells debt securities, backed by the student
         loan assets, to outside investors. The Company accounts for its securitization transactions in accordance with the
         provisions of SFAS No. 140.  During 2003 and the first six months of 2004, the Company did not enter into any new
         securitizations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Investors have recourse to the assets in the trust, but not to the Company, and benefit from other credit enhancements, such
         as a cash collateral account and other specified enhancements.  The documents establishing the trust generally require the
         Company to maintain an ownership interest in the trust.  In the event that net cash flows derived from the securitized
         student loan assets are insufficient to meet the payments of interest to trust investors and make other fee and transaction
         payments of the trust, the Company's retained interest is reduced or forfeited.  The Company's loss is limited to its
         retained interest in the securitized assets.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At June 30, 2004 and December 31, 2003, approximately $399.2 million and $414.5 million, respectively, of student loan
         assets were held by the trust. At June 30, 2004 and December 31, 2003, the Company had retained interests in the assets
         securitized of approximately $33.6 million and $28.7 million, respectively, recorded at fair value. The $4.9 million
         increase in fair value of the retained interest for the six-month period ended June 30, 2004 was composed of interest income
         of $7.1 million accreted in the first six months of 2004 and a $5.4 million change in the cash flow estimate, partially
         offset by $7.6 million in cash received from the trust.  Of the $7.1 million year-to-date interest accretion, $3.3 million
         was recorded in the second quarter of 2004. The amount of interest accretion recorded in 2003 was immaterial.  The increase
         in interest income accreted in the second quarter of 2004 was primarily attributable to the change in assumptions used in
         determining the estimated cash flows.  See Note 6 to the financial statements for more information.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company accounts for the retained interests as investments in available-for-sale securities and records them in other
         assets in the financial statements.   At June 30, 2004, the Company had an unrealized holding gain on its retained interests
         of $12.8 million (net of taxes of $8.2 million), recorded in accumulated other changes in equity from nonowner sources.  Of
         this unrealized gain, $1.7 million of unrealized loss, net of taxes, was recorded in the second quarter of 2004, and reflects
         a decrease in cash flow estimates.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | After securitization, the Company continues to provide servicing for the loans sold to the trust.  As a result, the Company
         earns administrative and servicing fees on the securitized portfolio.  Failure to service the loans in accordance with
         contractual obligations could lead to a termination of the servicing rights and the loss of future servicing revenue.  For
         each of the quarters ended June 30, 2004 and 2003, the Company received cash flows of $0.1 million for loan servicing and
         administrative fees as the master servicer.  For the first six months of 2004 and 2003, the Company received cash flows of
         $0.2 million and $0.3 million, respectively, for loan servicing and administrative fees.  See Note 7 to the financial
         statements for further information on the Company's securitizations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18

Interest Rate Swap Agreements

| | The Company's overall risk management strategy includes utilizing interest rate swap agreements to manage its exposure to
         interest rate variability between the rates paid on its borrowings (based on LIBOR) and received on its loan assets (based
         either on the 91-day Treasury Bill rate or the 90-day Commercial Paper rate), defined as basis risk.  In order to reduce
         this basis risk, the Company has entered into interest rate swap agreements on portions of its portfolio.  Management
         expects the Company's hedge program to be effective in offsetting changes in cash flows for the risk being hedged.  The
         program is in compliance with the hedge accounting provisions of SFAS No. 133, "Accounting for Derivative Instruments and
         Hedging Activities", as amended.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At June 30, 2004, the Company had a number of interest rate swap agreements outstanding with CBNA to receive payments based
         on LIBOR and make payments based on the 91-day Treasury Bill rate.  These agreements, which have been designated and are
         effective as cash flow hedges, have notional amounts totaling $1.6 billion and $3.0 billion at June 30, 2004 and December
         31, 2003, respectively.  At June 30, 2004, the contractual terms remaining on these agreements were for periods of between one and six months.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The fair value of the swaps at June 30, 2004 and December 31, 2003 were liabilities of $0.9 million and $1.6 million,
         respectively, and are reflected in other liabilities on the balance sheet with corresponding amounts, net of taxes of $0.3
         million and $0.6 million, respectively, reflected in the accumulated other changes in equity from nonowner sources component
         of stockholders' equity.  Substantially all of the June 30, 2004 balance in accumulated other changes in equity from
         nonowner sources is expected to be reclassified into earnings within the next twelve months.   No amounts have been excluded
         from the assessment of effectiveness and no hedge ineffectiveness has been recognized in earnings pursuant to these swap
         agreements.  Net amounts reclassified from accumulated other changes in equity from nonowner sources are reported in
         interest expense.  For additional information on the Company's interest rate swap agreements, see Note 4 to the financial
         statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Taxes

| | The Company is included in the consolidated federal income tax return of Citigroup, and is also included in certain combined
         or unitary state/local income or franchise tax returns of Citicorp/Citigroup or its subsidiaries.  In the three- and
         six-month periods ending June 30, 2004, the Company paid income taxes, net of refunds, of $27 million and $56 million,
         respectively, primarily pursuant to a tax-sharing agreement with its majority shareholder.  Income taxes of $1 million and
         $61 million were paid in the same three- and six-month periods last year, respectively.  The change in taxes paid is
         primarily attributable to the timing of the majority owner's requests for tax payments and is not reflective of any
         significant changes in the tax provision.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deferred income taxes of $152.9 million at June 30, 2004 increased $23.5 million compared to year-end 2003 (an increase of
         $17.6 million for the quarter).  This increase is primarily attributable to a rise in deferred tax liabilities related to
         deferred loan origination costs.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During the second quarter of 2004, the Company  released $2.8 million of a $7.0 million  IPO-related tax reserve that had been
         established  in 1993 for  estimates  of  potential  future  tax  liabilities.  The  release,  which  was  attributable  to the
         elimination of audit risk related to certain tax deductions taken in tax years closed,  increased  additional paid-in capital,
         but had no effect on earnings.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In the ordinary course of business, the Company is currently undergoing tax audits in various states.
| | -----------------------------------------------------------------------------------------------------

19

Borrowings

| | The Company's short- and long-term debt was procured primarily through the Omnibus Credit Agreement with its majority shareholder, which provides for a maximum aggregate credit limit of $25 billion.  Total short- and long-term borrowings of
         $23.6 billion at June 30, 2004 increased $1.3 billion compared to year-end 2003.  The increased debt was used to fund new
         loan originations and purchases.  Also, during the first six months of 2004, $3.7 billion of maturing long-term borrowings
         was reclassified to short-term borrowings.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At June 30, 2004 and 2003, the outstanding borrowings had contracted weighted average interest rates of 1.4% and 1.8%,
         respectively, based on LIBOR at the time the borrowings were established or rates reset.  For the three-month periods ended
         June 30, 2004 and 2003, the Company recorded $76.0 million and $96.0 million, respectively, in interest expense payable to
         its majority shareholder related to these borrowings. For the six-month periods ending June 30, 2004 and 2003,  the Company
         incurred $151.1 million and $189.4 million, respectively, in interest expense.  The $38.3 million year-to-date decrease in
         interest expense related to these borrowings was primarily attributable to the decline in interest rates.   During the first
         six months of 2004, the Company made $216.6 million in interest payments, compared to $202.0 million for the same period in
         2003.  The $14.6 million difference in interest paid was primarily a result of differences in the contractual interest due
         dates.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The decline in accrued interest expense, compounded by the increase in interest payments on its borrowings in the first six
         months of 2004 was the primary reason for the $91.5 million decrease in other liabilities as of June 30, 2004, compared to
         the balance at December 31, 2003.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dividends

| | The Company paid a quarterly dividend of $0.90 per common share on June 1, 2004.  On July 15, 2004, the Board of Directors
         declared a regular quarterly dividend on the Company's common stock of $0.90 per share to be paid September 1, 2004 to
         stockholders of record on August 13, 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Results of Operations

Quarter Ended June 30, 2004

| | Net income was $69.7 million ($3.48 basic and diluted earnings per share) for the second quarter of 2004.  This was an
         increase of $23.6 million (51%) compared to earnings for the same period last year.  The improvement is primarily
         attributable to portfolio growth of 10% over the previous twelve months and a decrease of $9.2 million (after taxes),
         compared to the same quarter last year, in deferred amortization charges related to changes in prospective prepayment
         speeds for student loan consolidations.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deferred amortization charges related to changes in prospective prepayment speeds are made when portfolio activity leads
         management to make changes in model assumptions related to future prepayment speeds.  When this occurs, the Company makes a
         current period adjustment to interest income in order to arrive at the investment balance that would have been remaining had
         the new effective yield been applied since loan inception and the amortization rates for future periods are appropriately
         adjusted.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net revenue of $143.6 million for the second quarter of 2004 was $37.5 million (35%) higher than revenue for the same period
         of 2003.  The net interest margin for the second quarter of 2004 was 2.35%, up 41 basis points from 1.94% for the same
         period of 2003.   Net interest income of $141.5 million for the second quarter of 2004 was $34.6 million higher than the
         same period last year, due primarily to portfolio growth, increased floor income resulting
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

| | from the Company's ability to take advantage of favorable funding opportunities, interest accretion of $3.3 million on the Company's retained interest
         investments, and the decrease in deferred cost amortization charges described above.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Total operating expenses for the second quarter of 2004 were $29.3 million, a decrease of $0.3 million (1%) from the same
         period last year, reflecting efficiency improvements.  For the second quarter of 2004, the Company's expense ratio,
         operating expenses as a percentage of average student loan assets, was 0.49%, an improvement of five basis points compared
         to the second quarter 2003 ratio.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | An allowance for loan losses provides a reserve for estimated losses on: (1) certain portions of the FFEL Program loan
         portfolio under the risk-sharing provisions of the Act, which generally provide for lender risk-sharing of 2% of the
         principal and accrued interest on default claims paid and (2) the CitiAssist Loan portfolio, after taking into consideration
         the risk-sharing provisions of the credit risk insurance obtained from third parties, if any, and/or other risk-sharing
         agreements with third parties.  Amounts of estimated potential future losses are expensed currently and actual losses are
         charged off against the reserve as they occur.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During 2003, the Company was designated as an Exceptional Performer by the Department in recognition of its exceptional
         level of performance in servicing FFEL Program loans.  As a result of the designation, the Company receives 100%
         reimbursement on all eligible FFEL Program default claims filed for reimbursement after December 31, 2003 on loans that are
         serviced by the Company, and the Company is not subject to the 2% risk-sharing loss for eligible claims filed after that
         date.  Similarly, in the second quarter of 2004, third party servicers for $3.2 billion of the Company's repayment portfolio
         received the Exceptional Performer designation, and therefore the Company is not subject to the 2% risk-sharing loss for
         eligible claims filed on this portion of its externally serviced portfolio.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Most of the Company's CitiAssist Loan portfolio is insured by Guaranty National Insurance Company (GNIC) and Globe Indemnity
         Company (GIC), subsidiaries of Royal & SunAlliance Insurance Group PLC (RSA). For those loans insured by these entities, the Company is to be reimbursed for losses that exceed 5% of the claimed amount. Effective April 1, 2003, the Company began to insure substantially all new
         CitiAssist Loan originations and purchases through a subsidiary of American International Group (AIG), diversifying private
         insurer risk.  Under the new insurer's program, defaults on new loan originations are generally subject to risk-sharing
         losses of 10% - 20%, with the Company to be reimbursed for losses that exceed that portion of the claimed amount.  However, since the increase in risk-sharing expense is generally expected to be offset by a decrease
         in insurance premiums, the Company does not expect a material change in overall costs related to the CitiAssist Loan
         program.  The allowance also provides a reserve for certain CitiAssist Loans that are not insured against loss.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's provision for loan losses for the second quarter of 2004 was $3.1 million, $1.5 million less than the
         provision for the same period of 2003. This decrease was primarily attributable to estimates of lower risk-sharing
         liabilities as a result of the Company and several of its servicers being designated  Exceptional Performers, as described
         above, partially offset by a change in the loan loss accrual calculation to a more conservative methodology.  Under the new
         calculation methodology, a loan loss reserve is accrued at one day of delinquency for all loans.  Under the previous method,
         a reserve was not accrued until 90 days of delinquency for FFEL Program loans and 30 days of delinquency for CitiAssist
         Loans.  The change in the methodology for calculating the loan loss reserve had no material effect on earnings.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's return on average equity was 27.5% for the second quarter of 2004, up 5.4% compared to 22.1% for the same
         period of 2003.
| | ------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's effective tax rate was approximately 39.1% for the second quarter of 2004, compared to 39.8%
| | ----------------------------------------------------------------------------------------------------------

21

| | for the same
         period of the prior year.  The decrease in the effective tax rate was primarily attributable to a change in tax estimates
         for certain states and the impact of the change on the Company's existing deferred tax assets and liabilities.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Six Months Ended June 30, 2004

| | The Company earned net income of $142.5 million ($7.13 basic and diluted earnings per share) for the six months ended June
         30, 2004.  This was an increase of $34.9 million (32%) compared to earnings for the same period last year. The improvement
         is primarily attributable to portfolio growth of 10% over the previous twelve months, increased floor income, and  a $10.0
         million pretax gain (recorded in fee and other income) that resulted from the sale of student loans of $617 million,
         including associated deferred costs.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net revenue of $286.5 million for the six months ended June 30, 2004 was $56.9 million (25%) higher than revenue for the
         same period of 2003.  The net interest margin for the six months ended June 30, 2004 was 2.29%, up 17 basis points from
         2.12% for the same period of 2003.   Net interest income of $272.6 million for the first six months of 2004 was $44.5
         million higher than the same period last year, due primarily to portfolio growth, increased floor income resulting from the
         Company's ability to take advantage of favorable funding opportunities, and interest accretion of $7.1 million on the Company's
         retained interest investments.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Total operating expenses for the six months ended June 30, 2004 were $58.1 million, an increase of $2.6 million (5%) from
         the same period last year.  The increase reflects both the incremental costs incurred to originate, service and administer
         the larger loan portfolio and ongoing infrastructure investments.  For the six months ended June 30, 2004, the Company's
         expense ratio, operating expenses as a percentage of average student loan assets, was 0.49%, an improvement of two basis
         points compared to the ratio for the same period last year.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's provision for loan losses for the six months ended June 30, 2004 was $5.3 million, $2.1 million less than the
         provision for the same period of 2003. This decrease was primarily attributable to lower risk-sharing
         liability estimates as a result of the Company and several of its servicers being designated Exceptional Performers, as described
         more fully underQuarter Ended June 30, 2004, above.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's return on average equity was 29.0% for the six months ended June 30, 2004, up 2.3% compared to 26.7% for the
         same period of 2003.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's effective tax rate was approximately 37.6% for the six months ended June 30, 2004, compared to 38.2% for the
         same period of the prior year.  The decrease in the effective tax rate was primarily attributable to a change in tax
         estimates for certain states and the impact of the change on the Company's existing deferred tax assets and liabilities.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Special Allowance and Floor Income

| | Most FFEL Program Stafford and Parent Loans to Undergraduate Students (PLUS) Loans originated prior to July 24, 1992 have
         fixed interest rates.  Those originated subsequent to July 23, 1992 generally have variable interest rates.  The Company
         also has a portfolio of FFEL Program Consolidation Loans, which have fixed borrower interest rates.   Most FFEL Program
         loans also qualify for the federal government's special allowance payment (SAP).  Whenever the stated interest rates on
         these FFEL Program loans provide less than prescribed rates of return, as defined by the Act, the federal government makes a
         SAP, which increases the lender's loan yield over a base rate tied to either the 91-day Treasury Bill auction yield or the
         90-day Commercial Paper rate, depending on the loan's origination date.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

| | In periods of declining interest rates, the stated borrower rates, which are generally subject to various annual reset
         provisions, become, in effect, interest rate floors until the next reset date. For purposes of evaluating financial results
         and the Company's results, management determines floor income to be the amount of additional interest income generated when
         net interest margin exceeds the minimum expected spreads and is generally earned in declining short-term interest rate
         environments when the Company's cost of funds declines while borrower and
         government subsidized interest rates remain fixed.
         Floor income, as determined by the Company, is a financial measure that is not defined by generally accepted accounting
         principles in the United States of America.  Depending on the manner in which the Company's assets are funded, the Company
         may earn net interest margin spreads, which include floor income, on portions of its portfolio until the next annual
         interest rate reset date.  Also, although the rate at which borrowers pay interest on FFEL Program Consolidation Loans is
         generally fixed and is not subject to the annual reset provisions, a decline in the Company's cost of funds during the term
         of such loans could contribute to floor income.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During the three- and six-month periods ended June 30, 2004, the Company earned $35.6 million and $72.6 million,
         respectively, of floor income. During the three- and six-month periods ended June 30, 2003, the Company earned $30.9 million
         and $64.5 million, respectively, of floor income.  The increase in 2004 floor income, compared to the prior year, is
         primarily a result of lower short-term interest rates in 2004 and the Company's ability to take advantage of favorable
         funding opportunities.   Floor income will decline in periods of increasing interest rates and is generally affected by the
         overall interest rate environment prevailing between the reset dates.  The Company has entered into loan commitments at
         implied current forward interest rates that lock in floor income on a portion of the portfolio for periods of up to one
         year.  However, as short-term interest rates rise above their current level, the floor income benefit could decline
         materially.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Regulatory Impacts

| | Over the past decade, amendments to the Act that governs the FFEL Program have reduced the interest spread earned on the
         FFEL Program guaranteed student loan portfolio as new loans with lower yields are added to the portfolio and older, more
         profitable loans are repaid.  Despite reductions in funding costs and their expected effects on net income, pressure on
         margins is expected to continue as more loans are originated with lower lender yields. Amendments to the Act also introduced
         a competitor program, the Federal Direct Student Loan Program (Direct Lending), in which private lenders, such as the
         Company, do not participate.  Direct Lending accounts for approximately 30%, on a national basis, of all student loans
         originated under federally sponsored programs.  In addition, reauthorization of the Act, which will occur in either 2004 or
         2005, depending on Congressional action, as well as other amendments to the Act, could ultimately result in further
         reductions in lender net interest margins on FFEL Program loans, and could influence customer prepayments.   Any such
         amendments, in part or in combination, could adversely affect the Company's business and prospects.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company continues to search for ways to take advantage of greater economies of scale.  It is pursuing both new and
         existing marketing programs, including electronic commerce, and continues to expand its guarantor relationships and pursue
         alternative loan products, such as CitiAssist, that are not dependent on federal funding and program authorization.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Forward-Looking Statements

| | Certain statements contained in this report that are not historical facts are forward-looking statements within the meaning
         of the Private Securities Litigation Reform Act.  The Company's actual results may differ materially from those suggested by
         the forward-looking statements, which are typically identified by the words or phrases "believe", "expect", "anticipate",
         "intend",  "estimate", "may increase", "may result in", and similar expressions or future or conditional verbs such as
         "will", "should", "would" and "could".   These forward-looking statements
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

| | involve risks and uncertainties including, but not
         limited to, the following: the effects of legislative changes, particularly those affecting the demand for and interest
         rates  on student loans, loan origination costs, and the availability and amount of certain loan subsidies;  the
         availability of alternative financing options to students and their parents, including competitive products offered by other
         lenders; the effects of changes in accounting standards; actual credit losses, loan collection strategies and their impact
         on delinquency rates, and the adequacy of loan loss reserves; the effect of fluctuations in interest rates, particularly as
         they affect the Company's funding costs, the rates at which interest accrues on its loan portfolio, the demand for student
         loans, and floor income; changes in prepayment rates on student loans and in the quality and profitability of those loans
         that move into repayment status; the Company's ability to continue to service its loan portfolio in accordance with its
         contractual obligations; the Company's ability to maintain its Exceptional Performer status; the Company's ability to
         acquire or originate loans in the amounts anticipated and with interest rates that generate sufficient yields and margins;
         the Company's ability to continue to develop its electronic commerce initiatives; the performance of the Company's loan
         portfolio insurers and risk-sharers; whether risk-sharing expenses for defaults are offset by lower insurance premiums; the
         adequacy of funds allocated for future capital expenditures; the Company's ability to utilize alternative sources of
         funding, including its ability to continue to securitize loan portfolios; as well as general economic conditions, including
         the performance of financial markets and the implementation of regulatory changes.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

Item 3.
Quantitative and Qualitative Discussion About Market Risk

| | The Company's primary market risk exposure results from fluctuations in the spreads between the Company's borrowing and
         lending rates, which may be impacted by shifts in market interest rates.  Market risk is measured using various tools,
         including Earnings-at-Risk.  The Earnings-at-Risk calculation seeks to estimate the effect that shifts in interest rates are
         expected to have on net interest margin in future periods.  The Company prepares Earnings-at-Risk calculations to measure
         the discounted pre-tax earnings impact over a preset time span of a specific parallel upward and downward shift in the
         interest rate yield curve. The Earnings-at-Risk calculation, a static and passive measurement that excludes management's
         responses to prospective changes in market interest rates, reflects the repricing gaps in the position as well as option
         positions, both explicit and embedded, in the loan portfolio.  Earnings-at-Risk is calculated by multiplying the gap between
         interest sensitive items, including assets, liabilities and derivative instruments, by 35 and 100 basis point changes in the
         yield curve.  A 35 basis point change in the yield curve represents approximately a two standard deviation change.  The one
         hundred basis point information is provided for comparative purposes.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Earnings-at-Risk calculation measures the Company's position at one point in time.  As indicated in the table below, as
         of June 30, 2004, a 35 basis point increase in the interest yield curve would have a potential negative impact on the
         Company's pretax earnings of approximately $11.4 million for the next twelve months and approximately $76.0 million
         thereafter.  A 35 basis point decrease in the interest yield curve as of June 30, 2004 would have a potential positive
         impact on the Company's pretax earnings of approximately $12.4 million for the next twelve months and approximately $76.0
         million thereafter.   The increase in the June 30, 2004 Earnings-at-Risk, compared to that at June 30, 2003, was due to
         changes in the interest rate environment and its impact on floor income.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Earnings-at-Risk (on pre-tax
    earnings)
|------------------------------------------
|                                          
|                                          
|                                          
|(Dollars in millions)                     
|                                          
|Thirty-five basis point increase          
|Thirty-five basis point decrease          
|One hundred basis point increase          
|One hundred basis point decrease          
|                                          

| | In addition, the Company has significantly greater exposure to uneven shifts in interest rate curves (i.e., the Treasury
         Bill to LIBOR rate spreads).  The Company, through its Asset/Liability Management Committee, actively manages these risks by
         setting Earnings-at-Risk limits and takes actions in response to interest rate movements against the existing structure.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

25

Item 4.
Controls and Procedures

(a) Disclosure Controls and Procedures

| | The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has
         evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e)
         and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered
         by this report.  Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded
         that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing,
         summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it
         files or submits under the Exchange Act.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b) Internal Control Over Financial Reporting

| | There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules
         13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially
         affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

26

PART II. OTHER
INFORMATION

Item 4.    
Submission of Matters to a Vote of Security Holders

At the Company's 2004 Annual Meeting of
Stockholders, held May 13, 2004, the Company's                         stockholders took the following actions:

1.        Three directors were elected to the Board of Directors: Bill Beckmann (with holders of 18,948,964                                 shares voting in favor,
              880,901 shares withheld and none abstaining); Glenda B. Glover (with                                 holders of 19,574,433 shares voting in favor,
              255,432 shares withheld and none abstaining); Yiannis                                 Zographakis (with holders of 18,953,157 shares voting in favor,
              876,708 shares withheld and none                                 abstaining).  Mr. Beckmann and Ms. Glover will each serve until the year 2007 annual
              meeting of                                 stockholders.  Mr. Zographakis resigned from his position on July 15, 2004.

2.        The selection of KPMG LLP as the Company's independent auditors for the 2004 fiscal year was                                 ratified (with holders of 19,727,268
shares voting in favor, 87,146 shares voting against and 15,451                                 shares abstaining).

Item 6.    
Exhibits and Reports on Form 8-K

a)        See Exhibit Index.

b)       Reports on Form 8-K

| | On April 6, 2004, the Company filed a Current Report on
Form 8-K, dated April 1, 2004, reporting                        under Item 5 thereof the appointment of
Daniel P. McHugh as Chief Financial Officer of The                        Student Loan Corporation and
filing therewith a copy of the related press release. On April 15,                        2004,
the Company filed a Current Report on Form 8-K, dated April 15, 2004, reporting
under                        Items 7 and 12 thereof its results of operations for the quarter ended
March 31, 2004 and filing                        therewith a copy of the related press release.
Also, on July 15, 2004, the Company filed a Current                        Report on Form 8-K, dated July 15, 2004, reporting under Items 7 and 12 thereof its results of
                        operations for the quarter ended June 30, 2004 and filing therewith a copy of the related press
                        release.
In addition, on July 16, 2004, the Company filed a Current Report on Form 8-K, dated July                        15, 2004, reporting under Item 5 thereof the appointment of Michael J. Reardon
as Chief Executive                        Officer and a director of the Board of The Student Loan Corporation replacing Yiannis Zographakis                        in those positions, and filing therewith a copy of the related press release.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27

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: August 6, 2004

The
Student Loan Corporation

By/s/ Daniel P. McHugh  
       Daniel P. McHugh        

                                         Principal
Financial and
Accounting
Officer

28

EXHIBIT INDEX



|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                        
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              
|3.1            |  | Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Companys
1992 Annual Report on Form 10-K (File No. 1-11616).                                                                                                           
|              
|3.2            |  | By-Laws of the Company, as amended, incorporated by reference to Exhibit 3.2 to the Companys Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30, 1993 (File No. 1-11616).                                                                                    
|              
|10.1           |  | Trust Agreement, dated as of December 21, 1992, between the Company and CNYS, incorporated by reference to Exhibit
10.2 to the Companys 1992 Annual Report on Form 10-K (File No. 1-11616).                                                                                  
|              
|10.2.1         |  | Non-Competition Agreement, dated as of December 22, 1992, among the Company, CNYS and Citicorp, incorporated by reference to Exhibit
10.4 to the Companys 1992 Annual Report on Form 10-K (File No. 1-11616).                                                                
|              
|10.2.2         |  | Amendment No. 1, dated as of June 22, 2000, to Non-Competition Agreement among the Company, CNYS and Citigroup
Inc., incorporated by reference to Exhibit 10.2.2 to the Company's 2001 Annual Report on Form 10-K (File No. 1-11616).                                         
|              
|10.2.3         |  | Amendment No. 2, dated as of June 22, 2001, to Non-Competition Agreement among the Company, CNYS and Citigroup
Inc., incorporated by reference to Exhibit 10.2.3 to the Company's 2001 Annual Report on Form 10-K (File No. 1-11616).                                         
|              
|10.2.4    *    |  | Amendment No. 3, dated as of May 5, 2002, to Non-Competition Agreement among the Company, CNYS and Citigroup
Inc.                                                                                                                                                             
|              
|10.2.5    *    |  | Amendment No. 4, dated as of June 22, 2003, to Non-Competition Agreement among the Company, CNYS and Citigroup
Inc.                                                                                                                                                           
|              
|10.2.6    *    |  | Amendment No. 5, dated as of June 22, 2004, to Non-Competition Agreement among the Company, CBNA and Citigroup
Inc.                                                                                                                                                           
|              
|10.3           |  | Tax Agreement, dated as of December 22, 1992, between the Company and CNYS, incorporated by reference to Exhibit 10.5
to the Companys 1992 Annual Report on Form 10-K (File No. 1-11616).                                                                                    
|              
|10.4           |  | Omnibus Credit Agreement, dated November 30, 2000, between the Company and CNYS, incorporated by reference to Exhibit
10.10 to the Companys 2000 Annual Report on Form 10-K (File No. 1-11616).                                                                              
|              
|10.4.1         |  | Amendment No. 1, dated as of October 15, 2002, to Omnibus Credit Agreement between the Company and CNYS, incorporated by reference to Exhibit 10.4.1 to the Company's 2002 Annual Report on Form 10-K (File No. 1-11616).                                                     
|              
|10.4.2         |  | Amendment No. 2, dated as of March 5, 2004, to Omnibus Credit Agreement between the Company and CBNA (as successor to CNYS), incorporated by reference to Exhibit 10.4.2 to the Company's 2003 Annual Report on Form 10-K (File No. 1-11616).                                 
|              
|10.5           |  | Facilities Occupancy, Management and Support Service Agreement, dated as of January 1, 1998, by and between the
Company, CNYS and Citicorp North America, Inc., incorporated by reference to Exhibit 10.5 to the Company's 2001 Annual Report on Form 10-K (File No. 1-11616).
|              
|10.6           |  | Retention Agreement for Sue F. Roberts, dated April 28, 2003, incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 2004 (File No. 1-11616).                                                        
|              
|31.1     *     |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                       
|              
|31.2     *     |  | Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                        
|              
|32.1     *     |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.                                                                                                

---

*Filed herewith



29