**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**__________________**

**FORM      10-Q**

**__________________**

| **x**      | **QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934**  |   |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|
|       |                                                                                                                                      |   |
|       | **For                the quarterly period ended June 30, 2007**                                                                           |   |
|       |                                                                                                                                      |   |
|       | **or**                                                                                                                                    |   |
|       |                                                                                                                                      |   |
| ** ̈** | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |   |
|       |                                                                                                                                      |   |
|       | **For                the transition period from ___ to ___**                                                                              |   |

**THE      STUDENT LOAN CORPORATION**

| **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)      975-6320**

**__________________**

|   | Yes | **x** | No | **o** |   |
|--------|-----|-------|----|-------|--------|

|                 Large                accelerated filer    **x** | Accelerated                filer  **o** | Non-accelerated                filer   **o** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|-------------------------------------------------------------|

|   | Yes | **o** | No | **x** |   |
|--------|-----|-------|----|-------|--------|

| Part                I              | Consolidated                Financial Information |                                                                                                                                                      |                         |   |
|------------------------------------|---------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|--------|
|                               |                                              |                                                                                                                                                      | Page                         |   |   |
|                               | Item                1 -                           | Consolidated                Financial Statements                                                                                                          |                         |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
|                               |                                              | Consolidated                Statement of Income (Unaudited) for the Three and Six Months Ended                June                30, 2007 and 2006       | 3                            |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
|                               |                                              | Consolidated                Balance Sheet as of June 30, 2007 (Unaudited) and December 31,                2006                                            | 4                            |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
|                               |                                              | Consolidated                Statement of Cash Flows (Unaudited) for the Six Months Ended June                30, 2007                and 2006             | 5                            |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
|                               |                                              | Consolidated                Statement of Changes in Stockholders’ Equity (Unaudited) for the Six                Months Ended June 30, 2007 and 2006 | 6                            |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
|                               |                                              | Notes                to Consolidated Financial Statements (Unaudited)                                                                                     | 7–                18   |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
|                               | Item                2 -                           | Management’s                Discussion and Analysis of Financial Condition and Results of                Operations                                 | 19                – 27 |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
|                               | Item                3 -                           | Quantitative                and Qualitative Disclosures About Market Risk                                                                                 | 27                           |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
|                               | Item                4 -                           | Controls                and Procedures                                                                                                                    | 28                           |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
| Part                II             | Other                Information                  |                                                                                                                                                      |                         |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
|                               | Item                1A-                           | Risk                Factors                                                                                                                               | 29                      |   |   |
|                               | Item                6 -                           | Exhibits                                                                                                                                                  | 29                           |   |   |
|                               |                                              |                                                                                                                                                      |                         |   |   |
| Signature                          |                                              |                                                                                                                                                      | 30                           |   |   |
|                               |                                              |                                                                                                                                                      |                         |
| Exhibit                Index  |                                              | 31                                                                                                                                                        |                         |   |
|                               |                                              |                                                                                                                                                      |                         |

**PART      I    CONSOLIDATED FINANCIAL      INFORMATION**

| **Item                1.** | **Consolidated                Financial Statements** |
|----------------------------|------------------------------------------------------|

**THE      STUDENT LOAN CORPORATION**

|                                                                                           | Three                months ended   |   | Six                months ended     |
|------------------------------------------------------------------------------------------------|-------------------------------------|--------|-------------------------------------|
|                                                                                           | June                30,             |   | June                30,             |
|                                                                                           | 2007                                |   | 2006                                |   | 2007 |   | 2006 |
| **NET                INTEREST INCOME**                                                         |                                |   |                                |   |   |   |   |
| Interest                income                                                                 | $400,674                            |   | $430,641                            |   | $779,321 |   | $807,558 |
| Interest                expense                                                                | 297,797                             |   | 315,453                             |   | 582,687 |   | 585,272 |
| **Net                interest income**                                                         | 102,877                             |   | 115,188                             |   | 196,634 |   | 222,286 |
| Provision                for loan losses                                                       | (3,895)                             |   | (5,302)                             |   | (14,423) |   | (11,441) |
| **    Net                interest income after provision for loan losses** | 98,982                              |   | 109,886                             |   | 182,211 |   | 210,845 |
|                                                                                           |                                |   |                                |   |   |   |   |
| **OTHER                INCOME**                                                                |                                |   |                                |   |   |   |   |
| Gains                on loans securitized                                                      | 48,548                              |   | 69,073                              |   | 48,548 |   | 69,073 |
| Gains                on loans sold                                                             | 2,492                               |   | 13,448                              |   | 20,266 |   | 20,199 |
| Fee                and other income                                                            | 9,420                               |   | 14,247                              |   | 24,283 |   | 19,396 |
| **Total                other income**                                                          | 60,460                              |   | 96,768                              |   | 93,097 |   | 108,668 |
|                                                                                           |                                |   |                                |   |   |   |   |
| **OPERATING                EXPENSES**                                                          |                                |   |                                |   |   |   |   |
| Salaries                and employee benefits                                                  | 16,120                              |   | 13,447                              |   | 30,570 |   | 26,159 |
| Other                expenses                                                                  | 29,631                              |   | 26,938                              |   | 59,379 |   | 51,788 |
| **Total                operating expenses**                                                    | 45,751                              |   | 40,385                              |   | 89,949 |   | 77,947 |
|                                                                                           |                                |   |                                |   |   |   |   |
| **Income                before income taxes**                                                  | 113,691                             |   | 166,269                             |   | 185,359 |   | 241,566 |
| Income                taxes                                                                    | 43,174                              |   | 64,459                              |   | 70,819 |   | 93,601 |
| **NET                INCOME**                                                                  | $  70,517                 |   | $101,810                            |   | $114,540 |   | $147,965 |
|                                                                                           |                                |   |                                |   |   |   |   |
| **DIVIDENDS                DECLARED AND PAID**                                                 | $  28,600                 |   |  $  26,000           |   | $                54,600 |   | $                47,600 |
|                                                                                           |                                |   |                                |   |   |   |   |
| **BASIC                EARNINGS PER COMMON SHARE**                                             | $     3.53 |   | $     5.09 |   | $     5.73 |   | $    7.40 |
| (based                on 20 million average shares outstanding)                                |                                |   |                                |   |   |   |   |
|                                                                                           |                                |   |                                |   |   |   |   |
| **DIVIDENDS                DECLARED AND PAID PER COMMON SHARE**                                | $    1.43       |   | $     1.30 |   | $     2.73 |   | $    2.38 |

**THE      STUDENT LOAN CORPORATION**

|                                                    | June                30,                                                                                                                            |                       | December                31, |
|---------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|-----------------------------|
|                                                    |                                                                                                                                               |                       |                        | 2007 |   | 2006 |
|                                                    |                                                                                                                                               |                       |                        | (Unaudited) |   |   |
| **ASSETS**                                              |                                                                                                                                               |                       |                        |   |   |
|                                                    | Federally                insured student loans                                                                                                     | $16,355,000                |                        | $17,184,133 |
|                                                    | Private                education loans                                                                                                             | 3,021,424                  |                        | 3,072,394 |
|                                                    | Deferred                origination and premium costs                                                                                              | 607,695                    |                        | 632,872 |
|                                                    | Allowance                for loan losses                                                                                                           | (15,411)                   |                        | (14,197) |
|                                                    | Student                loans, net                                                                                                                  |                       |                        | 19,968,708 |   | 20,875,202 |
|                                                    | Other                loans and lines of credit                                                                                                     |                       |                        | 18,809 |   | 76,117 |
|                                                    | Loans                held for sale                                                                                                                 |                       |                        | 2,160,804 |   | 323,041 |
|                                                    | Cash                                                                                                                                               |                       |                        | 363 |   | 6,570 |
|                                                    | Residual                interests in securitized loans                                                                                             | 593,552                    |                        | 546,422 |
|                                                    | Other                assets                                                                                                                        |                       |                        | 967,135 |   | 809,251 |
|                                                    |                                                                                                                                               |                       |                        |   |   |   |
|                                                    | **Total                Assets**                                                                                                                    |                       |                        | $23,709,371 |   | $22,636,603 |
|                                                    |                                                                                                                                               |                       |                        |   |   |   |
|                                                    |                                                                                                                                               |                       |                        |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY** |                                                                                                                                               |                       |                        |
|                                                    | Short-term                borrowings, payable to principal stockholder                                                                             | $                9,543,300 |                        | $11,136,800 |
|                                                    | Long-term                borrowings, payable to principal stockholder                                                                              | 11,900,000                 |                        | 9,200,000 |
|                                                    | Deferred                income taxes                                                                                                               |                       |                        | 271,429 |   | 287,641 |
|                                                    | Other                liabilities                                                                                                                   |                       |                        | 381,382 |   | 458,861 |
|                                                    |                                                                                                                                               |                       |                        |   |   |   |
|                                                    | Total                Liabilities                                                                                                                   |                       |                        | 22,096,111 |   | 21,083,302 |
|                                                    |                                                                                                                                               |                       |                        |   |   |   |
|                                                    | Common                stock, $0.01 par value; authorized 50,000,000 shares; 20,000,000                shares                issued and outstanding | 200                        |                        | 200 |
|                                                    | Additional                paid-in capital                                                                                                          |                       | 141,343                     |   | 141,324 |
|                                                    | Retained                earnings                                                                                                                   | 1,471,717                  |                        | 1,410,968 |
|                                                    | Accumulated                other changes in equity from nonowner sources                                                                           | -                          |                        | 809 |
|                                                    |                                                                                                                                               |                       |                        |   |   |   |
|                                                    | Total                Stockholders' Equity                                                                                                          |                       | 1,613,260                   |   | 1,553,301 |
|                                                    |                                                                                                                                               |                       |                        |   |   |   |
|                                                    | **Total                Liabilities and Stockholders' Equity**                                                                                      | $23,709,371                |                        | $22,636,603 |

**THE      STUDENT LOAN CORPORATION**

|                                                                                                     |                                                                                                                            |                      |                                              |                                        | Six                months ended |
|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|---------------------------|---------------------------------------------------|---------------------------------------------|---------------------------------|
|                                                                                                     |                                                                                                                            |                      |                                              |                                        | June                30,         |
|                                                                                                     |                                                                                                                            |                      |                                              |                                        | 2007                            |   | 2006 |
| Cash                flows from operating activities:                                                     |                                                                                                                            |                      |                                              |                                        |
| Net                income                                                                                | $  114,540                                                                                                            |                      | $    147,965                  |
| Adjustments                to reconcile net income to net cash from operating                activities: |                                                                                                                            |                      |                                              |
|                                                                                                     | Depreciation                and amortization of equipment and computer software                                                 | 7,142                     |                                              | 6,590                                       |
|                                                                                                     | Amortization                of deferred loan origination and purchase costs                                                     | 54,638                    |                                              | 72,022                                      |
|                                                                                                     | Accreted                interest on residual interests                                                                          | (28,813)                  |                                              | (8,882)                                     |
|                                                                                                     | Provision                for loan losses                                                                                        | 14,423                    |                                              | 11,441                                      |
|                                                                                                     | Deferred                tax provision                                                                                           | (16,212)                  |                                              | 13,696                                      |
|                                                                                                     | Gains                on loans sold and securitized                                                                              | (68,814)                  |                                              | (89,272)                                    |
|                                                                                                     | Loss                on valuation of residual interests                                                                          | 1,892                     |                                              | 2,437                                       |
|                                                                                                     | Loss                on valuation of servicing assets                                                                            | 12,397                    |                                              | 8,498                                       |
|                                                                                                     | Disbursements                and procurements of loans for resale                                                               | (142,278)                 |                                              | (10,019)                                    |
|                                                                                                     | Proceeds                from loans sold                                                                                         | 150,978                   |                                              | -                                           |
|                                                                                                     | Cash                received on residual interests in trading securitized                assets                                 | 36,374                    |                                              | -                                           |
|                                                                                                     | Impairment                loss on retained interests                                                                            | -                         |                                              | 2,934                                       |
|                                                                                                     | Change                in accrued interest receivable                                                                            | (139,139)                 |                                              | (156,608)                                   |
|                                                                                                     | Change                in other assets                                                                                           | (17,074)                  |                                              | (7,032)                                     |
|                                                                                                     | Change                in other liabilities                                                                                      | (77,461)                  |                                              | 36,074                                      |
|                                                                                                     |                                                                                                                            |                      |                                              |                                        |                            |   |   |
| **Net                cash (used in)/provided by operating activities**                                   | (97,407)                                                                                                                        |                      | 29,844                                            |
|                                                                                                     |                                                                                                                            |                      |                                              |                                        |                            |   |   |
| Cash                flows from investing activities:                                                     |                                                                                                                            |                      |                                              |
|                                                                                                     | Change                in loans                                                                                                  | (2,793,090)               |                                              | (2,404,599)                                 |
|                                                                                                     | Increase                in loan origination costs and purchase premiums                                                         | (137,246)                 |                                              | (150,791)                                   |
|                                                                                                     | Proceeds                from loans sold and securitized                                                                         | 1,973,607                 |                                              | 2,879,676                                   |
|                                                                                                     | Cash              received on residual interests in available-for-sale securitized              assets                          | -                    |                                              | 3,754                                  |
|                                                                                                     | Capital                expenditures on equipment and computer software                                                          | (3,971)                   |                                              | (7,105)                                     |
|                                                                                                     |                                                                                                                            |                      |                                              |                                        |                            |   |   |
| **Net                cash provided by investing activities**                                             | (960,700)                                                                                                                       |                      | 320,935                                           |
|                                                                                                     |                                                                                                                            |                      |                                              |                                        |                            |   |   |
| Cash                flows from financing activities:                                                     |                                                                                                                            |                      |                                              |
|                                                                                                     | Net                increase/(decrease) in borrowings with original maturities of one                year or                less | 106,500                   |                                              | (281,100)                                   |
|                                                                                                     | Proceeds                from borrowings with original terms of one year or more                                                 | 3,000,000                 |                                              | -                                           |
|                                                                                                     | Repayments                of borrowings with original terms of one year or more                                                 | (2,000,000)               |                                              | -                                           |
|                                                                                                     | Dividends                paid to stockholders                                                                                   | (54,600)                  |                                              | (47,600)                                    |
|                                                                                                     |                                                                                                                            |                      |                                              |                                        |                            |   |   |
| **Net                cash provided by/(used in) financing activities**                                   | 1,051,900                                                                                                                       |                      | (328,700)                                         |
|                                                                                                     |                                                                                                                            |                      |                                              |                                        |                            |   |   |
| **Net                (decrease)/increase in cash**                                                       | (6,207)                                                                                                                         |                      | 22,079                                            |
| **Cash                - beginning of period**                                                            | 6,570                                                                                                                           |                      | 1,152                                             |
|                                                                                                     |                                                                                                                            |                      |                                              |                                        |                            |   |   |
| **Cash                - end of period**                                                                  | $        363                                                                            |                      | $       23,231 |
|                                                                                                     |                                                                                                                            |                      |                                              |                                        |                            |   |   |
| **Supplemental                disclosure:**                                                              |                                                                                                                            |                      |                                              |
|                                                                                                     | Cash                paid for:                                                                                                   |                      |                                              |                                        |
|                                                                                                     | Interest                                                                                                                        | $                589,927  |                                              | $    559,087            |
|                                                                                                     | Income                taxes, net                                                                                                | $   83,936 |                                              | $      73,418 |

**THE      STUDENT LOAN CORPORATION**

|                                                                         |                                                                                                                                                                        | Six                months ended June 30,                                               |
|------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|
|                                                                         |                                                                                                                                                                        | 2007                                                                                   |   | 2006 |
| **COMMON                STOCK AND ADDITIONAL PAID-IN CAPITAL**               |                                                                                                                                                                        |                                                                                   |   |
|                                                                         | Balance,                beginning of period                                                                                                                                 | $   141,524                                                             |   | $     139,583 |
|                                                                         | Capital                contributions and other changes                                                                                                                      | 19                                                                                     |   | 1,917 |
|                                                                         | Balance,                end of period                                                                                                                                       | $  141,543                                                                   |   | $     141,500 |
|                                                                         |                                                                                                                                                                        |                                                                                   |   |   |
| **RETAINED                EARNINGS**                                         |                                                                                                                                                                        |                                                                                   |   |
|                                                                         | Balance,                beginning of period                                                                                                                                 | $1,410,968                                                                             |   | $  1,222,262 |
|                                                                         | Cumulative                effect of adoption of accounting standard, net of taxes $506 and                $941 in                2007 and                2006, respectively | 809                                                                                    |   | 1,494 |
|                                                                         | Net                income                                                                                                                                                   | 114,540                                                                                |   | 147,965 |
|                                                                         | Common                dividends declared, $2.73 per common share in 2007 and $2.38 per                common                share in 2006                                   | (54,600)                                                                               |   | (47,600) |
|                                                                         | Balance,                end of period                                                                                                                                       | $1,471,717                                                                             |   | $  1,324,121 |
|                                                                         |                                                                                                                                                                        |                                                                                   |   |   |
| **ACCUMULATED                OTHER CHANGES IN EQUITY FROM NONOWNER SOURCES** |                                                                                                                                                                        |                                                                                   |   |
|                                                                         | Balance,                beginning of period                                                                                                                                 | $          809                       |   | $               - |
|                                                                         | Cumulative                effect of adoption of accounting standard, net of taxes of                $506                                                                    | (809)                                                                                  |   | - |
|                                                                         | Balance,                end of period                                                                                                                                       | $              - |   | $               - |
|                                                                         |                                                                                                                                                                        |                                                                                   |   |   |
| **TOTAL                STOCKHOLDERS' EQUITY**                                | $1,613,260                                                                                                                                                                  |                                                                                   | $                1,465,621 |

**THE      STUDENT LOAN CORPORATION**

**Notes      to Consolidated Financial Statements (Unaudited)**

**June      30, 2007**

| **1.** | **Basis                of Presentation and Significant Accounting                Policies** |
|--------|---------------------------------------------------------------------------------------------|

**Interim      Financial Information**

** **
** **

**Use      of Estimates**

**Revenue      Recognition**

*Accounting for Nonrefundable Fees and      Costs Associated with Originating or Acquiring Loans and Initial Direct Costs      of      Leases*

**Loans**

**Allowance      for Loan Losses**

**Transfer      of Student Loans through Sale or Securitization**

***Whole      Loan Sales***

*Accounting for Transfers and Servicing of Financial Assets and      Extinguishments of Liabilities, a replacement of FASB Statement No. 125, *
* *

***Loans      Securitized***

**Accumulated other changes in equity from nonowner      sources**
**, **
*The Fair Value Option for Financial Assets and      Financial Liabilities*
**Accumulated other changes in equity from      nonowner sources **
** Retained earnings**
** Fee and other income**
**Fee and other      income**
*Accounting for Servicing of Financial Assets – an amendment of      FASB statement No. 140 *
**Other assets**
**Fee and other income**

**Gains on      loans securitized**

**Loans      Held for Sale**

**Derivatives**

**Other assets**
**Other liabilities**

**Internally      Developed Software**

* Accounting      for the Costs of Computer Software Developed or Obtained for Internal Use.*
**Other assets**

| **  ** |  |
|------------------|--|

**2.     New      Accounting Standards**

***Fair      Value Measurements***

*Fair Value      Measurements*

***Fair      Value Option***

**Accumulated other changes in equity from nonowner sources**
**Retained earnings**

***Accounting      for Uncertainty in Income Taxes***

*Accounting for Uncertainty      in Income Taxes *

| **Jurisdiction**             | **Tax                year** |
|------------------------------|-----------------------------|
| United                States | 2003                        |
| New                York      | 2005                        |

**3.            Student      Loans**

|                                                              | **June                30,** | **December                31,** |
|-------------------------------------------------------------------|-----------------------------|---------------------------------|
| (*Dollars                in thousands)*                           | **2007**                    | **2006**                        |
| Federal                Stafford Loans                             | $                7,870,593  | $                7,192,550      |
| Federal                Consolidation Loans                        | 7,543,775                   | 9,118,615                       |
| Federal                SLS/PLUS/HEAL Loans                        | 940,632                     | 872,968                         |
| Private                education loans                            | 3,021,424                   | 3,072,394                       |
| Total                student loans held, excluding deferred costs | 19,376,424                  | 20,256,527                      |
| Deferred                origination and premium costs             | 607,695                     | 632,872                         |
| Student                loans held                                 | 19,984,119                  | 20,889,399                      |
| Less:                allowance for loan losses                    | (15,411)                    | (14,197)                        |
| **Student                loans held, net**                        | 19,968,708                  | 20,875,202                      |
| Loans                held for sale, excluding deferred costs      | 2,087,431                   | 315,927                         |
| Deferred                origination and premium costs             | 73,373                      | 7,114                           |
| **Loans                held for sale**                            | 2,160,804                   | 323,041                         |
| **Other                loans and lines of credit**                | 18,809                      | 76,117                          |
| **Total                loan assets**                              | $22,148,321                 | $21,274,360                     |

**4.             Other        Assets**

|                                                                                                            | **June                30,** | **December                31,** |
|-----------------------------------------------------------------------------------------------------------------|-----------------------------|---------------------------------|
| (*Dollars                in thousands*)                                                                         | **2007**                    | **2006**                        |
| Accrued                interest receivable                                                                      |                        |                            |
| from                student loan borrowers/others                                                               | $576,846                    | $440,992                        |
| from                federal government                                                                          | 130,214                     | 126,929                         |
| Servicing                asset from securitization activity                                                     | 174,077                     | 169,234                         |
| Equipment                and computer software(1)                                                               | 39,252                      | 42,423                          |
| Other                                                                                                           | 46,746                      | 29,673                          |
| **Total                other assets**** ****          ** | $967,135                    | $809,251                        |

|   | (1) | Amounts                are reflected net of accumulated depreciation and amortization of                $46                million and $44 million at June 30, 2007 and December 31, 2006,                respectively. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**5.           Fee      and Other Income**

|                                                                               | **Three                months ended****June                  30,**  |                         | **Six                months ended ****June                  30,**  |
|------------------------------------------------------------------------------------|--------------------------------------------------------------------------|------------------------------|------------------------------------------------------------------------------|
| *(Dollars                in thousands)*                                            | **2007**                                                                 | **2006**                     |                                                                         | **2007** | **2006** |
| (Losses)/gains                related to residual interests                        | $   (114)                                                 | $    257 |                                                                         | $   (1,892) | $   (5,371) |
| Servicing                revenue net of gains/(losses) related to servicing assets |  8,489                                                              |  1,164                  |                                                                         |  20,125 |  4,803 |
| Mark-to-market                (losses)/gains on derivatives                        | (1,920)                                                                  | 8,424                        |                                                                         | (1,662) | 11,301 |
| Other                origination and servicing fees                                | 1,020                                                                    | 930                          |                                                                         | 3,081 | 2,800 |
| Late                fees                                                           | 1,509                                                                    | 1,048                        |                                                                         | 3,541 | 3,254 |
| Other                                                                              | 436                                                                      | 2,424                        |                                                                         | 1,090 |  2,609 |
| **Total                fee and other income**                                      | $                9,420                                                   | $14,247                      |                                                                         | $  24,283 | $    19,396 |

| **6.** | **Related                Party Transactions** |
|--------|-----------------------------------------------|

|  *(Dollars                in thousands)*                                                                                               | Three                months ended    June                30, | Six                  months ended    June                  30, |
|---------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|------------------------------------------------------------------------------------|
|                                                                                                                                        | 2007                                                                             | 2006                                                                               | 2007 | 2006 |
| **Revenues**Interest                income                                                                                                  |  $       285                             |  $       105                               | $                     532 | $       216 |
| Interest                expense                                                                                                             | 297,796                                                                          |       315,453                                        | 582,682 |  585,168 |
| Fee                and other income                                                                                                         |                                                                             |                                                                               |   |   |
| Derivative                valuation                                                                                                         | (1,920)                                                                          | 8,424                                                                              | (1,662) | 11,301 |
| Other                                                                                                                                       | 1,020                                                                            | 930                                                                                | 3,081 | 2,800 |
|                                                                                                                                        |                                                                             |                                                                               |   |   |
| **Operating                Expenses*****Salaries                and employee benefits***Employee                benefits and administration |   $    2,810                                       |   $   2,712                                               | $                  5,523 | $   5,128 |
| Stock-based                compensation                                                                                                     | 558                                                                              | 701                                                                                | 1,413 | 1,083 |
| ***Other                expenses***                                                                                                         |                                                                             |                                                                               |   |   |
| Servicing,                professional and other fees paid                                                                                  | $                 11,689                                                    | $                11,687                                                            | $23,479 | $                21,545 |
| Data                processing  and communications                                                                                | 1,518                                                                            | 1,463                                                                              | 3,040 | 3,020 |
| Premises,                primarily rent                                                                                                     | 774                                                                              | 731                                                                                | 1,527 | 1,467 |
| Other                                                                                                                                       | 395                                                                              | 197                                                                                | 1,163 | 398 |

*CBNA      Omnibus Credit Agreement*

*Interest      Rate Swap and Option Agreements*

*Student      Loan Origination Agreement and Servicing Fees Earned*

**Fee and other      income**

*Servicing,      Professional and Other Fees Paid*

*CBNA      Tax-sharing Agreement*

*Other      Intercompany Arrangements*

|   |   |
|--------|--------|

| **7.** | **Interest                Rate Derivative                Agreements** |
|--------|-----------------------------------------------------------------------|

|                                       | **  June                30, 2007**                            | **December                31, 2006** |
|--------------------------------------------|-------------------------------------------------------------------------|--------------------------------------|
|                                       |                                                                    | **Fair                Value**        |   | **Fair                Value** |
| (*Dollars                in thousands*)    | **Notional**                                                            | **Asset**                            | **Liability** | **Notional** | **Asset** | **Liability** |
| Prime                / LIBOR Swaps         | $           ---- | $     ----  | $       ---- | $                4,000,000 | $    ---- | $     761 |
| Other                LIBOR Based Swaps     | 8,185,000                                                               | 5,488                                | 5,081 | 8,035,000 | 462 | 1,803 |
| Interest                Rate Floor Options | 8,154,333                                                               | ----                                 | 21,822 | 6,200,000 | ---- | 9,500 |

| **8.** | **Student                Loan Securitizations** |
|--------|-------------------------------------------------|

|  *(Dollars                in thousands)*                                         | **Six                months ended****June                30, 2007** | **Six                months ended****June                30, 2006** |
|---------------------------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------|
| Student                loans securitized during the period                            | $1,201,603                                                          | $2,200,233                                                          |
| Proceeds                from student loans securitized during the period              | 1,221,216                                                           | 2,197,282                                                           |
| Realized                gains on loans securitized                                    | 48,548                                                              | 69,073                                                              |
| Mark-to-market                gains on retained interests at securitization date | 3,075                                                               | 2,718                                                               |

| *(Dollars                in thousands)*                    | **June                30, 2007**                            | **December                31, 2006**                                                  |
|------------------------------------------------------------|-------------------------------------------------------------|---------------------------------------------------------------------------------------|
| Total                student loan assets in trusts         |         $12,987,878 |       $12,375,339                                       |
| Residual                interests                          | 593,552                                                     |            546,422             |
| Servicing                assets                            | 174,077                                                     |              169,234 |
| Receivable                from trusts for servicing        | 5,406                                                       | 3,950                                                                                 |
| Payable                to trusts for student loan payments | 11,225                                                      | 11,494                                                                                |

| *(Dollars                in thousands)*                        | **2007**                                                                                                           | **2006**                                                  |
|----------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|
| Cash                received from trusts for servicing         | $ 31,065                                                                                                      |                  $ 12,912                            |
| Cash                received from trusts on residual interests |    36,374                |                       3,754 |

|                                                        | **Three                months ended  **** June                30,** | **Six                months ended****June                30,** |
|-------------------------------------------------------------|------------------------------------------------------------------------------------|----------------------------------------------------------------|
| *(Dollars                in thousands)*                     | **2007**                                                                           | **2006**                                                       | **2007** | **2006** |
| Balance                at beginning of period               | $                545,897                                                           | $187,299                                                       | $546,422 | $188,454 |
| Accreted                interest                            | 14,429                                                                             | 4,409                                                          | 28,813 | 8,882 |
| Cash                flows from trusts                       | (23,243)                                                                           | (3,754)                                                        | (36,374) | (3,754) |
| Losses/(gains)                related to residual interests | (114)                                                                              | 257                                                            | (1,892) | (5,371) |
| Student                loan securitizations                 | 56,583                                                                             | 84,926                                                         | 56,583 | 84,926 |
| **Balance                at end of period**                 | $                593,552                                                           | $273,137                                                       | $593,552 |      $273,137 |

|                                                                          | **Three                months ended  **** June                30,** | **Six                months ended****June                30,** |
|-------------------------------------------------------------------------------|------------------------------------------------------------------------------------|----------------------------------------------------------------|
| *(Dollars                in thousands)*                                       | **2007**                                                                           | **2006**                                                       | **2007** | **2006** |
| Balance                at beginning of period                                 | $                164,367                                                           | $75,977                                                        | $169,234 | $76,784 |
| Cumulative                effect adjustment                                   | -                                                                                  | -                                                              | - | 2,435 |
| Changes                in fair value due to changes in inputs and assumptions |  135                                                                          |  (2,029)                                                  | 3,261 | (3,497) |
| Other                changes                                                  | (7,665)                                                                            | (3,227)                                                        | (15,658) | (5,001) |
| Student                loan securitizations                                   | 17,240                                                                             | 29,968                                                         | 17,240 | 29,968 |
| **Balance                at end of period**                                   | $                174,077                                                           | $100,689                                                       | $174,077 |      $100,689 |

**Other changes**

|                                                                      | **2007-1**                                 |
|---------------------------------------------------------------------------|--------------------------------------------|
| Weighted                average discount rate                             | 10.2%                                      |
| Constant                prepayment rates                                  | Up                to 7.2% in 5 to 10 years |
| Anticipated                credit losses, net of insurance and guarantees | 0.34%                                      |
| Basis                spread between LIBOR and Commercial Paper rate       | 0.11%                                      |
| Utilization                rate of borrower benefits:                     |                                       |
| Automated                clearing house                                   | 10.0%                                      |
| On                time payments                                           | 0.0%                                       |

|                                                                      | **June                30, 2007**           | **December                31, 2006**       |
|---------------------------------------------------------------------------|--------------------------------------------|--------------------------------------------|
| Weighted                average discount rate                             |                                       |                                       |
| FFEL                Program Consolidation Loans                           | 10.2%                                      | 10.0%                                      |
| Private                education loans                                    | 12.2%                                      | 12.0%                                      |
| Constant                prepayment rates                                  |                                       |                                       |
| FFEL                Program Consolidation Loans                           | Up                to 7.2% in 5 to 10 years | Up                to 9.8% in 5 to 10 years |
| Private                education loans                                    | 7.2%                to 21.6% over 12 years | 4.6%                to 20.0% over 12 years |
| Anticipated                credit losses, net of insurance and guarantees |                                       |                                       |
| FFEL                Program Consolidation Loans                           | 0.14%                                      | 0.11%                                      |
| Private                education loans                                    | 1.10%                                      | 1.10%                                      |
| Basis                spread between LIBOR and Commercial Paper rate       | 0.11%                                      | 0.11%                                      |
| Utilization                rate of borrower benefits:                     |                                       |                                       |
| Automated                clearing house                                   | 10.0%                to 40.1%              | 17.5%                to 39.8%              |
| On                time payments                                           | 0.0%                to 40.9%               | 14.5%                to 36.5%              |

|                                            | **June                30, 2007**           | **December                31, 2006**       |
|-------------------------------------------------|--------------------------------------------|--------------------------------------------|
| Weighted                average discount rate   |                                       |                                       |
| FFEL                Program Consolidation Loans | 6.62%                                      | 6.0%                                       |
| Private                education loans          | 7.12%                                      | 6.5%                                       |
| Constant                prepayment rates        |                                       |                                       |
| FFEL                Program Consolidation Loans | Up                to 7.2% in 5 to 10 years | Up                to 9.8% in 5 to 10 years |
| Private                education loans          | 7.2%                to 21.6% over 12 years | 4.6%                to 20.0% over 12 years |
| Servicing                margin                 |  25                basis points       | 25                basis points             |

| *(Dollars                in thousands)*                   | **Residual                Interests**                               | **Servicing                Assets**              |
|-----------------------------------------------------------|---------------------------------------------------------------------|--------------------------------------------------|
| Fair                value at June 30, 2007                | $                   $593,552                         | $                  174,077             |
| Discount                rate                              |                                                                |                                             |
| 10%                adverse change                         | $     (24,040)                             | $    (4,280)                 |
| 20%                adverse change                         | $     (46,308)                             | $    (8,372)                 |
| Constant                prepayment rate                   |                                                                |                                             |
| 10%                adverse change                         | $     (11,314)                             | $    (2,870)                 |
| 20%                adverse change                         | $     (22,001)                             | $    (5,716)                 |
| Anticipated                net credit losses/defaults     |                                                                |                                             |
| 10%                adverse change                         | $       (5,102)                  | $       (912) |
| 20%                adverse change                         |                   $     (10,615) | $    (1,884)                 |
| Servicing                margin                           |                                                                |                                             |
| 10%                adverse change                         | -                                                                   | $  (16,623)                            |
| 20%                adverse change                         | -                                                                   | $  (33,059)                            |
| Basis                spread                               |                                                                | -                                                |
| 10%                adverse change                         | $       (4,852)                  | -                                                |
| 20%                adverse change                         | $       (9,702)                  | -                                                |
| Borrower                benefits – ACH              |                                                                | -                                                |
| 10%                adverse change                         | $       (3,210)                  | -                                                |
| 20%                adverse change                         | $       (6,802)                  | -                                                |
| Borrower                benefits – on time payments |                                                                | -                                                |
| 10%                adverse change                         | $       (9,177)                  | -                                                |
| 20%                adverse change                         | $     (18,353)                             | -                                                |

| **9.** | **Fair                Value** |
|--------|-------------------------------|

| ·   | Level                1 – Quoted prices for *identical* instruments in active                markets. |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | Level                2 – Quoted prices for *similar* instruments in active market,                quoted prices for identical or similar instruments in markets that                are not                active; and model derived valuations whose inputs are observable                or whose                primary value drivers are                observable. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level                3 – Instruments whose primary value drivers are                *unobservable*. |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| *(Dollars                in Thousands)*                | **Level                2**                                     | **Level                3**                                     |
|--------------------------------------------------------|----------------------------------------------------------------|----------------------------------------------------------------|
| **Assets**                                             |                                                           |                                                           |
| Residual                interests in securitized loans | $          - | $593,552                                                       |
| Other                assets                            |  5,488                                                    | 174,077                                                        |
| **Total                Assets**                        |  $  5,488                                       | $767,629                                                       |
|                                                   |                                                           |                                                           |
| **Liabilities**                                        |                                                           |                                                           |
| Other                liabilities                       | $26,903                                                        | $          - |

**Derivatives**

**Other assets**
**Other liabilities**

**Retained      Interests in Securitized Loans**

**Other assets**

| *(Dollars                in Thousands)*     | **Residual                Interests in Securitized Loans** | **Other                Assets** |
|---------------------------------------------|------------------------------------------------------------|---------------------------------|
| Balance                at December 31, 2006 | $546,422                                                   | $169,234                        |
| Net                unrealized gains(1)      | 26,921                                                     | 8,384                           |
| Issuances                and settlements    | 20,209                                                     | (3,541)                         |
| **Balance                at June 30, 2007** | $593,552                                                   | $174,077                        |

|   | (1) | Amount                includes, as applicable, accreted interest which is included in                **Interest income** and other unrealized gains and losses                which are included in **Fee and other income**in the                consolidated statement of income. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **10.** | **Short-                and Long-Term                Borrowings** |
|---------|-------------------------------------------------------------------|

| **11.** | **Commitments                and Contingencies** |
|---------|--------------------------------------------------|

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

**Forward-Looking      Statements**

**Business      Overview**

**Regulatory Impacts**

**Critical      Accounting Estimates**

**Accounting      Changes and Future Application of Accounting Standards**

**Financial      Condition**

***Loans***

| *(Dollars                in millions)*              | **June                30, ****2007** | **December                31,****2006** |
|-----------------------------------------------------|-------------------------------------------|-----------------------------------------|
| Average                owned loans (year to date)   | $22,784                                   | $25,355                                 |
| Owned                loans at end of period         | 22,164                                    | 21,289                                  |
| Average                managed loans (year to date) | 34,879                                    | 32,403                                  |
| Managed                loans at end of period       | 35,152                                    | 33,664                                  |

***Loan      Disbursement and Procurement Activity***

|                                                                       | **Three                months ended**** June                30,** | **Six                months ended ****June                30,**                                                                                                                                                                                    |
|----------------------------------------------------------------------------|------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *(Dollars                in millions)*                                     | **2007**                                                               | **2006**                                                                                                                                                                                                                                                | **2007** | **2006** |
| **Retail:**                                                                |                                                                   |                                                                                                                                                                                                                                                    |   |   |
| FFEL                Program Stafford and PLUS Loan originations            | $                582                                                   |        $ 497                                                                                                                                                                                                    | $                2,094 | $1,786 |
| CitiAssist                Loans disbursed under commitments to purchase(1) | 174                                                                    |                                                       162 | 886 |       781 |
| **Total                Retail**                                            |        756                          |      659                                                                                                                                                                                                                       |        2,980 |       2,567 |
| **Loan                consolidation and other secondary market volume**    | 580                                                                    | 1,213                                                                                                                                                                                                                                                   | 1,146 | 2,193 |
| **Total                Originations**                                      | $1,336                                                                 | $1,872                                                                                                                                                                                                                                                  | $4,126 | $4,760 |

|  |  (1)   This                amount represents CitiAssist Loans disbursed by CBNA. These loans                have                been or will be purchased by the Company after final                disbursement. |
|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Allowance      for loan losses***

**Regulatory Impacts**

|                                              | **Three                months ended June 30,** | **Six                months ended June 30,** |
|---------------------------------------------------|------------------------------------------------|----------------------------------------------|
| *(Dollars                in thousands)*           | **2007**                                       | **2006**                                     | **2007** | **2006** |
|                                              |                                           |                                         |   |   |
| **Balance                at beginning of period** |                                           |                                         |   |   |
| FFEL                Program                       | $                9,537                         | $                4,245                       | $                6,911 | $                1,993 |
| CitiAssist                                        | 11,318                                         | 5,142                                        | 7,286 | 2,997 |
|                                              | 20,855                                         | 9,387                                        | 14,197 | 4,990 |
| **Provision                for loan losses**      |                                           |                                         |   |   |
| FFEL                Program                       | (2,955)                                        | 1,149                                        | 869 | 3,550 |
| CitiAssist                                        | 6,850                                          | 4,152                                        | 13,554 | 7,891 |
|                                              | 3,895                                          | 5,301                                        | 14,423 | 11,441 |
| **Charge                offs**                    |                                           |                                         |   |   |
| FFEL                Program                       | (1,378)                                        | 124                                          | (2,576) | (30) |
| CitiAssist                                        | (5,840)                                        | (5,293)                                      | (9,831) | (7,299) |
|                                              | (7,218)                                        | (5,169)                                      | (12,407) | (7,329) |
| **Recoveries**                                    |                                           |                                         |   |   |
| FFEL                Program                       | -                                              | 1                                            | - | 6 |
| CitiAssist                                        | 802                                            | 416                                          | 2,121 | 828 |
|                                              | 802                                            | 417                                          | 2,121 | 834 |
| **Other(1)**                                      |                                           |                                         |   |   |
| FFEL                Program                       | (504)                                          | -                                            | (504) | - |
| CitiAssist                                        | (2,419)                                        | -                                            | (2,419) | - |
|                                              | (2,923)                                        | -                                            | (2,923) | - |
| **Balance                at end of period**       |                                           |                                         |   |   |
| FFEL                Program                       | 4,700                                          | 5,519                                        | 4,700 | 5,519 |
| CitiAssist                                        | 10,711                                         | 4,417                                        | 10,711 | 4,417 |
|                                              | $15,411                                        | $9,936                                       | $15,411 | $9,936 |

| (1)   | Represents                reserve amounts associated with loans sold or reclassified as                held-for-sale. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------|

***Private      Education Loans in Repayment***

|                                                                                                                                     | **June                30,**           | **December                31,**                  |
|------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------|--------------------------------------------------|
| *(Dollars                in thousands)*                                                                                                  | **2007**                              | **2006**                                         |
| Total                private education loans (including loans held for sale)                                                             | $                4,421,424            | $3,072,394                                       |
| Private                education loans in repayment                                                                                      | $                1,359,164            | $1,156,184                                       |
| Private                education loans in forbearance                                                                                    | $    122,829      | $     81,761            |
| Private                education loans delinquent 30 - 89 days as a % of total private education                loans in repayment       | 2.4%                                  | 2.6%                                             |
| Private                education loans delinquent 90 days or greater as a % of total private                education loans in repayment | 1.3%                                  | 2.6%                                             |
| Allowance                for loan losses for private education loans                                                                     | $     10,711 | $       7,286 |
| Total                private education loans insured by third parties                                                                    | $3,608,840                            | $2,410,142                                       |
| Total                uninsured private education loans                                                                                   | $   812,584            | $   662,252                       |

***Sources      and Uses of Cash***

**Results      of Operations**

***Factors      Affecting Net Interest Income***

*Net      Interest Margin Spread Analysis*

|                                                                        | **Six                months ended ****June                30,** |
|-----------------------------------------------------------------------------|----------------------------------------------------------------------|
|                                                                        | **2007**                                                             | **2006** |
| Student                loan yield                                           |  7.38%                                                          | 7.04                % |
| Consolidation                loan rebate fees                               | (0.42)%                                                              | (0.44)% |
| Accreted                interest on residual interests                      | 0.25%                                                                | 0.07                % |
| Amortization                of deferred loan origination and purchase costs | (0.47)%                                                              | (0.55)% |
| Net                yield                                                    | 6.74                %                                                | 6.12                % |
| Cost                of funds                                                | (5.04)%                                                              | (4.43)% |
| **Net                interest margin**                                      | 1.70%                                                                | 1.69                % |

**Regulatory Impacts**

*Rate/Volume      Analysis*

|                                        | **For                the six months ended June 30, 2007 vs. the six months ended June                30,                2006** |
|---------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|
|                                        | **Increase                (decrease) due to change in:**                                                                       |
| *(Dollars                in millions)*      | **Volume**                                                                                                                     | **Rate** | **   Net** |
| Interest                earning assets      | $  (98.8)                                                                                                            | $                  70.6 | $                (28.2) |
| Interest                bearing liabilities | (76.0)                                                                                                                         | 73.4 |                                     (2.6) |
| **Net                interest income**      | $  (22.8)                                                                                                            | $  (2.8) | $                (25.6) |

***Quarter      Ended June 30, 2007***

*Net      interest income*

**Factors      Affecting Net Interest Income**

*Gains      on loans sold and securitized*

*Fee      and other income*

*Operating      expenses*

*Provision      for loan losses*

*Income      taxes*

***Six      Months Ended June 30, 2007***

*Net      interest income*

**Factors Affecting Net Interest Income**

*Gains      on loans sold and securitized*

*Fee      and other income*

*Operating      expenses*

*Provision      for loan losses*

*Income      taxes*

**Regulatory      Impacts**

***Legislative      Activity***

| ·   | Increase                Stafford annual loan limits for students in their third year and                beyond                from $5,500 to $7,500 and base aggregate limits from $23,000 to $30,500                for undergraduate students and $65,500 to $73,000 for graduate                students. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Reduce                the Stafford interest rate from 6.80% to 3.40% over the next five                years,                with the rate returning to 6.80% in                2013. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Reduce                lender special allowance to 1.19% for Stafford Loans not in repayment,                1.79% for Stafford Loans in repayment and PLUS Loans, and 2.09% for                Consolidation Loans under H.R. 2669. This represents a 55 basis point                reduction for Stafford and Consolidation Loans and an 85 basis point                reduction for PLUS Loans. S. 1762 provides for a 50 basis point reduction                for Stafford and Consolidation Loans and an 80 basis point reduction                for                PLUS Loans. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Reduce                lender insurance to 95% (S. 1762 provides for a reduction to                97%). |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | Repeal                the Exceptional Performer program. |
|--------------------|----------------------------------------------------------|

| ·   | Increase                the lender fee from 0.50% to 1.00%. |
|--------------------|-------------------------------------------------------------|

| ·   | Expand                the income-contingent repayment plan to FFELP borrowers (currently                only                available to Direct Lending borrowers), provide a monthly repayment                cap of                15% of the amount by which a borrower’s adjusted gross income exceeds 150%                of the poverty line, and forgive remaining debt after 20 years of                repayment. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Require                the Department of Education and the U.S. Treasury Department to conduct                a                pilot program on using a market-based auction system for determining                lender interest rates and using the Internal Revenue Service to collect                income-contingent loans. This provision appears in S. 1762                only. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Ongoing      Inquiries into the Student Loan Industry***

**Off-Balance      Sheet Arrangements**

| *(Dollars                in millions)*                             | **June                30, 2007** |   | **December                31, 2006** |
|--------------------------------------------------------------------|----------------------------------|--------|--------------------------------------|
| Total                student loan assets in trusts                 | $12,988                          |   | $12,375                              |
| Residual                interests                                  | 594                              |   | 546                                  |
| Servicing                assets                                    | 174                              |   | 169                                  |
| Amounts                receivable from trusts for servicing        | 5                                |   | 4                                    |
| Amounts                payable to trusts for student loan payments | 11                               |   | 12                                   |

**Sources and Uses of Cash**

**Forward-Looking      Statements**

**Item      3.   Quantitative and Qualitative Disclosures About Market      Risk**

|                                   | **June                30** |
|----------------------------------------|----------------------------|
|                                   | **2007**                   | **2006** |
| *(Dollars                in millions)* | Increase                   | Decrease | Increase | Decrease |
| 100                basis points        | $3.1                       | $22.4 | $19.8 | $24.5 |

| **Item                4.** | **Controls                and Procedures** |
|----------------------------|--------------------------------------------|

|   | **(a)** | **Disclosure                Controls and Procedures** |
|--------|---------|-------------------------------------------------------|

|   | **(b)** | **Internal                Control Over Financial                Reporting** |
|--------|---------|-----------------------------------------------------------------------------|

**PART      II. OTHER INFORMATION**

**Item      1A. Risk Factors**

**Forward-Looking      Statements**

**Regulatory      considerations**

**Regulatory Impacts**

| **Item                6.** | **Exhibits** |
|----------------------------|--------------|

|   | The                Student Loan Corporation |                                                                                              |
|--------|---------------------------------------------|---------------------------------------------------------------------------------------------------|
|   |                                        |                                                                                              |   |
|   |                                        |                                                                                              |   |
|   |                                        |                                                                                              |   |
|   |                                        |                                                                                              |   |
|   |                                        |                                                                                              |   |
|   | By                                          | /s/                Daniel P. McHugh                                                               |   |
|   |                                        | Daniel                P. McHughChief                Financial Officer and Duly Authorized Officer |
|   |                                        | (Principal                Financial Officer)                                                      |

**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 through August 3,                2007. |
|------------------------|------------------------------------------------------------------------------------------|

| 31.1                * | Certification                of Principal Executive Officer pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002. |
|-----------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| 31.2  * | Certification                of Principal Financial 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. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|