UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30,
2003

or

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

For the transition period from    to

Commission File Number: 1-11616

THE STUDENT LOAN CORPORATION(Exact name of registrant as specified in its charter)

|Delaware                                       | 16-1427135                                
|---------------------------------------------- | ------------------------------------------
|(State or other jurisdiction
      of          | (I.R.S. Employer Identification
      No.)
|incorporation or organization)                
|                                              
|750 Washington Blvd.                           | 06901                                     
|Stamford, Connecticut                          | (Zip Code)                                
|(Address of principal executive
      offices)

(203) 975-6237(Registrant's telephone
number, including area code)

Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

Yes X       No

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

Yes X       No

On November 10, 2003,
there were 20,000,000 shares of The Student Loan Corporation's Common Stock
outstanding.

Available on the WorldWide Web at studentloan.com

Form 10-Q

Part I           Financial
Information                                                                                                                                                  
             Page        
Item 1 - Financial Statements

Statement
of Income (Unaudited) for the Three- and Nine-Month
Periods                        
Ended September 30, 2003 and 2002
...................................................................          
3

Balance
Sheet as of September 30, 2003
(Unaudited)                        
and December 31, 2002
(Audited).......................................................................          
4

Statement
of Cash Flows (Unaudited) for the Nine-Month Periods
Ended                        
September 30, 2003 and
2002..............................................................................         
 5

Statement
of Changes in Stockholders' Equity (Unaudited) for
the                        
Nine-Month Periods Ended September 30, 2003 and
2002.................................          
6

Notes
to Financial Statements
(Unaudited).............................................................         7-13

Item 2
- Management's Discussion and Analysis of Financial
Condition                                
and Results of
Operations.............................................................................      
14-20

Item 3
- Quantitative and Qualitative Discussion About Market
Risk................................         21

Item 4
- Controls and
Procedures........................................................................................         22

Part II           Other Information

Item 6
- Exhibits and Reports on Form
8-K........................................................................         23

Signature........................................................................................................................................         24

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

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

|                                                     | Three months ended      | Nine months ended      
|---------------------------------------------------- | ----------------------- | -----------------------
|                                                     | September 30,           | September 30,          
|                                                     | 2003     2002           | 2003      2002         
|
|Interest income                                      | $204,748      $222,968  | $630,314      $752,129 
|Interest expense                                     | 90,108      129,679     | 287,574      458,832   
|Net interest income                                  | 114,640          93,289 | 342,740        293,297 
|Less: provision for loan losses                      | (3,572)     (3,313)     | (10,246)     (8,608)   
|Net interest income after provision for loan losses  | 111,068          89,976 | 332,494         284,689
|Fee and other income                                 | 5,498     4,968         | 14,421     17,313      
|Total revenue, net                                   | 116,566    94,944       | 346,915    302,002     
|                                                    
|
|Salaries and employee benefits                       | 7,418            6,526  | 21,318          19,820 
|Other expenses                                       | 22,215     19,821       | 64,526     59,292      
|Total operating expenses                             | 29,633     26,347       | 85,844     79,112      
|                                                    
|Income before income taxes                           | 86,933          68,597  | 261,071        222,890 
|Income taxes                                         | 35,412     28,001       | 101,918     90,447     
|$51,521     $40,596                                  | $159,153     $132,443  
|                                                    
|$15,400      $14,000                                 | $  46,200      $42,000 
|                                                    
|
|(based on 20 million average shares outstanding)     | $ 2.58      $ 2.03      | $ 7.96      $ 6.62     
|                                                    
|$ 0.77      $ 0.70                                   | $ 2.31      $ 2.10     
|                                                    
|
|Net interest margin                                  | 2.02%           1.87%   | 2.08%           2.05%  
|Operating expense as a percentage of average student |                         |                        
|loans                                                | 0.52%           0.53%   | 0.52%           0.55%  
|Return on Equity                                     | 23.40%         22.26%   | 25.56%         25.40%  
|                                                    

See accompanying notes to financial statements.

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

|                                                                       | September 30,  | December 31,
|---------------------------------------------------------------------- | -------------- | ------------
|                                                                       | 2003           | 2002        
|                                                                       | (Unaudited)    | (Audited)   
|
|Student loans                                                          | $ 20,444,808   | $ 19,173,992
|Less: allowance for loan losses                                        | (6,884)        | (5,484)     
|Student loans, net                                                     | 20,437,924     | 19,168,508  
|Loans available for sale                                               | 2,443,412      | 1,361,874   
|Cash                                                                   | 287            | 383         
|Other assets                                                           | 524,669        | 474,839     
|                                                                      
|$ 23,406,292                                                           | $
  21,005,604
|                                                                      
|                                                                      
|
|Short-term borrowings                                                  | $ 11,772,700   | $ 15,789,900
|Long-term borrowings                                                   | 10,350,000     | 4,000,000   
|Payable to principal stockholder                                       | 5,189          | 6,247       
|Deferred income taxes                                                  | 129,328        | 105,897     
|Other liabilities                                                      | 256,564        | 338,524     
|                                                                      
|Total
      Liabilities                                                | 22,513,781     | 20,240,568  
|                                                                      
|Common stock, $.01 par value;
      authorized 50,000,000             
|shares; 20,000,000
      shares issued and outstanding                 | 200            | 200         
|Additional paid-in capital                                             | 135,811        | 135,205     
|Retained earnings                                                      | 749,095        | 636,142     
|Accumulated other changes in equity
      from nonowner        sources | 7,405          | (6,511)     
|                                                                      
|Total Stockholders'
      Equity                                       | 892,511        | 765,036     
|                                                                      
|$ 23,406,292                                                           | $ 21,005,604  
|                                                                      
|                                                                      
|$ 22,008,199                                                           | $ 19,481,147  
|(year-to-date)                                                        
|                                                                      

See accompanying notes to financial statements.

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

|                                                               | Nine months ended
|-------------------------------------------------------------- | -----------------
|                                                               | September 30,    
|                                                               | 2003             
|Cash flows from operating activities:                         
|Net income                                                     | $  159,153       
|Adjustments to reconcile net income to                        
|net cash from operating
    activities:                       
|Depreciation and amortization                                  | 82,365           
|Provision for loan losses                                      | 10,246           
|Deferred tax provison                                          | 13,898           
|Loss on disposal of assets                                     | -                
|Realized gains on securitized loans                            | (312)            
|(Increase) in accrued interest receivable                      | (24,622)         
|Decrease/(increase) in other assets                            | 3,469            
|(Decrease) in other liabilities                                | (73,767)         
|Net cash provided by operating activities                      | 170,430          
|                                                              
|Cash flows from investing activities:                         
|Disbursements of loans                                         | (2,162,986)      
|Loan portfolio purchases                                       | (1,990,846)      
|Loan purchases held for
    sale                               | (1,103,838)      
|Loan reductions                                                | 2,930,351        
|Net (increase) in deferred loan origination and purchase costs | (112,638)        
|Proceeds from loans securitized                                | -                
|Capital expenditures on equipment
      and computer software  | (17,169)         
|Net cash used in investing activities                          | (2,457,126)      
|                                                              
|Cash flows from financing activities:                         
|Net (decrease) in borrowings
      with original              
|maturities of one
      year or less                           | (4,617,200)      
|Repayments of long-term borrowings                             | (2,200,000)      
|Proceeds from long-term
    borrowings                         | 9,150,000        
|Dividends paid to stockholders                                 | (46,200)         
|Net cash provided by financing activities                      | 2,286,600        
|                                                              
|Net decrease in cash                                           | (96)             
|Cash - beginning of period                                     | 383              
|                                                              
|Cash - end of period                                           | $      
287      
|                                                              
|Supplemental disclosure of cash flow
      information:       
|Cash paid for:                                                
|Interest                                                       | $ 345,610        
|Income taxes
      paid, net of refunds                        | $  115,584       
|                                                              

See accompanying notes to financial statements.

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

|                                                                         | Nine months ended September 30,
|------------------------------------------------------------------------ | -------------------------------
|                                                                         | 2003                           
|COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL                             
|Balance, beginning of period                                             | $ 135,405                      
|Other                                                                    | 606                            
|Balance, end of period                                                   | $ 136,011                      
|                                                                        
|RETAINED EARNINGS                                                       
|Balance, beginning of period                                             | $ 636,142                      
|Net income                                                               | 159,153                        
|Common dividends declared, $0.77
      per common share in 2003;         |                                
|$0.70 per common share in 2002                                           | (46,200)                       
|Balance, end of period                                                   | $ 749,095                      
|                                                                        
|ACCUMULATED OTHER CHANGES IN EQUITY FROM NONOWNER
      SOURCES         
|Balance, beginning of period                                             | $   (6,511)                    
|Net change in cash flow hedges,
      net of taxes of $3,505 in 2003 and |                                
|$(5,496) in 2002                                                         | 5,016                          
|Net change in unrealized gains on investment securities,                 |                                
|net of taxes of $5,904 in 2003 and $242 in 2002                          | 8,900                          
|Balance, end of period                                                   | $    7,405                     
|                                                                        
|TOTAL STOCKHOLDERS' EQUITY                                               | $892,511                       
|                                                                        
|SUMMARY OF CHANGES IN EQUITY FROM NONOWNER SOURCES                      
|Net Income                                                               | $ 159,153                      
|Changes in equity from nonowner sources, net of taxes                    | 13,916                         
|Total changes in equity from nonowner sources                            | $  173,069                     

See accompanying notes to financial
statements.

THE STUDENT LOAN CORPORATIONNotes to Financial Statements
(Unaudited)September 30, 2003

1.       Significant
Accounting Policies

Interim
Financial Information

| | The
      financial information of The Student Loan Corporation (the Company) as
      of September 30, 2003 and for the three- and nine-month periods ended
      September 30, 2003 and 2002 is unaudited and includes all adjustments
      (consisting of normal recurring accruals) which, in the opinion of
      management, are necessary to fairly state the Company's financial position
      and results of operations in conformity with accounting principles
      generally accepted in the United States of America. The results for the
      three- and nine-month periods ended September 30, 2003 may not be
      indicative of the results for the full year ended December 31, 2003. The
      accompanying financial statements should be read in conjunction with the
      financial statements and related notes included in the Company's 2002
      Annual Report and Form 10-K.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

Use of Estimates

| | In
      preparing the financial statements in conformity with accounting
      principles generally accepted in the United States of America, management
      has used a number of estimates and assumptions relating to the reporting
      of assets and liabilities, the disclosure of contingent assets and
      liabilities and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from those estimates and
      assumptions.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue Recognition

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

| | Premiums and discounts on loan portfolio purchases and loan origination and
     lender fees paid on disbursements are deferred and amortized to interest income
     on a level yield basis over the expected average life of the student loans in those
     portfolios.  Expected average life is determined based upon a periodic consideration of a variety
     of factors, including market and borrower interest rates, customer prepayments and guarantor payments received
     through the claims process.  A student loan's expected average life, which is initially determined and may be subsequently revised, may be different from one portfolio to another based upon loan type, year of origination or purchase
or other factors.  Therefore, different lives are used for different portfolio types based
     upon these underlying loan characteristics and historical performance.  The expected average
     lives of these loans are reviewed periodically and compared to actual loan run off.
     If the actual loan run off is different from the anticipated prepayments reflected in the amortization tables, the Company makes a current
period adjustment to interest income to arrive at the investment balance that would have been remaining had
the new effective yield been applied since loan inception and the amortization rates for future periods are
appropriately adjusted.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Loans

| | Loans
primarily consist of student loans originated under the Federal Family Education
Loan (FFEL) Program authorized by the U.S. Department  of Education (the
Department) under the Act, and are insured by guaranty agencies (guarantors).
Student loan interest, inclusive of special allowance payments and floor income,
if any, is recognized as it is earned.  Federally mandated loan origination or
lender fees paid on disbursements, as well as other loan origination costs and
premiums and discounts on loan portfolio purchases, are deferred and amortized
to interest income on a level yield basis over the expected average lives of the student
loans in those portfolios.  The determination of the expected average life is based
upon a consideration of a variety of factors, including customer prepayments and
guarantor payments received through the claims process.  (See Revenue Recognition).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company also has a portfolio of alternative loans, primarily CitiAssist Loans.
Generally, such loans are insured against loss by private insurers or are covered
under risk-sharing agreements with creditworthy universities.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Allowance for Loan Losses

| | An allowance
for loan losses provides a reserve for estimated losses on the Company's
FFEL Program loan portfolio under the risk-sharing provisions of the Act, which
provide for lender risk-sharing of 2% of the principal and accrued interest on most
claims of FFEL Program defaulted loans.  The allowance also reserves for
estimated losses on CitiAssist Loans.  Most of the Company's CitiAssist Loan
portfolio is insured by Guaranty National Insurance Company (GNIC) and Globe Indemnity Company (GIC), subsidiaries of Royal
& SunAlliance Insurance Group PLC (RSA).  During the third quarter of 2003, the financial strength ratings of GNIC and GIC were downgraded to below investment grade.  These loans,
and the portion of these loans reinsured by other investment-grade private third party insurers, are
generally subject to risk-sharing losses of 5% of the claimed amount.  Effective
April 1, 2003, the Company began to insure substantially all new CitiAssist
Loan originations and purchases through a subsidiary
of American International Group (AIG).  Under the new insurer, defaults on new
loan originations are generally subject to risk-sharing losses of 10% - 20%.  The
allowance also provides a reserve for certain CitiAssist Loans that are not
insured against loss.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The allowance is established based on estimates of probable losses inherent in
the FFEL Program and CitiAssist Loan portfolios and is determined through various
statistical analyses.  These include migration analyses, in which historical
delinquency and credit loss experience is applied to the current aging of the
portfolio, together with analyses that reflect current trends and conditions.  The
estimated losses (net of any third party risk-sharing) are accrued to the
allowance when the student loans reach 90 days of delinquency for FFEL Program loans and 30 days of delinquency for CitiAssist Loans.  Actual losses,
including those that arise from claims with guarantors and private insurers, are
charged against the allowance as they occur.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Student Loan
Securitizations

| | The Company
accounts for its securitization transactions in accordance with the provisions of
Statement of Financial Accounting Standards (SFAS) No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,
a replacement of FASB Statement No. 125".  Under the Company's program to securitize
student loans, the loans are removed from the financial statements of the Company and
ultimately sold to an independent trust.  In turn, the trust sells securities,
backed by the student loan assets, to outside investors.  Since the securitizations
meet the SFAS No. 140 criteria for sale recognition, gains or losses on the sale
of the student loans are recorded at the time of securitization.  Residual
interests that are retained in the loans securitized are accounted for as
investments in available-for-sale debt securities.  Initial and subsequent
measurements of the fair value of the residual retained interests are performed
using a discounted cash flow model.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Loans
Available for Sale

| | Loans
      available for sale represent loans originated or purchased by the Company
      for future securitization. These loans are recorded at the lower of cost
      or market value. Net credit losses on these loans are charged to other
      expense as incurred.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Hedging Transactions

| | The Company's
     interest rate swap agreements are accounted for in accordance with SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", as amended, which
requires that all derivatives be recorded at fair value on the balance sheet.  Fair
value is determined by discounting the cash flows using market interest rates through
the contractual maturity dates.  These derivatives, which have been designated
and are effective as cash flow hedges, are recorded in other liabilities.  Changes
in these derivatives' fair values, net of taxes, are recorded in the accumulated other
changes in equity from nonowner sources component of stockholders' equity.  These
changes in fair value will be included in earnings of future periods when earnings
are also affected by the variability of the hedged cash flows.  Accrued interest
receivable or payable related to the interest rate swap agreements is
recorded in interest expense.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On July 1, 2003, the Company adopted SFAS No. 149,
"Amendment of Statement 133 on Derivative Instruments and Hedging Activities".  SFAS No. 149 amends and clarifies accounting for derivative
instruments, including certain derivative instruments embedded in other contracts,
and for hedging activities under SFAS No. 133.  In particular, this Statement
clarifies under what circumstances a contract with an initial net investment meets
the characteristic of a derivative and when a derivative contains a financing
component that warrants special reporting in the statement of cash flows.  This
Statement is generally effective for contracts entered into or modified after
June 30, 2003 and its adoption did not have a material impact on the Company's financial condition or results of operations.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.       Accounting Changes

| | The
Company participates in various stock-based compensation plans under which Citigroup stock or stock
options are granted to certain of the Company's employees.  On January 1, 2003, the Company adopted the
fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation",
prospectively to all awards granted, modified, or settled after December 31, 2002.  The prospective
method is one of the adoption methods provided for under SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure", issued in December 2002.  The fair value recognition
provisions of SFAS No. 123 require that compensation cost for all stock awards be calculated and
recognized over the service period.  This compensation cost is determined using option pricing models,
intended to estimate the fair value of the awards at the grant date.  Prior to January 1, 2003, the
Company applied Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees",
application of which generally results in no charge to earnings for employee stock option awards because
the options granted under these plans have an exercise price equal to the market value of the underlying
stock at the grant date.   Effective January 1, 2003, the Company began recording an expense for these
awards.  The adoption of SFAS No. 123 did not have a material impact on the Company's financial
condition or results of operations. Changes have been made to various stock-based compensation plan
provisions for awards granted in 2003.  Other changes also may be made that may impact the expense
recognized under SFAS No. 123.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|

| | Also, in January 2003, the FASB released FASB Interpretation
No. 46, "Consolidation of Variable Interest Entities" (FIN 46).  The provisions of FIN 46 applied immediately to variable interest entities (VIEs)
created after January 31, 2003, and to VIEs in which an enterprise obtains an interest after that date.  In October 2003, the FASB announced that the
effective date of FIN 46 was deferred from July 1, 2003 to periods ending after December 15, 2003 for VIEs created prior to February 1, 2003.  The Company
elected to adopt the provisions of FIN 46 in the third quarter of 2003.  FIN 46 changes the method of determining whether certain entities, including securitization entities, should be included in
consolidated financial statements.  An entity is subject to FIN 46 and is called a VIE if it has : (1) equity that is insufficient to permit the entity to
finance its activities without additional subordinated financial support from other parties, or (2) equity investors that cannot make significant decisions
about the entity's operations, or that do not absorb the expected losses or receive the expected returns of the entity.  A VIE is consolidated by its primary
beneficiary, which is the party involved with the VIE that absorbs a majority of the expected losses, receives a majority of the expected residual returns,
or both.  Certain entities, including transferors to qualifying special-purpose entities
(QSPEs) meeting the reporting requirements of SFAS No. 140, are specifically exempted from the scope of
FIN 46.  Since the Company's securitizations use trust arrangements that meet the QSPE conditions of
SFAS No. 140, its QSPE's financial statements are not consolidated with the financial statements of
the Company.  Therefore, the impact of adopting FIN 46 on July 1, 2003 was not material to the Company's financial
condition or results of operations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Financial Accounting Standards Board (FASB) continues to provide additional guidance on implementing FIN 46 through FASB staff positions.  In addition, a draft interpretation of FIN 46 has been
issued for comment.  As this guidance is finalized, the Company will continue to review the status of VIEs with which it is involved.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On July 1, 2003, the Company adopted SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity".  SFAS No. 150 establishes standards for classifying and measuring
certain financial instruments with characteristics of both liabilities and equity.  It requires that a financial instrument that falls within the scope of this
Statement be classified as a liability (or an asset in some circumstances) when that financial instrument embodies an obligation of the issuer.  This Statement
is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective July 1, 2003, and its adoption did not have a
material impact on the Company's financial statements.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.       Related Party
Transactions



| | As of August 30, 2003, Citibank, N.A. (CBNA), an indirect wholly owned subsidiary of Citigroup Inc. (Citigroup),
owns 80% of the outstanding common stock of the Company.  Previously, Citibank New York State (CNYS) had owned such stock, which was transferred to CBNA as a result of the August 2003
merger of CBNA and CNYS.  The merger did not have a material effect on the financial condition or results of operations of
the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | A number of significant transactions are carried out between the Company and Citigroup and its affiliates.  At the
effective date of the CBNA-CNYS merger, CBNA became a party to all intercompany agreements that the Company had previously entered into with CNYS, including the
Omnibus Credit Agreement (the Omnibus Agreement), the tax-sharing agreement and the CitiAssist loan originations and servicing agreements.  In addition, following the
merger, FFEL Program loans, which had previously been originated through a trust agreement with CNYS, are originated through a trust agreement with CBNA.  CBNA succeeded to
all of the rights and assumed all of the obligations of CNYS under such intercompany agreements.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The majority of the Company's loan originations and servicing is performed through the provisions of intercompany
agreements with affiliates of Citigroup.  Expenses related to these agreements were $22.7 million and $23.7 million for the nine-month periods ended September 30, 2003 and 2002, respectively.
In addition, the Company recorded loan origination and servicing revenue of $5.8 million and $4.8 million for the first nine months of 2003 and 2002, respectively, for work performed by
the Company on CitiAssist Loans held by CNYS and CBNA prior to purchase by the Company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company had outstanding short- and long-term unsecured borrowings with CBNA, pursuant to the terms of the Omnibus Agreement,
of $11.8 billion and $10.3 billion, respectively, at September 30, 2003.  At September 30, 2003 and 2002, the total outstanding borrowings had contracted weighted average interest rates of 1.6% and
2.4%, respectively, based on LIBOR at the time the borrowings were established or rates reset.  For the nine-month periods ended September 30, 2003 and 2002, the Company incurred $278.5 million and
$457.7 million, respectively, in interest expense payable to CBNA or CNYS related to these borrowings.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company has a number of interest rate swap agreements outstanding with a subsidiary of Citigroup.  At September 30, 2003, the agreements had notional
amounts totaling $3.0 billion and contractual terms of between six and twenty-four months.  For the three- and nine-month periods ended September 30, 2003, the Company realized $1.0 million and $9.1 million,
respectively, in interest expense related to these swap agreements.  For 2002, interest expense of $1.2 million was realized on the swap agreements during the third quarter.  This was also the amount realized for the first nine
months of 2002.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

4.       Interest Rate
Swap Agreements

| | To better match the interest rate characteristics of its borrowings with its loan assets, the Company,
         from time to time, enters into interest rate swap agreements on portions of its portfolio.  The swap
         agreements are intended to reduce the basis risk caused by differences between the Company's borrowing
         rates (based on LIBOR) and the student loan lending rates (based primarily on the 91-day Treasury Bill Rate).
         The Company's hedges are in compliance with the hedge accounting provisions of SFAS No. 133, as amended,
         and management expects the Company's hedge program to be effective in offsetting changes in cash flows
         for the risk being hedged.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At September 30, 2003 the Company had a number of interest rate swap agreements outstanding with a subsidiary of
Citigroup to receive payments based on LIBOR and make payments based on the 91-day Treasury Bill Rate.  These agreements, which have been designated and are effective as cash flow
hedges, have notional amounts totaling $3.0 billion and contractual terms of between six and twenty-four months.  Swap agreements with notional amounts totaling $1.3 billion matured
on July 1, 2003. New swap agreements with notional amounts totaling $1.1 billion were entered into
during September 2003.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The fair value of the outstanding swaps at September 30, 2003 was a $3.3 million liability and is reflected in other
liabilities on the balance sheet with a corresponding amount, net of taxes of $1.3 million, recorded in the accumulated other changes in equity from nonowner sources component of stockholders'
equity.  Substantially all of this balance in accumulated other changes in equity from nonowner sources is expected to be reclassified into earnings within the next twelve months.  No amounts have been
excluded from the assessment of effectiveness and no hedge ineffectiveness has been recognized in earnings pursuant to these swap agreements.  Net amounts reclassified from accumulated other
changes in equity from nonowner sources are reported in interest expense.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|                       | Three-Month Period  | Nine-Month Period  
|---------------------- | ------------------- | -------------------
|                       | Ended September 30, | Ended September 30,
|(Dollars in thousands) | 2003                | 2002               

|Beginning balance                                | $(1,437) | $(838)   | $(7,010) | $---    
|------------------------------------------------ | -------- | -------- | -------- | --------
|Net unrealized loss from cash flow        hedges | (1,181)  | (7,833)  | (463)    | (8,671) 
|Net amounts reclassified to earnings             | 623      | 694      | 5,478    | 694     
|Ending balance                                   | $(1,995) | $(7,977) | $(1,995) | $(7,977)

5.       Commitments and
Contingencies

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

| | Amendments to the Act have reduced the net interest spread earned on the FFEL Program guaranteed student
         loan portfolio as new loans with lower yields are added to the portfolio and older, more profitable
         loans are repaid.  Despite reductions in funding costs and their expected effects on net income,
         pressure on margins will continue as more loans are originated with lower yields.  Also, the Act
         may be amended by Congress at any time, possibly resulting in further reductions in FFEL Program loan
         subsidies and reduced lender net interest margins, in addition to influencing customer prepayments.  Any such amendments, in part or in combination, could adversely affect the Company's business and
         prospects.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6.      Student Loan
Securitization

| | In 2002, the Company commenced a program to securitize certain portfolios of FFEL Program student loan
         assets.  The Company accounts for its securitization transactions in accordance with the provisions of
         SFAS No. 140.  Under the Company's program to securitize student loans, the loans are sold, through a wholly owned special purpose subsidiary, to an independent trust that was established for that
         purpose.  The trust, in turn, sells debt securities, backed by the student loan assets, to outside
         investors.  The Company has retained the servicing relationship on the transferred portfolios and
         receives servicing and administrative fees from the trust.  Failure to service the loans in accordance
         with contractual obligations could lead to a termination of the servicing rights and the loss of future
         servicing revenue.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At September 30, 2003, total student loan assets held by the trust were approximately $421.5 million. At
         that time, the Company maintained an ownership interest in the assets securitized of approximately $30.4 million
in the form of residual retained interests.  The Company accounts for the retained interests as investments in available-for-sale debt securities
and records them in other assets in the Company's financial statements.  At September 30, 2003, the retained interests were composed
of a junior certificate of $2.2 million and other retained interests of $28.2 million.  The junior certificate balance of $2.2 million is reflective of a $6.3 million principal
payment received in the second quarter of 2003.  In addition, the payment resulted in the recognition of a $0.3
million pretax gain that was included in net income in the second quarter of 2003.  At September 30, 2003, the Company
had an unrealized holding gain on its retained interests of $9.4 million, net of taxes of $6.2 million, recorded in accumulated other changes
in equity from nonowner sources.  Of this unrealized gain, $2.7 million, net of taxes, was recorded in the third quarter of 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company also received cash flows of $0.4 million and $0.1 million from the trust during the first nine months of 2003 and 2002, respectively, for loan servicing and administrative fees as the master servicer.  Receivables
of $0.02 million were due from the trust for portfolio servicing fees and accrued interest on the junior certificate at both September 30, 2003 and 2002.  No amounts were paid or payable to the trust during the third
quarter of 2003.  At September 30, 2002, $0.6 million was payable to the trust for customer payments collected.  No new securitization transactions were entered into during the first nine months of 2003.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

At September 30, 2003, the key assumptions used to value retained interests were as follows:

|Discount Rate                 | 5.0% 
|----------------------------- | -----
|Constant prepayment rate      | 3.0% 
|Anticipated net credit losses | 0.24%

Sensitivity of the fair value to adverse changes in the key assumptions were as follows at September 30, 2003:

|(Dollars in thousands)
  Carrying value of retained interests                                                         $ 30,362.7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Discount Rate                                                                                                  5.0%
  +10%                                                                                                       $   (718.3)
  +20%                                                                                                       $(1,404.7)
  Constant prepayment rate                                                                                3.0%
  +10%                                                                                                       $   (238.6)
  +20%                                                                                                       $   (472.5)
  Anticipated net credit losses                                                                          0.24%
  +10%                                                                                                       $     (65.6)
  +20%                                                                                                       $   (131.4)

These estimates and assumptions, based upon the collateral held by the trust, are subject to change and, therefore, the fair values of the
retained interests as presented in the financial statements are subject to possible impairment and may not be fully recoverable.

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

Critical
Accounting Policies

| | There were no material changes to the Company's critical accounting policies during the third quarter of
         2003.  The Company considers its accounting policies on revenue recognition, allowance for loan losses,
         student loan securitizations, and hedging transactions to be its critical accounting policies.  For a
         description of these and other significant accounting policies, see Note 1 to the financial statements
         and the Company's 2002 Annual Report and Form 10-K.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Accounting Changes

| | For accounting
changes adopted during 2003, see Note 2 to the financial statements.
| | -----------------------------------------------------------------------------------

Financial Condition

| | As of August 30, 2003, Citibank, N.A. (CBNA), an indirect wholly owned subsidiary of Citigroup, Inc. (Citigroup), owns 80% of the outstanding common stock of the Company.  Previously, Citibank (New York State)(CNYS) had owned
such stock, which was transferred to CBNA as a result of the August 2003 merger of CBNA and CNYS.  The merger did not have a material effect on the financial condition or results
of operations of the Company.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At  the effective date of the merger, CBNA became a party to all intercompany agreements that the Company had previously entered into with CNYS, including the Omnibus Credit Agreement, the tax-sharing agreement and the
CitiAssist Loan originations and servicing agreements.  In addition, following the merger, FFEL Program loans, which had previously been originated through a trust agreement with CNYS, are currently originated
through a trust agreement with CBNA.  CBNA succeeded to all of the rights and assumed all of the obligations of CNYS under such intercompany agreements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At September 30, 2003, the Company's student loan assets were composed of a $20.5 billion portfolio of loans
         held and a $2.4 billion inventory of loans available for sale.  The combined $22.9 billion of loan assets,
         composed primarily of loans originated under the Federal Family Education Loan (FFEL) Program,
         increased by $2.4 billion (11%) from $20.5 billion at December 31, 2002.  This growth was attributable to
         FFEL Program loan disbursements totaling $2,163 million and loan purchases of $3,095 million in the
         first nine months of 2003, partially offset by $2,930 million in loan reductions (attributable to borrower
         principal payments, loan consolidations and claims paid by guarantors), and other adjustments of $24
         million.  During the nine months ended September 30, 2002, the Company had FFEL Program loan disbursements
         of $1,834 million, loan purchases of $2,822 million, loan securitizations of $249 million, loan reductions
         of $2,526 million and other adjustments of $80 million.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's loan disbursements and loan commitments
to finance education for the first nine months of 2003 and 2002 are presented below:
| | ------------------------------------------------------------------------------------------------------------------------------------------

|(Dollars in millions)                             | 2003   | 2002   | Difference | % Change
|------------------------------------------------- | ------ | ------ | ---------- | --------
|FFEL Program Stafford and PLUS Loan disbursements | $2,163 | $1,834 | $329       | 18%     
|CitiAssist Loans under commitments to purchase    | 899*   | 697**  | 202        | 29%     
|Total loan disbursements and commitments          | $3,062 | $2,531 | $531       | 21%     

| | * These disbursements are composed of $479 million of loans originated and disbursed by CBNA and CNYS
in 2003 and purchased by the Company in the first nine months of 2003 (and included in loan purchases) and $420 million originated and disbursed by CBNA and CNYS in 2003
and committed by the Company for purchase in the future.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | ** These disbursements are composed of $347 million of loans originated and disbursed by CNYS
in 2002 and purchased by the Company in the first nine months of 2002 (and included in loan purchases) and $350 million originated and disbursed by CNYS in 2002
and purchased by the Company in subsequent periods.                      
|
| | The $329 million increase in loan disbursements for the first nine months of 2003, compared to the same period
last year, is primarily attributable to ongoing sales and electronic commerce initiatives.                                                                                                                               

| | In order to comply with certain regulatory requirements, CitiAssist Loans are originated by Citibank, N.A. (CBNA)
         through an intercompany agreement.  Following full disbursement, the Company purchases all qualified
         CitiAssist Loans at their current value at the time of purchase, including contractual fees.  At September 30,
         2003, CitiAssist Loans of $420 million had been disbursed by CBNA or CNYS, but had not yet been purchased by the Company.
         These loans are not included in the Company's September 30, 2003 loan portfolio.  CitiAssist Loans are originated
         through an alternative loan program and do not carry federal government
         guarantees.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's secondary market loan activities for the first nine months of 2003 and 2002 are shown in the table below:
| | -----------------------------------------------------------------------------------------------------------------------
|

|(Dollars in millions)                     | 2003   | 2002   | Difference | % Change
|----------------------------------------- | ------ | ------ | ---------- | --------
|FFEL Program Consolidation Loan purchases | $2,134 | $2,018 | $  116     | 6%      
|CitiAssist Loan purchases                 | 885    | 636    | 249        | 39%     
|Other loan purchases                      | 76     | 168    | (92)       | (55%)   
|Total loan purchases                      | $3,095 | $2,822 | $   273    | 10%     

| | From time to time, the Company makes student loan purchases.  For the first nine months of 2003, the
         Company's loan purchases increased by $273 million compared to the same period last year.  The increase in loan purchases is primarily attributable to new
CitiAssist and Consolidation Loan volume.  The Federal Consolidation Loans were purchased primarily for the Company's available for sale inventory, which was established
to create a portfolio of loans available for future securitization.  The size of the available for sale portfolio is dependent upon the needs of the securitization
program.  The Company's participation in securitization and secondary market loan activities is dependent upon market conditions.  Of the Consolidation Loans purchased in the first nine months of 2003 and 2002,
$920 million and $631 million, respectively, were consolidations of federally guaranteed student loans already held in the Company's loan portfolios.  For the first nine months of 2003,
the Company's student loan purchases included $1,991 million purchased for its portfolio and $1,104 million purchased for its resale inventory.  During the nine months ended
September 30, 2002, the Company purchased $1,770 million of student loans for its portfolio and $1,052 million for its resale inventory.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In 2002, the Company commenced a program to securitize certain portfolios of FFEL Program student loan
         assets.  The Company accounts for its securitization transactions in accordance with the provisions of
         Statement of Financial Accounting Standards (SFAS) No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of FASB Statement No. 125."  Under the Company's program to securitize student loans, the loans are sold, through a
         wholly owned special purpose subsidiary, to an independent trust that was established for that
         purpose.  The trust, in turn, sells debt securities, backed by the student loan assets, to outside
         investors.  The Company has retained the servicing relationship on the transferred portfolios and
         receives servicing and administrative fees from the trust.  Failure to service the loans in accordance
         with contractual obligations could lead to a termination of the servicing rights and the loss of future
         servicing revenue.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At September 30, 2003, total student loan assets held by the trust were approximately $421.5 million. At
         that time, the Company maintained an ownership interest in the assets securitized of approximately $30.4 million
in the form of residual retained interests.  The Company accounts for the retained interests as investments in available-for-sale
debt securities and records them in other assets in the Company's financial statements.  At September 30, 2003, the retained interests were composed of a junior certificate of
$2.2 million and other retained interests of $28.2 million.  The junior certificate balance of $2.2 million is reflective of a $6.3 million principal payment received in the second quarter of 2003.  In addition,
 the payment resulted in the recognition of a $0.3 million pretax gain that was included in net income in the second quarter of 2003.
At  September 30, 2003, the Company had an unrealized holding gain on its retained interests of $9.4 million, net of taxes of $6.2 million, recorded in accumulated other changes in equity from nonowner sources.
Of this unrealized gain,
$2.7 million, net of taxes, was recorded in the third quarter of 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company received cash flows of $0.4 million and $0.1 million from the trust during the first nine months of 2003 and 2002, respectively, for loan servicing and administrative fees as the master servicer. Receivables of $0.02 million
were due from the trust for portfolio servicing fees and accrued interest on the junior certificate at both September 30, 2003 and 2002.  No amounts were paid or payable to the trust during the third quarter of 2003.
At September 30, 2002, $0.6 million was payable to the trust for customer payments collected.  No new securitization transactions were entered into during the first nine months
of 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | To better match the interest rate characteristics of its borrowings with its loan assets, the Company,
         from time to time, enters into interest rate swap agreements on portions of its portfolio.  The swap
         agreements are intended to reduce the basis risk caused by differences between the Company's borrowing
         rates (based on LIBOR) and the student loan lending rates (based primarily on the 91-day Treasury Bill Rate).
         The Company's hedges are in compliance with the hedge accounting provisions of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended,
         and management expects the Company's hedge program to be effective in offsetting changes in cash flows
         for the risk being hedged.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At September 30, 2003, the Company had a number of interest rate swap agreements outstanding with a subsidiary of
         Citigroup to receive payments based on LIBOR and make payments based on the 91-day Treasury Bill Rate.
         These agreements, which have been designated and are effective as cash flow hedges, have notional
         amounts totaling $3.0 billion and contractual terms of between six and twenty-four months.  Swap agreements with notional amounts totaling $1.3 billion matured on July 1, 2003.
         New swap agreements with notional amounts totaling $1.1 billion were entered into during September 2003.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The fair value of the outstanding swaps at September 30, 2003 was a $3.3 million liability and is reflected in other liabilities on the balance sheet with a corresponding amount, net of taxes
of $1.3 million, recorded in the accumulated other changes in equity from nonowner sources component of stockholders' equity.  Substantially all of this balance in accumulated other changes in equity from
nonowner sources is expected to be reclassified into earnings within the next twelve months.  No amounts have been excluded from the assessment of effectiveness and no hedge ineffectiveness has been recognized in earnings pursuant to these
swap agreements.  For additional information on the Company's interest rate swap agreements, see Note 4 to the financial statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Pursuant to federal tax regulations, the Company has elected to be included in the consolidated federal
         income tax return of Citigroup, and is also included in certain combined or unitary state/local income
         or franchise tax returns of Citicorp/Citigroup or its subsidiaries.  In the first nine months of 2003,
         the Company paid income taxes, net of refunds, of $116 million, primarily pursuant to a tax-sharing
         agreement with its majority shareholder, compared to $71 million paid in the same period last year.  The increase in taxes
         paid is primarily attributable to the timing of the majority owner's requests for tax payments and is not reflective of
         any significant changes in the tax provision.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's short- and long-term debt was procured primarily through an Omnibus Credit Agreement with
         its majority shareholder, which provides for a maximum aggregate credit limit of $25 billion.   Short-term debt decreased by
         $4.0 billion to $11.8 billion at September 30, 2003, compared to that outstanding at December 31, 2002. The
         decrease was primarily attributable to $37.8 billion in repayments of rolling short-term borrowings in the first
         nine months of 2003, partially offset by new rolling short-term borrowings of $31.0 billion and a $2.8 billion
         reclassification of maturing long-term debt to short-term debt.  The $6.4 billion increase in long-term
         borrowings at September 30, 2003, compared to December 31, 2002, was primarily due to the procurement of
         $9.2 billion of new long-term borrowings, partially offset by the reclassification of $2.8 billion of
         maturing long-term debt to short-term debt.  The new long-term borrowings were used primarily to fund new loan
         disbursements and purchases and reflects the replacement of maturing short-term debt with long-term debt in order to lock in lower interest rates for
an extended period of time.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At September 30, 2003 and 2002, the total outstanding borrowings had weighted average interest rates of 1.6%
         and 2.4%, respectively, based on LIBOR at the time the borrowings were established or rates reset.  For
         the nine-month periods ended September 30, 2003 and 2002, the Company incurred $278.5 million and $457.7
         million, respectively, in interest expense payable to CBNA or CNYS related to these borrowings.  The $179.2
         million decrease in interest expense was primarily attributable to the decline in interest rates.
         During the first nine months of 2003, the Company made $346 million in interest payments to CBNA and CNYS, compared
         to $607 million for the same period in 2002.   The difference in interest payments between the two
         periods resulted primarily from differences in the contractual interest due dates and the lower interest rates on
         the Company's borrowings.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company paid a quarterly dividend of $0.77 per common share on September 2, 2003.  On October 16, 2003,
         the Board of Directors declared a regular quarterly dividend on the Company's common stock of $0.77 per
         share to be paid December 1, 2003 to stockholders of record on November 14, 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Results of
Operations

Quarter Ended
September 30, 2003

| | Net income was $51.5 million ($2.58 basic and diluted earnings per share) for the third quarter of
         2003.  This was an increase of $10.9 million (27%) compared to earnings for the same period last year.
         The improvement is primarily attributable to portfolio growth of 13% over the previous twelve months and increased floor income earned on both Consolidation
and Stafford Loan assets.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The net interest margin for the third quarter of 2003 was 2.02%, up 15 basis points from the third
         quarter 2002 margin of 1.87%.  The improvement was due to a $12.2 million increase in floor income resulting from the Company's ability to take advantage of favorable funding opportunities, partially offset by an
increase in loan fee amortizations of $9.5 million, of which $7.4 million is attributable to principal prepayments.
Should short-term interest rates increase above the September 30, 2003 level, the floor income benefit could decline materially.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Total operating expenses for the third quarter of 2003 were $29.6 million, an increase of  $3.3 million
         (12%) from the same period last year, reflecting both the incremental costs incurred to originate, service and administer the
         larger loan portfolio and ongoing infrastructure investments.  For the third quarter of
         2003, the Company's expense ratio, operating expenses as a percentage of average student loan assets,
         was 0.52%, reflecting a one basis point improvement from the third quarter of 2002.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | An allowance for loan losses provides a reserve for estimated losses on the Companys FFEL Program loan
         portfolio under the risk-sharing provisions of the Act, which provide for lender risk-sharing of 2% of the principal and accrued
interest on most claims of FFEL Program defaulted loans.  The allowance also provides a reserve for
         estimated losses on CitiAssist Loans.  Most of the Company's CitiAssist Loan portfolio is insured by Guaranty National Insurance Company (GNIC) and Globe Indemnity Company (GIC),
         subsidiaries of Royal & SunAlliance Insurance Group PLC (RSA).  During the third quarter of 2003, the financial strength ratings of GNIC and GIC were downgraded to below investment grade.
These loans, and the portion of these loans reinsured by other investment-grade private insurers, are generally subject to risk-sharing losses of 5% of the
         claimed amount. Effective April 1, 2003, the Company began to insure substantially all new CitiAssist
         Loan originations and purchases through a subsidiary of American
         International Group (AIG).  Under the new insurer's program, defaults on new loan originations are
         generally subject to risk-sharing losses of 10% - 20%.  However, since the increase in risk-sharing
         expense is generally expected to be offset by a decrease in insurance premiums, the Company does not
         expect a material change in  overall costs related to the CitiAssist Loan program.  The allowance also
         provides a reserve for certain CitiAssist Loans that are not insured against loss.  In the third quarter
         of 2003, the provision for loan losses increased by $0.3 million, compared to the same period in 2002.
         This increase is due to changes in product mix and an increase in loans moving into repayment over the previous twelve-month period.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company's return on equity was 23.4% for the third quarter of 2003, up 1.1% compared to 22.3% for the same
         period of 2002.
| | ---------------------------------------------------------------------------------------------------------------------------------------

| | The Company's effective tax rate for the third quarter of 2003 was approximately 40.7%, compared to
         40.8% for the same period in the prior year.  The decrease in the effective tax rate was primarily attributable
         to a change in certain 2003 state tax estimates.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Nine Months Ended September 30, 2003

| | The Company earned net income of $159.2 million ($7.96 basic earnings per share) for the nine months ended September 30, 2003, an
         increase of 20% from the $132.4 million ($6.62 basic earnings per share) for the same period of 2002. Increased floor income
         and portfolio growth accounted for substantially all of this improvement.                                                                                                                                              
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | The net interest margin for the nine months ended September 30, 2003 was 2.08%, up three basis points from the margin of 2.05% for the
same period last year.  The improvement was due to a $37.2 million increase in floor income resulting from the Company's ability to take advantage of favorable funding opportunitues,
partially offset by an increase in loan fee amortizations of $32.9 million, of which $24.7 million is attributable to principal prepayments.                              
|
| | Total operating expenses for the first nine months of 2003 were $85.8 million, $6.7 million (9%) higher than the same period
         last year. The increase reflects the incremental costs incurred to originate, service and administer the larger loan portfolio and
         ongoing technology infrastructure investments.  Operating expenses as a percentage of average student loans for the first
         nine months of 2003 was 0.52%, compared to 0.55% for the first nine months of 2002.
|
| | The Company's return on equity was 25.6% for the first nine months of 2003, 0.2% higher than the 25.4% return for the same
         period of 2002.                                                                                                                                                                                                                                                                                                                                                     
|
| | The Company's effective tax rate was approximately 39.0% for the first nine months of 2003, compared to 40.6% for the same period
         in the prior year.  The decrease in the effective tax rate was primarily attributable to a change in certain 2003 state tax estimates
         and its impact on the Company's existing deferred tax assets and liabilities.                                                                                                                                 

Special Allowance and Floor Income

| | Most FFEL Program Stafford and Parent Loans to Undergraduate Students (PLUS) Loans originated subsequent to July 23, 1992
         have variable interest rates and qualify for the federal government's special allowance payment (SAP).  Whenever the
         stated interest rates on these FFEL Program loans provide less than prescribed rates of return, as defined by the Act, the
         federal government makes a SAP, which increases the lender's loan yield by markups ranging between 1.74 and 3.50 percentage
         points per annum, over a base rate tied to either the 91-day Treasury Bill auction yield or the 90-day Commercial Paper
         rate, depending on the loan's origination date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | The variable borrower rates on most of the Company's FFEL Program Stafford and PLUS Loans are generally subject to annual
         reset provisions.  In periods of declining interest rates, the stated borrower rates become, in effect, interest rate
         floors.  Floor income is generally earned in declining short-term interest rate environments when the Company's cost of
         funds declines while the borrower interest rate remains fixed, generating net interest margin in excess of the expected
         spread. Floor income may also be earned on certain Federal Consolidation Loans since the borrower interest rate for these
         loans is fixed for the life of the loan.   Depending on the manner in which the Company's assets are funded, the Company may
         earn higher interest margin spreads, which include floor income, on portions of its portfolio until the borrower interest
         reset date, which occurs annually for the majority of the Company's loans.  During the three- and nine-month periods ended
         September 30, 2003, the Company earned $30.4 million and $94.9 million, respectively, of floor income.  During the three- and nine-month periods ended September 30, 2002, the Company earned $18.2 million and $57.7 million, respectively, of floor income.  The
         increase in the 2003 floor income, compared to that earned for the same periods in 2002, was primarily a result of growth in
         Consolidation Loans, which is the largest contributor to the Company's floor income.  This increase was partially
         offset by lower floor income earned on Stafford Loans compared to the prior year.

Off-Balance Sheet Transactions

| | The Company entered into two off-balance sheet transactions in 2002 in which certain FFEL Program portfolios of student loan
         assets were securitized, a process by which the loans are transferred to a special purpose entity (SPE), thereby
         converting the loans into cash before they would have been realized in the normal course of business.  The securitized loans
         are removed from the financial statements of the Company and ultimately sold to an independent trust that was established
         for that purpose.  In turn, the trust sells debt securities, backed by the student loan assets, to outside investors in
         order to provide the cash to pay for the transferred loans.  Investors have recourse to the assets in the trust and benefit
         from other credit enhancements, such as a cash collateral account and other specified enhancements. After securitization,
         the Company continues to provide servicing for the loans sold to the trust.  As a result, the Company earns administrative
         and servicing fees on the securitized portfolio. The Company can use the cash proceeds from the loan sale to retire debt,
         fund new loan originations, purchase loans or for other business purposes. During the first nine months of 2003, there were
         no new securitizations of loan assets.  For additional information on the Company's student loan securitization activities,
         see Note 6 to the financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Regulatory Impacts

| | Amendments to the Act that governs the FFEL Program have reduced the interest spread earned on the FFEL Program guaranteed
         student loan portfolio as new loans with lower yields are added to the portfolio and older, more profitable loans are
         repaid.  Despite reductions in funding costs and their expected effects on net income, pressure on margins is expected to
         continue as more loans are originated with lower lender yields. Amendments to the Act also introduced a competitor program,
         the Federal Direct Student Loan Program (Direct Lending), in which private lenders, such as the Company, do not
         participate.  Direct Lending accounts for approximately 20-30%, on a national basis, of all student loans originated under
         federally sponsored programs.  Also, the Act may be amended by Congress at any time, possibly resulting in further
         reductions in FFEL Program loan subsidies and reduced lender net interest margins, in addition to influencing customer
         prepayments.   Any such amendments, in part or in combination, could adversely affect the Company's business and prospects.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | The Company continues to search for ways to take advantage of greater economies of scale.  It is pursuing both new and
         existing marketing programs, including electronic commerce, and continues to expand its guarantor relationships and pursue
         alternative loan products, such as CitiAssist, that are not dependent on federal funding and program authorization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Forward-Looking Statements

| | Certain statements contained in this report that are not historical facts are forward-looking statements within the meaning
         of the Private Securities Litigation Reform Act.  The Company's actual results may differ materially from those suggested by
         the forward-looking statements, which are typically identified by the words or phrases "believe", "expect", "anticipate",
         "intend",  "estimate", "may increase", "may result in", and similar expressions or future or conditional verbs such as
         "will", "should", "would" and "could".   These forward-looking statements involve risks and uncertainties including, but not
         limited to, the following: the effects of legislative changes, including those affecting the interest rates borrowers pay on
         certain loans, the magnitude of certain loan subsidies and the related introduction of competitive loan programs by other
         lenders; the effects of changes in accounting standards; actual credit losses experienced by the Company in future periods
         compared to the estimates used in calculating reserves; fluctuations in the interest rates paid by the Company for its
         funding and received on its loan portfolio, and the effect of such rates on floor income; the Company's ability to
         service its loan portfolio in accordance with its contractual obligations; the actual cost of employee stock option awards
         and the effects of changes made to various stock-based compensation programs; the success of the Company's hedging policies;
         the Company's ability to acquire or originate loans in the amounts anticipated and with interest rates adequate to generate
         sufficient yields and margins; the Company's ability to continue to develop its electronic commerce initiatives; the
         Company's success in expanding its guarantor relationships and products; whether risk-sharing expenses for defaults on new
         loan originations are offset by lower insurance premiums; the Company's ability to utilize alternative sources of funding,
         including its ability to continue to securitize loan portfolios; the Company's ability to derive incremental economic
         benefits from greater economies of scale as its portfolio grows; as well as general economic conditions, including the
         performance of financial markets and the implementation of regulatory changes.
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Item 3. Quantitative and Qualitative Discussion About Market Risk

| | The Company's primary market risk exposure results from fluctuations in the spreads between the
         Company's borrowing and lending rates, which may be impacted by shifts in market interest rates.  Market
         risk is measured using various tools, including Earnings-at-Risk.  The Earnings-at-Risk calculation
         seeks to determine the effect that shifts in interest rates are expected to have on net interest margin
         in future periods.  The Company prepares Earnings-at-Risk calculations to measure the discounted pre-tax
         earnings impact over a preset time span of a specific upward and downward shift in the interest rate
         yield curve. The Earnings-at-Risk calculation, a static and passive measurement that excludes
         management's responses to prospective changes in market interest rates, reflects the repricing gaps in
         the position as well as option positions, both explicit and embedded, in the loan portfolio.
         Earnings-at-Risk is calculated by multiplying the gap between interest sensitive items, including
         assets, liabilities and derivative instruments, by a 100 basis point change in the yield curve.
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| | The Earnings-at-Risk calculation measures the Company's position at one point in time.  As indicated in
         the table below, as of September 30, 2003, a 100 basis point increase in the interest yield curve would have
         a potential negative impact on the Company's pre-tax earnings of approximately $18.3 million for the
         next twelve months and approximately $182.8 million thereafter.  A 100 basis point decrease in the
         interest yield curve as of September 30, 2003 would have a potential positive impact on the Company's pre-tax
         earnings of approximately $70.9 million for the next twelve months and approximately $180.4 million
         thereafter.   The increase in the September 30, 2003 Earnings-at-Risk calculations, compared to those at
         September 30, 2002, was due to the interest rate environment at September 30, 2003 and its impact on floor
         income.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Earnings-at-Risk (effect on pre-tax
    earnings) | September 30, 2003                          | September 30, 2002                            
|------------------------------------------------- | ------------------------------------------- | ----------------------------------------------
|(Dollars in millions)                             | Next 12
      Mos.     Thereafter     Total | Next   12

      Mos.     Thereafter     Total
|One hundred basis point increase                  | $(18.3)       $(182.8)   $(201.1)           | $(7.7)         $(149.3)     $(157.0)          
|One hundred basis point decrease                  | $70.9          $180.4     $251.3            | $52.9           $149.3        $202.2          

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

Item 4. Controls and
Procedures

(a) Disclosure Controls and Procedures

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

| | There have not been any changes in the Company's internal control over financial reporting (as such term
is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably
likely to materially affect, the Company's internal control over financial reporting.
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|PART II. OTHER INFORMATION
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|Item 6.                   
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SIGNATURE

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

Date: November 13, 2003

The
Student Loan Corporation

By/s/ Steven J. Gorey  
       Steven J.
Gorey          
                                    Vice
President and Principal
Financial                        and
Accounting
Officer