SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

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

For the quarterly period ended September 30, 2002

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)

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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.

YesX       No

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

YesX       No

On
November 4, 2002, there were 20,000,000 shares of The Student Loan
Corporations Common Stock outstanding.

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,
2002 and 2001


...................................................................          3

Balance Sheet as of September 30, 2002 (Unaudited)                        
                              and December 31, 2001 (Audited).......................................................................           4

Statement of Cash Flows (Unaudited) for the Nine-Month Periods Ended                        
                              September 30, 2002 and 2001..............................................................................        
  5

Statement of Changes in Stockholders' Equity (Unaudited) for the                        
                              Nine-Month Periods Ended September 30, 2002 and 2001.................................          6

Notes to Financial Statements (Unaudited).............................................................       7-10

Item 2 -    Management's Discussion and Analysis of Financial Condition                                
                           and Results of Operations.............................................................................    
    11-15

Item 3 -    Quantitative and Qualitative Discussion About Market Risk................................        16

Item 4 -    Controls and Procedures........................................................................................         17

Part II  Other Information

Item 6 -   Exhibits and Reports on Form 8-K.......................................................................         18

Signature.......................................................................................................................................         19

Certifications................................................................................................................................       20-21

2

|PART I. FINANCIAL INFORMATION                                                                                                                                                                                                                                        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                     
|Item 1. Financial Statements.                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                     
|THE STUDENT LOAN CORPORATION
                                                      STATEMENT OF INCOME
                                        (Dollars in thousands, except per share amounts)
                                                          (Unaudited)

|                                                    | Three months ended     | Nine months ended          
|--------------------------------------------------- | ---------------------- | ---------------------------
|                                                    | September 30,          | September 30,              
|                                                    | 2002             2001  | 2002              2001     
|
|Interest income                                     | $222,968      $262,042 | $752,129       $884,437    
|Interest expense                                    | 129,679      187,411   | 458,832     662,850        
|Net interest income                                 | 93,289          74,631 | 293,297         221,587    
|Provision for loan losses                           | (3,313)     (2,202)    | (8,608)    (5,767)         
|Net interest income after provision for loan losses | 89,976          72,429 | 284,689         215,820    
|Gain on student loan securitization                 | -                    - | 3,121                     -
|Fee and other income                                | 4,968     3,404        | 14,192     7,865           
|Total revenue, net                                  | 94,944     75,833      | 302,002     223,685        
|                                                   
|
|Salaries and employee benefits                      | 6,526            5,886 | 19,820           16,624    
|Other expenses                                      | 19,821     17,552      | 59,292     51,920          
|Total operating expenses                            | 26,347     23,438      | 79,112     68,544          
|                                                   
|Income before income taxes                          | 68,597          52,395 | 222,890         155,141    
|Income taxes                                        | 28,001     21,554      | 90,447     63,061          
|                                                   
|$40,596     $30,841                                 | $132,443     $92,080  
|                                                   
|$14,000      $14,000                                | $42,000     $42,000   
|                                                   
|
|(based on 20 million average shares outstanding)    | $ 2.03      $ 1.54     | $ 6.62     $ 4.60          
|                                                   
|$ 0.70      $ 0.70                                  | $ 2.10     $ 2.10     
|                                                   
|
|Net interest margin                                 | 1.87%           1.69%  | 2.05%           1.74%      
|Operating expense as a percentage of               
|average student loans                               | 0.53%           0.53%  | 0.55%           0.54%      
|Return on equity                                    | 22.26%         19.94%  | 25.40%         20.73%      
|                                                   
|                                                   

3

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

|                                                    | September 30, | December 31,
|--------------------------------------------------- | ------------- | ------------
|                                                    | 2002          | 2001        
|                                                    | (Unaudited)   | (Audited)   
|
|Student loans                                       | $ 18,624,355  | $ 18,236,966
|Less: Allowance for loan losses                     | (5,484)       | (3,584)     
|Student loans, net                                  | 18,618,871    | 18,233,382  
|Loans available for sale                            | 1,573,259     | -           
|Cash                                                | 813           | 1,222       
|Other assets                                        | 536,913       | 482,492     
|                                                   
|$ 20,729,856                                        | $ 18,717,096 
|                                                   
|                                                   
|
|Short-term borrowings                               | $ 15,447,100  | $ 15,383,800
|Long-term notes                                     | 4,150,000     | 2,200,000   
|Payable to principal stockholder                    | 6,599         | 7,282       
|Deferred income taxes                               | 94,631        | 93,908      
|Other liabilities                                   | 296,653       | 380,404     
|                                                   
|Total Liabilities                                   | 19,994,983    | 18,065,394  
|                                                   
|Common stock, $.01 par value; authorized 50,000,000
|shares; 20,000,000 shares issued and outstanding    | 200           | 200         
|Additional paid-in capital                          | 135,205       | 134,851     
|Retained earnings                                   | 607,094       | 516,651     
|Accumulated other changes in equity from nonowner  
|sources
(net of taxes of $5,254)                    | (7,626)       | -           
|                                                   
|Total Stockholders' Equity                          | 734,873       | 651,702     
|                                                   
|$ 20,729,856                                        | $ 18,717,096 
|                                                   
|                                                   
|$ 19,165,897                                        | $ 17,296,907 
|(year-to-date)                                     



See accompanying notes to financial statements.

4

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

|                                                        | Nine months ended September 30,
|------------------------------------------------------- | -------------------------------
|                                                        | 2002                           
|Cash flows from operating activities:                  
|Net income                                              | $ 132,443                      
|Adjustments to reconcile net income to                 
|net cash from operating activities:                    
|Gain on securitization of loans                         | (3,121)                        
|Loss on disposal of assets                              | 1,678                          
|Depreciation and amortization                           | 48,856                         
|Provision for loan losses                               | 8,608                          
|Deferred tax provision                                  | 5,978                          
|(Increase) in accrued interest receivable               | (21,259)                       
|(Increase)/decrease in other assets                     | (31,155)                       
|(Decrease)/increase in other liabilities                | (84,081)                       
|Net cash provided by operating activities               | 57,947                         
|                                                       
|Cash flows from investing activities:                  
|Disbursement of loans                                   | (2,455,251)                    
|Portfolio loan purchases                                | (909,219)                      
|Loan purchases available for sale                       | (1,358,115)                    
|Repayment of loans                                      | 1,977,462                      
|Proceeds on loan securitization                         | 249,317                        
|Sale of loans                                           | 473,733                        
|Capital expenditures on equipment and computer software | (7,583)                        
|Net cash used in investing activities                   | (2,029,656)                    
|                                                       
|Cash flows from financing activities:                  
|Net decrease in borrowings with original               
|maturities of one year or less                          | (2,079,700)                    
|New long-term borrowings                                | 4,150,000                      
|Repayments of long-term borrowings                      | (57,000)                       
|Dividends paid to stockholders                          | (42,000)                       
|Net cash provided by financing activities               | 1,971,300                      
|                                                       
|Net decrease in cash                                    | (409)                          
|Cash - beginning of period                              | 1,222                          
|                                                       
|Cash - end of period                                    | $ 813                          
|                                                       
|Supplemental disclosure of cash flow information:      
|Cash paid for:                                         
|Interest                                                | $ 606,923                      
|Income taxes paid, net of refunds                       | $   70,872                     

See accompanying notes to financial statements.

5

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

|                                                          | Nine Months Ended September 30,
|--------------------------------------------------------- | -------------------------------
|                                                          | 2002                           
|COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL              
|Balance, beginning of period                              | $ 135,051                      
|Other                                                     | 354                            
|Balance, end of period                                    | $ 135,405                      
|                                                         
|RETAINED EARNINGS                                        
|Balance, beginning of period                              | $ 516,651                      
|Net income                                                | 132,443                        
|Common dividends declared, $2.10 per common share         | (42,000)                       
|Balance, end of period                                    | $ 607,094                      
|                                                         
|ACCUMULATED OTHER CHANGES IN EQUITY FROM NONOWNER SOURCES
|Balance, beginning of period                              | $            -                 
|Net change for cash flow hedges, net of tax               | (7,977)                        
|Net change for investments, net of tax                    | 351                            
|Balance, end of period                                    | $   (7,626)                    
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         

See accompanying notes to financial statements.

6

THE STUDENT LOAN CORPORATION
                                     Notes to Financial Statements (Unaudited)
                                                September 30, 2002

1.       Significant Accounting Policies

Interim Financial Information

| | The
financial information of The Student Loan Corporation (the Company)
as of September 30, 2002 and for the three- and nine-month periods ended
September 30, 2002 and 2001 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 2002 may not be indicative of the results for the full year ended December 31, 2002. The accompanying financial statements should be read
in conjunction with the financial statements and related notes included in the
Companys 2001 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 and net credit losses are charged to other expense as incurred.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Impairment or Disposal of Long-Lived Assets

| | On
January 1, 2002, the Company adoptedStatement of Financial Accounting
Standards (SFAS) No. 144, Accounting for Impairment or
Disposal of Long-Lived Assets (SFAS No. 144), when the rule became
effective for calendar year companies. SFAS No. 144 established additional
criteria for determining when a long-lived asset is held-for-sale. It also
requires that an impairment loss be recognized only if the carrying amount of a
long-lived asset is not recoverable from its undiscounted cash flows and it
measures an impairment loss as the difference between the carrying amount and
fair value of the asset. The provisions of the new standard are to be applied
prospectively.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest Rate Swap Agreements

| | The
Companys interest rate swap agreements are accounted for in accordance
with SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, which requires that all derivatives be recorded on the balance
sheet at their fair value. These derivatives have been designated and are
effective as cash flow hedges and are recorded in other liabilities. Changes in these
derivatives fair value, net of taxes, are recorded in the accumulated
other changes in equity from nonowner sources component of stockholders
equity.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.       Related Party Transactions

| | Citibank
(New York State) (CNYS), an indirect wholly owned subsidiary of
Citigroup Inc., owns 80% of the outstanding common stock of the Company. A
number of significant transactions are carried out between the Company and
Citigroup and its affiliates. At September 30, 2002, the Company had outstanding
short- and long-term unsecured borrowings with CNYS, pursuant to the terms of an Omnibus Credit Agreement (the "Omnibus Agreement") of $15.4 billion and $4.2
billion, respectively, compared to $15.4 billion and $2.2 billion, respectively,
at December 31, 2001. At September 30, 2002, the outstanding borrowings had a weighted average interest rate of 2.4%, which is based on LIBOR as defined by the Omnibus Agreement, at the time the borrowings were established or rates reset. For the three- and nine-month periods ended September 30,
2002, the Company incurred $129.7 million and $458.8 million, respectively, in
interest expense payable to CNYS and its affiliates, compared to $187.4 million
and $662.9 million, respectively, for the same periods in 2001. Also, during the
first six months of 2002, the Company entered into a number of interest rate
swap agreements with a subsidiary of Citigroup. At September 30, 2002, the
agreements had notional amounts totaling $2.7 billion and remaining terms of
between nine and fifteen months. 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, a
limited number 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.       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). In compliance with the hedge accounting requirements
of SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended, management expects the Companys hedge
program to be highly effective in offsetting changes in cash flows for the risk
being hedged.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
2002, the Company entered into a number of forward-starting interest rate swap
contracts with an affiliate of Citigroup to receive payments based on LIBOR and
make payments based on the 91-day Treasury Bill rate. During the first six
months of 2002, the Company entered into swap contracts with
notional amounts totaling $2.7 billion. They have been designated and are
effective as cash flow hedges. The swap agreements have terms of between nine
and fifteen months. The fair value of the swaps at September 30, 2002 was a
$13.5 million liability and is reflected in other liabilities at September 30,
2002 with a corresponding amount, net of taxes, reflected in the accumulated
other changes in equity from nonowner sources component of stockholders
equity (see below). Substantially all of the 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 related to these swap agreements.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

| | 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        
|------------------------------------ | ------------------------ | -------------------------
|(Dollars in thousands)               | Ended September 30, 2002 | Ended September 30,
 2002
|Beginning Balance                    | ($838)                   | $      --                
|Net loss from cash flow hedges       | (7,139)                  | (8,671)                  
|Net amounts reclassified to earnings | -                        | 694                      
|Ending Balance                       | ($7,977)                 | ($7,977)                 

4.       Commitments and Contingencies

| | In February 2000, three stockholders' derivative complaints, captionedAlan Kahn v. Citigroup Inc.,
         Kenneth Steiner v. Citigroup Inc., andKatherine F. Petty v. Citigroup Inc., were filed in the Delaware
         Court of Chancery against the Company and its directors (as well as Citigroup and certain
         subsidiaries).  In April 2000, the Delaware Court of Chancery consolidated the three complaints for all
         purposes under the caption In re The Student Loan Corp. Derivative Litigation, and designated theAlan
         Kahn v. Citigroup Inc. complaint as the operative pleading.  The action remains pending.  For further
         information, see "Legal Proceedings" in the Company's Annual Report on Form 10-K for the year ended
         December 31, 2001.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the ordinary course of business, the Company is also involved in various legal
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 Higher Education Act of 1965 (the Act) have significantly
reduced the net interest spreads earned on the Federal Family Education Loan
(FFEL) Program guaranteed student loan portfolio as new loans with
lower yields were added to the portfolio and older, more profitable loans were
repaid. As the funding costs have not been similarly reduced, pressure on
margins will continue as more loans are originated with lower yields. In
addition, Congress may amend the Act at any time, possibly resulting in further
reductions in FFEL Program loan subsidies, which could occur in the form of
increased risk-sharing costs or reduced margins. Any such amendment could
adversely affect the Companys business and prospects.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.       Loan Securitization

| | In
the first quarter of 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 FASB Statement
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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the first quarter of 2002, the Company securitized approximately $249 million of
Federal Consolidation Loans through the sale of the loans to a trust that was
established for that purpose. The Company recognizes the securitization as a
sale for financial statement purposes and the securitization qualifies as a
financing for tax purposes. The Company sold the loans to the trust through a
wholly owned, special purpose subsidiary formed to acquire the Companys
loans. A pre-tax gain of $3.1 million was recorded as a result of
the securitization. The gain was reflective of the difference between the
carrying value of the assets sold to the trust by the Companys wholly
owned special purpose subsidiary and the fair value of the assets received from
the trust. As a result of the securitization transaction, the Company recorded
approximately $12.6 million in residual trust investments (composed
 of a note
receivable of $8.5 million and residual trust equity of $4.1 million), which are
included in other assets on the Companys financial statements. The Company
regularly reviews these residual trust investments for impairment and accounts
for them as investments in available-for-sale debt securities. At September 30,
2002, the fair values of these assets approximated their carrying values. The
Company receives administrative and servicing fees on the securitized portfolio
and investment income on the note receivable. A net of tax amount of
approximately $0.3 million, which is related to the securitization investments,
has been recorded as an increase to accumulated other changes in equity from
nonowner sources in the stockholders equity component of the financial
statements as of September 30, 2002.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

| | At
September 30, 2002, total student loan assets held by the trust were
approximately $245.8 million. At that time, receivables due from the trust were
$0.02 million and payables to the trust were $0.6 million. During the quarter
ended September 30, 2002, the Company received cash flows from the trust related
to the securitization of $0.07 million for loan servicing and administrative
fees as the master servicer. Also, consistent with terms agreed upon at the time
the transaction was consummated, $0.01 million was paid to the Company by the
trust to acquire additional eligible add-on loan assets during the third quarter
of 2002. There were no additional securitizations of student loans in the third
quarter of 2002.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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

Financial Condition

| | During
the nine months ended September 30, 2002, the Companys student loan
portfolio, composed primarily of loans originated under the Federal Family
Education Loan (FFEL) Program, increased by $0.4 billion (2%) to
$18.6 billion from $18.2 billion at December 31, 2001. This growth was
attributable to loan disbursements totaling $2,455 million and loan purchases of
$909 million in the first three quarters of 2002, partially offset by $474
million in loan sales, $1,960 million in loan reductions (attributable to
borrower principal payments and claims paid by guarantors), $490 million in
loans conveyed in a noncash transfer to an available-for-sale inventory that was
established in the first quarter of 2002, and other adjustments of $55 million.
During the nine months ended September 30, 2001, the Company made loan
disbursements of $1,905 million, loan purchases of $1,881 million, loan sales of
$279 million, loan reductions of $1,426 million and other adjustments of $45
million.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company's loan disbursements for the first nine months of 2002 and 2001 are shown in the         table below:

|(Dollars in millions)                | 2002   | 2001   | Difference | % Change
|------------------------------------ | ------ | ------ | ---------- | --------
|FFEL Program Stafford and PLUS Loans | $1,834 | $1,577 | $257       | 16%     
|Federal Consolidation Loans          | 621    | 328    | 293        | 89%     
|Total                                | $2,455 | $1,905 | $550       | 29%     

| | The
increase in loan disbursements for the first nine months of 2002, compared to
the same period last year, is primarily attributable to ongoing sales and
electronic commerce initiatives. The Federal Consolidation Loan originations
reflected in the above table do not include Consolidation Loans generated
through third party marketing relationships. Loans generated through these
relationships are reported as purchases since unconsolidated loan balances held
by other lenders must be purchased at face value from the other lenders prior to
loan consolidation and incur costs associated with their procurement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
mentioned above, during the first quarter of 2002, the Company established an
inventory of loans available for sale. At September 30, 2002, this inventory had
a balance of $1,573 million, composed of $490 million of loans conveyed in a
noncash transfer from the Companys loan portfolio and $1,358 million of
loans purchased in the first nine months of 2002, partially offset by a loan
securitization of approximately $249 million, and loan reductions of $26
million. The balance of loans available for sale has continued to grow
throughout the year in order to establish an adequate pool of loans available
for future securitization.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | From
time to time, the Company makes student loan purchases. For the first nine
months of 2002, the Companys student loan purchases included $909 million
purchased for its portfolio and $1,358 million purchased for its resale
inventory. This is an increase of $386 million (21%) in loan purchases compared
to the same period in 2001. The Companys participation in the secondary
market is dependent upon market conditions.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company's loan purchases for the first nine months of 2002 and 2001 are shown in the table
         below:

|(Dollars in millions)                | 2002   | 2001   | Difference | % Change
|------------------------------------ | ------ | ------ | ---------- | --------
|FFEL Program Stafford and PLUS Loans | $  174 | $ 591  | $(417)     | (71%)   
|Federal Consolidation Loans          | 1,422  | 833    | 589        | 71%     
|CitiAssist Loans                     | 671    | 457    | 214        | 47%     
|Total                                | $2,267 | $1,881 | $386       | 21%     

11

| | In
order to comply with certain regulatory requirements, CitiAssist Loans are
originated by CNYS through an intercompany agreement. The Company purchases all
qualified CitiAssist Loans following
 full disbursement. These loans are
originated through an alternative loan program and do not carry federal
government guarantees.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the first quarter of 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 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the first quarter of 2002, the Company securitized approximately $249 million of
Federal Consolidation Loans through the sale of the loans to a trust that was
established for that purpose. The Company recognizes the securitization as a
sale for financial statement purposes and the securitization qualifies as a
financing for tax purposes. The Company sold the loans to the trust through a
wholly owned, special purpose subsidiary formed to acquire the Companys
loans. A pre-tax gain of $3.1 million was recorded as a result of
the securitization. The gain was reflective of the difference between the
carrying value of the assets sold to the trust by the Companys wholly
owned special purpose subsidiary and the fair value of the assets received from
the trust. As a result of the securitization transaction, the Company recorded
approximately $12.6 million in residual trust investments (composed of a note
receivable of $8.5 million and residual trust equity of $4.1 million), which are
included in other assets on the Companys financial statements. The Company
receives administrative and servicing fees on the securitized portfolio and
investment income on the note receivable. A net of tax amount of approximately
$0.3 million, which is related to the securitization investments, has been
recorded as an increase to accumulated other changes in equity from nonowner
sources in the stockholders equity component of the financial statements
as of September 30, 2002.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
September 30, 2002, total student loan assets held by the trust were
approximately $245.8 million. At that time, receivables due from the trust were
$0.02 million and payables to the trust were $0.6 million. During the quarter
ended September 30, 2002, the Company received cash flows from the trust related
to the securitization of $0.07 million for loan servicing and administrative
fees as the master servicer. Also, consistent with terms agreed upon at the time
the transaction was consummated, $0.01 million was paid to the Company by the
trust to acquire additional eligible add-on loan assets during the third quarter
of 2002. There were no additional securitizations of student loans in the third
quarter of 2002.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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). In compliance with the hedge accounting requirements
of SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended, management expects the Companys hedge
program to be highly effective in offsetting changes in cash flows for the risk
being hedged.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
2002, the Company entered into a number of forward-starting interest rate swap
contracts with an affiliate of Citigroup to receive payments based on LIBOR and
make payments based on the 91-day Treasury Bill rate. During first six months of
2002, the Company entered into swap contracts with
notional amounts totaling $2.7 billion. They have been designated and are
effective as cash flow hedges. The swap agreements have terms of between nine
and fifteen months. The fair value of the swaps at September 30, 2002 was a
$13.5 million liability and is reflected in other liabilities at September 30,
2002 with a corresponding amount, net of taxes, reflected in the accumulated
other changes in equity from nonowner sources component of stockholders
equity. Substantially all of the 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
related to these swap agreements.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

| | 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. The Company paid income taxes, net of
refunds, of $71 million primarily to CNYS in the first nine months of 2002. The
Companys income taxes were overfunded at December 31, 2000 and throughout
the first half of 2001, generating the receipt of a $12 million federal tax
refund from CNYS in the first quarter of 2001.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys short- and long-term debt was borrowed primarily through an Omnibus Credit Agreement
with CNYS (the "Omnibus Agreement"). In the first nine months of 2002, short-term debt increased
by $0.1 billion to $15.4 billion. The increase was primarily attributable to a
$2.2 billion reclassification of maturing long-term debt to short-term debt,
partially offset by a $2.1 billion repayment of short-term borrowings. The $2.0
billion increase in long-term borrowings at September 30, 2002 was primarily due
to the procurement of $4.2 billion of new long-term borrowings, partially offset
by the reclassification of $2.2 billion of maturing long-term debt to short-term
debt. The new borrowings were used primarily to fund new loan disbursements and
purchases.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At September 30, 2002, the outstanding borrowings had a weighted average interest rate of 2.4%, which is based on LIBOR as defined by the Omnibus Agreement, at the time the borrowings were established or rates reset. At September 30, 2002, accrued interest on the Companys
borrowings was $112 million, compared to accrued interest of $345 million at
December 31, 2001. The September 30, 2002 decrease in accrued interest, which is
reflected in other liabilities on the financial statements, results from the
structure of the interest payment terms on a substantial portion of the
Companys debt. These terms required that interest accumulate for periods
of up to one year, starting in mid-2001 and ending July 2002, when interest in
the amount of $492 million was due and paid. During the first nine months of
2002, the Company made $607 million in interest payments, compared to $664
million for the same period in 2001. The decrease is attributable to changes in
both the interest rates paid on the borrowings and the timing of the interest
payments.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company paid a quarterly dividend of $0.70 per common share on September 3,
2002. On October 17, 2002, the Board of Directors declared a regular quarterly
dividend on the Companys common stock of $0.70 per share to be paid
December 2, 2002 to stockholders of record on November 15, 2002.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Results of Operations

Quarter Ended September 30, 2002

| | Net
income was $40.6 million ($2.03 basic and diluted earnings per share) for the
third quarter of 2002. This was an increase of $9.8 million (32%) compared to
earnings for the same period last year. The increase in net income was primarily
attributable to higher net interest income generated by portfolio growth and
floor income earned on segments of the Companys student loan assets.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
net interest margin for the third quarter of 2002 was 1.87%, up 18 basis points
from the third quarter 2001 margin of 1.69%. The improvement in net interest
margin was primarily attributable to third quarter 2002 floor income on segments
of the Companys student loan assets, compared to the same period of 2001,
which generated little floor revenue. Borrower interest rates on FFEL Program
loans reset on July 1, 2002 to historically low levels. This significantly
reduced the floor income benefit and net interest margins earned during the
third quarter of 2002, compared to that earned during the first two quarters of
2002.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Total
operating expenses for the third quarter of 2002 increased $2.9 million (12%)
from the same period last year, primarily reflecting the incremental costs
incurred to service the larger loan portfolio. For the third quarter of 2002,
the Companys expense ratio, operating expenses as a percentage of average
student loan assets, was 0.53%, the same as the third quarter 2001 expense
ratio, as investments in sales and technology offset cost savings resulting from
ongoing operational improvements.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

| | In
the third quarter of 2002, the provision for loan losses increased by $1.1
million, compared to the same period in 2001. This increase is attributable
primarily to the growth in the repayment portfolio, including CitiAssist Loans, and is not indicative of any material
changes in delinquency rates between the two periods.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys return on equity was 22.3% for the third quarter of 2002,
compared to 19.9% for the same period of 2001.
| | ----------------------------------------------------------------------------------------------------------------------

Nine Months Ended September 30, 2002

| | The
Company earned net income of $132.4 million ($6.62 basic earnings per share) for
the nine months ended September 30, 2002, an increase of $40.4 million (44%)
from the first nine months of 2001. The increase was primarily attributable to
the higher interest income generated by both loan portfolio growth and increased
floor income.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Total
operating expenses for the first nine months of 2002 were $79.1 million, $10.6
million (15%) higher than the same period last year. The increase reflects the
incremental costs incurred to service the larger portfolio, technology
infrastructure costs, and growth in the Companys sales force. Operating
expenses as a percentage of average student loans for the first nine months of
2002 was 0.55%, compared to 0.54% for the first nine months of 2001.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys return on equity was 25.4% for the first nine months of 2002,
4.7% higher than the 20.7% return for the same period of 2001. The improvement
was primarily attributable to increased net interest income resulting from
higher floor income. Borrower interest rates on FFEL Program loans reset on July
1, 2002 to historically low levels, significantly reducing the floor income
benefit earned after that date.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys effective tax rate was approximately 40.6% for the first nine
months of 2002, equivalent to the rate in effect for the first nine months of
2001.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

Special Allowance and Floor Income

| | Most
FFEL Program loans originated prior to July 23, 1992 have fixed interest rates.
Those issued subsequent to July 23, 1992 generally have variable rates. Most
FFEL Program loans also qualify for the federal governments special
allowance payment (SAP). Whenever the stated interest rates on these
FFEL Program loans provide less than prescribed rates of return, as defined by
the Act, the federal government makes a SAP, which increases the lenders
loan yield 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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
indicated above, whenever the stated interest rates on qualifying FFEL Program
loans provide less than prescribed rates of return, as defined by the Act, the
federal government pays a SAP, which increases the loan yield to lenders. In
periods of declining interest rates, the stated fixed borrower rates, which are
subject to various annual reset provisions, become, in effect, interest rate
floors. Floor income is generally available in declining short-term interest
rate environments when the Companys cost of funds declines while this
borrower interest rate remains fixed, generating net interest margin in excess
of the expected spread. Depending on the manner in which the Companys
assets are funded, the Company may earn net interest margin spreads, which
include floor income, on portions of its portfolio until the borrower interest
reset date, which occurs annually for the majority of the Companys loans. During the quarter ended September 30, 2002, the Company earned $18.2 million of floor income, compared to $1.0 million floor loss, incurred for the same period of 2001.
The Company earned $57.7 million of floor income for the first nine months of
2002, compared to $20.4 million for the same period of 2001.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

Off-Balance Sheet Arrangements

| | In
the first quarter of 2002, the Company entered into an off-balance sheet
arrangement in which a $249 million portfolio of student loans was securitized,
a process by which the loans were 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 SPE obtained the cash needed
to pay the Company for the loan assets received by issuing securities to
investors in the form of debt instruments (asset-backed securities). Investors
have recourse to the assets in the SPE and benefit from other credit
enhancements, such as a cash collateral account and other specified
enhancements. 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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.
As the funding costs have not been similarly reduced, 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 one-third, on a national basis, of all student loans originated
under federally sponsored programs.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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
e-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 future legislative changes and 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; the
effectiveness of the Companys hedging policies; the Companys ability
to acquire or originate loans in the amounts anticipated and with interest rates
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; the means by
which the Companys assets are funded and its ability to utilize
alternative sources of funding, including securitization; the favorable
resolution of legal proceedings; as well as general economic conditions,
including the performance of financial markets and the implementation of
regulatory changes.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

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 future 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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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, 2002, 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 $7.7 million for
the next twelve months and approximately $149.3 million thereafter. A 100 basis
point decrease in the interest yield curve as of September 30, 2002 would have a
potential positive impact on the Companys pretax earnings of approximately
$52.9 million for the subsequent twelve-month period and approximately $149.3
million thereafter.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Earnings-at-Risk (effect on pre-tax earnings) | September 30, 2002                     | September 30, 2001                      
|--------------------------------------------- | -------------------------------------- | ----------------------------------------
|(Dollars in millions)                         | Next
 12 Mos.     Thereafter     Total | Next
   12 Mos.     Thereafter     Total
|One hundred basis point increase              | ($7.7)        ($149.3)    ($157.0)     | $26.3         ($103.4)     ($77.1)      
|One hundred basis point decrease              | $52.9          $149.3      $202.2      | ($10.2)         $103.4       $93.2      

| | 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

Item 4.           Controls and Procedures

Evaluation of Disclosure Controls and Procedures

| | The
Companys Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of the Companys disclosure controls and
procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934, as amended (the Exchange Act)) as
of a date within 90 days prior to the filing date of this quarterly report (the
Evaluation Date). Based on such evaluation, such officers have
concluded that, as of the Evaluation Date, the Companys disclosure
controls and procedures are effective in alerting them on a timely basis to
material information relating to the Company (including its consolidated
subsidiaries) required to be included in the Companys reports filed or
submitted under the Exchange Act.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in Internal Controls

| | Since
the Evaluation Date, there have not been any significant changes in the
Companys internal controls or in other factors that could significantly
affect such controls.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17

|PART II. OTHER INFORMATION
|--------------------------
|                          
|Item 6.                   
|                          
|                          
|                          
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|                          
|                          
|                          
|                          
|                          
|                          
|                          
|                          
|                          
|                          
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|                          

18

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 14, 2002

The Student Loan Corporation

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

19

CERTIFICATIONS

I, Yiannis Zographakis, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of The Student Loan Corporation;                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Based on my knowledge,  this quarterly  report does not contain any untrue statement of a material fact or
              omit to state a material fact  necessary to make the statements  made, in light of the  circumstances
              under which such  statements  were made,  not  misleading  with respect to the period covered by this
              quarterly report;                                                     
|3. | Based on my knowledge, the financial statements, and other financial information included in this
              quarterly report, fairly present in all material respects the financial condition, results of
              operations and cash flows of the registrant as of, and for, the periods presented in this quarterly
              report;                                                                                  
|4. | The registrant's other certifying officers and I are responsible for establishing and maintaining
              disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
              registrant and we have:                                                                                                                                                                                  
|   | a)         Designed such disclosure controls and procedures to ensure that material information      relating to the
                  registrant, including its consolidated subsidiaries, is made known to us by      others within those
                  entities, particularly during the period in which this quarterly report is      being prepared;                                                                          
|   | b)   Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a      date within
                  90 days prior to the filing date of this quarterly report (the "Evaluation Date");      and                                                                                                                                                                                                         
|   | c)          Presented in this quarterly report our conclusions about the effectiveness of the disclosure       controls
                  and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                                                                                                            
|5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
              the registrant's auditors and the audit committee of registrant's board of directors (or persons
              performing the equivalent function):                                                                                                                                                             
|   | a)          All significant deficiencies in the design or operation of internal controls which could       adversely
                  affect the registrant's ability to record, process, summarize and report financial       data and
                  have identified for the registrant's auditors any material weaknesses in internal       controls; and                                                                       
|   | b)          Any fraud, whether or not material, that involves management or other employees who       have a significant
                  role in the registrant's internal controls; and                                                                                                                                                                                                                                             
|6. | The registrant's other certifying officers and I have indicated in this quarterly report whether or not
              there were any significant changes in internal controls or in other factors that could
              significantly affect internal controls subsequent to the date of our most recent evaluation,
              including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  November 14, 2002

By:   /s/ Yiannis Zographakis,
        Principal Executive Officer

20

I, Steven Gorey, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of The Student Loan Corporation;                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Based on my knowledge,  this quarterly  report does not contain any untrue statement of a material fact or
              omit to state a material fact  necessary to make the statements  made, in light of the  circumstances
              under which such  statements  were made,  not  misleading  with respect to the period covered by this
              quarterly report;                                                     
|3. | Based on my knowledge, the financial statements, and other financial information included in this
              quarterly report, fairly present in all material respects the financial condition, results of
              operations and cash flows of the registrant as of, and for, the periods presented in this quarterly
              report;                                                                                  
|4. | The registrant's other certifying officers and I are responsible for establishing and maintaining
              disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
              registrant and we have:                                                                                                                                                                                  
|   | a)         Designed such disclosure controls and procedures to ensure that material information      relating to the
                  registrant, including its consolidated subsidiaries, is made known to us by      others within those
                  entities, particularly during the period in which this quarterly report is      being prepared;                                                                          
|   | b)   Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a      date within
                  90 days prior to the filing date of this quarterly report (the "Evaluation Date");      and                                                                                                                                                                                                         
|   | c)          Presented in this quarterly report our conclusions about the effectiveness of the disclosure       controls
                  and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                                                                                                            
|5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
              the registrant's auditors and the audit committee of registrant's board of directors (or persons
              performing the equivalent function):                                                                                                                                                             
|   | a)          All significant deficiencies in the design or operation of internal controls which could       adversely
                  affect the registrant's ability to record, process, summarize and report financial       data and
                  have identified for the registrant's auditors any material weaknesses in internal       controls; and                                                                       
|   | b)          Any fraud, whether or not material, that involves management or other employees who       have a significant
                  role in the registrant's internal controls; and                                                                                                                                                                                                                                             
|6. | The registrant's other certifying officers and I have indicated in this quarterly report whether or not
              there were any significant changes in internal controls or in other factors that could
              significantly affect internal controls subsequent to the date of our most recent evaluation,
              including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  November 14, 2002

By:   /s/ Steven Gorey,
        Principal Executive Officer

21

Exhibit 99.01

CERTIFICATION PURSUANT TO
                                              18 U.S.C. SECTION 1350,
                                              AS ADOPTED PURSUANT TO
                                   SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the
Quarterly Report on Form 10-Q of The Student Loan Corporation (the
Company) for the quarterly period ended September 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the
Report), Yiannis Zographakis, as Chief Executive Officer of the
Company, and Steven Gorey, as Chief Financial Officer of the Company, each
hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to
§906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.

/s/ Yiannis Zographakis
Yiannis Zographakis
Chief Executive Officer
November 14, 2002

/s/ Steven Gorey
Steven Gorey
Chief Financial Officer
November 14, 2002

This certification
accompanies each Report pursuant to §906 of the Sarbanes-Oxley Act of 2002
and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002,
be deemed filed by the Company for purposes of §18 of the Securities
Exchange Act of 1934, as amended.

22