SCHEDULE 14A INFORMATION

                  Proxy Statement Pursuant to Section 14(a) of
           the Securities Exchange Act of 1934 (Amendment No.      )


              
      Filed by the Registrant /X/

      Filed by a Party other than the Registrant / /

      Check the appropriate box:
      / /        Preliminary Proxy Statement
      / /        Confidential, for Use of the Commission Only (as permitted
                 by Rule 14a-6(e)(2))
      / /        Definitive Proxy Statement
      /X/        Definitive Additional Materials
      / /        Soliciting Material Pursuant to Section240.14a-11(c) or
                 Section240.14a-12



          
                            USA EDUCATION, INC.
----------------------------------------------------------------------------
              (Name of Registrant as Specified In Its Charter)

----------------------------------------------------------------------------
  (Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/        No fee required
/ /        Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
           and 0-11

           (1)  Title of each class of securities to which transaction
                applies:
                ------------------------------------------------------------
           (2)  Aggregate number of securities to which transaction applies:
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           (3)  Per unit price or other underlying value of transaction
                computed pursuant to Exchange Act Rule 0-11 (set forth the
                amount on which the filing fee is calculated and state how
                it was determined):
                ------------------------------------------------------------
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           (5)  Total fee paid:
                ------------------------------------------------------------

/ /        Fee paid previously with preliminary materials.

           Check box if any part of the fee is offset as provided by
/ /        Exchange Act Rule 0-11(a)(2) and identify the filing for which
           the offsetting fee was paid previously. Identify the previous
           filing by registration statement number, or the Form or Schedule
           and the date of its filing.

           (1)  Amount Previously Paid:
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                                     [LOGO]

                                   NOTICE OF
                                      2001
                                 ANNUAL MEETING
                              AND PROXY STATEMENT

                            YOUR VOTE IS IMPORTANT!

 Please complete and return the enclosed proxy card in the enclosed envelope or
                      vote by phone or over the Internet.

                              USA EDUCATION, INC.
                             11600 SALLIE MAE DRIVE
                             RESTON, VIRGINIA 20193

                                                                   April 6, 2001

                            MEETING OF SHAREHOLDERS
                            TO BE HELD MAY 10, 2001

Dear Shareholder:

    You are invited to attend USA Education, Inc.'s (formerly SLM Holding
Corporation) Annual Meeting of Shareholders on Thursday, May 10, 2001 at
10:00 a.m. at the Corporation's offices located at 11100 USA Parkway, Fishers,
Indiana, 46038. The Notice of the Annual Meeting of Shareholders and the Proxy
Statement accompanying this letter describe the business to be transacted at the
meeting.

    YOUR PARTICIPATION IN THE ANNUAL MEETING IS IMPORTANT. REGARDLESS OF WHETHER
YOU PLAN TO ATTEND, WE URGE YOU TO VOTE YOUR PROXY AT YOUR EARLIEST CONVENIENCE.
This will help establish a quorum for the meeting and avoid the cost of further
solicitation. We hope that you will be able to attend the meeting and encourage
you to read the enclosed materials.

    We look forward to seeing you on May 10.

                                          Sincerely,

                                          [LOGO]

                                          Edward A. Fox
                                          Chairman of the Board of Directors

                              USA EDUCATION, INC.
                             11600 SALLIE MAE DRIVE
                             RESTON, VIRGINIA 20193

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                           TO BE HELD ON MAY 10, 2001


                                   
TIME........................      -      10:00 a.m., local time, on Thursday, May 10, 2001

PLACE.......................      -      11100 USA Parkway
                                         Fishers, Indiana 46038

ITEMS OF BUSINESS...........  At the Annual Meeting, shareholders will be asked to vote on the
                              following items:
                                 (1)     Elect the Board of Directors for a term of one year;
                                 (2)     Amend the Corporation's Certificate of Incorporation to
                                         increase the number of authorized shares of common
                                         stock;
                                 (3)     Ratify the appointment of Arthur Andersen LLP as
                                         independent auditors for 2001; and
                                 (4)     Conduct other business if properly introduced.

RECORD DATE.................      -      You can vote if you were a shareholder on March 12,
                                         2001.

ANNUAL REPORT
  AND FORM 10-K.............      -      Our 2000 Annual Report and our 2000 Form 10-K, which are
                                         not part of the proxy soliciting material, are enclosed.

PROXY VOTING................      -      The Board of Directors solicits your proxy and asks you
                                         to vote your proxy at your earliest convenience to be
                                         sure your vote is received and counted. You may vote by
                                         mail, telephone or over the Internet, depending on how
                                         your share ownership is recorded. If you plan to attend
                                         the Annual Meeting, please check the box on the proxy
                                         card, make the appropriate telephone or Internet
                                         response or advise my office directly at (703) 810-7785.


                                                                    Mary F. Eure

                                                             Corporate Secretary

April 6, 2001

                              USA EDUCATION, INC.

                                    -------

                              2001 PROXY STATEMENT

                                    -------

                               TABLE OF CONTENTS

                                    -------


                                                           
QUESTIONS AND ANSWERS ABOUT VOTING..........................      1
PROPOSAL 1--ELECTION OF DIRECTORS...........................      2
  Information Concerning Nominees...........................      3
  Description of Principal Business or Occupation...........      3
  Meetings of the Board.....................................      6
PROPOSAL 2--AMENDMENTS TO THE CORPORATION'S CERTIFICATE OF
  INCORPORATION.............................................      8
PROPOSAL 3--APPOINTMENT OF INDEPENDENT AUDITORS.............      9
COMMON STOCK INFORMATION....................................      9
  General Information.......................................      9
  Board and Management Ownership............................     10
  Principal Shareholders....................................     11
DIRECTOR COMPENSATION.......................................     12
EXECUTIVE OFFICERS..........................................     12
EXECUTIVE COMPENSATION......................................     13
  Report of the Compensation and Personnel Committee on
    Executive Compensation..................................     13
  Summary Compensation Table................................     16
  2000 Option Grant Table...................................     17
  2000 Option Exercises and Year-End Value Table............     17
  Pension Plan Benefits.....................................     18
  Employment Agreements.....................................     18
  Certain Relationships and Related Transactions............     19
REPORT OF AUDIT/FINANCE COMMITTEE...........................     19
STOCK PERFORMANCE GRAPH.....................................     20
OTHER MATTERS...............................................     20
  Solicitation Costs........................................     21
  Shareholder Proposals for 2002 Annual Meeting.............     21
  Section 16(a) Beneficial Ownership Reporting Compliance...     21
EXHIBIT A--Audit/Finance Committee Charter..................     22


                                       i

                              USA EDUCATION, INC.

                            ------------------------

                       QUESTIONS AND ANSWERS ABOUT VOTING

WHO MAY VOTE?

    Only USA Education, Inc. shareholders who owned common stock at the close of
business on March 12, 2001, the record date for the Annual Meeting, can vote. We
refer to USA Education, Inc. as Sallie Mae or the Corporation.

HOW ARE MY VOTES COUNTED?

    In the election of directors, shares are entitled to cumulative voting,
which means that each share of your common stock is entitled to the number of
votes equal to the number of directors to be elected. As a result, each share is
entitled to 16 votes in the election of directors.

    If you vote in person, you may cumulate your votes and give one nominee all
of your votes or you may distribute your votes among the nominees in any manner.
If you vote by proxy, your votes will be cast and cumulated so as to elect the
maximum number of the nominees named on the proxy card, except that none of your
votes will be cast for any nominee for whom you instruct that the vote be
withheld. The 16 nominees who receive the greatest number of votes cast and
entitled to be voted at the Annual Meeting will be elected.

    Approval of the amendment to the Corporation's Certificate of Incorporation
requires the affirmative vote of at least a majority of shares outstanding on
the record date, with each share of stock entitled to one vote. Abstentions and
shares that are not voted, including shares for which a broker does not have
discretionary voting authority, have the same effect as votes against this item.

    Approval of other matters at the Annual Meeting requires an affirmative vote
of at least a majority of the votes present or represented and entitled to be
voted on the matter, with each share of stock entitled to one vote. Abstentions
have the same effect as votes against the matter. Shares that are not voted on a
matter, including shares for which a broker does not have discretionary voting
authority, do not affect the vote.

HOW DO I VOTE?

    You may vote in person at the Annual Meeting or you may vote by proxy. We
recommend that you vote by proxy even if you plan to attend the Annual Meeting.

    The process of voting by proxy differs slightly, based on how your share
ownership is recorded. Your share ownership is recorded in one of three ways:
direct ownership, recorded by the stock transfer agent for the Corporation, the
Bank of New York; beneficial ownership, recorded through a brokerage or bank
account; or beneficial ownership, recorded by the Corporation's 401(k) Plan
Trustee.

    If your ownership is recorded directly, you will receive a proxy card from
the Bank of New York. If your share ownership is beneficial, your broker, bank
and/or the 401(k) Plan Trustee will issue you a voting instruction form that you
use to instruct them how to vote your shares. Your broker, bank or the 401(k)
Plan Trustee must follow your voting instructions.

    If you receive a voting instruction card from your broker, bank or the
401(k) Plan Trustee, you may vote those shares telephonically by calling the
telephone number shown on the voting form, or via the Internet at the web site
shown on the voting form. A proxy card from the Bank of New York may be voted
only by mail.

                                       1

    Votes submitted via the Internet or by telephone must be received by 12:00
midnight, Eastern Standard Time, on May 9, 2001. Voting by returning a paper
proxy, via the Internet or by telephone will not affect your right to vote in
person should you decide to attend the Annual Meeting. However, if your shares
are held through a bank, broker or the 401(k) Plan and you wish to vote those
shares in person at the Annual Meeting, you must obtain a legal proxy from your
bank, broker or the 401(k) Plan Trustee.

HOW DO PROXIES WORK?

    Sallie Mae's Board of Directors is requesting your proxy. Giving the Board
your proxy means that you authorize representatives of the Board to vote your
shares at the Annual Meeting in the manner you direct. If you sign and return
the enclosed proxy card or voting instruction form but do not specify how to
vote, the Board of Directors will vote your shares in favor of all of the
nominees for director, amendment of the Certificate of Incorporation and
ratification of Arthur Andersen, LLP, as independent auditor. If you own shares
through the 401(k) Plan, however, and do not vote your plan shares, the Trustee
will vote your plan shares in the same proportion as other plan shares have been
voted.

CAN I CHANGE MY VOTE?

    A shareholder whose ownership is recorded directly has the power to change
or revoke a proxy prior to its exercise by voting in person at the Annual
Meeting, by giving written notice to the Corporate Secretary prior to the
meeting or by giving a later dated proxy. A shareholder whose shares are owned
beneficially through a bank, broker, or the 401(k) Plan must contact that entity
to change or revoke a previously given proxy.

                       PROPOSAL 1--ELECTION OF DIRECTORS

    The Board of Directors, pursuant to the Corporation's Certificate of
Incorporation, has determined that the number of directors of the Corporation
will be 16 through May 2002, thereafter the maximum may not exceed 15.
Accordingly, shareholders are asked to elect 16 directors to serve on the Board
of Directors for a one-year term or until their successors are elected or
appointed.

    Upon the recommendation of the Nominations and Governance Committee of the
Board, the Board has nominated each of the current directors for reelection.
Three of the nominees, Earl A. Goode, Barry L. Williams and James C. Lintzenich
are nominated pursuant to the terms of the Corporation's acquisition of certain
stock and assets of USA Group, Inc. ("USA Group"), under which the Corporation
agreed to nominate for election three individuals selected by the USA Group
Foundation, Inc., the successor in interest of USA Group.

                                       2

INFORMATION CONCERNING NOMINEES

    Biographical information about each nominee as of February 28, 2001 is set
forth below. Board service with the Corporation's predecessor entity, the
Student Loan Marketing Association (the "GSE"), is included. There are no family
relationships among the nominees and the executive officers of the Corporation.

    THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE 16 NOMINEES
NAMED BELOW. PROXIES WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY
CHOICE ON THEIR PROXY CARD.



                                      DESCRIPTION OF PRINCIPAL BUSINESS OR OCCUPATION
                             
      CHARLES L. DALEY          Director, Executive Vice President and Secretary of TEB
                                Associates, Inc., a real estate finance company, since 1992.
           Age 68               Mr. Daley was Executive Vice President and Chief Operating
 Director since July 5, 1995    Officer of First Peoples Financial Corporation, a bank
                                holding company, from 1987 to 1992 and Executive Vice
                                President and Chief Operating Officer of First Peoples Bank
                                of New Jersey, a state-chartered commercial bank, from 1984
                                to 1992.

WILLIAM M. DIEFENDERFER, III    President and Co-Founder, e-Numerate Solutions, Inc. and
                                since 1991, a partner with the law firm of Diefenderfer,
           Age 55               Hoover & Wood, Pittsburgh, PA. Previously, Mr. Diefenderfer
  Director since August 8,      was Deputy Director of the Office of Management and Budget
            1997                from 1989 to 1991 by appointment of President Bush. During
                                that period Mr. Diefenderfer also served on the Deputies
                                Committee of the National Security Council, as Chairman of
                                the President's Council on Management and Integrity, and as
                                Chairman of the President's Council on Improvement and
                                Efficiency. Mr. Diefenderfer has been a director of the GSE
                                since August 1997, a director of Chart House Enterprises
                                since 1991, and was a member of the board of Trustees of
                                Dickinson College from 1992 to 1994.

    THOMAS J. FITZPATRICK       President and Chief Marketing and Administrative Officer.
                                Mr. Fitzpatrick joined the Corporation in 1998 as executive
           Age 52               vice president. Prior to joining Sallie Mae, Mr. Fitzpatrick
Director since July 31, 2000    was president and chief executive officer of Equity One,
    and from July 1997 to       Inc. He served as vice chairman of Consumer Credit Co. from
          May 1999              1988 to 1989; president and chief operating officer of
                                Manufacturers Hanover Consumer Services (MHCS) from 1983 to
                                1988; and chief financial officer of MHCS from 1978 to 1983.
                                Mr. Fitzpatrick is currently a member of the Board of
                                Directors of MAB Paints, Inc.

        EDWARD A. FOX           Mr. Fox retired from the GSE in 1990 after serving as its
                                President and Chief Executive Officer since its inception in
           Age 64               1973. From 1990 until 1994, he was the Dean of the Amos Tuck
Director since July 31, 1997    School of Business Administration at Dartmouth College. Mr.
                                Fox is a director of Delphi Financial Group, Delphi
                                International Ltd., Greenwich Capital Management and New
                                England Financial. Mr. Fox serves as Trustee of the
                                University of Maine system and is a member of the Board and
                                President of the American Ballet Theatre.


                                       3




                                      DESCRIPTION OF PRINCIPAL BUSINESS OR OCCUPATION
                             
    DIANE SUITT GILLELAND       Deputy Director of the Illinois Board of Higher Education.
                                Previously, Dr. Gilleland was senior associate, Institute
           Age 54               for Higher Education Policy (1998-1999); senior fellow,
Director since March 25, 1994   American Council on Education, Washington, DC (1997);
                                director, Arkansas Department of Higher Education
                                (1990-1997) and chief finance officer for Arkansas Higher
                                Education (1986-1990). Dr. Gilleland is currently a director
                                and on the Executive Committee of the GSE and previously
                                served by appointment of the President of the United States
                                from 1994 to 1997. Dr. Gilleland serves on the boards of
                                several organizations and as an advisor to state, national
                                and international higher education organizations.

        EARL A. GOODE           Formerly, president of GTE Information Services and GTE
                                Directories Corporation (1994 to 2000). Previously, Mr.
           Age 60               Goode held a number of positions within GTE, including
Director since July 31, 2000    President of GTE Telephone Operations North and East;
                                President of GTE Telephone Company of the Southwest; and
                                Vice President-Operations, GTE Telephone Operations North.
                                Mr. Goode serves or has served on the Boards of Georgetown
                                College Foundation, Alma College, the Chase Bank of Texas,
                                N.A. -- Dallas, NBD Bank of Indiana, Meridian Insurance
                                Company, and Williams Manufacturing Company. He previously
                                served on the Board of USA Funds, Inc. from 1994 to 2000.

       ANN TORRE GRANT          Strategic and Financial Consultant. Ms. Grant is an
                                independent director of Franklin Mutual Series, which is
           Age 42               part of the Franklin Templeton mutual fund complex; U.S.A.
Director since July 31, 1997    Floral Products, Inc., a floral distributor; Condor
                                Technology Solutions, Inc., an information technology
                                consulting firm; and Training Devices, Inc., an aircraft
                                simulator manufacturing and training company. Ms. Grant was
                                a director of the GSE from 1997 to 2000. Ms. Grant was
                                Executive Vice President, Chief Financial Officer and
                                Treasurer of NHP Incorporated, a national real estate
                                services firm, from 1995 to 1997. Ms. Grant was Vice
                                President and Treasurer of USAirways from 1991 until 1995,
                                and held other finance positions at USAirways from 1988
                                until 1991.

    RONALD F. HUNT, ESQ.        Attorney and private investor. Mr. Hunt retired from the GSE
                                in 1990 after serving in a number of executive positions,
           Age 57               beginning in 1973. Mr. Hunt is a director and Vice Chairman
 Director since July 5, 1995    of the GSE; Chairman of the Board of Directors of the
                                National Student Clearinghouse, a not-for-profit corporation
                                that provides loan status verification and other services
                                for participants in the federal student loan program; and a
                                member of the Board of Directors of e-Numerate Solutions,
                                Inc., a software technology company.


                                       4




                                      DESCRIPTION OF PRINCIPAL BUSINESS OR OCCUPATION
                             
  BENJAMIN J. LAMBERT, III      Senator of the Commonwealth of Virginia since 1986. As a
                                Senator, Dr. Lambert focuses on education issues and is
           Age 64               Chairman of the General Government and Compensation
 Director since July 5, 1995    Subcommittee of the Senate's Finance Committee. Dr. Lambert
                                has been self-employed as an optometrist since 1962. Dr.
                                Lambert is a director of Consolidated Bank & Trust Company
                                and Dominion Resources and was a director of the GSE from
                                1995 to 2000. Dr. Lambert is also Secretary of the Board of
                                Trustees of Virginia Union University, where he has served
                                as a Trustee for over 15 years. Dr. Lambert is Secretary of
                                the Medical College of Virginia Hospital Authority Board.

     JAMES C. LINTZENICH        President and Chief Operating Officer of the Corporation.
                                Chief Executive Officer and Vice Chairman of USA Group, Inc.
           Age 47               (from 1997 to 2000). Prior to 1997, Mr. Lintzenich served as
Director since July 31, 2000    Executive Vice President and Chief Operating Officer of USA
                                Group, which he joined in 1992. Mr. Lintzenich serves on the
                                board of MetroBanCorp and Lumina Foundation for Education.

       ALBERT L. LORD           Vice Chairman and Chief Executive Officer of the Corporation
                                (1997-present). Previously, Mr. Lord was President and
           Age 55               principal shareholder of LCL Ltd., a Washington D.C. firm
 Director since July 5, 1995    that provided investment and financial consulting services.
                                Mr. Lord served as the Executive Vice President and Chief
                                Operating Officer of the GSE from 1990 to 1994. From July
                                1995 until August 1997, Mr. Lord was a director of the GSE.

       BARRY A. MUNITZ          President and Chief Executive Officer, The J. Paul Getty
                                Trust, Los Angeles, CA. Dr. Munitz formerly served as
           Age 59               Chancellor and Chief Executive Officer of the California
Director since July 31, 1997    State University System from 1991 to 1997. Dr. Munitz is
                                former Chair of the American Council on Education and Vice
                                Chair of the National Commission on the Cost of Higher
                                Education. He is a trustee of Princeton University, a
                                director of KB Home, and a member of the Executive Committee
                                of Los Angeles' KCET Public Television Station. Dr. Munitz
                                also served as a director of SunAmerica Corp. from 1994 to
                                1998. He currently serves as a Fellow to the American
                                Academy of Arts and Sciences.

  A. ALEXANDER PORTER, JR.      Co-Founder and President of Porter, Felleman Inc., an
                                investment management company, since 1976. He is also
           Age 62               General Partner of Amici Associates, L.P. since 1976 and of
 Director since July 5, 1995    the Collectors' Fund since 1984. Amici and the Collectors'
                                Fund are investment partnerships in which Mr. Porter has
                                investment discretion to buy and sell securities. Mr. Porter
                                was a director of the GSE from 1995 to 2000. He is a trustee
                                of Davidson College in North Carolina, a founder and
                                director of Distribution Technology, Inc., a privately held
                                company, and a trustee of The John Simon Guggenheim Memorial
                                Foundation.


                                       5




                                      DESCRIPTION OF PRINCIPAL BUSINESS OR OCCUPATION
                             
    WOLFGANG SCHOELLKOPF        Chief Executive Officer, Bank Austria Group's U.S.
                                operations. Formerly, Mr. Schoellkopf was Partner, Ramius
           Age 68               Capital Group (1996-1998), Vice Chairman and Chief Financial
Director since July 31, 1997    Officer of First Fidelity Bancorporation from 1990 until
                                1996. From 1963 to 1988, Mr. Schoellkopf was with The Chase
                                Manhattan Bank, most recently as Executive Vice President
                                and Treasurer. Mr. Schoellkopf is a director of PMW Capital
                                Management, LLC; Inner-City Scholarship Fund; and Marymount
                                University.

      STEVEN L. SHAPIRO         Certified Public Accountant and Personal Financial
                                Specialist. Mr. Shapiro is Chairman of Alloy, Silverstein,
           Age 60               Shapiro, Adams, Mulford & Co., an accounting firm, where he
 Director since July 5, 1995    has been employed since 1960, and has served on its board of
                                directors since 1966. Mr. Shapiro is a member of the
                                executive advisory council of Rutgers University, the
                                American Institute of Certified Public Accountants and the
                                New Jersey Society of CPAs. Mr. Shapiro also serves on the
                                board of the West Jersey Hospital Foundation (since 1993).
                                He was director of Carnegie Bancorp, a Princeton New Jersey
                                bank from 1992 to 1998, the New Jersey Casino Reinvestment
                                Development Authority from 1992 to 1998, First Peoples
                                Financial Corp. from 1990 to 1992 and Vice Chairman of the
                                Board of Jefferson Bank of New Jersey from 1988 to 1990.

      BARRY L. WILLIAMS         President, Williams Pacific Ventures, Inc. and interim
                                President and CEO of the American Management Association
           Age 56               International. Previously, Mr. Williams held positions with
Director since July 31, 2000    Bechtel Group, where he served as managing principal of
                                Bechtel Investments, Inc. He previously served on the board
                                of USA Funds, Inc. from 1995 to 2000. Mr. Williams serves on
                                the boards of PG&E Corporation, R. H. Donnelly & Company,
                                Northwestern Mutual Life Insurance Company, CH2M Hill,
                                Newhall Land & Farming Company, Synavant Inc., Simpson
                                Manufacturing Co., Inc., and Kaiser-Permanente. He is also a
                                General Partner with WDG Ventures, Inc. He has been
                                President of the Harvard Alumni Association and Lead Trustee
                                of the Willits Environmental Trust.


MEETINGS OF THE BOARD

    During 2000, the Board of Directors met seven times. Each of the incumbent
directors attended at least 75 percent of the total number of meetings of the
Board and committees on which they serve.

    The Board uses committees to assist it in the performance of its duties.
Each committee has a charter approved by the Board, which sets forth the
respective committee's functions and responsibilities. Shareholders may obtain a
copy of a committee charter by contacting the Corporate Secretary. The present
standing committees of the Board are the Audit/Finance Committee, the
Compensation and Personnel Committee, the Nominations and Governance Committee,
the Operations Committee, the Executive Committee and the Preferred Stock
Committee. The purposes of the Audit/ Finance, Compensation and Personnel, and
Nominations and Governance Committees, their current members, and the number of
meetings held during 2000 are set forth below.

    AUDIT/FINANCE COMMITTEE.  The Audit/Finance Committee assists the Board in
fulfilling its responsibilities by providing oversight relating to (1) audit
review and financial reporting functions, (2) assessment and management of
certain business risks, (3) adequacy of internal controls,

                                       6

(4) establishment of an effective audit function, and (5) capital management and
funding strategy. A copy of the Committee's charter is attached as Exhibit A.

    Each member of the Audit/Finance Committee is an "independent director" as
defined in the Corporation's By-laws and by the New York Stock Exchange. The
current membership of the Audit/ Finance Committee, which held eight meetings in
2000, is as follows: William M. Diefenderfer, III, Chairman; A. Alexander
Porter, Jr., Vice Chairman; Charles L. Daley; Ann Torre Grant; Benjamin J.
Lambert, III; and Barry L. Williams.

    COMPENSATION AND PERSONNEL COMMITTEE.  The Compensation and Personnel
Committee assists the Board in fulfilling its responsibilities relating to human
resources, compensation and benefit matters concerning the Corporation and its
subsidiaries. The Committee makes recommendations to the Board as to
compensation and other benefits for members of the Board, reviews annually the
performance of the CEO and the executive officers of the Corporation and
establishes compensation terms for such individuals, and generally oversees the
programs and policies of the Corporation relating to compensation and the
development and retention of capable management.

    Each member of the Committee is an "independent director" as defined by the
Corporation's By-laws. The current membership of the Compensation and Personnel
Committee, which held nine meetings in 2000, is as follows: Barry A. Munitz,
Chairman; William M. Diefenderfer, III, Vice Chairman; Charles L. Daley; Earl A.
Goode; Ann Torre Grant; Wolfgang Schoellkopf; and Steven L. Shapiro.

    NOMINATIONS AND GOVERNANCE COMMITTEE.  The Nominations and Governance
Committee assists the Board in establishing appropriate standards for the
governance of the Corporation, the operations of the Board and the
qualifications of directors, as well as proposing candidates for Board
membership. The Committee reviews the composition, diversity and operation of
the Board, and evaluates the performance and contributions of individual
directors and the Board as a whole. The Committee considers nominees for
election to the Corporation's Board of Directors at the annual meeting of
shareholders. Shareholders may recommend candidates for nomination to the
Corporation's Board by sending their recommendation to the Corporate Secretary.

    Each member of the Nominations and Governance Committee is an "independent
director" as defined in the Corporation's By-laws. The current membership of the
Nominations and Governance Committee, which held eight meetings in 2000, is as
follows: Benjamin J. Lambert, III, Chairman; Diane Suitt Gilleland, Vice
Chairman; A. Alexander Porter, Jr.; and Barry L. Williams. In addition, the
Nominations and Governance Committee has invited Ronald F. Hunt to attend its
meetings as a non-voting participant.

                                       7

    PROPOSAL 2--AMENDMENTS TO THE CORPORATION'S CERTIFICATE OF INCORPORATION

    The Board of Directors recommends that shareholders consider and vote in
favor of a proposal to amend the Corporation's Certificate of Incorporation (the
"Charter") to increase the authorized number of shares of the Corporation's
common stock from 250,000,000 shares to 375,000,000 shares. As of March 12,
2001, 162,933,604 shares were issued and outstanding out of the currently
authorized 250,000,000 shares and, after taking into account shares reserved for
issuance upon the exercise of the Corporation's stock options and warrants, and
shares reserved for equity forward transactions to achieve favorable accounting
treatment, approximately 14,500,673 shares of common stock were available for
issuance. The text of the first sentence of Article 4 of the Charter, as it is
proposed to be amended, is as follows:

    The total number of shares of stock which the Corporation shall have
    authority to issue is 395,000,000 shares of capital stock, consisting of
    (i) 375,000,000 shares of common stock, par value $.20 per share (the
    "Common Stock"), and (ii) 20,000,000 shares of preferred stock, par value
    $.20 per share (the "Preferred Stock").

    The purpose of the increase in authorized shares is to provide additional
shares of common stock that could be issued for corporate purposes without
further shareholder approval unless required by applicable law or regulation.
The Corporation currently expects that reasons for issuing or reserving
additional shares of common stock will include effecting acquisitions of other
business or properties, establishing strategic relationships with other
companies, securing additional financing for the operation of the Corporation
through the issuance of additional shares or other equity-based securities,
paying stock dividends, subdividing outstanding shares through stock splits,
providing equity incentives to employees, officers or directors, and achieving
favorable accounting treatment for equity forward contracts. The Board of
Directors believes that it is in the best interests of the Corporation to have
additional shares of common stock authorized at this time to alleviate the
expense and delay of holding a special meeting of stockholders to authorize
additional shares of common stock when the need arises.

    The additional shares for which authorization is sought will be identical to
the shares of common stock now authorized and outstanding, and this proposal
will not affect the rights of holders of the common stock. No additional action
or authorization by shareholders would be necessary prior to the issuance of
additional shares unless required by applicable law or the rules of any stock
exchange or national securities association trading system on which the common
stock is then listed or quoted. Under the Charter, shareholders do not have
preemptive rights with respects to common stock. Thus, should the Board of
Directors elect to issue additional shares of common stock, existing
shareholders would not have any preferential rights to purchase the newly issued
shares. An issuance of additional shares of common stock could have the effect
of diluting the earnings per share and book value per share of existing shares
of common stock and diluting the stock ownership of persons seeking to obtain
control of the Corporation.

    The amendment could, under certain circumstances, have an anti-takeover
effect, although this is not the intention of the proposal, and the
Corporation's Charter imposes some limitations on the Board's ability to adopt
such measures. The amendment therefore may have the effect of discouraging
unsolicited attempts to take over or change control of the Corporation. The
Board of Directors is not aware of any attempt to take over or change control of
the Corporation, however, and the Board of Directors has not presented this
proposal with the intent that it be utilized as a type of anti-takeover device,
although it has the ability to utilize the additional shares or to take other
actions that may have that effect or intent in the future if it believes the
interests of the stockholders would be served thereby.

                                       8

REQUIRED VOTE

    The affirmative vote of the holders of a majority of the shares of common
stock of the Corporation outstanding on March 12, 2001 is required to amend the
Charter.

BOARD RECOMMENDATION

    The Board of Directors of the Corporation recommends a vote FOR approval to
amend the Charter.

                PROPOSAL 3--APPOINTMENT OF INDEPENDENT AUDITORS

    The independent public accounting firm of Arthur Andersen LLP, which has
served as auditor for the Corporation since October 23, 1997, has been selected
by the Board as independent financial auditor for 2001. This proposal is put
before the shareholders because the Board believes that it is a good corporate
practice to seek shareholder ratification of the selection of independent
auditors.

    The appointment of independent auditors is approved annually by the Board of
Directors based upon the recommendation of the Audit/Finance Committee. If the
appointment of Arthur Andersen LLP is not ratified, the Board will evaluate the
basis for the shareholders' vote when determining whether to renew the firm's
engagement or expand the scope of services the firm provides.

    Representatives of Arthur Andersen LLP are expected to attend the Annual
Meeting and to respond to appropriate questions from shareholders present at the
meeting, and will have an opportunity to make a statement if they desire to do
so.

    AUDIT FEES. The aggregate fees billed for professional services rendered by
Arthur Andersen LLP for 2000 for the audit of the Corporation's annual financial
statements for 2000 and the reviews of the financial statements included in the
Corporation's Forms 10-Q for 2000 were $1,043,000.

    FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The aggregate
fees billed for 2000 for professional services rendered by Arthur Andersen LLP
for financial information systems design and implementation were $10,000.

    ALL OTHER FEES. The aggregate fees billed for professional services rendered
by Arthur Andersen LLP for 2000 for services other than those described above,
including tax outsourcing and consulting and internal audit outsourcing, were
$3,470,000.

REQUIRED VOTE

    The affirmative vote of the holders of a majority of the shares of common
stock present or represented and entitled to be voted at the Annual Meeting is
required to ratify the appointment of Arthur Andersen LLP. Unless marked to the
contrary, proxies received will be voted FOR the ratification of the appointment
of Arthur Andersen LLP as independent auditors for 2001.

BOARD RECOMMENDATION

    The Board of Directors of the Corporation recommends a vote FOR the
ratification of the appointment of Arthur Andersen LLP as independent auditors
for 2001.

                            COMMON STOCK INFORMATION

GENERAL INFORMATION

    At December 31, 2000, 164,144,845 of the Corporation's common stock par
value $.20 per share, were outstanding. At March 12, 2001, the record date,
162,933,604 shares of common stock were

                                       9

outstanding and eligible to be voted. The common stock is listed on the New York
Stock Exchange, under the symbol "SLM."

BOARD AND MANAGEMENT OWNERSHIP

    The following table provides information regarding shares owned by each
nominee to the Board of Directors and executive officer of the Corporation at
February 28, 2001.



                                                                                       TOTAL
                                                                       VESTED       BENEFICIAL     PERCENT OF
                                             SHARES (1)              OPTIONS (2)   OWNERSHIP (3)     CLASS
                                             ----------              -----------   -------------   ----------
                                                                                    
DIRECTOR NOMINEES
Charles L. Daley (4).......................     27,892                   49,000         76,892           *
William M. Diefenderfer, III...............      6,090                   45,800         51,890           *
Thomas J. Fitzpatrick......................    272,216                  168,257        440,473           *
Edward A. Fox (4)..........................    214,656                   52,500        267,156           *
Diane Suitt Gilleland......................     21,004                   59,775         80,779           *
Earl A. Goode..............................      2,380                        0          2,380           *
Ann Torre Grant............................     16,779                   35,000         51,779           *
Ronald F. Hunt (4).........................     37,896                   35,000         72,896           *
Benjamin J. Lambert, III...................     20,957                   35,000         55,957           *
James C. Lintzenich........................     54,167                        0         54,167           *
Albert L. Lord (5).........................    356,578                  357,408        713,986           *
Barry A. Munitz............................     25,079                   35,000         60,079           *
A. Alexander Porter, Jr. (4)...............    189,667                  144,000        333,667           *
Wolfgang Schoellkopf (4)...................      8,840                   90,000         98,840           *
Steven L. Shapiro..........................     26,118                   49,000         75,118           *
Barry L. Williams..........................      2,181                        0          2,181           *

Total Percentage Increase in Share
  Ownership from 2000 Proxy Statement......                   84%

NAMED EXECUTIVE OFFICERS
Albert L. Lord (5).........................    356,578       148%       357,408        713,986           *
Thomas J. Fitzpatrick......................    272,216       140%       168,257        440,473           *
James C. Lintzenich........................     54,167       N/A              0         54,167           *
J. Paul Carey..............................    156,650       132%       170,479        327,129           *
Robert R. Levine...........................     44,609        57%       310,000        354,609           *

DIRECTORS AND EXECUTIVE OFFICERS AS A
  GROUP (6)................................  1,617,529                2,022,561      3,640,090        2.23%

Total Percentage Increase in Share
  Ownership from 2000 Proxy Statement......                   97%


------------------------

*   Less than one percent

(1) Shares held directly or indirectly by the individual, including shares
    credited to Corporation-sponsored retirement plans.

(2) Shares that may be acquired within 60 days through the exercise of stock
    options.

(3) Total of columns 1 and 2. Except as otherwise indicated and subject to
    community property laws, each owner has sole voting and sole investment
    power with respect to the shares listed.

                                       10

(4) Mr. Daley's share ownership includes 875 shares held through a limited
    partnership, in which he owns a 50% interest. Mr. Fox's share ownership
    includes 14,000 shares held in a charitable remainder trust. Mr. Hunt's
    share ownership includes 525 shares held solely in his wife's name.
    Mr. Porter's share ownership includes 187,000 shares over which he shares
    investment and voting control through two limited partnerships of which he
    is a general partner. Mr. Schoellkopf's share ownership includes 5,000
    shares held through a limited partnership of which he is the sole general
    partner.

(5) Mr. Lord's reported ownership does not include 25,000 shares of Restricted
    Stock Units described in the Executive Compensation section of this Proxy
    Statement.

(6) Includes the director nominees and Named Executive Officers listed above
    plus two other executive officers.

PRINCIPAL SHAREHOLDERS

    To the Corporation's knowledge, the following institutions were beneficial
owners of 5% or more of the Corporation's outstanding common stock on March 12,
2001. The holdings reported below are based solely on Schedules 13G filed with
the Securities and Exchange Commission as of December 31, 2000. The Corporation
is not aware of any other beneficial owner who became the beneficial owner of 5%
or more of the Corporation's common stock between December 31, 2000 and
March 12, 2001.



                                                                    OWNERSHIP
                                                                  PERCENTAGE AT
NAME AND ADDRESS OF BENEFICIAL OWNER               SHARES(1)    DECEMBER 31, 2000
------------------------------------               ----------   -----------------
                                                          
Capital Group International, Inc.(2)               18,142,380         11.06%
  11100 Santa Monica Blvd.
  Los Angeles, CA 90025
Capital Research and Management                    14,062,000          8.57%
  Company(3)
  333 South Hope Street
  Los Angeles, CA 90071
FMR Corp(4)                                        17,387,732         10.60%
  82 Devonshire Street
  Boston, MA 02109


------------------------

(1) Except as indicated, each institution has sole investment power with respect
    to the shares listed.

(2) Capital Guardian Trust Company, a subsidiary of Capital Group
    International, Inc., beneficially owns 13,863,930 shares and has sole power
    to vote 9,939,730 of these shares and dispose of 13,863,930 shares.

(3) Capital Research and Management Company, a registered investment adviser,
    does not have sole or shared power to vote any of these shares; although it
    has sole investment power over all the shares.

(4) Fidelity Management and Research Company, a wholly-owned subsidiary of FMR
    Corp., beneficially owns 16,627,600 or 10.135% of the shares outstanding,
    does not have investment power over any of the shares, but may vote all of
    the shares. Fidelity Management Trust Company, a wholly-owned subsidiary of
    FMR Corp., beneficially owns 199,172 or 0.121% of the shares outstanding.
    FMR Corp. has sole power to vote 145,072 of these 199,172 shares. Fidelity
    International Limited beneficially owns 560,960 of the shares included
    herein, over which it has sole voting power.

                                       11

                             DIRECTOR COMPENSATION

    In 1997, the Corporation established an exclusively equity-based director
compensation plan and eliminated annual cash retainers, meeting fees and
retirement benefits. The Board of Directors believes that all-equity
compensation best aligns director and shareholder interests.

    Generally, each non-employee director is compensated for services in the
fiscal year in the form of an option grant established by the Board. For 2001,
the Chairman received an option grant covering 30,000 shares of the
Corporation's common stock, the lead independent director received a grant
covering 25,000 shares, and other directors receive a grant covering 20,000
shares. These options vest upon the later of: 1) the Corporation's common stock
reaching a closing price representing an increase of 20 percent over the
exercise price (fair market value on the date of grant) for five trading days;
or 2) separation from service from the Board, whichever occurs first. The
options also vest on the fifth anniversary of their grant date. Options are
granted at the start of the year but are cancelled if the optionee is not
elected to the Board at that year's Annual Meeting.

    In July 2000, upon their appointment to the Board on account of the
acquisition of the USA Group, Mr. Williams and Mr. Goode were each granted
options covering 20,000 shares. The options have an exercise price of $43.0625
and vested during the year, when the share price closed 20 percent above the
exercise price for five trading days. Mr. Diefenderfer did not receive an option
grant in 2000 because he received a 3-year grant upon joining the Corporation's
Board in 1999.

    Directors are eligible to receive replacement options upon the exercise of
vested options as described in the Executive Compensation section of this Proxy
Statement. Directors who receive replacement options, but fail to hold shares
acquired through the exercise of the original options for at least one year or
sell shares such that his/her ownership drops below 5,000, are not eligible for
certain future option grants. In 2000, this program resulted in options for
29,980 shares being granted to Mr. Munitz; 15,947 shares being granted to
Mr. Williams; 57,834 shares being granted to Mr. Fox; 40,303 shares being
granted to Mr. Shapiro; 7,187 shares being granted to Mr. Diefenderfer; 39,318
shares being granted to Mr. Daley; 15,659 shares being granted to Mr. Goode; and
27,626 shares being granted to Mr. Schoellkopf.

    The Corporation's non-employee directors are provided with $50,000 of life
insurance, are covered by a travel insurance plan while traveling on Corporation
business and may receive a $1,500 per diem payment for additional work. No such
payments were made to directors in 2000. Neither Mr. Lord, Mr. Fitzpatrick, nor
Mr. Lintzenich receive any separate compensation for their service on the Board
and were not recipients of the above-described options.

                               EXECUTIVE OFFICERS

    Biographical information about each Named Executive Officer as of
February 28, 2001 is as follows:

    Albert L. Lord, 55, was named Vice Chairman and Chief Executive Officer of
the Corporation in August 1997. From 1994 to 1997, Mr. Lord was President and
principal shareholder of LCL, Ltd., A Washington, DC firm that provided
investment and financial consulting services. From 1990 to 1994, Mr. Lord was
Executive Vice President and Chief Operating Officer of the GSE. From July 1995
until August 1997, Mr. Lord was a director of the GSE.

    Thomas J. Fitzpatrick, 52, President and Chief Marketing and Administrative
Officer, was appointed as an executive officer of the Corporation in
September 1998. From July 1997 until May 1999 he served as a director of the
Corporation. Before joining the Corporation's executive management team. He
served as President, Chief Executive Officer and Director of Equity One, Inc.
established in 1990. Mr. Fitzpatrick was Vice Chairman of Consumer Credit Co.
from 1988 until 1989. From 1983 until 1988, Mr. Fitzpatrick was President and
Chief Operating Officer of Manufacturers

                                       12

Hanover Consumer Services, where he had been employed since 1978. He currently
serves on the board of directors of MAB Paints.

    James C. Lintzenich, 47, President and Chief Operating Officer, was
appointed as an executive officer of the Corporation in July 2000. Before
joining the Corporation, Mr. Lintzenich was Chief Executive Officer and Vice
Chairman of USA Group, Inc. Mr. Lintzenich joined USA Group, Inc. in
December 1982 and was elected to USA Group's board in 1990. Mr. Lintzenich
currently serves on the boards of MetroBanCorp and Lumina Foundation for
Education.

    J. Paul Carey, 41, Executive Vice President, was appointed as an executive
officer of the Corporation in August 1997. Mr. Carey is also President and a
director of the GSE. From 1994 to 1997, Mr. Carey was an officer and shareholder
of LCL, Ltd., a Washington, DC firm that provided consulting services in
investment and financial services. From 1990 to 1994, Mr. Carey was Vice
President, Institutional Finance of the GSE.

    Robert R. Levine, 45, Executive Vice President, was appointed as an
executive officer in January 1998. From 1990 to 1997, Mr. Levine was Vice
President and Treasurer of the GSE. Mr. Levine joined the GSE in 1981.

                             EXECUTIVE COMPENSATION

    This section includes (1) a report made by the Compensation and Personnel
Committee (the "Compensation Committee" or "Committee") regarding the
Corporation's executive compensation policy; (2) a summary presentation in
tabular form of executive compensation; (3) a summary of 2000 stock option
grants to Named Executive Officers; (4) a valuation of option exercises during
the year and remaining option holdings for Named Executive Officers; and
(5) descriptions of pension plan benefits, certain employment arrangements and
related transactions.

    REPORT OF THE COMPENSATION AND PERSONNEL COMMITTEE ON EXECUTIVE COMPENSATION

    The Corporation's executive compensation program is administered by the
Compensation Committee of the Board of Directors. In this role, the Committee
sets compensation for the CEO and the senior management team and administers the
Management Incentive Plan and other stock-based compensation programs. The
Committee is composed entirely of non-employee independent directors, as defined
in the Corporation's By-laws. The Committee utilizes the services of an
independent compensation consulting firm in establishing executive and director
compensation.

    COMPENSATION POLICY.  The Corporation's executive compensation policy is
based on a belief that compensation tied to corporate performance and share
price will enhance shareholder value. To implement this policy, the Committee
strives to strike a balance between fixed compensation, in the form of base
salary, and "at risk" compensation, in the form of annual bonuses based on the
attainment of corporate and individual goals and long-term compensation in the
form of stock-based awards.

    Another goal is to offer a total compensation potential that is competitive
with that offered at peer companies, which are selected financial services
corporations, some of which are listed in note 1 to the Stock Performance Graph.
The total compensation package at the Corporation is designed, however, to
attract and to retain executive officers who are entrepreneurial and desire a
"risk and reward" compensation structure that is based on ownership principles,
not the traditional employee-employer relationship. To this end, the 2000 base
salary for Mr. Lord was at or below the 25th percentile for base salaries for
CEO's at selected financial services corporations, while the potential total
cash compensation was above the median.

                                       13

    To further promote the principle of executives as owners, the Corporation
adopted stock ownership guidelines in January 1999. The three-year target
ownership levels are:



                         STOCK OWNERSHIP AS A
      POSITION          MULTIPLE OF BASE SALARY
---------------------   -----------------------
                     
      CEO                          10 X salary
   President                       10 X salary
      EVP                          10 X salary
      SVP                           7 X salary


    Performance stock and options, including vested options, are not counted in
calculating stock ownership.

    As of February 28, 2001, each officer has achieved compliance with his or
her ownership guidelines, with the exception of those officers who in the last
year joined the Corporation from USA Group. It is anticipated that these
officers will achieve their ownership goals over the next 3 years.

    In order to assist the executive officers in meeting their share ownership
targets, the Corporation adopted a replacement option program in 1999 with
respect to certain previously issued and newly issued options. The program also
applies to Board members. This program recognizes the fact that option exercises
typically reduce the option holders' total potential investment in the
Corporation's common stock, discouraging conversion of option positions into
ownership positions. Under the replacement program, officers and directors are
eligible to receive new options upon their exercise of vested options in an
amount equal to the number of shares needed to pay the exercise price for the
original option. Replacement options carry an exercise price equal to the fair
market value of the Corporation's common stock on the date of their grant and
vest one year from the grant date. The term of replacement options equal the
remaining term of the underlying options. If any officer fails to hold shares
acquired through the exercise of the original option for at least one year (and
for senior officers subject to the share ownership guidelines explained above,
until they reach their ownership targets), eligibility for future option grants
may be adversely affected. This program was successful in increasing the share
ownership of Board members and senior management in 2000.

    BASE SALARY.  Consistent with its goal of emphasizing "at risk"
compensation, the Committee did not increase base salary for Named Executive
Officers for 2000, with the exception of an adjustment for Mr. Fitzpatrick and
Mr. Levine effective as of January 2000. In establishing salaries, the Committee
reviewed the salaries of executives at peer companies at levels that the
Committee considered to be comparable to the Corporation's. Mr. Lord's salary
for 2000 was below the 25th percentile for salaries paid to chief executive
officers at the Corporation's peer companies. The Committee set base salaries
for other executive officers at levels below the average base salaries at the
selected peer companies. Accordingly, a significant portion of each executive
officer's cash compensation is subject to the achievement of goals as set forth
in the Corporation's performance-based compensation program.

    PERFORMANCE BONUSES.  The Compensation Committee believes that executive
officer bonuses should be tied to satisfaction of specified performance
criteria. For 2000, the Compensation Committee established a bonus program under
the shareholder-approved Management Incentive Plan, pursuant to which bonuses
could be earned based in part on corporate performance. The terms of the program
establish the overall corporate goals that must be achieved before a bonus is
earned and the maximum bonus amount that may be earned in any one year. The
Committee may use its discretion to reduce payments below that amount. The
corporate goals used by the Committee to measure success for purposes of
awarding bonuses in 2000 were "core cash basis" earnings per share growth, "core
cash basis" net income growth, loan acquisition volume and control channel
origination volume. (Core cash basis earnings exclude any gain on sale from
securitizations and any subsequent servicing or securitization revenue and the
effect of any floor income and certain one-time gains on sales of investment
securities and student loans.) The Corporation's performance surpassed each
goal. With

                                       14

respect to individual performance achievement, the Committee favorably
considered Mr. Lord's role in negotiating and successfully executing Sallie
Mae's acquisition of USA Group and Student Loan Funding Resources, which
significantly broadened the Corporation's revenue and customer base. Mr. Lord's
bonus was also based on success in containing the Corporation's operating
expenses and cost of funds, strengthening the Corporation's overall capital
position, and growing it's control channel student loan volume.

    The Committee directed that a portion of Mr. Lord's 2000 bonus be awarded in
the form of Sallie Mae Restricted Stock Units, as a retention tool. This
component of Mr. Lord's annual bonus is more fully explained in the Summary
Compensation Table. The Compensation Committee approved other executive officer
performance bonuses, as recommended by Mr. Lord, based on his assessment of
individual performance and on relative compensation levels within the executive
officer ranks. Consistent with the Compensation Committee's preference for
equity-oriented compensation, a minimum of 40 percent of each executive
officer's annual bonus (on a pre-tax or after-tax basis at the election of the
executive) was awarded in the form of Sallie Mae common stock.

    STOCK OPTIONS AND PERFORMANCE STOCK.  The Compensation Committee believes
that stock options provide an appropriate incentive to promote long-term stable
growth while aligning executives' interests with those of shareholders. In
January 2000, the Compensation Committee granted options to Mr. Lord and other
members of the senior management team. These option grants introduced an annual
option grant program for the Corporation's officers. Prior to these grants, the
Corporation had not made any option grants to senior management since 1997,
except for grants to newly-hired executives. The options granted in
January 2000 vest upon the stock price reaching 120 percent of the grant price,
but no earlier than 12 months from their grant date. The options also vest on
the fifth anniversary of their grant date, or upon a change in control of the
Corporation. If options vest upon a change in control and, as a result, an
executive becomes subject to excise taxes, the Corporation will make certain tax
gross-up payments on behalf of the executive.

    SECTION 162(M).  Section 162(m) of the Internal Revenue Code limits to
$1 million the deductibility of compensation paid to each of the Corporation's
five Named Executive Officers, unless the compensation satisfies one of the
exceptions set forth in the Code, which includes an exception for
"performance-based compensation." The Compensation Committee generally attempts
to have significant aspects of performance-based compensation that it awards
qualify under Section 162(m), although it recognizes that situations may arise
where other considerations may prevail over obtaining such qualification. The
Compensation Committee believes that the compensation that the Corporation's
Named Executive Officers received under the 2000 Management Incentive Plan and
will realize upon exercise of stock options or upon vesting of performance
shares granted to them will qualify as "performance-based compensation," and
therefore will not be subject to the $1 million limitation.

COMPENSATION AND PERSONNEL COMMITTEE

Barry A. Munitz, Chairman
William M. Diefenderfer, III, Vice Chairman
Charles L. Daley
Earl A. Goode
Ann Torre Grant
Wolfgang Schoellkopf
Steven L. Shapiro

                                       15

SUMMARY COMPENSATION TABLE

    The tables below set forth certain compensation information for the
Corporation's Chief Executive Officer and the Corporation's next four most
highly compensated executive officers employed by the Corporation at the end of
the 2000 fiscal year (collectively, the "Named Executive Officers").



                                                                         LONG-TERM COMPENSATION
                                                                       ---------------------------
                                      ANNUAL COMPENSATION                               SECURITIES
                              -----------------------------------      STOCK BASED      UNDERLYING         ALL OTHER
NAME AND PRINCIPAL POSITION     YEAR      SALARY        BONUS(1)        AWARD($)         OPTIONS        COMPENSATION(2)
---------------------------   --------   --------      ----------      -----------      ----------      ---------------
                                                                                      
Albert L. Lord..............    2000     $650,000      $3,000,000      $1,571,875(3)      463,691(4)        $39,000
Chief Executive Officer         1999      650,000       1,600,000              --              --            39,000
  And Vice Chairman             1998      325,000       1,000,000              --              --            20,077

Thomas J. Fitzpatrick.......    2000     $500,000      $2,500,000      $2,153,125(5)      200,000           $30,000
  President                     1999      400,000       1,086,000          58,289              --            16,062
                                1998      100,000(6)      748,700(7)    3,425,480         500,000                --

James C. Lintzenich.........    2000     $192,308(8)   $1,000,000      $2,153,125(5)      700,000           $ 5,770
  President

J. Paul Carey...............    2000     $400,000      $  500,000      $  430,625(5)      179,251(4)        $24,000
  Executive Vice President      1999      400,000         750,000              --              --            21,251
                                1998      275,000         600,000       1,118,750         150,000            16,962

Robert R. Levine............    2000     $275,000      $  600,000      $       --         100,000           $16,800
  Executive Vice President      1999      200,000         420,000              --              --            15,385
                                1998      200,000         314,500              --              --            12,376


------------------------

(1) Bonus is the amount earned for the year indicated and is typically paid in
    the following year.

(2) Employer matching contributions under the Sallie Mae 401(k) Savings Plan and
    the Sallie Mae Supplemental 401(k) Savings Plan.

(3) Amount reflects the market value of 25,000 shares of Sallie Mae stock on the
    date of award as Restricted Stock Units (RSUs), as part of Mr. Lord's 2000
    bonus payment under the Management Incentive Plan. The RSUs are compensation
    for service successfully performed in 2000. However, the Compensation
    Committee placed additional restrictions on the RSUs as a retention tool.
    All of the RSUs are forfeited by Mr. Lord if he voluntarily leaves
    employment prior to January 25, 2002, and one-half of the RSUs are forfeited
    if Mr. Lord voluntarily leaves employment on or after January 25, 2002, but
    prior to January 25, 2003. Dividends accrue on the RSUs. The value of the
    RSUs as of December 31, 2000 was $1,700,000.

(4) Includes options granted under the replacement option program.

(5) Amounts reflect the grant date value of performance shares awarded to
    Mr. Fitzpatrick: 50,000, 25,000, 50,000; Mr. Lintzenich: 50,000 and
    Mr. Carey 10,000 and 25,000. These shares have vested or vest upon the
    achievement of corporate performance goals. No other Named Executive Officer
    held any restricted stock as of the end of 2000. The value of unvested
    performance stock as of December 31, 2000 for Messrs. Fitzpatrick,
    Lintzenich and Carey was $5,950,000, $3,400,000 and $1,530,000,
    respectively.

(6) Salary paid for service from October 1 through December 31, 1998, at a
    salary of $400,000 per year for Mr. Fitzpatrick.

(7) Included in this amount is a payment of $165,700 by the Corporation to
    Mr. Fitzpatrick to reimburse him for the tax liability he incurred as a
    result of his early withdrawal from the Equity One, Inc. Deferred
    Compensation Plan.

(8) Salary paid for service from August 5 through December 31, 2000, at a salary
    of $500,000 per year for Mr. Lintzenich.

                                       16

2000 OPTION GRANT TABLE



                                                                                               % OF TOTAL
                                                                                                OPTIONS
                                                                                  NUMBER OF     GRANTED
                                                                                  SECURITIES       TO
                                                                       MARKET     UNDERLYING   EMPLOYEES    GRANT DATE
                                   GRANT     EXPIRATION   EXERCISE    PRICE ON     OPTIONS     IN FISCAL      PRESENT
NAME                                DATE        DATE       PRICE     GRANT DATE    GRANTED        YEAR         VALUE
----                              --------   ----------   --------   ----------   ----------   ----------   -----------
                                                                                       
Albert L. Lord..................   1/13/00     1/13/10     $43.00      $43.00      225,000        2.41%     $ 4,706,550
                                  11/15/00     8/13/07     $55.00      $55.00      238,691*       2.56%     $ 5,391,552

Thomas J. Fitzpatrick...........   1/13/00     1/13/10     $43.00      $43.00      175,000        1.88%     $ 3,660,650
                                   6/14/00     6/14/10     $38.00      $38.00       25,000         .27%     $   449,675

James C. Lintzenich.............   6/14/00     6/14/10     $38.00      $38.00      700,000        7.50%     $12,590,900

J. Paul Carey...................   1/13/00     1/13/10     $43.00      $43.00      100,000        1.07%     $ 2,091,800
                                   6/14/00     6/14/10     $38.00      $38.00       10,000         .11%     $   179,870
                                   11/1/00     8/13/07     $57.56      $57.56       34,894*        .37%     $   829,116
                                   11/8/00     8/13/07     $58.13      $58.13        9,480*        .10%     $   226,297
                                  11/15/00     8/13/07     $55.00      $55.00       24,877*        .27%     $   561,922

Robert R. Levine................   1/13/00     1/13/10     $43.00      $43.00      100,000        1.07%     $ 2,091,800


    "Grant Date Present Value" represents a hypothetical present value under the
Black-Scholes Option Pricing Model, calculated using the following assumptions:
a term equaling the term of the option, a risk-free interest rate based on the
appropriate term Treasury Receipt Rate ranging from 6.04% to 6.91%, a weighted
average 5-year historical dividend yield ranging from 1.49% to 1.56%, and annual
stock price volatility ranging from 34.33% to 35.23%.

    Options vest upon the stock price reaching 120 percent of the grant price,
but no earlier than 12 months from their grant date. The options also vest on
the fifth anniversary of their grant date or upon a change in control of the
Corporation. If options vest upon a change in control and, as a result, an
executive becomes subject to excise taxes, the Corporation will make certain
gross-up payments on behalf of the executive.

    * Replacement options vest one year from their grant date.

2000 OPTION EXERCISES AND YEAR-END VALUE TABLE



                                                              NUMBER OF SECURITIES          VALUE OF UNEXERCISED
                                                             UNDERLYING UNEXERCISED             IN-THE-MONEY
                               SHARES                          OPTIONS AT 12/31/00           OPTIONS AT 12/31/00
                             ACQUIRED ON       VALUE       ---------------------------   ---------------------------
NAME                          EXERCISE       REALIZED      EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
----                         -----------   -------------   -----------   -------------   -----------   -------------
                                                                                     
Albert L. Lord.............    347,459     $6,228,654.27     356,040        813,692      $10,234,008    $18,759,222
Thomas J. Fitzpatrick......          0     $          --     386,629        384,962      $ 7,860,818    $ 8,816,030
James C. Lintzenich........          0     $          --           0        700,000      $        --    $21,000,000
J. Paul Carey..............    100,000     $1,747,347.50     233,332        345,919      $ 5,721,375    $ 7,874,997
Robert R. Levine...........          0     $          --     179,885        170,001      $ 5,504,992    $ 4,506,271


    During the year, Named Executive Officers who exercised stock options held
all shares acquired from the exercise after selling only the number of shares
necessary to cover the cost of an exercise (including taxes). This entitled the
Named Executive Officers to grants of replacement options and accomplished a
corporate objective of encouraging option holders to become shareholders. The
table above sets forth information on the number and the value of exercisable
and unexercisable stock options held by the Named Executive Officers as of the
fiscal year-end (calculated by the difference between the Corporation's fiscal
year-end stock price and the option's exercise price), based upon a year-end
stock price of $68.00 per share.

                                       17

PENSION PLAN BENEFITS

                        ANNUAL NORMAL RETIREMENT BENEFIT
                  CALCULATED AS A SINGLE LIFE ANNUITY (AGE 62)



                                    YEARS OF SERVICE
    FINAL AVERAGE       -----------------------------------------
    COMPENSATION           15         20         25         30
---------------------   --------   --------   --------   --------
                                             
     $  500,000         159,573    212,764    265,955    319,146
        600,000         192,573    256,764    320,955    385,146
        700,000         225,573    300,764    375,955    451,146
        800,000         258,573    344,764    430,955    517,146
        900,000         291,573    388,764    485,955    583,146
      1,000,000         324,573    432,764    540,955    649,146
      1,100,000         357,573    476,764    595,955    715,146
      1,200,000         390,573    520,764    650,955    781,146
      1,300,000         423,573    564,764    705,955    847,146


    Under the Corporation's regular and supplemental pension plans, participants
accrue benefits under a cash balance formula. Under the formula, each
participant has an account, for record keeping purposes only, to which credits
are allocated each payroll period based on a percentage of the participant's
compensation for the current pay period. The applicable percentage is determined
by the number of years of service the participant has with the Corporation. If
an individual participated in the Corporation's prior pension plan as of
September 30, 1999 and met certain age and service criteria, the participant
("grandfathered participant") will receive the greater of the benefits
calculated under the prior plan, which uses a final average pay plan method, or
under the cash balance formula. Mr. Lord, Mr. Carey and Mr. Levine qualify as
grandfathered participants. Through December 31, 2005, Mr. Lintzenich's benefit
accrues under a formula, grandfathered from the USA Group transaction, that
takes into account compensation and age.

    The Corporation's supplemental pension plan assures that participants
receive the full amount of benefits to which they would have been entitled under
the pension plan but for limits on compensation and benefit levels imposed by
the Internal Revenue Code. For grandfathered participants, the amount of
compensation considered covered compensation for the prior supplemental pension
plan is the sum of the individual's salary and his annual bonus, up to 35% of
the prior year's salary. For all participants in the supplemental cash balance
plan (effective October 1, 1999), the amount of compensation is the sum of
salary and annual bonus.

    The table above illustrates the approximate annual pension that may be
payable to an employee in the higher salary classifications under the
Corporation's prior pension plans, final average pay plans, at age 62, as a
single life annuity. The benefit amounts shown are not subject to any deductions
for social security or other offset amount. The credited years of service as of
December 31, 2000 for Mr. Lord is 15 years, 9 months; Mr. Fitzpatrick 2 years,
4 months; Mr. Lintzenich 18 years, 1 month (includes service with USA Group);
Mr. Carey, 15 years, 3 months and Mr. Levine 19 years, 10 months. The estimated
annual benefit payable upon retirement at age 62 under the new cash balance
plans for each of these individuals is: Mr. Lord--$420,800;
Mr. Fitzpatrick--$215,300; Mr. Lintzenich--$530,200; Mr. Carey--$573,900; and
Mr. Levine--$460,100.

EMPLOYMENT AGREEMENTS

    The Corporation has entered into employment agreements with
Messrs. Fitzpatrick and Lintzenich. Their agreements provide for a base annual
salary of $400,000 (since adjusted to $500,000) and $500,000, respectively and
participation in the Management Incentive Plan. Mr. Fitzpatrick's agreement
provides for a term commencing on October 1, 1998 and continuing through
September 30, 2001; Mr. Lintzenich's agreement provides for a term commencing
July 31, 2000 and continuing through July 31, 2003, in each case unless
terminated earlier in accordance with certain specified events.

                                       18

    Each agreement provides for certain payments if the Corporation terminates
the executive's employment or if his employment is terminated by reason of death
or disability or within 18 months after a "change in control" of the
Corporation. For Mr. Fitzpatrick, the payment amount equals $2.0 million if his
employment terminates before September 30, 2001, the final year of his
agreement. For Mr. Lintzenich, the payment amount equals $5.0 million if
employment terminates before August 1, 2001, $3.0 million if such termination
occurs during the following year and $2.0 million if the termination date occurs
during the final year of the agreement. These payments are subject to being
grossed-up for any excise taxes payable by the executive and for taxes payable
on the gross-up amounts.

    The agreement with Mr. Lintzenich provides for grants of options for 700,000
shares and 200,000 shares of stock with vesting criteria based on performance
goals tied to his business responsibilities in connection with the acquisition
of the business operations of USA Group. The agreement with Mr. Fitzpatrick
provides for an annual retirement supplement in the event that his employment is
terminated by reason of death, disability, involuntary termination or following
a change in control of the Corporation during the term of the agreement, so that
his retirement benefits equal the greater of what is provided for under all of
the Corporation's retirement plans or what he would have received under the
retirement plans of his prior employer.

    Each agreement contains an agreement not to compete with the Corporation or
its affiliates for a period of two years following termination of employment for
any reason.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    During 2000, the Corporation loaned up to $1,000,000 to Mr. Lord, at a
variable interest rate equal to the current prime interest rate as reported in
the Wall Street Journal, for the purpose of funding his ownership of Corporation
common stock. The loan was paid in full in January 2001.

                     REPORT OF THE AUDIT/FINANCE COMMITTEE

    The Audit/Finance Committee has reviewed and discussed with management the
Corporation's audited financial statements as of and for the year ended
December 31, 2000.

    The Committee discussed with the independent auditors, Arthur Andersen, LLP,
the matters required to be discussed by Statement on Auditing Standards No. 61,
COMMUNICATION WITH AUDIT COMMITTEES, as amended, by the Auditing Standards Board
of the American Institute of Certified Public Accountants.

    The Committee received and reviewed the written disclosures and the letter
from the independent auditors required by Independence Standards Board Standard
No. 1, INDEPENDENCE DISCUSSIONS WITH AUDIT COMMITTEES, as amended, and have
discussed with the auditors the auditor's independence. The Committee considered
whether the provisions of non-financial audit services was compatible with
Arthur Andersen's independence in performing financial audit services.

    Following the reviews and discussions referred to above, the Committee
recommended to the Board of Directors that the financial statements referred to
above be included in the Corporation's Annual Report on Form 10-K for the year
ended December 31, 2000.

AUDIT/FINANCE COMMITTEE

William M. Diefenderfer, III, Chairman
A. Alexander Porter, Jr., Vice Chairman
Charles L. Daley
Ann Torre Grant
Benjamin J. Lambert, III
Barry L. Williams

                                       19

                            STOCK PERFORMANCE GRAPH

    The following graph compares the yearly percentage change in the
Corporation's cumulative total shareholder return on the common stock to that of
Standard & Poor's 500 Stock Index and Standard & Poor's Financial-Miscellaneous
Index. The graph assumes a base investment of $100 at December 31, 1995 and
reinvestment of dividends through December 31, 2000.

                               USA EDUCATION INC.
                       FIVE YEAR CUMULATIVE TOTAL RETURN

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]



                                                        BASE
COMPANY/INDEX                                           YEAR     12/31/96   12/31/97   12/31/98   12/31/99   12/31/00
-------------                                         --------   --------   --------   --------   --------   --------
                                                                                           
USA EDUCATION, INC..................................   100.0      144.0      218.3      267.2      238.5      389.7
S&P FINANCIAL -- MISC(1)(2).........................   100.0      130.3      198.8      260.0      332.1      407.7
S&P 500 INDEX(2)....................................   100.0      122.9      163.9      210.6      254.8      231.6


------------------------

(1) Companies included in Standard & Poor's Financial- Miscellaneous Index are:
    AFLAC Inc, AMBAC Financial, American Express, American General Finance, CIT
    Group Inc., Citigroup Inc, Federal National Mortgage Association, Federal
    Home Loan Mortgage Corporation, Franklin Resources Inc., MBIA Inc., MBNA
    Corporation, Metlife Inc., Moody's Corporation, Morgan Stanley Dean Witter,
    Stilwell Financial, T. Rowe Price, and USA Education, Inc.

(2) SOURCE: Bloomberg Comparative Return Table

                                 OTHER MATTERS

    As of the date of this proxy statement, there are no matters that the Board
of Directors intends to present for a vote at the Annual Meeting other than the
business items discussed in this proxy statement. In addition, the Corporation
has not been notified of any other business that is proposed to be presented at
the Annual Meeting. If other matters now unknown to the Board come before the
Annual Meeting, the accompanying proxy card confers discretionary authority on
the persons named on the proxy card to vote such proxies on any such matters in
accordance with their best judgment.

                                       20

SOLICITATION COSTS

    All expenses in connection with the solicitation of the enclosed proxy will
be paid by the Corporation. The Corporation has hired Georgeson Communication
Services, Inc. to solicit proxies for a fee of $7,000 plus reimbursement for
out-of-pocket expenses. In addition to solicitation by mail, officers,
directors, regular employees or other agents of the Corporation may solicit
proxies by telephone, telefax, personal calls, or other electronic means. The
Corporation will request banks, brokers, custodians and other nominees in whose
names shares are registered to furnish to beneficial owners of the Corporation's
common stock material related to the Annual Meeting, including the annual
report, this proxy statement and the proxy card to the beneficial owners of such
shares and, upon request, the Corporation will reimburse such registered holders
for their out-of-pocket and reasonable expenses in connection therewith.

SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING

    A shareholder who intends to introduce a proposal for consideration at the
Corporation's year 2002 Annual Meeting may seek to have that proposal and a
statement in support of the proposal included in the Corporation's proxy
statement if the proposal relates to a subject that is permitted under U.S.
Securities and Exchange Commission ("SEC") Rule 14a-8. To qualify for this, the
shareholder must submit the proposal and supporting statement to the Corporation
not later than December 7, 2001 and must satisfy the other requirements of
Rule 14a-8. The submission of a shareholder proposal does not guarantee that it
will be included in the Corporation's proxy statement.

    A shareholder may otherwise propose business for consideration or nominate
persons for election to the Board of Directors, in compliance with federal proxy
rules, applicable state law and other legal requirements and without seeking to
have the proposal included in the Corporation's proxy statement pursuant to
Rule 14a-8. The Corporation's Bylaws provide that any such proposals or
nominations for the Corporation's 2002 Annual Meeting must be received by the
Corporation after February 9, 2002 and on or before April 10, 2002. If, however,
the Corporation's 2001 Annual Meeting is called for a date occurring on or
before April 10, 2002 or after June 9, 2002, such proposals or nominations must
be received by the Corporation not later than the close of business on the 10th
day following the day on which notice of the 2002 Annual Meeting is given in
order to be considered at the Corporation's 2002 Annual Meeting. Any such notice
must satisfy the other requirements with respect to such proposals and
nominations contained in the Corporation's Bylaws. If a shareholder fails to
meet these deadlines or fails to comply with the requirements of SEC
Rule 14a-4, the Corporation may exercise discretionary voting authority under
proxies it solicits to vote on any such proposal.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

    Section 16 of the Securities Exchange Act of 1934 requires the Corporation's
executive officers and directors to file reports on their holdings of and
transactions in the Corporation's common stock. To the Corporation's knowledge,
for the fiscal year 2000 all of the Corporation's executive officers and
directors timely filed all required reports under Section 16, except Mr. Levine
failed to report a charitable gift of 170 shares of the Corporation's common
stock made in December, 2000.

                                       21

                                   EXHIBIT A

                              USA EDUCATION, INC.
                            AUDIT/FINANCE COMMITTEE
                           OF THE BOARD OF DIRECTORS
                   CHARTER OF RESPONSIBILITIES AND FUNCTIONS

    As authorized in the By-Laws and implemented by Resolution of the Board of
Directors, an Audit/ Finance Committee has been established for the purpose of
assisting the Board in fulfilling its responsibilities and providing oversight
relating to (1) the assessment and management of certain business risks,
including financial, operational, litigation and regulatory risks; (2) the
adequacy of internal controls and the integrity of reporting and information
systems; (3) the establishment of an effective independent audit function; and
(4) capital management and funding strategy.

AUTHORITY OF THE COMMITTEE:

    The Audit/Finance Committee has unrestricted access to all information
relating to the Corporation and its subsidiaries, including documents and
personnel. Adequate resources will be available for the Committee to fulfill its
oversight responsibilities.

THE FUNCTIONS OF THE COMMITTEE

    A. AUDIT REVIEW AND FINANCIAL REPORTING FUNCTIONS

    - Subject to any action that may be taken by the full Board, to select,
      evaluate and where appropriate, replace the independent auditor. The
      independent auditor is ultimately accountable to the Board of Directors
      and the Audit Committee.

    - To obtain a written representation regarding the independent auditor's
      role, its relationships with the Corporation and that in its professional
      judgement, it is independent of the Corporation and its related entities.
      To review the nature and extent of non-audit related services provided to
      the Corporation and its affiliates by the independent auditors and, in
      consultation with management, to review and approve all fees charged for
      independent auditing services.

    - To review with management and the independent auditors the Corporation's
      audited financial statements and significant accounting, tax and reporting
      issues underlying those statements, including the quality of the
      accounting principles applied and judgements made affecting the
      Corporation's financial statements. The Committee or its Chairman will
      discuss with management and the independent auditor any significant
      accounting issues regarding the Corporation's quarterly financial results
      prior to the release of such results to the public. The Committee will
      discuss with management and the independent auditors the financial
      statements to be included in the Corporation's Annual Report to
      Shareholders and on Form 10-K.

    - To review with the independent auditors, (i) the scope and results of
      their examination of the Corporation's financial statements and (ii) the
      scope of the annual operational audit plan and to receive, on a periodic
      basis, summary audit reports from completed audits, progress reports on
      the annual audit plan and a status report detailing actions taken, or to
      be taken, by management to address outstanding issues or findings.

    - To review with management and the independent auditors, the adequacy and
      effectiveness of the Corporation's internal business, financial and
      information system controls, and recommendations for establishing new or
      enhanced controls and procedures.

                                       22

    B. REVIEW OF CAPITAL AND RISK MANAGEMENT ACTIVITIES

    - To review the risk posture of the Corporation, including without
      limitation credit, interest rate, currency and significant operational
      risks, and review with management the steps taken to manage such risks.

    - To review with management the credit quality of asset acquisitions,
      including policies and procedures regarding credit approval and ordinary
      investment activity.

    - To review with management the methodology and adequacy of reserves for
      losses and contingencies.

    - To review with management, the Corporation's capital adequacy, credit
      standing, borrowing needs and proposed debt and equity programs.

    - To review with management the adequacy and appropriateness of insurance
      coverage.

    - To review with management and the independent auditors the implementation
      by the Corporation of appropriate legal and regulatory compliance
      measures, including compliance with the Corporation's Code of Business
      Conduct and tax compliance.

    - To review with management, significant pending or potential litigation
      against the Corporation and its subsidiaries.

    - To review proposed significant activities and investments outside the
      ordinary course of the Corporation's business.

    - To advise and consult with management on the financial impact of the
      Corporation's pricing and market strategies, including the periodic review
      of the annual plan, financial results, asset quality, and financing
      activity of the Corporation or its affiliates.

    - To oversee the Corporation's capital management policies, equity
      investments, proposed issuance of new equity by the Corporation and its
      affiliates, and plans to return excess capital to shareholders through
      dividends and share repurchase activity.

    - To declare and authorize payment of dividends on the Corporation's common
      stock.

FREQUENCY AND FORMAT OF MEETINGS:

    The Committee generally will meet at least two times a year. Meetings will
normally be attended by the independent auditors responsible for the
Corporation's audit function. Other directors may attend the meetings. At all
meetings of the Committee, sufficient opportunity will be made available for the
independent auditors to meet with the Committee without members of management
present.

MEMBERSHIP:

    The Board of Directors of the Corporation will designate at least four
directors to serve on the Audit/Finance Committee. The Committee membership will
meet the requirements of the audit committee policy of the New York Stock
Exchange (NYSE). A Chairman of the Committee will also be appointed by the
Board.

CHARTER REVIEW:

    This charter will be reviewed by the Audit/Finance Committee and the
Nominations and Governance Committee and updated as appropriate by the full
Board on an annual basis.

                                                            Revised May 18, 2000

                                       23