Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

As of June 29, 2009, The Student Loan Corporation (the Company) has drawn down an additional $4.6 billion of funding from the U.S. Department of Education sponsored conduit, Straight-A Funding, LLC (the Conduit), which raises the total borrowings since inception of the Conduit to $8.6 billion. Conduit expenses and interest and principal due on the funding are paid exclusively from cash collections related to the FFEL Program Stafford and PLUS loans that have been pledged to the Conduit (pledged loans). The interest rate on the funding obligations is variable and is based on the interest rates paid to holders of the short-term promissory notes issued by the Conduit.

The Conduit provides five year funding for pledged loans with a short-term liquidity backstop provided by the Federal Financing Bank (FFB). The Conduit obtains funding via the issuance of short-term promissory notes to private investors, with the proceeds used to either fund purchases of, or increases in, funding notes; or to repay existing short-term promissory notes. If the Conduit is not able to issue sufficient new short-term promissory notes in order to repay liquidity advances from the FFB or funding notes, the Company has the option of prepaying the funding note or selling the pledged loans to the U.S. Department of Education at a price equal to 100% of the accrued interest and outstanding principal of pledged loans with first disbursements made on or after May 1, 2008, and 97% of the accrued interest and outstanding principal of all other pledged loans.