December 2010 - The Student Loan Corporation announced that it has entered into a memorandum of understanding with plaintiffs' counsel in connection with putative class action lawsuits filed in the Chancery Court for the State of Delaware and the Superior Court of the State of Connecticut in connection with (i) the Company's merger agreement with Discover Financial Services and the merger contemplated thereby; (ii) the Company's agreement with SLM Corporation pursuant to which affiliates of SLM Corporation will acquire from the Company certain securitized federal student loans and related assets; and (iii) the Company's agreement with Citibank, N.A., pursuant to which Citibank will acquire from the Company certain federal and private student loans and other assets. Under the terms of the memorandum, The Student Loan Corporation, the other named defendants, and the plaintiffs have agreed to settle the lawsuits, subject to court approval. The Company and the other defendants have agreed to settle the putative class action lawsuits in order to avoid the burden and expense of continued litigation. Pursuant to the terms of the memorandum, subject to the effectiveness of the DFS Merger and certain other customary conditions, including court approval of a final settlement agreement, in consideration for the full settlement and release of all defendants, the amount of $2.50 cash per share will be distributed by Citibank to those persons who are the Company's stockholders of record immediately prior to the effective time of the DFS Merger (excluding Citibank, Discover and their affiliates). At this point, the settlement agreement is not final and is subject to a number of future events including approval of the settlement by the Court. There can be no assurance as to the timing of the payments described above.
September 2010 - An investor in the Student Loan Corp. (NYSE:STU) securities filed a lawsuit in State Court alleging the minority public shareholders of Student Loan Corp. (NYSE:STU) will be shortchanged in the planned $600 million acquisition of the Student Loan Corp. (NYSE:STU) by Discover Financial Services.

According to the complaint the plaintiff alleges that Student Loan Corp. majority owner Citigroup Inc.'s proposed $600 million sale of the Student Loan Corp. to Discover Financial Services shortchanged minority shareholders by valuing shares at less than half SLC's book value. Citigroup Inc. owns 80 percent of Student Loan Corp. On Friday, September 17, 2010, The Student Loan Corporation (NYSE:STU), announced that The Student Loan Corporation and Discover Financial Services have entered into an agreement for Discover Financial Services to acquire The Student Loan Corporation, and thereby become the owner of its private student loan business as well as $4 billon of its private student loans. Under the terms of the agreement shareholders of Student Loan Corporation will receive $30 per STU share they hold. Separately and immediately prior to the transaction, SLM Corporation will acquire from Student Loan Corp $28 billion of securitized federal student loans and related assets and Citibank will acquire from Student Loan Corporation certain federal and private student loans and other assets totaling $8.7 billion. The transaction has been approved by the SLC Board of Directors.

The plaintiff alleges that Citigroup Inc put its own “desperate need to raise cash and divest non-core banking assets in the short term” ahead of the needs of Student Loan Corp and the deal is “underpriced”. Even though shares of The Student Loan Corp. (NYSE:STU) traded the day before the announcement at $21.20 per share and STU shares jumped to $29.86 per share or by over 40% after the news, STU shares traded as recently as May as high as $29.69 per share, during April as high as $37.14 per share, in March over $37.50 per share, and in February as high as over $44 per share. Thus well above the current price offered. During 2009 STU shares traded several months at even over $50 per share, in 2008 as high as $135.26 per share, during 2007 over $200 per share, and in 2006 at almost $240 per share.