Student Lending Analytics Flash Survey Update: FFEL and Direct Lending Trends March 15, 2010

1. Student Lending AnalyticsFlash Survey Update: FFEL and Direct Lending TrendsMarch 15, 2010 This presentation does not constitute formal policy or legal advice and should not be relied upon as such.

2. SLA Flash Survey: FFELP and DL Trends Background • Situation • Student aid bill may be part of reconciliation package with health care overhaul which could be voted upon as early as this week • Survey Goals • Determine where schools are in the decision-making process when it comes to the federal student loan program for 2010-11 • Identify steps that schools have taken to prepare for a potential transition to the Direct Loan program • Generate ideas for improving the implementation process for the Direct Loan program

3. SLA Flash Survey: FFELP and DL Trends Methodology • Emailed flash survey on March 10, 2010 with due date of March 12, 2010. • In addition to demographic questions, the survey had the following questions: • Please select the choice which best describes your institution's current plans for the 2010-2011 academic year? • [For those transitioning to Direct Lending] Describe your overall level of satisfaction with the implementation process to date. • [For those transitioning to Direct Lending] What single resource has been most helpful to you and your team? • CHECK ALL THAT APPLY. My institution (either myself or other staff members) has taken the following steps to prepare for Direct Lending should that become the platform for loan origination as well as servicing in 2010-11: • COMMENT ON THIS STATEMENT. The administration at my institution is interested in having a contingency plan prepared to implement Direct Lending by the proposed July 1, 2010 start date.

4. SLA Flash Survey: FFELP and DL Trends Methodology (continued) • Responses were normalized for following reasons • Email addresses that did not correspond with an educational institution were excluded • Several schools provided multiple responses; only one response was analyzed • Overall, 365 responses from financial aid administrators were included in the analysis

5. SLA Flash Survey: FFELP and DL Trends Insights • Seventy two percent (72%) of respondents to the survey are currently in Direct Lending (24% of respondents) or have committed to move to DL for the 2010-11 school year (48%). • These figures are up from 47% from the November 2009 survey when 24% of respondents were in Direct Lending and 23% had committed to move to DL for 2010-11 school year. • 17% of respondents indicated that they were preparing for DL but had not fully committed to implementing it. • 2% indicated that they would “only begin preparations for a transition to Direct Lending when required by legislation.” • Overall, 2% of survey respondents indicated that they had not completed any of the listed activities (there were twelve in the survey) to prepare for a possible transition to Direct Lending • The five most frequently cited activities that respondents are undertaking/have undertaken to prepare to implement Direct Lending are: • Participating in Direct Lending webinars • Contacting the COD School Relations Center to request participation in DL program • Reviewing materials on the Direct Lending website • Updating the PPA • Attended the FSA Conference

6. SLA Flash Survey: FFELP and DL Trends Insights (Continued) • 97% of schools found the direct lending implementation process to be acceptable or better • 16% of respondents indicated that they were “very satisfied”, 52% “satisfied” and 29% found the implementation process to be “acceptable” • Over 2/3 of respondents “agree” or “strongly agree” that their school administration is interested in having a contingency plan in place to implement DL by the July 1, 2010 deadline.

7. SLA Flash Survey: FFELP and DL Trends Profile of Survey Participants

8. SLA Flash Survey: FFELP and DL TrendsCurrent Plans For 2010-11 (Overall) Survey question #1: Please select the choice which best describes your institution's current plans for the 2010-2011 academic year?

9. SLA Flash Survey: FFELP and DL TrendsCurrent Plans For 2010-11 (4-Year Private) Survey question #1: Please select the choice which best describes your institution's current plans for the 2010-2011 academic year?

10. SLA Flash Survey: FFELP and DL TrendsCurrent Plans For 2010-11 (4-Year Public) Survey question #1: Please select the choice which best describes your institution's current plans for the 2010-2011 academic year?

11. SLA Flash Survey: FFELP and DL TrendsCurrent Plans For 2010-11 (2-Year Public) Survey question #1: Please select the choice which best describes your institution's current plans for the 2010-2011 academic year?

12. SLA Flash Survey: FFELP and DL TrendsActivities To Prepare for DL – Overall Survey question #2: CHECK ALL THAT APPLY. My institution (either myself or other staff members) has taken the following steps to prepare for Direct Lending should that become the platform for loan origination as well as servicing in 2010-11:

13. SLA Flash Survey: FFELP and DL Trends Most Important Resource For Implementing DL • Listservs • “Emails from listservs that I belong to…” • “Other schools on our enterprise software user listserv.” • Department of Education/COD • “The Department direct lending transition process and newsletters as well as being assigned a DOE rep to help with the transition.” • WE have had several conference calls with the DL staff at the department. THey have been extremely helpful. • “Barbara Davis with Dept of Education has been absolutely wonderful!! • “Catherine Lee, our USDE Direct Lending contact person” • “Christopher Smith, the client rep from USDE helped us with setup.” • “Federal Student Aid and NASFAA training.” • “The DL "onboarding team" has been a great help. We have had a contact person who is extremely knowledgeable about all aspects of DL.” • “COD staff assigned to assist with school implementation.” • “COD testing liason”

14. SLA Flash Survey: FFELP and DL Trends Most Important Resource • Peers • “Site visit to another institution already processing DL.” • “Training with another DL school on the same FA system.” • “Professional Colleagues” • “Discussions with other schools” • “Copying what schools have done before us.” • Software guides/consultants • Software vendor consultant is helping is with the process. • “Lists from our FAMS on what steps should be taken for transition.” • We also spent the money to have a Datatel consultant come in for 2 days to help us move things along.” • “Banner consultant” • “Powerfaids manual”

15. SLA Flash Survey: FFELP and DL Trends Satisfaction With Implementation Process Survey question: Describe your overall level of satisfaction with the implementation process to date.

16. SLA Flash Survey: FFELP and DL Trends Ideas To Improve DL Implementation Process • Difficulty of getting other departments on board • “Our Business Office staff seems resistant to the fact that they are a vital part of making our switch to Direct Lending a successful one.” • “Our business office folks have not plugged in as much to the G5 process as we think they ought to. They will be surprised!” • Support from COD • “COD support is flagging. Difficult to access and numerous wrong answers. COD needs improvement.” • One-to-one resources • “Webinars and workshops have been a good tool, but I wish I were assigned someone specific from the Dept of Ed to help me with the transition.” • “Need money for consultant to help with the conversion and training.” • “The dept should have personnel available to visit schools to help with implementation.”

17. SLA Flash Survey: FFELP and DL Trends Ideas To Improve DL Implementation Process • Website updates • “Quicker updates from the Department of Education. Have a website starting March 26th, but it feels like the deconstruction of the FFEL program began in November of last year. If the Feds were going to push this without the July 1st decision, then they themselves should have been more prepared.” • “Bring up the new website for PLUS loans asap!” • Testing • “Being able to test files sooner. I am told by the person who handles this that the Dept. has specific guidelines on when to start testing, and the amount of records that can be tested.” • “Provide more opportunities for testing the COD data flow in our system.” • “DL was quite inflexible with testing.”

18. SLA Flash Survey: FFELP and DL Trends Ideas To Improve DL Implementation Process • Software vendor issues • “Provide software-specific (i.e., Banner, Datatel, PeopleSoft, etc) opportunities to learn about appropriate process flows.” • “PowerFAIDS is late in with acceptable modules.” • “Powerfaids software support” • ONE implementation guide • “Found multiple descriptions of steps for implementation (from DL coalition, from DL servicing, from NASFAA) and they did not all match. Would be nice if there was one absolute step-by-step that all agencies and organizations would point schools to.” • Dissatisfaction with Congress • “Congress needs top act sooner so that schools can make a decision. By not doing so, yet indicating that "if it passes it will be in effect for 7/1/2010", they have given schools no other choice but to prepare their processes as if Direct Lending for all is definitely going to happen, whether it passes or not. We are being blackmailed into going Direct whether we want to or not, even if the bill doesn't pass or if the legislation delays implementation for another year.”

19. SLA Flash Survey: FFELP and DL Trends School Administration’s Interest In Direct Lending Survey question: COMMENT ON THIS STATEMENT. The administration at my institution is interested in having a contingency plan prepared to implement Direct Lending by the proposed July 1, 2010 start date.

20. Thank You • Thank you again for your participation! • Please contact Tim Ranzetta if you have any additional comments or questions regarding this survey • Email: tranzetta@studentlendinganalytics.com • Phone: 650-218-8408 • For more information on Student Lending Analytics, proceed to the final two slides

21. Student Lending AnalyticsBackground • Founded in 2007 • Independent Research and Advisory Service with NO lender affiliations • Mission: Find best lenders for students through an analytically rigorous and comprehensive process • Services • RFI Management of FFEL and Private Loans • Research • Successes to Date • Managed RFI process at institutions with over $600 million in loan volume • Inside Student Lending, our monthly newsletter, reaches over 5,000 financial aid administrators • Student Lending Analytics Blog has become the go-to source for breaking developments and analysis on the student lending industry • SLA Flash Surveys have included the insights from over 1,500 financial aid professionals on a variety of timely topics • Private Loan Options and the SLA’s 2008 Alternative Loan Guide provides students and financial aid offices with an objective and focused list of private lenders

22. Student Lending AnalyticsResources Available • SLA Private Student Loan Ratings • 2009 SLA Private Loan Series • Ten part series on topics ranging from finding a cosigner to reading the promissory note • Student Lending Analytics Blog • Timely, insightful information about the student loan market • Private Loan Insight Survey • Student Satisfaction Surveys