Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. SALLIE MAE CAMPUS SOLUTIONS SALLIE MAE CAMPUS SOLUTIONS EMERGING TRENDS IN STUDENT BANKING MAY 2012

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 2 The information contained in this presentation is not comprehensive, is subject to constant change, and therefore should serve only as general, background information for further investigation and study related to the subject matter and the specific factual circumstances being considered or evaluated. Nothing in this presentation constitutes or is designed to constitute legal advice. Introduction SALLIE MAE BANK

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 3 Objective Understand the new world of banking options available to students Learn what students know and dont know and how that impacts their decision-making Process Invest in understanding the bank/student relationship –How are banks reaching out/marketing to students? –How will students receive information on best practices for managing their financial life? Background SALLIE MAE BANK

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved Student Banking Lifecycle SALLIE MAE BANK Before Enrollment In SchoolPost Grad

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 5 SALLIE MAE BANK Before Enrollment

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 6 Banks market to prospective students who have a history of good credit or have parents willing to co-sign for them Financial services companies market to students and parents to establish long-term relationships When evaluating the numerous services available, students should consider: –Where can deposits and other banking transactions be made easily? –Will parents make deposits on their behalf? –Are online banking and branch locations available for both students and parents? The Environment SALLIE MAE BANK

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 7 Banks need to tailor their message to both parents and students When parents are involved with their childs financial literacy education it is a Win/Win for both the family and your institution Parent involvement in student finances can positively influence your relationship with the student Savvy parents look for a financial institution offering a full suite of products; working with one company can save time and avoid the aggravation of dealing with multiple banks Parental Involvement SALLIE MAE BANK

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 8 Keep the Conversation Going Schools provide valuable information to students ahead of campus arrival Put prospective and current students in touch with on-campus resources, websites, blogs, Facebook pages where they can gather the information they need Your awareness of the latest trends in student banking can make the student and parent more confident in their school choice Ongoing Communication SALLIE MAE BANK

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 9 SALLIE MAE BANK In School

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 10 The Environment: Align Needs & Objectives SALLIE MAE BANK STUDENTS CAMPUS Bill Processing Payment Processing Convenience fee model and cost associated with accepting credit cards Tuition Payment Plans Managing institutional cash flow Refund Processing Student fees associated with credit card usage Checking /Saving Accounts Mobile Banking Credit Cards ATMs Convenience Cash flow Access Security Align Common Needs and Objectives

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 11 Students should look for: –Access to funds with 24/7 account accessibility –Account security; online secure forms and electronic signature capabilities –Competitive interest rates and minimal fees –Low or no fee ATM access Student Banking

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 12 Establishing long term checking/savings accounts and good credit is an advantage for students and parents alike Students may not know what they need – they should be thinking about: –No minimum balance requirement –Free ATM/check card –Free ATM usage –Free online checking account –Free online eBill Pay –Free direct deposit –Overdraft protection; avoidance of fees Student Banking SALLIE

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 13 Not just online anymore This is the future of banking Consumers are adapting quickly Users check account balances, transfer funds, send money, make payments and other account transactions, payments etc. via a mobile device: cell phones, iPhones ®, BlackBerry ® or iPads ® Advantages? Mobile access to information keeps students aware of account balances, can help to avoid over-drafts and incurring fees associated with overdrafts. Mobile Banking

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 14 Just over 2 in 5 college students have a credit card; 49%, of student respondents replied they have a credit card; 35% of parent respondents said their student have a card Among students with credit cards, it is primarily the students themselves making monthly payments 64% percent of card-holding students make monthly payments as opposed to 28% of parents making payments for students –Those parents who contributed toward their students credit card pay an average of $259 per month –Students making a monthly credit card payment pay an average of $168 per month The Reality of Credit Cards *2010 How America Pays for College," Sallie Maes National Study of College Students and Parents Conducted by Gallup; full study available at

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 15 The Reality of Credit Cards *2010 How America Pays for College," Sallie Maes National Study of College Students and Parents Conducted by Gallup; full study available at Student average monthly credit card payment: $168

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 16 The Credit Card Accountability, Responsibility and Disclosure Act of 2009 ; in effect February 22, 2010 Also known as The Credit Card Act 2010, mandates reforms for the credit card industry, such as limiting when banks and other issuers can increase annual percentage rates (APRs) and gives cardholders more time to pay their monthly credit card bills Also includes several measures aimed at young consumers and college students regarding offers of credit –Student applicants under 21 required to have a co-signer; or proof of ability to pay –Prohibits incentives (t-shirts, iPod raffles ) for submitting an application for credit –Prohibits credit reporting agencies providing credit reports to card companies unless the consumer requests they do so –Requires annual disclosures regarding marketing or promotional agreements institutions have with credit card companies for affinity programs The law also urges institutions to –Adopt policies that appropriately manage credit card marketing on their campuses, including requiring advance notice of when companies will be on campus and limiting the locations of marketing activities –Require credit and debt management sessions as a part of new student orientation programs Recent Legislations & State Actions SALLIE MAE BANK

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 17 Students and Parents want more information on financial management Preferred topics: –Debt management Student loan repayment (67%) Debt reduction strategies (50%) –Money management Budgeting (46%) Savings strategies (45%) –Ways to pay for school Financial aid resources (42%) Paying-for-college planning (35%) Student Financial Management SALLIE MAE BANK *2010 How America Pays for College," Sallie Maes National Study of College Students and Parents Conducted by Gallup; full study available at

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 18 Examples: Financial Education Resources SALLIE MAE BANK Education Investment Planner SallieMae.com/invest Free online tool, for families to quickly estimate the total cost of college and find ways to save and pay for it Upromise-College Planning Resource Center Upromise.com/college Free online tool, for families to quickly estimate the total cost of college and find ways to save and pay for it Upromise Investments com Upromise Investments' educational college savings website for over 20 college savings plans across 11 states. The main focus is to help all families invest for college

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 19 MyMoney.gov FinAid.org/savings StudentAid.ed.gov 360FinancialLiteracy.org FinancialLit.org JumpStart.org Examples: Financial Education Resources SALLIE MAE BANK

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 20 SALLIE MAE BANK Post Grad

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 21 Students who are careful in college by not overdrawing their student bank account, exceeding their credit limit nor forgetting to pay a few bills will see their efforts rewarded in a positive credit history Maintaining good credit is one of the most fundamental ways to ensure a person has access to borrow funds for a car or a home and potentially at a lower interest rate for even greater savings Potential next steps: paying for graduate school and/or beginning to save for a child's higher education Focus on a Students Future SALLIE MAE BANK

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 22 SALLIE MAE BANK Conclusions

Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved. 23 Reinforce the importance of financial literacy Communicate the short- and long-term benefits of building good credit Advocate responsible banking practices by students and families to help control debt Shared Goals for Schools & Financial Institutions SALLIE MAE BANK