1. Jackson, Mississippi May 22, 2008
Student Loan Summit
Jackson, Mississippi
May 22, 2008

3. Current Environment Recent History Impact Why?---The Perfect Storm
Good Reading
Recent Legislation
The Last 24 Hours

4. Recent History Exodus of Lenders from FFELP
Exodus of Lenders from Consolidation Market
Exodus of Lenders from Private Student Loan Market

5. Impact Loss of Front-end Pricing Benefits
Reduced or elimination of Back-end Borrower Benefits
Reduced Service Levels
Limited availability to certain sectors and students
More restricted availability of Private Loans at higher prices

6. Why?---The Perfect Storm
College Cost Reduction and Access Act of 2007—Reduced Margins and Insurance
Sub Prime Credit Crisis spreads to Student Loans—No liquidity for new loans
“Congress took away half the lender profits and the credit crisis took the other half.”

7. Good Reading
NASFAA’s “The Student Loan Credit Crunch” published 4/29/2008
Mark Kantrowitz”s “Solving the Student Loan Credit Crunch” published 3/10/1008 and updated 4/30/2008
Tim Ranzetta’s Student Lending Analytics

8. Recent Legislation
HR 5715 Ensuring Continued Access to Student Loans Act of 2008
--DOE able to act as secondary market for FFELP
--Increased Unsubsidized Stafford Loan Limits for Undergraduates
--PLUS Loan Modifications
--Lender of Last Resort Provisions
HR 5914 & HR 5723

9. The last 24 Hours Dear Colleague Letter of May 21, 2008
Sallie Mae’s Announcement of May 21, 2008

10. Guarantors Respond To Survey Tool
Survey Results
May 22, 2008

11. All Sectors – FFEL Loans Originated Between 7/01/06 and 6/30/07
Current Guaranty Agencies Ranked by Dollars Disbursed

12. Guarantor 2008 Survey Results Pricing Top 5 Guarantors for MS respond
What pricing/repayment benefit changes have been made for FY 09?
USA Funds – for loans guaranteed on or after Feb 1, 2008, USAF will subsidize from its non-federal resources, one half (1/2) of the 1% federal default fee, when the origination
NSLP – Has extended the ½% FDF through 6/30/09
TSAC – Has begun paying the 1% FDF on behalf of the borrowers for all institutions, all loan types, and all lenders.
TG – Will continue to subsidize the 1% FDF for Stafford and PLUS loans for student and parent borrowers for 08/09
ASA – Making no changes to pricing and repayment benefits for the upcoming year. ASA continues to charge the 1% FDF.

13. Guarantor 2008 Survey Results Changes Top 5 Guarantors for MS respond
What changes in terms of the type of schools, students and parents do you plan to serve in FY 09?
USA Funds – None
NSLP – None
TSAC – None
TG – None
ASA - None

14. Guarantor 2008 Survey Results Outlook Top 5 Guarantors for MS respond
What is the outlook in terms of capacity to guarantee Federal Student Loans in FY 09?
USA Funds – No limits or curtailments are planned
NSLP – No limits or curtailments are planned
TSAC – No limits or curtailments are planned
TG – No limits or curtailments are planned
ASA – No limits or curtailments are planned

15. Guarantor 2008 Survey Results Internal Changes Top 5 Guarantors for MS respond
What internal changes have been made by your organization in terms of marketing, personnel, customer service representation and other support resources in light of the current student lending issues?
USA Funds – No staffing or organizational changes
NSLP – No Cutbacks
TSAC – Checking with schools to determine lender changes requiring systematic changes to the guarantor system
TG – No major internal changes are currently expected
ASA – No changes

16. Are you continuing to guarantee Federal Consolidation Loans?
Guarantor 2008 Survey Results Continuing Top 5 Guarantors for MS respond
Are you continuing to guarantee Federal Consolidation Loans?
USA Funds – Yes
NSLP – Yes
TSAC – Yes
TG – Yes
ASA - Yes

17. NSLP – No TSAC – No TG – No ASA - No
Guarantor 2008 Survey Results Changes to Terms/Benefits Top 5 Guarantors for MS respond
Have you made any changes in your requirements and/or terms/benefits? If so, what?
USA Funds – No
NSLP – No
TSAC – No
TG – No
ASA - No

18. Guarantor 2008 Survey Results Contingency Plans Top 5 Guarantors for MS respond
What contingency plans do you have for FY 08/09 given the current student loan environment?
All Guarantor’s have a plan to address potential gaps and are working with the U.S. Department of Education’s requirement to submit a LLR plan

19. Guarantor 2008 Survey Results Top 5 Guarantors for MS respond Information
What information do you expect to receive at the Summit?
Hear of the concerns of the schools and how we can assist MS financial aid community and the students we serve
A better understanding as to what schools are planning for 09/10
A sense from the schools about concerns on preferred lender lists, LLR, funding shortfalls and HR 5715
The many challenges in funding and access in higher education faced by schools in MS
To reassure schools of our commitment to them and the students they serve and the availability of FFEL funds in the future

20. Lenders Respond To Survey
Survey Results
May 22, 2008

21. Lenders by Dollars Disbursed between 7/01/06 and 6/30/07
All Sectors Original Lender for student Attending Schools in the State Top Ten (10)
Lenders by Dollars Disbursed between 7/01/06 and 6/30/07

22. Lender 2008 Survey Results Products Offered
Loans products provided
BancorpSouth – Stafford, Undergraduate/Graduate PLUS
Brazos Student Lending – Stafford, Undergraduate/Graduate PLUS, Private (Alternative)
CampusDoor – Private (Alternative) only
Citibank – Stafford, Undergraduate/Graduate PLUS, Private (Alternative)
Citizens Bank of Philadelphia – Stafford, Undergraduate/Graduate PLUS
Education Services Foundation – Stafford, Undergraduate/Graduate PLUS
First Tennessee Bank – Stafford, Undergraduate/Graduate PLUS, Private (Alternative)
Hancock Bank – Stafford, Undergraduate/Graduate PLUS

23. Lender 2008 Survey Results Products Offered Continued
Regions Bank – Stafford, Undergraduate/Graduate PLUS, Private (Alternative)
Renasant Bank – Stafford, Undergraduate/Graduate PLUS
SallieMae/Sallie Mae Education Trust – Stafford, Undergraduate/Graduate PLUS, Private (Alternative)
Trustmark National Bank – Stafford, Undergraduate/Graduate PLUS
Wells Fargo Bank – Stafford, Undergraduate/Graduate PLUS, Private (Alternative)

24. Lender 2008 Survey Results Sources
What is the source(s) of funding used to originate your loans?
Premiums from sale of loans to secondary markets. Interest income less cost of funding and expenses.
Commercial lines of credit Securitization
Line of credit is funding source to originate loans which includes provision to sell loans within a specified timeline after the final disbursement of such loans.
Bank’s own funds; from lines of credit, shareholders, etc.
Uses deposits from Consumer, Business and Commercial sources to create and originate funding for student loans.
Asset backed securitizations
Funding is based on bank sources

25. Lender 2008 Survey Results Pricing
What pricing/repayment benefit changes have been made for 2008/2009?
BancorpSouth – No front end or back end benefits due to the programs being eliminated by our secondary markets
Brazos Student Lending – Elimination of benefits that allowed the lender to pay the federal and guarantor fees on behalf of the borrower
Citibank – Origination fee is now paid by Stafford Loan borrowers. The Federal Default Fee (FDF) is now paid by the borrower unless the borrower uses a guarantor who pays the fee
Citizens Bank of Philadelphia – No longer offer zero (0) fee loans and no longer offer 2% interest rate reduction for auto debt
Education Services Foundation – No payment of upfront fees; no repayment benefits
First Tennessee Bank – All borrower benefits have been eliminated for

26. Lender 2008 Survey Results Pricing (Continued)
Hancock Bank – No longer offer zero (0) fee loans or the 2% interest rate reduction for auto debit
Regions Bank – Discontinuing subsidy of Stafford Loan origination fee for loans guaranteed after May 2, 2008
Renasant Bank – No longer subsidize default and origination fees nor offer repayment benefits (interest rate reduction for ACH payments
SallieMae/Sallie Mae Education Trust – Benefits and repayment incentives and the terms of private loan programs vary by school, servicer, guarantor (if applicable) and other factors
Trustmark National Bank – No longer offer 2% rate reduction in repayment benefit on all loan products
Wells Fargo Bank – interest reduction rate of .050% at repayment; interest rate reduction during repayment (.025%) for automatic withdrawals from a checking or saving account; no longer paying FDF or origination fee for fedreral loans after July 1, 2008

27. Lender 2008 Survey Results Changes
As of this date what changes in terms of the types of schools, students and parents do you plane to serve in
BancorpSouth – Will lend to borrowers attending an eligible MS school, and will lend to MS residents attending out of state eligible school
Brazos Student Lending – None
Citibank – Will suspend lending at certain schools where loans with lower balances and shorter interest earning periods result in unsatisfactory financial returns. Citizens Bank of Philadelphia - None
Education Services Foundation – None
First Tennessee Bank – None

28. Lender 2008 Survey Results Changes Terms/Types (Continued)
Hancock Bank - None
Regions Bank – None
Renasant Bank – borrowers must be attending an eligible MS school or a MS resident attending an eligible out of state school
SallieMae/Sallie Mae Education Trust – None
Trustmark National Bank – None
Wells Fargo Bank - None

29. Lender 2008 Survey Results Outlook
As of this date what is the outlook in terms of capacity or originate Federal Student Loans in 2008/09?
BancorpSouth – Will be originating loans for this loan period
Brazos Student Lending - 0% funding suspended until portfolio can be securitized
Citibank – Continues to have the necessary funding available to originate student loans
Citizens Bank of Philadelphia – Continues to have funding available for student loan for FY 08/09
Education Services Foundation – Does not currently anticipate a lack of funding for the AY 08/09
First Tennessee Bank – Outlook is still good

30. Lender 2008 Survey Results Outlook (Continued)
Hancock Bank – Has available student loan funds for 08/09
Regions Bank – Not changing it’s capacity to originate Federal Student Loans in 08/09
Renasant Bank – If no further negative impact to the student loan industry, plans are to originate as in the past
SallieMae/Sallie Mae Education Trust – Has funds available for funding both student loans and general corporate purposes
Trustmark National Bank – Does not have a set capacity at this time and are still open for all originations at this point
Wells Fargo Bank – Has available student loan funds for 08/09

31. Lender 2008 Survey Results Private/Alternative Loans
What is the Outlook in terms of capacity to originate Private (Alternative) Loans for applicants in 08/09?
Brazos Student Lending – 30% Some trading partners have abandoned their programs
Campus Door – Continues to have the necessary funding available
Citibank – Continues to have the necessary funding available
First TN – Outlook is good
Renasant – No plans to change
Sallie Mae/Sallie Mae Education Trust – Continues to have the necessary funding available
Wells Fargo – Continues to have necessary funding available

32. Lender 2008 Survey Results Internal Changes
What internal changes have been made by your organization in terms of marketing, personnel, customer service representation and other support resources in light of the current student lending environment?
BancorpSouth – Reduction in marketing as a result of the Sunshine Act, elimination of three (3) positions in other states as our policy changed on 1/08 only originate for MS schools and MS residents attending in or out of state institutions
Brazos Student Lending – 60% of workforce will be eliminated by 10/01/08
Citibank – Unable to determine their comment due to space on the site
Education Services Foundation – Decreased marketing and efforts and budget
Sallie Mae/Sallie Mae Education Trust – Currently making changes in response to the College Cost Reduction and Access Act of 2007

33. Lender 2008 Survey Results Internal Changes (Continued)
Citizens Bank of Philadelphia – None
First Tennessee Bank – To date no changes have been made in this area
Hancock Bank - None
Regions – To date no changes
Renasant Bank – Personnel and customer service has not changed
Wells Fargo - None at this time

34. Lender 2008 Survey Results Consolidation Loans
Are you continuing to originate Federal Consolidation Loans?
All responses were no

35. Lender 2008 Survey Results Contingency Plan
What contingency plan do you have for 2008/2009 given the current student lending environment?
BancorpSouth – Lending in MS and MS residents attending an eligible out of state school
Brazos Student Lending – Diversify business in lines that are complimentary to our non-profit mission
Citibank –
Citizens Bank of Philadelphia – Continue to serve our students
Education Services Foundation – If no changes to the student loan environment occur over the next several months we will attempt to amend our line of credit to allow us to hold the loans for an extended period of time to work in conjunction with MHEAC
First Tennessee Bank – Other than eliminating borrower benefits FTB plans to operate basically has it has in past years

36. Lender 2008 Survey Results Contingency Plan (Continued)
Hancock Bank – To continue to offer our commitment and involvement within our community and the student loan industry
Regions – Committed to student lending as one of the many services and products that are provided to it’s customers
Renasant Bank – Plans to continue originating student loans for 2008/ Any future plans will be dependent upon the U.S. Department of Education
Sallie Mae/Sallie Mae Education Trust – Secure
Trustmark – To move forward in the program utilizing low key marketing strategy, prepared to hold loans for a longer period of time until the market makes and turn and our loans can be purchased
Wells Fargo – Actively evaluating pending legislative changes and the evolving student lending environment

37. Lender 2008 Survey Results Information?
What information do you expect to receive at the Student Loan Summit?
To reassure Mississippi Universities and Colleges that they are committed to the loan industry, to students, parents and schools and to financing higher education
To learn the reaction of schools of current market conditions and their plans for the future
Other school and lender thoughts on the future of the student loan industry
A hope that the majority of schools, lenders and guarantee agencies will be able to assist and support one another and continue to serve in the FFEL programs as in previous years
To learn how to best work together

38. Schools Respond to Survey

39. School 2008 Survey Results FY 09 Plans
Which description most accurately describes your school’s federal student loan plans for 08/09 school year?
We remain committed to the FFEL program and never seriously considered a move to Direct Lending
Wesley College – A DIRECT Lending school but have decided to become a FFEL school for FY 08/09
Alcorn State – Will remain a DIRECT Lending school

40. School 2008 Survey Results Importance and Preferred Lender List
Please indicate the single most important reason to remain or (become) a FFEL school?
Insufficient time to make change (concerned about implementation time)
Enhanced customer service to the Financial Aid Office
Better borrower benefits for the student (Majority answered)
Other systems/operational issues

41. School 2008 Survey Results Preferred Lender List
Do you have separate Preferred Lender lists for Stafford, Undergrad PLUS, Graduate Plus, and/or Private (Alternative) Loans?
7 out of the 10 who do provide a Preferred Lender List offers a separate listing for other loan types

42. School 2008 Survey Results Preferred Lender List (Continued)
What criteria is used in the selection process for your PLL?
Knowledge, customer and quality of service
Availability
Calls and visits from representatives from the various lenders
RFI with formal Lender, Review meetings
Electronic capability
Volume
An assessment tool used by those in the office with direct student contact

43. Best Practices for Constructing a Lender List
Determine your selection criteria
Develop a list of factors to evaluate when deciding which lenders to recommend to borrowers
Do all the candidates meet the chosen criteria
Are certain factors of greater significance than others
Borrower’s needs and expectations
Borrower benefits
Customer Service
Customer satisfaction
Lifetime service and repayment support
Lender experience and reputation
School’s processing needs
Lender processing standards
Interest rates, fees and loan benefits
Estimated costs, savings, sample payment charts

44. Preferred Lender Lists
Remember schools are required to document the process and
Must disclose to prospective borrowers your method and criteria used to select lenders
Must provide comparative information on interest rates and other benefits
Must provide prominent statement that prospective borrowers are not limited to lenders on list
May not assign lender to first-time borrowers
Must update list and comparison information at least annually

45. Preferred Lender Lists Things to Remember
What are the Conditions
Must contain a minimum of 3 lenders willing to make loans to students at the institution
All lenders listed must not be affiliated*
May not include lenders that have offered financial or other benefits to the school in exchange for inclusion on the list
If you do not use the term Preferred with your lender list then you do not have a Preferred Lender List

46. Affiliated Lender Is defined as one that:
Is under the ownership or control of the same entity or individuals
Is a wholly or partly owned subsidiary of the same parent company
Has director, trustees, or general partners of one of the lenders that constitute a majority of the persons holding similar positions with the other lender

47. Preferred Lender Lists Things to Remember (Cont.)
Consider carefully the placement of each lender on your list since some borrowers will simply choose the first lender
Determine which criteria to use in order to sort the list and make it clear how the list is sorted (by alpha or by a score assigned by the school based on the selection process or maybe your listing is based upon customer service ratings or on the lowest cost to the borrower based on the mix of borrower benefits offered by the lender)

48. Preferred Lender Lists
The U.S. Department of Education stated that plans are in place to provide a model format for schools to use when designing and publishing a list of recommended or suggested lender

49. School 2008 Survey Results One or More Guarantor
Do you utilize more than one Guarantor?
Of the 17 schools which responded only 3 answered “No”
Do you require school certification of Private Loans?
Of the 13 schools which participate in the Private Loan Programs all responded “Yes”
What platform do you use to electronically communicate with lenders?
2 - participants use Open Net
1 - other
14 - use ELM

50. School 2008 Survey Results Contingency Plans
Given the current student lending environment what contingency plans do you have for 2008/2009?
Field Co-Op
Lender of Last Resort
No plans at the time (majority responded)
Exploring Direct Lending

51. School 2008 Survey Results Today’s Meeting
What do you expect to learn here today?
The advantages of Direct Lending from a Non-Lender or Guarantor
What are other financial aid offices doing
Candid exchange of information
To stay as informed as possible
Receive updates as to what is going on in the industry
Determine how current and possible future changes will impact the students
Commitment from lenders and will be there for our students
Plans/strategies others are using
How current and future changes within the industry may impact our students