0. A View from the Industry: Discussing the Opportunities in Financing Student Loans
Private Loans - Steve Fernald, Executive Director,
Morgan Stanley
Refinance Loans - Robert Lavet, General Counsel SoFi Direct Lending Opportunities - Judd Deppisch, Director BMO Capital Market (Presentation Unauthorized to be posted by NCHER)

1. Student Loan and Consumer Debt Markets Outstanding
Student Loans Outstanding
Total Student Loan Debt Size - $1,325 billion
Consumer Debt Market Size by Type
Total Consumer Loan Debt Size - $3,322 billion
Source Department of Education, Federal Reserve, Morgan Stanley
Source Federal Reserve, Federal Reserve Bank of New York
Does not include mortgages 2

2. Annual Student Loan Originations and Securitizations
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Annual Student Loan Originations and Securitizations
Student Loan Originations
Since FY 1995
$ Bn
Source CollegeBoard “Trends in Student Aid 2014”
Student Loan ABS Issuance
Since 1993
$ Bn
Source SIFMA, IFR Markets, Morgan Stanley Student Loan Database 3

3. Private Credit Student Loan Financing Market
2014 For Profit Private Student Loan Issuers(1)
Total: $2,739
2015YTD For Profit Private Student Loan Issuers(1)
Total: $1,707
($ MM)
($ MM)
2014 Non-Profit Private Student Loan Issuers(1)
Total: $693
2015YTD Non-Profit Private Student Loan Issuers(1)
Total: $444
($ MM)
($ MM)
Notes
Numbers may not total due to rounding. Sallie Mae split in April 2014 into Navient and Sallie Mae Bank 4

4. Recent For Profit Private Credit Transactions
Notes
Morgan Stanley lead managed transactions
ReFi loans are loans awarded to graduates to refinance their existing federal private loans. In-school loans are awarded to borrowers who are in school when receiving the loan 5

5. Non-Profit Private Credit Transactions
Notes
Weighted averages shown are based upon the par amounts by maturity date for each issuer’s capital structure, excluding the effects of early redemptions or prepayments 6

6. Private Credit Investor Overview
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Private Credit Investor Overview
Hypothetical Private Credit Taxable Investor Participation
Investor Type
Hypothetical Private Credit Tax-Exempt Investor Participation
Investor Type
Source Morgan Stanley
Source Morgan Stanley 7

7. 10-Year Treasury Auction Result
Competing with PLUS: Rate Basis Considerations
Issuer Spread FDLP PLUS Spread
10Y Treasury Forward Curve(1)
Rate (%)
Expected 10-Year Treasury Auction
6.84%
10-Year Treasury Auction Result
Current: 2.24%
Loan Spread 4.60%
Issuer Loan Spread
Current: 2.00%
5.55%
MMD
Current: 2.15%
Issuer Credit Spread
Current: 1.40%
Q2 2016: 2.83%
Q2 2016: 2.75%
Q1 2016: 2.65%
Q4 2015: 2.50%
Q1 2016: 2.55%
Q3 2015: 2.32%
MMD/Treasury Basis Histogram(2)
10-Year history at daily close
Q4 2015: 2.40%
Frequency (days)
10Y Average:
30 bps
Q3 2015: 2.20%
10Y Treasury – 10Y MMD (bps)
Source Morgan Stanley
Source Bloomberg, Morgan Stanley
Notes
As of May 2015
The -80bps cohort includes all data points below -80bps (data points from October 2008 to March 2009) 8

8. Issuer Historical Implied Performance Benchmark
Issuer benchmarking analysis implies effective competition with FDLP PLUS
Spread analysis assumptions:
10Y assets and liabilities
Cost of funds (“COF”) is the current Issuer spread to MMD(2)
Loans rates based on historical average of COF bps with ±50 bp margin
Issuers compete with the hypothetical FDLP PLUS rate
Under this framework, the two main risks faced by the Issuer’s student loan program are:
Credit risk (spread to MMD): credit spreads may widen due to investor attitudes
MMD/Treasury basis risk: spreads between Issuer’s COF and the PLUS rate may decrease if Treasury rates fall relative to MMD, reducing Issuer’s ability to compete with the PLUS rate
Since 2008, the long-term relationship between MMD and Treasuries has occasionally dislocated, with MMD setting higher than Treasury rates
Treasury, MMD, Hypothetical Historical FDLP PLUS(1) and Issuer Funding and Loan Rates(2)
10-Year History for Hypothetical 10-Year Tenor
Rate (%)
+/- 50 bps
PLUS Spread to 10Y UST: 4.60%
Loan Spread to COF: 2.00%
COF Spread to MMD: 1.40%
Source Morgan Stanley Student Loan Banking, Morgan Stanley Research
Notes
Based on the lesser of (i) the high yield of the last 10-Year Treasury auction prior to June 1 of the respective year plus 4.60% and (ii) 10.5%, effective July 1 of the respective year through June 30 of the following year
Cost of funds based on Issuer’s financing scale 9

9. Underwriting Trends – PLUS Loan and Private Lenders
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Underwriting Trends – PLUS Loan and Private Lenders
Source: Sallie Mae web portal; Massachusetts Educational Financing Authority, Rhode Island Student Loan Authority and Connecticut Higher Education Supplemental Loan Authority Offering Statements; Department of Education; Past, Current and Recently Passed PLUS standards taken from Federal Register on 12/10/2014 at 10

10. SLM Private Education Loan Underwriting Criteria
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SLM Private Education Loan Underwriting Criteria
Source: Sallie Mae ASF Presentation 2014 11

11. Private Loan Performance by Debt Burden & Income
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Private Loan Performance by Debt Burden & Income
Default Rate by Debt-to-Income Ratio
Default Rate (%)
Debt-to-Income Ratio
Default Rate by Income
Default Rate (%)
Default Rate by Discretionary Income
Default Rate (%)
Income ($000)
Discretionary Income ($000)
Source: Mark Kantrowitz, “Relationship of Default Rates to Debt and Income.” 12

12. New Market: Student Loan Refinancing
Refinancing mechanics
Refinance lender disburses loan proceeds directly to borrower’s existing loan holders to pay off balance
No cash out to borrower
Refinance loan preserves 523(c)(8) bankruptcy non-dischargeability
Some lenders only refinance private student loans
SoFi and several other lenders refinance federal and private student loans
Challenges
Customer acquisition: cannot rely on school
Borrowers may have multiple loans and multiple servicers
Difficulties capturing all information from borrower
Who benefits from refinancing
Graduates with jobs and good credit can reduce rate
Borrowers who need flexibility of government repayment options or who are facing financial hardship generally should not refinance

13. About SoFi
Social Finance, Inc. (SoFi) launched in 2011 to offer an innovative approach to the student loan market
SoFi refinances federal and private student loans of successful young professionals
ReFi borrowers have already achieved the two most credit-enhancing accomplishments: degree completion and employment
Successfully originated over $2B in loans to date
Demonstrated ability to acquire high quality student loan borrowers
Addressable market of $80B outstanding, with $20B originated annually
Portfolio performing better than anticipated
Rapid growth:
$250M funded in 2013
$1.2B funded in 2014
Expect $2.4B volume in 2015
New product launches to core customer base, including mortgage product and unsecured personal loan

14. Fastest Growing Marketplace Lender

15. Prime Consumer Credit in a Qualified Education Loan1
Education: Advanced degree graduates of Northwestern, Duke, Michigan, Penn, Chicago, etc.
Employment: Employed at top companies like McKinsey, Deloitte, Skadden, Apple, Morgan Stanley, Kirkland & Ellis, etc.
Salary: Pre-bonus income of $141K
Age: 33 years old
Credit: Credit Score of 758
Debt Service: Significant free cash flow (after taxes and obligations)
Seasoning: 22 months into student loan repayment
Status: More than 99% in full repayment
Location: 71% in 25 large U.S. urban areas
1. Average statistics for loans funded by SoFi as of December 31, 2013.

16. Diverse Funding Sources
Significant traction from investors, lenders and rating agencies
Equity
Approx. $440M in equity raised
Securitization
Expect to conclude 5th Securitization in May
Recent transactions rated by Moody’s, S&P and DBRS
Bank Participations
Whole Loan Sales
Warehouse Lines