Student Loan Summit

Jackson, Mississippi

May 22, 2008

Current Environment

• Recent History

• Impact

• Why?---The Perfect Storm

• Good Reading

• Recent Legislation

• The Last 24 Hours

Recent History

• Exodus of Lenders from FFELP

• Exodus of Lenders from Consolidation Market

• Exodus of Lenders from Private Student Loan Market

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

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.”

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

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

The last 24 Hours

• Dear Colleague Letter of May 21, 2008

• Sallie Mae’s Announcement of May 21, 2008