1. Higher Education Landscape: Recent Trends in Federal and Private Student Loans Moderator: Timothy D. Kaiser, Director and Senior Counsel, Discover Financial Services Presenters: Chris Keaveney, President and Chief Credit Officer, MeasureOne and Mark Weadick, Managing Director, S L Capital Strategies, LLC

2. Higher Education Landscape: Trends in Federal Student Loans NCHER 2016 Spring Convention June 7, 2016 Mark Weadick S L Capital Strategies LLC www.slcapitalstrategies.com

3. Discussion Topics Topics to discuss today include: –Student Loan Balances and Volumes –FFELP Loan Performance –FFELP & Default Portfolio Runoff –Predictions for 2016 and beyond –and…….Industry Gossip I’m looking forward to an open discussion, so please ask Qs as we go. Thank you for having me at your meeting. 3

4. $1.3 Trillion Student Loan Market Loan ProgramsFunding Source Dollars in Billions Loan P&I Balances, Public sources and SLCS guesstimates as of September 30, 2015 4

5. Loan Portfolio “Fair Market Value” 5 The chart below shows Sallie Mae/Navient’s fair market value disclosures for their FFELP and Private Loan Portfolios from Dec. 31, 2006 to the present. Source: SEC filings

6. FFELP Financing Spreads The table below shows FFELP FRN financing spreads over time. 6

7. 7 FFELP Performance Stabilizing? Forbearance and delinquency have moderated but remain above pre- credit crisis levels Source: SLM public reports; SLCS estimates

8. 8 FFELP and DL Comparison Source: DOE, Navient, Nelnet *Extrapolated based on 65% of FFELP held by ED, Navient and Nelnet

9. 9 Repayment Plan Distribution Source: SLM/Navient Financials Direct Loan PortfolioFFELP Portfolio Samples from SLM/Navient Securitizations Stafford Pools: 20-26% IDR Consolidation Pools: 10-19% IDR Samples from Other Lenders Professional Programs up to 30% IDR

10. 10 FFELP Continues to Consolidate into DL Source: SLM/Navient Financials

11. 2012: Projected Student Loan Market 11 Dollars in Billions

12. 2016: Projected Student Loan Market 12 Dollars in Billions

13. Direct Loan Servicing Metrics TIVAs and NFP estimated servicing volumes: 13 Source: DOE; Public Reports from Navient, Nelnet and PHEAA

14. 2012: FFELP Remaining Life 14 Dollars in Billions

15. 2016: FFELP Remaining Life 15 Dollars in Billions

16. 2012: Projected FFELP Collections 16 Source: DOE for 8/31/12 FYTD actuals, SLCS estimates for projection Dollars in millions

17. 2016: Projected FFELP Collections 17 Source: DOE for 10/31/15 FYTD actuals, SLCS estimates for projection Dollars in millions

18. 2016 and Beyond ? Private Sector FFELP Portfolio is $220 Billion and amortizing – Non-scale programs: “restructure”, “outsource” or “sell”? – Scale programs: add Portfolio and servicing volumes to defray platform investment Capital Markets: volatility seems to be the new normal – Financing costs have tightened dramatically though remain elevated – Financings remain difficult to execute – Securitization “Restructurings” mostly completed Whole Loan Portfolio Sales – as market consolidates, portfolio sales will remain active – volume will increase when financing market conditions improve 18

19. 2016 and Beyond ? NFPs/Agencies continue to explore different business models –NFP DL Servicing is working, though economics are thin –State-based Fixed Rate Private loan programs – Refi Loan Programs – Default prevention and other school services The Big Guys (Navient, NNI, TIVAS) –Many are seeking and achieving market share gains –Continuous focus on cost efficiencies and value – Diversification of revenue stream, e.g. Health care servicing Guarantors - Consolidation will naturally continue - 3 rd Party Servicing arrangements attractive for some - DOE “wind down” policies also impactful 19

20. NCHER Conference June 7, 2016 Chris Keaveney – President & Chief Credit Officer www.measureone.com

21. 21 The information provided in this document is strictly private and confidential. This document may not be made available, in whole of in part, without the prior written consent of MeasureOne LLC  The MeasureOne presentation has been pulled to make a correction. A corrected presentation deck will be uploaded when available. We apologize for the inconvenience.