1. 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. 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. 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. 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 2008-2009

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 2008-2009 –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 2008/2009. 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