1. APOLLO GROUP, INC. 1 Bob Collins, VP Student Financial Aid Indianapolis, IN June 11, 2010 CAAHE - Financial Aid in Changing Times Apollo Federal Relations Apollo Federal Relations

2. APOLLO GROUP, INC. 2 Higher Education Policy Authorizing vs. Appropriating language Master Calendar concept –Final Rules by November 1 effective July 1 Regional Hearings Negotiated Rulemaking Notice of Proposed Rulemaking comments Federal Register published

3. APOLLO GROUP, INC. Title IV Student Assistance HEOA increased Pell Authorization Level –$6,000 in 2009-2010 –$8,000 in 2014-2015 18-semester limit on Pell Grants Health Care-Education Reconciliation Act –FFELP eliminated –Direct Loans exclusive - July 2010 –Pell funding $5,550 in 2010-2011-2012-2013

4. APOLLO GROUP, INC. Reporting and Disclosures HEOA adds 110 reporting and record- keeping requirements, including: –Transfer of credit policy –Distance learner authentication –Campus security and student safety –Textbook information –College tuition reporting (Net Price Calc) College Navigator website –http://nces.ed.gov/collegenavigator

5. APOLLO GROUP, INC. Cohort Default Rate Changes from a two-year to a three-year window beginning with FY2009 Increases minimum 3 consecutive year threshold for participating in Title IV programs from 25% to 30% for FY2012 Changes threshold rate from 10% to 15% for delayed delivery and single-term multiple disbursements beginning 10/1/11

6. APOLLO GROUP, INC. Cohort Default Rate Calculation FY2009 CDR using Current Calculation Borrowers entering repayment between 10/1/08 and 9/30/09 and who default on or before 9/30/10 Borrowers entering repayment between 10/1/08 and 9/30/09 FY2009 CDR using Revised Calculation Borrowers entering repayment between 10/1/08 and 9/30/09 and who default on or before 9/30/11 Borrowers entering repayment between 10/1/08 and 9/30/09

7. APOLLO GROUP, INC. On the Regulatory Horizon Negotiated Rulemaking –Foreign School Issues (medical schools focus) –Program Integrity Issues Definition of a high school diploma Ability to Benefit (ATB) Misrepresentation of information provided to students and prospective students Incentive compensation State authorization as a component of institutional eligibility

8. APOLLO GROUP, INC. On the Regulatory Horizon Program Integrity Issues (cont’d) Gainful employment in a recognized occupation Definition of a credit hour for purposes of determining program eligibility status Agreements between institutions Verification of information included on student aid applications Satisfactory Academic Progress Retaking coursework R2T4 (two issues) Disbursement timelines and method

9. APOLLO GROUP, INC. Regulation Timeline NPRM to be published in coming days –Preamble language provides context Public comment period 30-60 days –Public record ED analysis of comments 60-90 days –All comments reviewed and addressed Final regulation on or before November 1 –Preamble language discusses changes Final regulations effective July 1, 2011 9