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EFC Legal Conference

EFC Legal Conference. Matthew Myers – SVP, Private Loan Services MMyers@GoalSolutions.com 858-248-1372 Goal Structured Solutions Largest third party student loan administrator ($19.4b AUM) Largest third party student loan special servicer ($4.5b AUM)

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EFC Legal Conference

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  1. EFC Legal Conference • Matthew Myers – SVP, Private Loan Services • MMyers@GoalSolutions.com • 858-248-1372 • Goal Structured Solutions • Largest third party student loan administrator ($19.4b AUM) • Largest third party student loan special servicer ($4.5b AUM) • Clients include: not-for-profits, hedge funds, investment banks, colleges and universities, insurance companies, private equity and asset-backed trusts • Manage lifecycle of assets from origination to collections • We traffic in data –forecasting, modeling and valuation experts utilizing two decades of loan-level data

  2. Data Limitations There are two certainties when it comes to data: Data is valuable That value is limited by the experience and expertise of the entity analyzing the data, and the additional they have available at their disposal This can be illustrated by two real world examples of how data would suggest one outcome yet the actual result is dramatically different, with significant implications for various parties

  3. Surface Similarities Pool APool B Asset Type Private Student Loans Private Student Loans Issuer Issuer X Issuer X Average FICO 719 712 Cosigner % 84% 84% Average Balance $11.5k $14.4k Average Loan Rate L+4.49 L+5.10% Undergrad Share 84% 85% But underneath the surface…

  4. ...Dramatically Different Results

  5. FFELP Assets Pool APool B Asset Type FFELP Student Loans FFELP Student Loans Loan Type Consolidation Consolidation Issuer Issuer Y Issuer Z Average Balance $39k $52k Average Loan Rate 4.42% 5.14% Average Term 24.1 years 26.4 years Channel DTC DTC Also comparable using standard loan-level data…

  6. ...Widely Disparate Performance

  7. Not All Similar-Looking Assets Are Created Equal Attributes that play a vital role in asset performance that are not always contained in loan-level data: Program guidelines Non-credit worthy borrower quality Non-FICO underwriting criteria School type Area of study Origination channel Servicer and contractual SLAs Use of supplemental third parties Geographic concentration

  8. Implications of False Security While data can inform, an overreliance on incomplete data can have serious adverse consequences: Originators – Unprofitable products Issuers – Overestimate residual value Investors – Buy worthless subordinate bonds and/or resids Service providers – Overestimate fee streams Insurers – Underpriced premiums on wraps

  9. Data is an Input, Like Fuel You can put the same fuel in a Yugo and a Ferrari and get very different results At GS2 our data, experience and expertise ensures the Ferrari and not the Yugo

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