Why Choose New Mexico Student Loans Presented by Oscar Garcia, Compliance Officer

1. Why Choose New Mexico Student Loans? Presented by Oscar Garcia, Compliance Officer

2. New Mexico Student Loans 25 years experience in Student Loan Industry One-Stop Shop 501(c)(3) Company: Can return excess earnings to borrowers through fee and interest rate reductions as well as loan forgiveness programs Combined billing for borrowers’ Stafford, PLUS and Link Loans One Stop Shop – Originates, Guarantees, and Services loans for NMSL Lender and all Full Service Lenders NMSL also consolidates loans. 501 © (3) – Company classification for IRS tax purposes Set up in New Mexico to service students in New Mexico Applies to the following lenders: NMSL Lender, Bank of Albuquerque, Bank of America, Bank of the Rio Grande, Bank of the West, & Citizens Bank of Clovis Combined billing – for all loans serviced by NMEAF One Stop Shop – Originates, Guarantees, and Services loans for NMSL Lender and all Full Service Lenders NMSL also consolidates loans. 501 © (3) – Company classification for IRS tax purposes Set up in New Mexico to service students in New Mexico Applies to the following lenders: NMSL Lender, Bank of Albuquerque, Bank of America, Bank of the Rio Grande, Bank of the West, & Citizens Bank of Clovis Combined billing – for all loans serviced by NMEAF

3. New Mexico Student Loans Outreach efforts: Middle School & High School Events College & University Events Default Aversion Activities Scholarship Search Sites Sponsored Events in state & local communities Outreach: FAFSA completion, High School & College Nights, Financial Aid Fairs & Orientations, Entrance/ Exit Counseling Sessions Default Aversion – as a guarantor – Works with delinquent borrowers; Notebooks printed and distributed based on school requests – Notebooks indicated what NMSL staff is doing by school and what school can do to avoid having defaulted borrowers; Debt Management presentations have been given at previous NMSL Fall conferences or at individual schools. Notify Melissa Dale or Carolyn Holder if more Notebooks are needed Scholarship Search Sites – College Board, CollegeNet MACH25, College Scholarships.com, Fast Web, FinAid, FRESCH! Free Scholarship Search, Go College, The Higher Education Department, Scholarships.com, College Funding Made E-Z, NMSL 25th Anniversary Scholarship Sponsored Events: Make-A-Wish Foundation Fundraiser, Governor’s Summit on Higher Education, APS Education Hiring Fairs, Golden Apple Foundation, NEA Conference, NM Mesa – NM Mathematics, Engineering, Science, Achievement; NM Assoc. of Elementary School Principals, NM DECA, NM Education Council (College Days), NMCAC – NM College Awareness Coalition, NM Nurses Association, NMSLGC Fall Conference, RMACAC – Rocky Mountain, Supercomputing Challenge, Misc. Careers Fairs, GED Graduating Scholarships, NMCAC – College Goal Sunday (booths)Outreach: FAFSA completion, High School & College Nights, Financial Aid Fairs & Orientations, Entrance/ Exit Counseling Sessions Default Aversion – as a guarantor – Works with delinquent borrowers; Notebooks printed and distributed based on school requests – Notebooks indicated what NMSL staff is doing by school and what school can do to avoid having defaulted borrowers; Debt Management presentations have been given at previous NMSL Fall conferences or at individual schools. Notify Melissa Dale or Carolyn Holder if more Notebooks are needed Scholarship Search Sites – College Board, CollegeNet MACH25, College Scholarships.com, Fast Web, FinAid, FRESCH! Free Scholarship Search, Go College, The Higher Education Department, Scholarships.com, College Funding Made E-Z, NMSL 25th Anniversary Scholarship Sponsored Events: Make-A-Wish Foundation Fundraiser, Governor’s Summit on Higher Education, APS Education Hiring Fairs, Golden Apple Foundation, NEA Conference, NM Mesa – NM Mathematics, Engineering, Science, Achievement; NM Assoc. of Elementary School Principals, NM DECA, NM Education Council (College Days), NMCAC – NM College Awareness Coalition, NM Nurses Association, NMSLGC Fall Conference, RMACAC – Rocky Mountain, Supercomputing Challenge, Misc. Careers Fairs, GED Graduating Scholarships, NMCAC – College Goal Sunday (booths)

4. New Mexico Student Loans One-Stop Shop: Loan Originator & Servicer for Partner Lenders FFELP Lender Alternative Loan Lender Loan Guarantor Loan Servicer Consolidation Loan Lender & Servicer Partner Lenders: Bank of Albuquerque, Bank of America, Bank of the Rio Grande, Bank of the West, Citizens Bank of Clovis, UNM – School As LenderPartner Lenders: Bank of Albuquerque, Bank of America, Bank of the Rio Grande, Bank of the West, Citizens Bank of Clovis, UNM – School As Lender

5. NMSL as Lender + 5 Lender Partners 0% Origination Fee on all Stafford Loans 3% Origination Fee rebated to borrower’s principal on PLUS and Grad PLUS Loans (after each disbursement) 0% default fee for NMSL and partner-lender borrowers .25% interest rate reduction for ACH 0% Interest on Stafford, PLUS and Grad PLUS loans in repayment for MD’s, nurses and public school teachers, counselors, or librarians who work full-time in New Mexico Loan Forgiveness Program: Over $5 million paid out to borrowers in FY 2006. Board approval for $1.5 million in 2007. 0% origination/default fees – for loans disbursed after July 1, 2006 3% rebate – loans disbursed after July 1, 2006 (For Bank of America – rebate is given when B of A loans are purchased, not after each disbursement) 0% interest rates – for loans disbursed after May 1, 2000 Loan Forgiveness Program – implemented 20060% origination/default fees – for loans disbursed after July 1, 2006 3% rebate – loans disbursed after July 1, 2006 (For Bank of America – rebate is given when B of A loans are purchased, not after each disbursement) 0% interest rates – for loans disbursed after May 1, 2000 Loan Forgiveness Program – implemented 2006

6. NMSL Guarantee Corp as Guarantor School and Lender Assistance Serve as liaison for schools and borrowers Process borrowers’ MPNs and update loan changes Handle NSLDS reviews/corrections on borrower accounts Respond to business partner requests School/lender loan volume flow charts and ad hoc reports Default Prevention: NMSL recognized for low default rate NMSLGC Default Rate: 3.3% National Default Rate: 5.1% Continued service to borrowers who transfer out-of-state

7. NMSL / NMEAF as Servicer Originates Loans: NMSL-as-lender and for NMSL partner lenders Recognized for Low Default rate NMEAF Default Rate: 2.2% Services Stafford, PLUS, Grad PLUS & Link Loans Services Perkins Loans – through 3rd party servicer contract with University Accounting Service (UAS) Services Consolidation Loans

8. NMSL as Consolidation Lender .25% interest rate reduction for ACH 1.25% interest in repayment on consolidated Stafford, PLUS and Grad PLUS loans for MD’s, nurses and public school teachers, counselors, or librarians who work full-time in New Mexico Loan Forgiveness Program eligibility 1.25% Interest – for loans consolidated after May 1, 2000 Made decision to eliminate previous borrower benefit program in order to be able to offer 0 origination fee. Leadership is analyzing and reviewing the impact of new borrower benefit program and will once again review previous program1.25% Interest – for loans consolidated after May 1, 2000 Made decision to eliminate previous borrower benefit program in order to be able to offer 0 origination fee. Leadership is analyzing and reviewing the impact of new borrower benefit program and will once again review previous program

9. NMSL Customer Satisfaction Spring 2006 Customer Satisfaction Survey conducted by Research & Polling, Inc. NMSL rated 6.2 (on 7-point scale) for the second consecutive year. Random Sample of 600 NMSL customers Survey Evaluations: Loan Application Process – 6.1 out of 7.0 Loan Repayment Process – 6.2 out of 7.0

10. NMSL: Improving Efficiencies Imaging system implemented Auto-dialer implemented Streamlining Online Loan Process Offering Next-Day Funding Offering Management Consultation Sessions for New Mexico colleges & universities Imaging: 2002 – allows for easy access to file information when borrowers call – no more visits to file room Audit compliance – Once document is imaged, no one can alter the document Eliminates paper documents No backlogs now – imaging of incoming daily documents completed by noon daily (exception – Consolidation applicants – docs not imaged until file is complete) Auto dialer Gives NMSL ability to have reports available immediately Allows NMSL to have automated call and due diligence campaigns In one week after implementation, NMSL has seen a 12% increase in contacts Next Day Funding – Projected implementation date – mid- November Management Sessions – Slowly making contacts with all New Mexico schools – the “Road Show” Imaging: 2002 – allows for easy access to file information when borrowers call – no more visits to file room Audit compliance – Once document is imaged, no one can alter the document Eliminates paper documents No backlogs now – imaging of incoming daily documents completed by noon daily (exception – Consolidation applicants – docs not imaged until file is complete) Auto dialer Gives NMSL ability to have reports available immediately Allows NMSL to have automated call and due diligence campaigns In one week after implementation, NMSL has seen a 12% increase in contacts Next Day Funding – Projected implementation date – mid- November Management Sessions – Slowly making contacts with all New Mexico schools – the “Road Show”

11. NMSL Web-Based Products Stafford Pre-Application Stafford, PLUS & Grad PLUS Entrance Counseling: Mapping Your Future Stafford, PLUS & Grad PLUS MPNs PLUS Pre-approval process Link Loan Application E-sign available: Stafford, PLUS, Grad PLUS, Link Loans Quick Links: Downloadable Forms, Interest Rates, Loan Calculators, FAFSA Information and NMSL Scholarship Information