Student Loan ABS Sector

1
Student Loan ABS Sector

• Moderated by
• Linda Stesney,Managing Director

American Securitization Forum January 30, 2006
2
Our Panelists

• Sharon AschDirector ABN AMRO Inc.
• John HupaloExecutive Vice President Group Head,
  First Marblehead Corp.
• Leo SublerManaging DirectorSallie Mae
• Amy Vespasiano, DirectorLloyds TSB Bank
• Linda StesneyManaging Director, Moodys
  Investors Service

3
Our Goals

• Summarize 2005 Issuance and 2006 Outlook
• Review Impact of Deficit Reduction Act of 2005 on
  Student Loan ABS
• Perspective on Private SLABS
• Credit and Cash Flow Analysis on Private SLABS

4
2005 Highlights

• Record Issuance--73.3 Billion
• FFELP Consolidation Loans Dominated--38 Billion
• Private Loan Securitized Volume--9.4 Billion
• Deficit Reduction Act of 2005

5
Student Loan ABS Issuance
6
2005 Private Loan Volumes
7
Consolidation Loan Volume
8
Deficit Reduction Act of 2005Key Proposals

• Reduce government guarantee
• (from 98 to 97 from 100 for Exceptional
  Performers to 99)
• Stafford and Plus Loans go fixed rate (6.8 and
  8.5, respectively)SAP continues to float
• Floor Income rebated back to government
• excess of borrower rate over quarterly SAP

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Deficit Reduction Act of 2005Key Proposals
(contd)

• Eliminates in-school consolidation and virtually
  eliminates two-step consolidations
• PLUS loans available to grad and professional
  students
• Loan limits increased on Staffords
• Recycling of 9.5 loans virtually eliminated

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Know Your Audience

• Q1 Which category best describes you role in
  student loan ABS?
• Investor
• Intermediary
• Issuer
• Other

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Know Your Audience (contd)

• Q2 Describe your exposure to student loans
• I am considering investing in student loans and
  want to learn more about the product
• I already invest in student loans but want to
  deepen my understanding of
• A. FFELP Loans
• B. Private Loans
• --Student loans make up a significant portion of
  my portfolio

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Q3 Audience Follow-Up

• In 2006 do you expect to allocate more investment
  dollars to Student Loan ABS?
• I will increase holdings in FFELP ASB
• I will increase holdings in private loan ABS
• I expect to decrease holdings in FFELP ABS
• I expect to decrease holdings in private loan ABS
• I expect to maintain the same allocation