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1 Easy Money $ $ $ $ $ How Congress Could Increase Federal Student Aid Funding at No Additional Cost to Taxpayers May 2005 American Association of Collegiate Registrars and Admissions Officers State Public Interest Research Groups Higher Education Project U.S. Student Association

2 Table of Contents Executive Summary... 2 Introduction... 3 Background: A Tale of Two Loan Programs... 4 A Win-Win Proposal for Students and Taxpayers... 5 Findings: Billions of Dollars in Additional Student Aid... 5 Lending Industry Profits from Current Structure of Student Loan Programs... 6 Conclusion... 6 Methodology... 7 Student Aid Reward Act Funding Increases by State 9 1

3 Executive Summary Over the last three decades, higher education has become an even greater necessity for all Americans. Our citizens know that the key to economic success for them and their children is to invest in education. Since the Higher Education Act was passed in 1965, the nation has made enormous strides toward realizing the dream of equal access to a college degree. However, we still fall short of ensuring that every qualified high school student has the opportunity to pursue postsecondary education, regardless of income. Over the last three years, higher education costs have increased, largely as a result of state budget cuts. Over the same period, funding for critical federal student aid programs has been level-funded, decreased, or proposed for elimination entirely. Congress recently passed a budget for Fiscal Year 2006 that includes significant cuts to critical student aid programs, including $7 billion to federal student loan programs. These cuts threaten to put affordable higher education even further out of reach for millions of students. Congress has the opportunity this year, however, to increase student aid funding by billions of dollars at no additional cost to taxpayers. Bipartisan legislation is pending in Congress that would increase federal student aid for those colleges and universities that utilize the more economically efficient of the two federal student loan programs. The Student Aid Reward (STAR) Act, introduced in March 2005, would increase student aid funding by redirecting the subsidies currently going to student loan companies to needy students. Currently, two federal student loan programs provide essentially the same loans and interest rates to students, but one costs taxpayers and the federal government several billion dollars more annually than the other. According to President Bush's 2006 education budget, student loans made through the more expensive program cost the federal government nearly $11 more for every $100 loaned to students than the same loans made directly by the federal government. By encouraging more schools to participate in the more efficient program, Congress has the opportunity to increase student aid funding by billions of dollars, without any additional cost to taxpayers, students, or their families. Key findings: The Student Aid Reward Act could generate $4.4 billion in new federal money next year, based on the savings of all colleges and universities switching into the more cost effective Direct Loan program. At least $3 billion of this money could be used to increase federal student aid funding at all colleges and universities across the country. This student aid increase would be available at no additional cost to taxpayers. This $3 billion increase would be enough to give each Pell Grant recipient almost $600 more in additional grant aid a year, which is six times the proposed increase in the Pell Grant maximum for next year in the FY06 federal budget. 2

4 Introduction Access to affordable higher education is critical to the future success of Americans. The rewards of federal investment in higher education include strengthening our economy and maintaining the health of our democracy. In addition to the evident cultural and personal benefits, a college degree is worth nearly 75 percent more in earnings than a high school diploma, or nearly $1 million in additional income over a lifetime in the workforce. 1 Since 1965, the Higher Education Act has helped students realize the dream of equal access to a college degree. However, for many students, unacceptable barriers still exist as they pursue a college education. Students are now borrowing and working more than ever before in order to pay for the costs of a higher education. Even worse, without adequate financial assistance to help cover these costs, each year 170,000 qualified students are unable to pursue higher education due to financial constraints, according to the U.S. Department of Education s Advisory Committee on Student Financial Assistance. 2 Lagging college enrollment hurts the country s economy and democracy. A recent College Board study found that college graduates will pay more than twice as much in federal income taxes and 78 percent more in overall taxes than those with a high school degree. 3 In addition, states with higher college enrollment rates are likely to have more active citizens who vote and donate to charities in higher percentages than the national average. 4 Over the last three years, higher education costs have increased while funding for critical federal student aid programs has been level-funded, decreased, or proposed for elimination entirely. The maximum Pell Grant award, which assists the neediest students in the country, is worth $800 less in real terms than its value twenty years ago. The maximum Pell Grant award has been frozen at $4,050 for the last three years, which amounts to a 10 percent cut in funding given inflation increases over this period. Congress recently passed a budget for 2006 that includes significant cuts to critical student aid programs, including $7 billion in cuts to federal student loan programs. These cuts threaten to put affordable higher education even further out of reach for millions of students. Need-based aid is essential to increase college participation rates. Greater federal investment in student aid makes the difference in thousands of students decisions each year as to whether they can afford to attend college, which in turn benefits our economy, our democracy, and our society. 1 Education Pays: The College Board. 2 Empty Promises: The Myth of College Access in America. The Advisory Committee on Student Financial Assistance. June Education Pays: The College Board. 4 Measuring Up 2002: The State by State Report Card for Higher Education. 3

5 Background: A Tale of Two Loan Programs The federal government operates two major loan programs to help students pay for college: the Federal Family Education Loan (FFEL) and the Direct Loan (DL) programs. In the FFEL program, the government pays private lenders and banks to offer loans to college students. In the DL program, the government offers these loans directly to students. Under current law, individual colleges choose which program they will use to make loans to their students. Approximately 25 percent of all student loan volume is currently disbursed through the Direct Loan program. President Bush s recently released 2006 budget reveals that the bank-based (FFEL) program costs taxpayers several billion dollars more each year than the Direct Loan program. The President s FY 2006 budget indicates that, even after administrative costs are factored in, FFEL loans are estimated to cost the government $8.91 for every $100 in loans in FY06. By contrast, even after administrative costs are factored in, Direct Loans actually save the federal government $2.06 for $100 in loans. 5 Student loans made through the FFEL program therefore cost the federal government nearly $11 more for every $100 lent than the same loans made through the Direct Loan program. This cost differential between the two programs has occurred each year; for example, President Bush s budget states that the Direct Loan program was $11.25 cheaper than FFEL loans on every $100 loaned in FY04. From 1992 to 2004, the cumulative taxpayer subsidy costs were $39 billion for FFEL loans but only $3 billion for Direct Loans. 6 The larger volume of FFEL loans partially accounts for the program s larger subsidy costs. However, even if the programs had the same exact amount of loan volume, the Direct Loan program would still cost billions of dollars less over this period, since the dollar-for-dollar subsidy costs on loans made through the DL program are less than in the FFEL program. President Bush s budget reinforces the findings of the Government Accountability Office (GAO), the Congressional Budget Office (CBO), and the Office of Management and Budget (OMB) over the last 10 years: that the Direct Loan program saves billions of dollars a year, as compared with the FFEL program. 7 In the FFEL program, the federal government pays banks and other financial intermediaries for providing the loan capital. Through the Direct Loan program, the federal government can take advantage of gaining capital at lower rates through efficient Treasury auctions. 8 The government-guaranteed FFEL program is structured so that the federal government assumes most of the risks commonly borne by lenders in private credit transactions, including default costs and costs associated with fluctuating interest rates. While the federal government bears 5 President Bush s FY06 Budget. Office of Student Financial Assistance, p President Bush s FY06 Budget. Office of Student Financial Assistance, p A More Efficient Loan Program Would Leave Money for Students. TICAS website. 4

6 virtually all of the risks and costs, participating lenders and student loan companies reap all of the profits. In the Direct Loan program, the government assumes the same risks, but is able to cover some expenses with the interest paid by borrowers. A Win-Win Proposal for Students and Taxpayers On March 15, 2005, Representative Thomas Petri (R-WI) and Representative George Miller (D- CA) introduced the Student Aid Reward (STAR) Act (H.R. 1425) in the House. Senator Ted Kennedy (D-MA), Senator Gordon Smith (R-OR), and Senator Richard Durbin (D-IL) introduced the same legislation in the Senate in April (S. 754). The Student Aid Reward Act calls upon the Secretary of Education to determine which loan program is more efficient each year. Schools would then be rewarded with additional scholarship funds for utilizing the more efficient of the two student loan programs. Colleges and universities that switch into the more efficient Direct Loan program would receive half of the savings that they generate from participating in the DL program instead of the FFEL program. The other half of this savings would be directed into an account to be divided among currently participating Direct Loan schools. Colleges could use this new money to provide additional need-based financial aid to students already receiving Pell Grants and graduate fellowships. The non-partisan Congressional Budget Office (CBO) estimated this year that the Student Aid Reward Act would make available $17.25 billion in additional student aid at no cost to taxpayers over the next ten years, given modest increases in Direct Loan growth. 9 Since the additional student aid provided under the Student Aid Reward Act would come from the funds formerly used to subsidize private banks, no new taxpayer funds would be needed under the program. In essence, the program redirects federal subsidies from lenders and other student loan intermediaries to needy students. Findings: Billions of Dollars in Additional Student Aid Using data on student loan volumes at universities and colleges across the country, 10 the American Association of Collegiate Registrars and Admissions Officers (AACRAO), the state Public Interest Research Groups (PIRGs) Higher Education Project, and the U.S. Student Association (USSA) calculated how much each institution and state could receive in additional student aid under the Student Aid Reward Act. We found that the Student Aid Reward Act could generate $4.4 billion in new federal money next year, based on the savings of all colleges and universities switching into the more cost effective Direct Loan program. Of this money, the Student Aid Reward Act could increase federal student aid funding by at least $2.9 billion a year. This increase would be enough to give 9 Representative Petri Unveils Legislation to Cut Waste in Student Loan Programs and Increase Pell Grants. Press release on the CBO estimate from Congressman Thomas Petri s office Office of Federal Student Aid, U.S. Department of Education 5

7 each Pell Grant recipient $600 more in additional grant aid a year, which is six times the proposed increase in the Pell Grant maximum for next year in the FY06 federal budget. Refer to page nine of this report for a state-by-state breakdown of potential student aid increases under the Student Aid Reward Act. Visit for a breakdown of potential student aid increases by institution. Lending Industry Profits from Current Structure of Student Loan Programs As the costs of higher education continue to climb and student loan volume rises, the student loan industry has become a hugely profitable business. According to a recent Fortune 500 ranking, Sallie Mae is rated as the second most profitable corporation for return on revenues, with a 36.9 percent return in The median return on revenues for the 500 biggest companies in the United States during the same period was 4.6 percent. 11 Student loan companies benefit from the current structure of the government-guaranteed student loan program in which they participate; they gain from both profits and generous subsidies, while the government and taxpayers foot the bill and the financial risk. This is not surprising since the loan industry spends enormous sums on lobbying and has essentially written its preferential subsidies into federal law. Conclusion As the costs of higher education continue to climb, Congress must take steps to maintain the affordability of a college degree. The future of our democracy, economy, and global competitiveness depends on equal access to affordable higher education. Congress needs to restore the purchasing power of programs such as the Pell Grant program through the annual budget process. This investment of taxpayer dollars is a worthwhile one, as numerous studies have shown that a better-educated citizenry improves our economy and pays dividends far beyond that investment. 12 In addition, Congress should take advantage of any opportunity that exists to increase student aid funding without any additional spending by the federal government. Congress should pass the Student Aid Reward Act, which would make available nearly $3 billion in increased student aid a year, at no additional cost to taxpayers. 11 Shireman, Robert. Corporate Welfare in Disguise. National Crosstalk. Winter Education Pays: The College Board. 6

8 Methodology The STAR Act would require the U.S. Secretary of education to annually determine which of the two federal student loan programs the Federal Family Education Loan Program (FFEL) or the Direct Loan program (DL) is fiscally more efficient. Calculations of the STAR Act s benefits in this report are based on the subsidy rates provided in the President s Budget for Fiscal Year The Budget Appendix indicates that the FY 2006 subsidy rate for FFEL would be significantly reduced if the President s loan reform proposals were enacted. Because the Budget Resolution adopted by Congress assumes $7 billion in savings from student loans, we use the FY 2006 subsidy rates in this analysis, even though Congress has not adopted the President s proposals. The use of the projected FY 2006 subsidy rates reduces the amount of institutional and deficit reduction benefits of the STAR Act. As indicated in the President s FY06 Budget Appendix (p. 371), the 2006 adjusted subsidy rate for FFEL is estimated at 8.91 percent and the adjusted subsidy rate for DL is estimated at percent. These rates, as reported by the Office of Management and Budget, clearly demonstrate that every $100 of student lending costs the taxpayers $8.91 under FFEL, but would generate net revenues of $2.06 under Direct Loans. It is important to note that these rates are calculated in accordance with the Federal Credit Reform Act of 1990, but have been adjusted to include administrative costs associated with the two loan programs. As such, they represent an even more accurate economic analysis than strictly required under Credit Reform. Calculation of FFEL Benefits The STAR Act provides institutions currently participating in FFEL with an opportunity to receive half of the savings generated by their conversion to Direct Loans, which, at a subsidy rate of percent, would be percent more efficient than FFEL with its subsidy rate of 8.91 percent, even after the President s reforms are enacted. The amount of new student aid dollars generated at each FFEL institution if it were to take advantage of the STAR Act would therefore be equal to its loan volume multiplied by percent [( ) / 2]. Any differences between our estimates of institutional benefits and actual savings would be a function of changing loan volume since 2004, the most recent year for which data were available. In the vast majority of instances, the volumes and STAR Act benefits would be higher than estimated here. Our estimates of STAR Act benefits by state, as well as our estimates of total national savings, are based on the assumption that all FFEL institutions would take advantage of the STAR Act s benefits. As such, they are estimates of the maximum benefits available under the Act, and could be linearly revised downwards based on alternative assumptions about the percentage of the FFEL volume that converts to DL. 7

9 Calculation of DL Benefits In the case of institutions that already participate in the Direct Loan program, the amount of new student aid dollars is a function of other institutions choices. As explained above in connection with state and national estimates, we have again assumed full conversion to DL for purposes of estimating the maximum amount of new funds made available to institutions already participating in DL by the STAR Act. Once again, these estimates could be linearly reduced on the basis of alternative assumptions about the percentage of FFEL volume that converts to DL. Beyond this assumption, the STAR Act is silent on the specifics of the procedures by which the amount of benefits for institutions currently participating in DL would be calculated. The Act delegates to the Secretary of Education the authority to develop the process for distribution of funds on a pro rata basis. For purposes of simplicity, the estimates produced here are based on the same formula as that used for FFEL institutions, i.e., loan volume multiplied by percent. Because total DL volume is about 25 percent of total loan volume, and because the STAR Act sets aside 50 percent of total savings generated by conversion of institutions in FFEL, this assumption will produce additional federal savings of about $1.496 billion dollars beyond the $2.9 billion it would provide for distribution to students. Source: Institutional volume data for Fiscal Year Office of Federal Student Aid, U.S. Department of Education. 8

10 State by State STAR Boost State DL FFEL Total AK $48,649 $2,821,840 $2,870,489 AL $13,769,319 $31,761,590 $45,530,910 AR $922,594 $19,821,881 $20,744,475 AZ $16,170,171 $125,279,009 $141,449,181 CA $67,314,499 $178,821,359 $246,135,858 CO $15,389,307 $37,968,477 $53,357,784 CT $3,600,053 $26,112,342 $29,712,395 DC $8,514,134 $27,851,417 $36,365,551 DE $3,586,396 $4,102,317 $7,688,713 FC $17,417,251 $17,417,251 FL $20,429,114 $116,798,003 $137,227,117 GA $29,691,488 $52,863,455 $82,554,943 GU $67,628 $212,760 $280,388 HI $17,905 $5,721,657 $5,739,563 IA $26,494,795 $20,422,117 $46,916,912 ID $7,768,199 $3,851,886 $11,620,085 IL $45,218,189 $108,471,116 $153,689,305 IN $7,888,390 $62,314,030 $70,202,420 KS $6,275,850 $23,825,200 $30,101,050 KY $7,466,657 $24,776,233 $32,242,889 LA $1,616,553 $41,712,112 $43,328,664 MA $33,835,946 $56,452,063 $90,288,009 MD $18,333,554 $25,162,565 $43,496,119 ME $1,079,173 $10,175,830 $11,255,003 MI $41,529,705 $55,530,431 $97,060,136 MN $19,371,401 $50,350,938 $69,722,339 MO $13,930,158 $58,045,273 $71,975,431 MS $1,113,641 $22,276,688 $23,390,329 MT $8,274,401 $8,274,401 NC $13,725,104 $46,293,654 $60,018,758 Page 9

11 State DL FFEL Total ND $9,759,200 $9,759,200 NE $5,150,629 $16,104,679 $21,255,309 NH $1,528,761 $13,436,807 $14,965,568 NJ $20,827,887 $27,766,873 $48,594,760 NM $4,304,319 $7,475,628 $11,779,947 NV $4,286,912 $3,789,150 $8,076,062 NY $57,256,365 $169,417,564 $226,673,928 OH $50,034,057 $76,560,782 $126,594,839 OK $5,260,200 $28,548,687 $33,808,887 OR $19,182,107 $22,574,032 $41,756,139 PA $3,712,339 $165,335,865 $169,048,203 PR $936,062 $10,953,762 $11,889,823 RI $5,480,047 $12,192,283 $17,672,330 SC $6,454,378 $27,192,281 $33,646,658 SD $78,495 $9,626,333 $9,704,829 TN $9,178,654 $42,049,532 $51,228,186 TX $8,835,317 $152,133,768 $160,969,085 UT $544,844 $16,381,552 $16,926,396 VA $25,056,657 $38,181,824 $63,238,480 VI $102,410 $102,410 VT $430,362 $10,153,306 $10,583,668 WA $20,374,219 $29,326,360 $49,700,579 WI $14,850,445 $32,385,755 $47,236,200 WV $13,190,532 $5,948,927 $19,139,460 WY $37,238 $5,518,297 $5,555,534 Totals $702,261,808 $2,198,301,141 $2,865,009,687 Page 10

12 AK FFEL School Name Congressional District Loan Amount STAR Boost ALASKA PACIFIC UNIVERSITY AL $3,676, $201, ALASKA VOCATIONAL TECHNICAL AL $308, $16, CENTER CAREER ACADEMY AL $1,141, $62, CHARTER AL $4,338, $237, SHELDON JACKSON AL $413, $22, UNIVERSITY OF ALASKA - AL $27,295, $1,497, ANCHORAGE UNIVERSITY OF ALASKA AL $10,817, $593, FAIRBANKS UNIVERSITY OF ALASKA SOUTHEAST AL $3,455, $189, Total for AK FFEL Schools $2,821, DL School Name Congressional District Loan Amount Maximum STAR Boost UNIVERSITY OF ALASKA FAIRBANKS Total for AK DL Schools AL $886, $48, $48, Total STAR Boost for AK $2,870, Page 11

13 AL FFEL School Name Congressional District Loan Amount STAR Boost ALABAMA AGRICULTURAL & 05 $38,362, $2,104, MECHANICAL UNIVERSITY ALABAMA STATE UNIVERSITY 03 $34,542, $1,894, AUBURN UNIVERSITY 03 $81,132, $4,450, AUBURN UNIVERSITY 03 $17,293, $948, MONTGOMERY BIRMINGHAM SOUTHERN 07 $4,435, $243, BLUE CLIFF CAREER 01 $294, $16, CALHOUN COMMUNITY - 05 $6,281, $344, DECATUR CENTRAL ALABAMA COMMUNITY 03 $2,578, $141, CHATTAHOOCHEE VALLEY 03 $1,437, $78, COMMUNITY ENTERPRISE-OZARK COMMUNITY 02 $790, $43, FAULKNER STATE COMMUNITY 01 $3,122, $171, FAULKNER UNIVERSITY 02 $18,271, $1,002, GADSDEN BUSINESS 04 $559, $30, GEORGE C. WALLACE STATE COMMUNITY -MAIN CAMPUS 04 $4,542, $249, HERITAGE CHRISTIAN UNIVERSITY 05 $375, $20, HERZING 07 $219, $12, HUNTINGDON 02 $3,131, $171, JACKSONVILLE STATE UNIVERSITY 03 $22,553, $1,237, JUDSON 07 $1,419, $77, MARION MILITARY INSTITUTE 07 $183, $10, NORTHEAST ALABAMA 04 $880, $48, COMMUNITY NORTHWEST-SHOALS 05 $4,882, $267, COMMUNITY OAKWOOD 05 $9,898, $542, PRINCE INSTITUTE OF PROFESSIONAL STUDIES 03 $375, $20, Page 12

14 AL REMINGTON - MOBILE 01 $13,081, $717, CAMPUS SAMFORD UNIVERSITY 06 $34,548, $1,894, SOUTHEASTERN BIBLE 06 $1,102, $60, SOUTHERN CHRISTIAN 03 $7,364, $403, UNIVERSITY SOUTHERN UNION STATE 03 $3,373, $185, COMMUNITY SPRING HILL 01 $8,070, $442, STILLMAN 07 $5,826, $319, TALLADEGA 03 $1,196, $65, TROY STATE UNIVERSITY 02 $106,338, $5,832, TROY STATE UNIVERSITY DOTHAN 02 $1,520, $83, TROY STATE UNIVERSITY 02 $6,713, $368, MONTGOMERY TUSKEGEE UNIVERSITY 03 $20,285, $1,112, UNITED STATES SPORTS ACADEMY 01 $3,814, $209, UNIVERSITY OF MOBILE 01 $8,195, $449, UNIVERSITY OF MONTEVALLO 06 $8,794, $482, UNIVERSITY OF NORTH ALABAMA 05 $15,506, $850, UNIVERSITY OF SOUTH ALABAMA 01 $61,631, $3,380, UNIVERSITY OF WEST ALABAMA 07 $13,213, $724, VIRGINIA 07 $918, $50, Total for AL FFEL Schools $31,761, DL School Name Congressional District Loan Amount Maximum STAR Boost ATHENS STATE UNIVERSITY 05 $9,531, $522, CAPPS 01 $82, $4, HERZING 07 $2,717, $149, JACKSONVILLE STATE UNIVERSITY 03 $8,224, $451, JEFFERSON STATE COMMUNITY 07 $3,820, $209, MILES 07 $8,624, $473, REMINGTON - MOBILE CAMPUS 01 $1,228, $67, Page 13

15 AL STILLMAN 07 $488, $26, TALLADEGA 03 $236, $12, UNIVERSITY OF ALABAMA 07 $73,428, $4,027, UNIVERSITY OF ALABAMA AT 07 $75,093, $4,118, BIRMINGHAM UNIVERSITY OF ALABAMA IN 05 $15,093, $827, HUNTSVILLE VIRGINIA 07 $52,467, $2,877, Total for AL DL Schools $13,769, Total STAR Boost for AL $45,530, Page 14

16 AR FFEL School Name Congressional District Loan Amount STAR Boost ARKANSAS OF 02 $322, $17, BARBERING & HAIR DESIGN ARKANSAS NORTHEASTERN 01 $555, $30, ARKANSAS STATE UNIVERSITY 01 $43,077, $2,362, ARKANSAS STATE UNIVERSITY - 02 $2,448, $134, BEEBE ARKANSAS TECH UNIVERSITY 03 $18,755, $1,028, ARTHUR'S BEAUTY 02 $20, $1, ASKINS VO TECH 03 $40, $2, BLACK RIVER TECHNICAL 01 $1,391, $76, CENTRAL BAPTIST 02 $1,220, $66, CROWLEY'S RIDGE 01 $461, $25, EASTERN OF HEALTH 02 $1,812, $99, VOCATIONS FAYETTEVILLE BEAUTY 03 $39, $2, HARDING UNIVERSITY 02 $27,015, $1,481, HENDERSON STATE UNIVERSITY 04 $12,244, $671, HENDRIX 02 $5,256, $288, JEFFERSON SCHOOL OF NURSING 04 $104, $5, JOHN BROWN UNIVERSITY 03 $8,842, $484, LYON 01 $1,904, $104, NATIONAL PARK COMMUNITY 04 $394, $21, NEW TYLER BARBER 02 $362, $19, NORTH ARKANSAS 03 $1,933, $106, NORTHWEST ARKANSAS 03 $433, $23, AVIATION TECHNOLOGIES CENTER NORTHWEST ARKANSAS 03 $3,661, $200, COMMUNITY OUACHITA BAPTIST UNIVERSITY 04 $4,170, $228, OUACHITA TECHNICAL 04 $226, $12, OZARKA 01 $1,454, $79, Page 15

17 AR PHILANDER SMITH 02 $398, $21, PHILLIPS COMMUNITY 01 $438, $24, OF THE UNIVERSITY OF ARKANSAS PULASKI TECHNICAL 02 $22,741, $1,247, SEARCY BEAUTY 02 $63, $3, SOUTH ARKANSAS COMMUNITY 04 $1,299, $71, SOUTHEAST ARKANSAS 04 $711, $39, SOUTHERN ARKANSAS 04 $6,444, $353, UNIVERSITY SOUTHERN ARKANSAS 04 $714, $39, UNIVERSITY TECH UNIVERSITY OF ARKANSAS 03 $54,227, $2,974, UNIVERSITY OF ARKANSAS AT 03 $10,027, $549, FORT SMITH UNIVERSITY OF ARKANSAS AT 02 $49,455, $2,712, LITTLE ROCK UNIVERSITY OF ARKANSAS AT 04 $7,753, $425, MONTICELLO UNIVERSITY OF ARKANSAS AT 04 $16,315, $894, PINE BLUFF UNIVERSITY OF ARKANSAS COMMUNITY AT BATESVILLE 01 $1,449, $79, UNIVERSITY OF ARKANSAS COMMUNITY AT MORRILTON 02 $453, $24, UNIVERSITY OF ARKANSAS FOR 02 $22,249, $1,220, MEDICAL SCIENCES UNIVERSITY OF CENTRAL 02 $26,697, $1,464, ARKANSAS UNIVERSITY OF THE OZARKS 03 $1,791, $98, Total for AR FFEL Schools $19,821, DL School Name Congressional District Loan Amount Maximum STAR Boost ARKADELPHIA BEAUTY 04 $135, $7, ARKANSAS BAPTIST 02 $117, $6, EAST ARKANSAS COMMUNITY Page $166, $9,134.34

18 AR LEES SCHOOL OF COSMETOLOGY 02 $107, $5, MARGARET'S HAIR ACADEMY 02 $1, $71.96 PHILANDER SMITH 02 $6,078, $333, UNIVERSITY OF ARKANSAS 04 $263, $14, COMMUNITY AT HOPE UNIVERSITY OF CENTRAL 02 $8,083, $443, ARKANSAS WILLIAMS BAPTIST 01 $1,866, $102, Total for AR DL Schools $922, Total STAR Boost for AR $20,744, Page 17

19 AZ FFEL School Name Congressional District Loan Amount STAR Boost AMERICAN INDIAN OF 03 $30, $1, THE ASSEMBLIES OF GOD AMERICAN INSTITUTE OF 04 $2,804, $153, TECHNOLOGY APOLLO 04 $17,824, $977, ARIZONA AUTOMOTIVE INSTITUTE 04 $6,481, $355, ARIZONA OF ALLIED 02 $1,418, $77, HEALTH ARIZONA STATE UNIVERSITY 05 $28,860, $1,582, ARIZONA WESTERN 07 $1,393, $76, ARTISTIC BEAUTY S - 01 $1,896, $104, FLAGSTAFF ARTISTIC BEAUTY S - 03 $1,062, $58, GLENDALE ARTISTIC BEAUTY S - 02 $1,762, $96, PHOENIX ARTISTIC BEAUTY S - 05 $495, $27, SCOTTSDALE ARTISTIC BEAUTY S - 08 $1,644, $90, TUCSON BRYMAN SCHOOL (THE) - PHOENIX 03 $30,295, $1,661, CARSTEN INSTITUTE 05 $1,126, $61, CENTRAL ARIZONA 01 $1,963, $107, COCHISE 08 $2,628, $144, COLLINS 05 $24,098, $1,321, CONSERVATORY OF RECORDING 05 $4,370, $239, ARTS & SCIENCES EARL'S ACADEMY OF BEAUTY 05 $610, $33, ESTRELLA MOUNTAIN 07 $2,902, $159, COMMUNITY EVEREST 03 $5,114, $280, GATEWAY COMMUNITY 04 $9,300, $510, GLENDALE COMMUNITY 02 $11,355, $622, GRAND CANYON UNIVERSITY 04 $31,613, $1,733, HIGH-TECH INSTITUTE - PHOENIX 04 $35,647, $1,955, Page 18

20 AZ INTERNATIONAL BAPTIST 05 $103, $5, INTERNATIONAL INSTITUTE OF 04 $5,896, $323, THE AMERICAS ITT TECHNICAL INSTITUTE - 04 $9,772, $536, ITT TECHNICAL INSTITUTE - 08 $9,025, $495, LAMSON 05 $1,679, $92, LONG TECHNICAL 04 $1,758, $96, MARICOPA BEAUTY 02 $260, $14, MESA COMMUNITY 05 $23,123, $1,268, METROPOLITAN 04 $1,199, $65, MOHAVE COMMUNITY 02 $3,668, $201, MOTORCYCLE MECHANICS INSTITUTE, DIVISION OF CLINTON TECHNICAL INS 03 $46,363, $2,543, MUNDUS INSTITUTE 04 $729, $39, NORTHCENTRAL UNIVERSITY 01 $271, $14, PARADISE VALLEY COMMUNITY 03 $3, $ PHOENIX 04 $8,435, $462, PHOENIX THERAPEUTIC MASSAGE 05 $846, $46, PIMA COUNTY COMMUNITY 07 $11,889, $652, PIMA MEDICAL INSTITUTE 08 $24,771, $1,358, PRESCOTT 01 $8,091, $443, RIO SALADO COMMUNITY 05 $7,907, $433, ROBERTO-VENN SCHOOL OF 04 $253, $13, LUTHIERY SAFFORD OF BEAUTY 01 $211, $11, CULTURE SCOTTSDALE COMMUNITY 05 $9,802, $537, SCOTTSDALE CULINARY 05 $19,938, $1,093, INSTITUTE SOUTH MOUNTAIN COMMUNITY 04 $1,255, $68, Page 19