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T.H.E. Repayment Bonus Benefit Plan



Northstar Education Finance, Inc. (“NEF”) provides individuals, who obtained or co-signed a student loan under NEF’s Total Higher Education (“T.H.E.”) Loan Program, a T.H.E. Repayment Bonus (the “Bonus”) if the following two conditions have been met:

a) the loan is in repayment (and at least one payment made while in repayment), and
b) the student loan account is 59 days or less delinquent.

When any T.H.E. student loan account becomes 60 or more days delinquent, the borrower is not entitled to receive a Bonus. The borrower will once again be entitled to start receiving a Bonus when all of his or her T.H.E. student loans become 59 days or less delinquent. The specific credit applied to the student loan account is based on the type of loan, school and loan origination date. See below for specific details as to how NEF’s Bonus is calculated.

The funding source for paying the Bonus is excess cash released from NEF’s trusts established pursuant to terms and conditions as set forth under specific indenture agreements associated with NEF’s financings. The cash flows of the trusts are the only means through which NEF is obligated to pay the Bonuses.

NOTE: as the cash flows from NEF’s trusts are dependent on economic and legislative conditions and contingencies, NEF cannot guarantee any specific level of funding for its T.H.E. Bonus payments.

NorthStar Education Finance, Inc.
T.H.E. Repayment Bonus (“Bonus”) Calculations

Bonus payments are generally made on a monthly basis around the first week of the month. The percentages below are based on the outstanding principal balance of the respective loan as of the previous month end (example: Bonus payments made in July would be based on outstanding principal balance as of June 30). The percentages are annual rates and thus, the calculation converts these to a monthly percentage to determine the monthly payments.

1.3% (in repayment, made at least one payment, and all accounts are less than 60 days delinquent)

1.0% bonus (in repayment and made at least one payment less than 60 days delinquent all accounts)

.25% (all accounts are less than 60 days delinquent)

.75% (in repayment, made at least one payment, and all accounts are less than 60 days delinquent)

Exceptions to the calculations:

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