NSLDS Annual Reasonability is designed to compare the loan-level detail
reported to NSLDS and the aggregated loan data reported on the Guaranty
Agency Financial Report (GAFR). In order to accurately account for the
loan-level detail on NSLDS, NSLDS performs two types of calculations on
the NSLDS database: Quarterly Calculations and Yearly Calculations.

**Quarterly Calculations**

Sixty days after the end of each fiscal quarter, NSLDS extracts all
loans from the NSLDS database that meet the following GAFR line item
requirements:

1.  Loan Guaranty (AR-1 and AR-3)

2.  Loan Cancellation (AR-2 and AR-4)

3.  Loans Transferred In (AR-6)

4.  Loans Transferred Out (AR-7)

5.  Default Claims Paid (AR-8)

6.  Death and Disability Clams Paid (AR-10)

7.  Closed School/False Certification Claims Paid (AR-11)

For each activity above, NSLDS extracts all loans for the GA that meets
the requirements. The current quarter's extract is compared to the
previous quarter's extract at the loan-level. The difference between the
two files is summarized, capturing all of the loan activity not
previously captured, representing current quarter activity as well as
prior period activity that had not been previously reported. This
process continues for each quarter.

When the Annual Reasonability reports are produced, NSLDS adds each of
the four quarters' summary amounts for the fiscal year to equal the
Amount from NSLDS displayed on the report.

**Yearly Calculations**

Sixty days after the end of each fiscal year, NSLDS extracts all loans
from the NSLDS database that meet the following GAFR line item
requirements:

1.  Loans Paid in Full (AR-12)

2.  Interim Loans (AR-13)

3.  Federal Default Fee (AR-19)

For each activity above, NSLDS extracts all loans that meet the
requirements for the line item. For AR-12, NSLDS calculates the total
amount of loans paid in full for the GA. The amount on the report is the
total value calculated in the current fiscal year minus the total amount
calculated for the prior fiscal year. For AR-13, the amount on the
report is the total value of interim loans as of the end of the current
fiscal year. For AR-19, NSLDS calculates the total amount of
disbursements for the GA. The amount on the report is the total value
calculated in the current fiscal year minus the total value calculated
in the prior fiscal year, which represents the total amount of
disbursements attributed to the current fiscal year. The resulting total
amount disbursed for the fiscal year is multiplied by the 1 percent
default fee and is the value on the Annual Reasonability report.

**GAFR Line Item Logic**

For most line items, the amount reported on the GAFR is the agency
cumulative total. The value represented on the Annual Reasonability
Report is the difference between your current annual reported amount for
the line item minus the amount for the same line item reported the
previous year. It is this difference amount that is compared to the
values calculated by NSLDS, representing the equivalent, summarized
loan-level information. The exceptions are the line items which the GA
reports an "as of" amount for the fiscal year such as AR-13, Interim
Loans.

NSLDS Line Item Logic

The Annual Reasonability reports will include the GAFR line items
calculated according to the following chart; however, adjustments for
prior calculated quarters and previous fiscal years will need to be
taken into consideration. **B**ecause the comparison is made at the
loan-level, adjustments to amounts and dates that affect the individual
activities will reflect in the totals on the report and the loan
activity in the back-up detail. If amounts change (positive or negative)
after a calculation has occurred, the difference amount between the
original calculation and the next calculation will be included with the
next calculation's summary totals and back-up detail. The same holds
true if dates move forward or backwards, such as claim paid dates.

The computation logic chart provides the key fields that are used in the
computation for each NSLDS calculated value.

+---------+------------+-----------------------------------------------+
| **GAFR  | **\        | **\                                           |
| Line    | NSLDS      | \                                             |
| Item**  | Source     | Description**                                 |
|         | Attributes |                                               |
|         | from DPI** |                                               |
+=========+============+===============================================+
| AR-1    | Amount of  | Total Amount of Guaranty for FFEL Subsidized, |
| Loan    | Guaranty   | Unsubsidized, and PLUS loans guaranteed       |
| G       |            | during the fiscal year.                       |
| uaranty | Date of    |                                               |
|         | Guaranty   |                                               |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-2    | Amount of  | Total Amount of Cancellation (partial or      |
| Loan    | Ca         | whole) for FFEL Subsidized, Unsubsidized, and |
| Cance   | ncellation | PLUS loans where the cancellation occurred    |
| llation |            | during the fiscal year.                       |
|         | Date of    |                                               |
|         | Ca         |                                               |
|         | ncellation |                                               |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-3    | Amount of  | Total Amount of Guaranty for FFEL             |
| Loan    | Guaranty   | Consolidation loans guaranteed during the     |
| G       |            | fiscal year.                                  |
| uaranty | Date of    |                                               |
|         | Guaranty   |                                               |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-4    | Amount of  | Total Amount of Cancellation (partial or      |
| Loan    | Ca         | whole) for FFEL Consolidation loans where the |
| Cance   | ncellation | cancellation occurred during the fiscal year. |
| llation |            |                                               |
|         | Date of    |                                               |
|         | Ca         |                                               |
|         | ncellation |                                               |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-6    | Amount of  | Total Amount of Guaranty for all FFEL loans   |
| Loans   | Guaranty   | transferred from another active Guaranty      |
| Tran    |            | Agency to your Guaranty Agency during the     |
| sferred | Date of    | fiscal year.                                  |
| In      | Guaranty   |                                               |
|         |            |                                               |
|         | Date Loan  |                                               |
|         | Guaranty\  |                                               |
|         | T          |                                               |
|         | ransferred |                                               |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-7    | Amount of  | Total Amount of Guaranty for all loans        |
| Loans   | Guaranty   | transferred to another active Guaranty Agency |
| T       |            | from your Guaranty Agency where the transfer  |
| ransfer | Date of    | occurred during the fiscal year.              |
| Out     | Guaranty   |                                               |
|         |            |                                               |
|         | Date Loan  |                                               |
|         | Guaranty\  |                                               |
|         | T          |                                               |
|         | ransferred |                                               |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-8    | Amount of  | Total Amount of Default Claims Paid to Lender |
| Default | Claim Paid | minus Amount Repurchased minus Amount of      |
| Claims  | to\        | Refund from Lender on Claims. Includes        |
| Paid    | Lender     | Default ('DF') and Exempt ('EX') claim types. |
|         |            |                                               |
|         | Date Claim | Note: NSLDS does not collect a specific Claim |
|         | Paid       | Type associated with each reported Repurchase |
|         |            | or Claim Refund from Lender. The Repurchase   |
|         | Claim      | and/or Claim Refund must follow the Claim     |
|         | Reason for | Payment in order to be associated with the    |
|         | Lender\    | Claim Payment in question.                    |
|         | Claim      |                                               |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Amount     |                                               |
|         | R          |                                               |
|         | epurchased |                                               |
|         |            |                                               |
|         | Date       |                                               |
|         | R          |                                               |
|         | epurchased |                                               |
|         |            |                                               |
|         | Amount of  |                                               |
|         | Refund     |                                               |
|         | from\      |                                               |
|         | Lender on  |                                               |
|         | Claims     |                                               |
|         |            |                                               |
|         | Date of    |                                               |
|         | Refund     |                                               |
|         | from\      |                                               |
|         | Lender on  |                                               |
|         | Claims     |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-10   | Amount of  | Total Amount of Claim Paid to Lender minus    |
| --      | Claim Paid | Amount Repurchased minus Amount of Refund     |
| Death   | to\        | from Lender on Claims. Includes Death ('DE')  |
| and     | Lender     | and Disability ('DI') claim types.            |
| Dis     |            |                                               |
| ability | Date Claim | Note: NSLDS does not collect a specific Claim |
| Claims  | Paid       | Type associated with each reported Repurchase |
| Paid    |            | or Claim Refund from Lender. The Repurchase   |
|         | Claim      | and/or Claim Refund must follow the Claim     |
|         | Reason for | Payment in order to be associated with the    |
|         | Lender\    | Claim Payment in question.                    |
|         | Claim      |                                               |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Amount     |                                               |
|         | R          |                                               |
|         | epurchased |                                               |
|         |            |                                               |
|         | Date       |                                               |
|         | R          |                                               |
|         | epurchased |                                               |
|         |            |                                               |
|         | Amount of  |                                               |
|         | Refund     |                                               |
|         | from\      |                                               |
|         | Lender on  |                                               |
|         | Claims     |                                               |
|         |            |                                               |
|         | Date of    |                                               |
|         | Refund     |                                               |
|         | from\      |                                               |
|         | Lender on  |                                               |
|         | Claims     |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-11   | Amount of  | Total Amount of Claim Paid to Lender minus    |
| --      | Claim Paid | Amount Repurchased minus Amount of Refund     |
| Closed  | to\        | from Lender on Claims. Includes Closed School |
| Schoo   | Lender     | ('CS') False Certification ('FC') claim       |
| l/False |            | types.                                        |
| Certif  | Date Claim |                                               |
| ication | Paid       | Note: NSLDS does not collect a specific Claim |
| Claims  |            | Type associated with each reported Repurchase |
| Paid    | Claim      | or Claim Refund from Lender. The Repurchase   |
|         | Reason for | and/or Claim Refund must follow the Claim     |
|         | Lender\    | Payment in order to be associated with the    |
|         | Claim      | Claim Payment in question.                    |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Amount     |                                               |
|         | R          |                                               |
|         | epurchased |                                               |
|         |            |                                               |
|         | Date       |                                               |
|         | R          |                                               |
|         | epurchased |                                               |
|         |            |                                               |
|         | Amount of  |                                               |
|         | Refund     |                                               |
|         | from\      |                                               |
|         | Lender on  |                                               |
|         | Claims     |                                               |
|         |            |                                               |
|         | Date of    |                                               |
|         | Refund     |                                               |
|         | from\      |                                               |
|         | Lender on  |                                               |
|         | Claims     |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-12   | Amount of  | Total Amount of Guaranty minus the total      |
| --      | Guaranty   | Amount of Cancellation for loans reported in  |
| Loans   |            | a Paid in Full Status. Includes Paid in Full  |
| Paid in | Code for   | ('PF'), Paid in Full through Consolidation    |
| Full    | Loan       | ('PC', 'PN') and Presumed Paid in Full ('PM') |
|         | Status     | loan statuses.                                |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Amount of  |                                               |
|         | Ca         |                                               |
|         | ncellation |                                               |
|         |            |                                               |
|         | Date of    |                                               |
|         | Ca         |                                               |
|         | ncellation |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-13   | Amount of  | Total Amount of Guaranty minus the total      |
| --      | Guaranty   | Amount of Cancellation for loans that were in |
| Interim |            | an Interim Loan as of the fiscal year end.    |
| Loans   | Code for   | Includes Loan Originated ('IA'), In School or |
|         | Loan       | Grace Period ('ID'), In Grace ('IG'), and In  |
|         | Status     | Military Grace ('IM') loan statuses.          |
|         |            |                                               |
|         | Type of    |                                               |
|         | Loan       |                                               |
|         |            |                                               |
|         | Amount of  |                                               |
|         | Ca         |                                               |
|         | ncellation |                                               |
|         |            |                                               |
|         | Date of    |                                               |
|         | Ca         |                                               |
|         | ncellation |                                               |
|         |            |                                               |
|         | Code for   |                                               |
|         | Guaranty   |                                               |
|         | Agency     |                                               |
+---------+------------+-----------------------------------------------+
| AR-19   | Date of    | 1% of the total Amount of Disbursement that   |
| --      | Guaranty   | occurred during the fiscal year for all FFEL  |
| Federal |            | loans that have a Guaranty Date on or after   |
| Default | Date of    | July 1, 2006.                                 |
| Fee     | Di         |                                               |
|         | sbursement |                                               |
|         |            |                                               |
|         | Amount of  |                                               |
|         | Di         |                                               |
|         | sbursement |                                               |
+---------+------------+-----------------------------------------------+

Note: Computational Logic was updated February 15, 2007, for the
addition of the Federal Default Fee.