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                                                                   EXHIBIT 10.17

                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and between John
T. Fees (the "Executive"), and Collegiate Funding Services, Inc., a corporation
organized and existing under the laws of the State of Delaware (the "Company").

WHEREAS, pursuant to the terms of the Merger Agreement dated as of April 21,
2004 (the "Merger Agreement"), among the Company, Affinity Acquisition Corp., a
Delaware limited liability company and the Company's wholly-owned subsidiary
("Acquirer"), Members Connect Inc., a Delaware corporation, d/b/a Youth Media &
Marketing Networks ("Y2M"), and certain major stockholders of Y2M listed on a
schedule to the Merger Agreement, Acquirer shall be merged with and into Y2M,
and Y2M shall be the surviving corporation and a wholly-owned subsidiary of the
Company; and

WHEREAS, in recognition of Executive's contributions to the success and
accomplishments of Y2M during his tenure as Chief Executive Officer of Y2M,
Company wishes to retain Executive and obtain his commitment to serve as
Executive Vice President of the Company and President of Y2M on the terms set
forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and intending to be legally bound, the parties, subject to the
terms and conditions set forth herein, agree as follows:

1. EMPLOYMENT AND TERM.

(A)   Executive hereby agrees to be employed by the Company as Executive Vice
      President of the Company and President of Y2M, and Company hereby agrees
      to employ Executive in such capacity. To the extent required by law,
      Executive's employment under this Agreement shall be maintained through
      the primary subsidiary of the Company, Collegiate Funding Services, L.L.C.
      ("CFS"), or another wholly owned subsidiary of Company used to employ
      Company executives, and in such case any reference in this Agreement to
      employment or termination of employment with Company shall be deemed to
      include employment or termination of employment with CFS or such other
      subsidiary.

(B)   The period of Executive's employment under this Agreement (the "Term")
      shall begin on April 21, 2004 (the "Effective Date") and end on April 20,
      2005, unless sooner terminated in accordance with section 10 hereof or
      extended pursuant to (c), below.

(C)   The Term shall automatically be extended for an additional one-year period
      each April 21, beginning April 21, 2005, unless either Executive or
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      the Company delivers written notice to the other party, not later than 60
      days before the end of the Term (including extensions) of their election
      that the Term not be extended.

(D)   As of the Effective Date, this Agreement shall supersede and take the
      place of any and all other agreements between Executive and the Company or
      CFS that govern the terms and conditions of Executive's employment.

2. BASE SALARY.

(A)   The Company shall pay Executive an annual salary at the rate of
      $220,000.00 (the "Base Salary"). The Base Salary shall be inclusive of all
      applicable income, Social Security and other taxes and charges which are
      required by law or requested to be withheld by Executive and which shall
      be withheld and paid in accordance with Company's normal payroll practice
      for its similarly situated executives as in effect from time to time.

(B)   The Compensation and Personnel Committee (the "Compensation Committee") of
      the Company's Board of Directors (the "Board"), in consultation with the
      Chief Executive Officer of the Company (the "Chief Executive Officer"),
      shall review Executive's Base Salary annually during the Term of this
      Agreement, and in its discretion may increase Executive's Base Salary by
      any amount but may not decrease Executive's Base Salary by more than ten
      (10%) per cent per annum.

3. STOCK OWNERSHIP. Executive agrees to comply with the Company's stock
ownership guidelines as may be established by the Board in consultation with the
Chief Executive Officer, which guidelines shall establish the appropriate level
of equity ownership expressed as a multiple of Base Salary and a target number
of years within which such level of equity ownership is to be attained. In
computing whether the annual and overall guidelines have been met, all shares of
Common Stock ("Shares") held by Executive and all stock options ("Stock
Options") to purchase Common Stock and restricted shares of Common Stock
("Restricted Shares") granted to Executive shall be counted.

4. ANNUAL INCENTIVE COMPENSATION.

(A)   With respect to each full fiscal year during the Term, Executive shall
      have an annual cash incentive opportunity (the "Incentive") in an amount
      not to exceed 150% of Base Salary, based upon the achievement of
      performance criteria established by the Compensation Committee of at the
      beginning of each such fiscal year in consultation with the Chief
      Executive Officer. The final amount of the Incentive will be determined by
      the Compensation Committee in its discretion. Notwithstanding the
      foregoing, the minimum
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      Incentive the Executive is guaranteed to earn with respect to the first
      fiscal year of this Agreement shall be no less than $60,000.

(B)   At the discretion of the Compensation Committee, a portion, not to exceed
      fifty percent (50%) of the Incentive, may be paid in Restricted Shares,
      which Restricted Shares shall be issued from Shares reserved under the
      Company's equity share plan. The restrictions with respect to any
      Restricted Shares issued pursuant to this Section 4(b) shall lapse over a
      period of three (3) years from the date of issuance.

5. STOCK OPTIONS.

(A)   Executive shall be granted Stock Options to purchase up to 0.10% of the
      fully diluted outstanding Shares at the time of the initial public
      offering of the Shares pursuant to a registration statement filed with and
      declared effective by the Securities and Exchange Commission (the "SEC")
      under the Securities Act of 1933, as amended (the "IPO").

(B)   Any Stock Options granted pursuant to the provisions of this Section 5
      shall count towards any stock ownership requirement applicable to
      Executive under this or any other agreement between Executive and the
      Company.

(C)   The exercise price of the Stock Options granted in connection with the IPO
      (the "IPO Options") will have an exercise price equal to the offering
      price of the Shares offered to the public in the IPO. The IPO Options will
      vest with respect to 25% of the Shares covered by the IPO Options on the
      first anniversary of the date of grant and on each of the immediately
      following three anniversaries.

6. PENSION PLANS; SERP

(A)   Executive shall be entitled to participate in any tax-qualified retirement
      plans maintained by or contributed to by the Company for the benefit of
      its senior executives (Executive Vice President level), (collectively
      "Qualified Plans"), including without limitation, the CFS 401K Retirement
      Plan (the "401(k) Plan"), in accordance with the terms of the Qualified
      Plans as they may be amended from time to time in the discretion of the
      Company.

(B)   Executive shall be eligible to participate in the Company's Supplemental
      Employee Retirement Plan (the "SERP"). Under the terms of the SERP,
      Executive may make a deferral contribution on a pre-tax basis of up to
      $25,000 of Base Salary, after subtracting Executive's maximum permissible
      contribution to the 401(k) plan, into the SERP. The Company shall make a
      matching contribution to the SERP, in cash or Common
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      Stock, in an amount equal to one hundred percent (100%) of Executive's
      contribution to the SERP. The Company's matching contribution shall vest
      in equal installments over three (3) years.

7. MEDICAL INSURANCE AND OTHER BENEFITS.

(A)   During the Term of this Agreement Executive shall be entitled to
      participate in any medical and dental insurance plans generally available
      to the senior management of Company, as such plans may be in effect from
      time to time.

(B)   Executive shall be entitled to receive or participate in such further
      savings, deferred compensation, life insurance, health or welfare benefit
      plans offered to Company's senior management generally, in accordance with
      the terms of such plans as they may be amended from time to time in the
      discretion of the Company.

(C)   The Company agrees to reimburse Executive for all reasonable, ordinary and
      necessary business expenses incurred by Executive in performing his duties
      pursuant to this Agreement, in accordance with Company's reimbursement
      policies generally applicable to management personnel.

(D)   Executive shall be entitled to receive a five thousand dollar ($5,000)
      annual allowance for tax preparation, planning and advice.

(E)   Executive shall be entitled to paid time off as provided under the terms
      of the Company's paid time off policy; provided that Executive shall be
      provided credit for four (4) years of service at Y2M.

8. NONDISCLOSURE OF PROPRIETARY AND CONFIDENTIAL INFORMATION.

(A)   Executive and Company acknowledge that Executive will, in the course of
      his employment, come into possession of confidential, proprietary business
      and technical information, and trade secrets of Company and its
      Affiliates, as defined in Section 9(d) (the "Proprietary Information").
      Proprietary Information includes, but is not limited to, the following:

      (i)   Business Procedures, Financial Information, Accounting Information,
            Credit Information. All information concerning or relating to the
            way Company and its Affiliates conduct their business, which is not
            generally known to the public or within the industry or trade in
            which Company or its Affiliates compete (such as Company contracts,
            internal business procedures, controls, plans, licensing techniques
            and practices, supplier, subcontractor and prime contractor names
            and contacts and other vendor information, computer system passwords
            and other computer
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            security controls, financial information, distributor information,
            and employee data) and the physical embodiments of such information
            (such as check lists, samples, service and operational manuals,
            contracts, proposals, printouts, correspondence, forms, listings,
            ledgers, financial statements, financial reports, financial and
            operational analyses, financial and operational studies, management
            reports of every kind, databases, employment or personnel records,
            and any other written or machine-readable expression of such
            information as are filed in any tangible media).

      (ii)  Marketing Plans and Customer Lists. All information not generally
            known to the public or within the industry or trade in which Company
            or its Affiliates compete pertaining to Company's and its
            Affiliates' marketing plans and strategies; forecasts and
            projections; marketing practices, procedures and policies; goals and
            objectives; quoting practices, procedures and policies; and customer
            data including the customer list, contracts, representatives,
            requirements and needs, specifications, data provided by or about
            prospective customers, and the physical embodiments of such
            information.

      (iii) Business Ventures. All information not generally known to the public
            or within the industry or trade in which Company or its Affiliates
            operate concerning new product development, negotiations for new
            business ventures, future business plans, and similar information
            and the physical embodiments of such information.

      (iv)  Software. All information relating to Company's and its Affiliates'
            software or hardware in operation or various stages of research and
            development, which are not generally known to the public or within
            the industry or trade in which Company or its Affiliates compete and
            the physical embodiments of such information.

      (v)   Litigation. Information which is not a public record and is not
            generally known to the public or within the industry or trade in
            which Company or its Affiliates compete regarding litigation and
            potential litigation matters and the physical embodiments of such
            information.

      (vi)  Policy Information. Information not of a public nature regarding the
            policies and positions that have been or will be advocated by
            Company and its Affiliates with government officials, the views of
            government officials toward such policies and positions, and the
            status of any communications that Company or its Affiliates may have
            with any government officials.
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      (vii) Information Not Generally Known. Any information which (a) is not
            generally known to the public or within the industry or trade in
            which Company or its Affiliates compete and (b) (1) gives Company or
            its Affiliates an advantage over its or their competitors or (2) has
            significant economic value or potentially significant economic value
            to Company or its Affiliates, including the physical embodiments of
            such information.

(B)   Executive acknowledges that the Proprietary Information is a valuable and
      unique asset of Company and its Affiliates. Executive agrees that he will
      not, at any time during his employment or after the termination of his
      employment with Company, without the prior written consent of Company or
      its Affiliates, as applicable, either directly or indirectly divulge any
      Proprietary Information for his own benefit or for any purpose other than
      the exclusive benefit of Company and/or its Affiliates.

9. AGREEMENT NOT TO COMPETE.

(A)   Executive acknowledges and agrees that the Company is engaged in a highly
      competitive business and that by virtue of Executive's position and
      responsibilities with the Company and access to the Proprietary
      Information, engaging in any business which is competitive with the
      Company's Business (as defined below) will cause the Company great and
      irreparable harm.

(B)   Executive covenants and agrees that at all times during the Term, and
      during the period beginning on the date of termination of his employment
      (whether such termination is voluntary or involuntary) and ending one (1)
      year following his date of termination (the "Restricted Period"), he shall
      not, either directly or indirectly through one or more intermediaries:

      (i)   work or serve as a director, officer, employee, consultant, agent,
            representative, or in any other capacity, with or without
            compensation, on behalf of any Prohibited Entity;

      (ii)  interfere with the Company's relations with any person or entity who
            is a client or customer of the Company;

      (iii) solicit any employees, customers, or business partners of Company,
            induce any customer or business partner of the Company to breach a
            contract with the Company or any principal for whom the Company acts
            as agent to terminate such agency relationship; or
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      (iv)  make statements about Company or its employees, officers or
            directors reasonably determined by the Company to be disparaging.

(C)   For purposes of this Agreement:

      (i)   The term "Entity" shall mean a business entity of any type, whether
            or not incorporated.

      (ii)  A "Prohibited Entity" is any Entity that is primarily engaged in the
            Company's Business in the United States, Canada, or any other
            country where Company (including any Affiliate) either engages in
            the Company's Business at the time of Executive's termination or
            where Company, at the time of Executive's termination, has developed
            a business plan or taken affirmative steps to engage in the
            Company's Business;

      (iii) The Company's "Business" shall include any business activity or line
            of business similar to the type of education finance business
            conducted by Company, CFS, and/or their Affiliates at the time of
            Executive's termination of employment or which Company, CFS and/or
            their Affiliates at the time of Executive's termination of
            employment has developed a business plan or has taken affirmative
            steps to engage in such business activity or line of business.

      (iv)  An Entity is primarily engaged in the Company's Business if more
            than fifty (50%) of the revenues generated by the Entity are
            generated by such Business. For this purpose, each parent,
            subsidiary or other affiliate shall be deemed to be a separate
            Entity

      (v)   The term "Affiliate" shall be deemed to refer to Company, and any
            entity (whether or not existing on the date hereof) controlling,
            controlled by or under common control with Company.

(D)   Given his role as Executive Vice President, Executive expressly agrees
      that the markets served by Company, CFS and their Affiliates extend
      nationally and to Canada and are not dependent on the geographic location
      of the executive personnel or the businesses by which they are employed
      and that the restrictions set forth in this Section 9 are reasonable and
      are no greater than are required for the protection of Company, CFS, and
      its Affiliates.

(E)   In the event the Company reasonably determines that Executive has violated
      any provision of this Section 9, and Executive has not cured such
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      violation within five (5) days of the date of receipt of written notice
      thereof by Executive, then:

      (i)   Executive shall be terminated for Cause (as defined in Section
            10.3);

      (ii)  Executive will repay to Company any after tax profits realized from
            the exercise of Stock Options since the earlier of one year prior to
            the date of such violation and the termination of Executive's
            employment with Company (whichever date occurred the longest period
            of time before the date of any such option exercise); and

      (iii) the Company may discontinue any or all remaining benefits payable to
            Executive by virtue of his termination of employment.

      Such termination of employment or discontinuance of benefits shall be in
      addition to and shall not limit in any way any and all other rights and
      remedies that the Company may have against Executive.

10. TERMINATION OF EMPLOYMENT.

(A)   In addition to the expiration or nonrenewal of the Term, Executive's
      employment hereunder may be terminated during the Term upon the occurrence
      of any one of the events described in this Section 10. Except for
      termination of the Agreement due to the death of Executive or by Executive
      without Good Reason (as defined in Section 10.2), all termination
      decisions by the Company shall require Board action. Upon termination,
      Executive shall be entitled only to such compensation and benefits as
      described in this Section 10.

10.1  DEATH; TOTAL DISABILITY.

(A)   Executive's employment shall terminate upon Executive's death. The Company
      may terminate Executive's employment upon his becoming "Totally Disabled."
      For purposes of this Agreement, Executive shall be "Totally Disabled" if
      Executive is physically or mentally incapacitated so as to render
      Executive incapable of performing the essential functions of his position
      with or without reasonable accommodation, for a period of more than 180
      days. Executive's receipt of disability benefits under the Company's
      long-term disability benefits plan or receipt of Social Security
      disability benefits shall be deemed conclusive evidence that Executive is
      Totally Disabled for purpose of this Agreement. In the absence of
      Executive's receipt of such long-term disability benefits or Social
      Security benefits, the determination of whether Executive is Totally
      Disabled will be made by a personal physician selected by Executive (or
      his legal
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      representative) and approved by the Compensation Committee. The
      determination of such personal physician shall be final and binding,
      unless it is determined to have been arbitrary and capricious.

(B)   Upon termination of the employment of Executive due to death or Total
      Disability during the Term, Executive (or Executive's executors, legal
      representatives or administrators, as applicable) will be entitled to
      receive the following payments and benefits:

      (i)   Accrued but unpaid Base Salary through the date of termination;

      (ii)  Reimbursement for any unreimbursed business expenses and for accrued
            paid time off;

      (iii) Within thirty (30) days of termination of employment, a lump sum
            payment in an amount equal to Base Salary (as in effect on the date
            of termination); and

      (iv)  A pro rata portion of the Incentive, if any, that Executive would
            have been entitled to receive pursuant to Section 4 hereof in the
            year of Executive's death or Total Disability (i) based upon the
            percentage of the fiscal year that shall have elapsed through the
            date of Executive's termination of employment and (ii) to the extent
            payment of the Incentive is based upon individual performance
            criteria, based upon the actual performance of Executive during the
            portion of such fiscal year that Executive was employed by the
            Company prior to such death or Total Disability, payable when such
            Incentive would have otherwise been payable had Executive's
            employment not terminated.

(C)   All of the Stock Options and/or Restricted Shares previously awarded to
      Executive shall fully vest and be exercisable immediately. Unless
      otherwise provided by the Company in its sole discretion, Executive (or
      Executive's executors, legal representatives or administrators, as
      applicable) shall be required to exercise all vested Stock Options held by
      him as of the date of termination within one hundred and twenty (120) days
      of the date of termination. Any Stock Options not exercised within such
      120-day period shall expire.

(D)   In the event Executive's employment is terminated due to Executive's death
      or Total Disability following the IPO, all restrictions on Restricted
      Shares held by Executive at such time shall lapse.

10.2. TERMINATION BY COMPANY WITHOUT CAUSE; TERMINATION BY EXECUTIVE FOR GOOD
      REASON.
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(A)   Termination By Company Without Cause. The Company may terminate
      Executive's employment hereunder at any time for any reason other than
      Cause (as defined in Section 10.3) or Total Disability upon written notice
      to Executive ("Termination Without Cause).

(B)   Termination By Executive For Good Reason. Executive may terminate his
      employment hereunder at any time for Good Reason upon prior written notice
      at any time during the Term. For purposes of this Agreement, "Good Reason"
      shall mean:

      (i)   Subject to the provisions of Section 2 of this Agreement, a
            reduction by the Company in Executive's Base Salary of more than ten
            percent (10%) unless such reduction is part of an overall corporate
            restructuring or cost reduction plan; or

      (ii)  The change of Executive's principal place of employment to a
            location more than seventy-five (75) miles from such principal place
            of employment (which as of the Effective Date is acknowledged by
            both Executive and the Company to be Phoenix, Arizona).

For purposes of this Agreement, Good Reason shall not include notice to
Executive of the nonrenewal of the Term in accordance with Section 1(c).

(C)   In the event of a Termination Without Cause, or a Termination For Good
      Reason during the term of this Agreement, Executive shall be entitled to
      receive the following payments and benefits:

      (i)   Accrued but unpaid Base Salary through the date of termination;

      (ii)  Reimbursement for any unreimbursed business expenses and for accrued
            paid time off;

      (iii) Within thirty (30) days following the date of termination, a lump
            sum payment in an amount equal to the following:

            (A)   One hundred percent (100%) of Base Salary in effect on the
                  date of termination; plus

            (B)   One hundred percent (100%) of Executive's average annual
                  Incentive (the "Average Incentive"). For purposes of
                  determining the Average Incentive, the average of the
                  Incentive earned by Executive with respect to the two (2)
                  completed years immediately prior to his termination shall be
                  used. If the number of completed years beginning on and after
                  the Effective Date is less than two (2), the
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                  Average Incentive shall be the Incentive, if any, earned with
                  respect to the first year of Executive's employment; and

      (iv)  For a period beginning on the date of termination, and ending twelve
            (12) months after the last day of the Term (including extensions
            thereof pursuant to Section 1(c), both for periods that have begun
            as of the date of termination as well as periods that have not begun
            but for which the 60-day notice of nonrenewal date has passed),
            Executive and his eligible dependents shall be entitled to continue
            to participate in the Company's group life, medical and dental plans
            on the same basis as immediately prior to termination. The Company
            shall pay the entire cost of such coverage, including any employee
            cost-sharing provisions, if any. To the extent the terms and
            conditions of the aforesaid plans do not permit participation by
            Executive and his eligible dependents, Company shall arrange to
            provide Executive and his eligible dependents with the same level of
            coverage under individual policies. Executive shall cease to be
            covered under the foregoing medical and/or dental insurance plans if
            he obtains other coverage under other medical, dental and/or vision
            insurance plans. After expiration of the twelve-month period, if
            Executive has not obtained any other medical, dental and/of vision
            plans, the Company shall offer coverage under COBRA to the maximum
            allowed and Executive shall be responsible for all costs thereof.

(D)   The Executive shall not be required to mitigate the amount of any payment
      or benefit contemplated by this section, nor shall any such payment or
      benefit be reduced by any earnings or benefits that Executive may receive
      from any other source.

(E)   Executive shall be required to exercise all vested Stock Options held by
      him as of the date of termination within one hundred and twenty (120) days
      of the date of termination. Any vested Stock Options not exercised within
      such 120-day period shall expire. All unvested Stock Options held by
      Executive as of the date of termination shall be forfeited.

(F)   In the event Executive's employment is terminated by the Company without
      Cause, or Executive resigns for Good Reason following the IPO, all
      restrictions on Restricted Shares held by Executive at such time shall
      lapse.

10.3  TERMINATION FOR CAUSE; TERMINATION BY EXECUTIVE WITHOUT GOOD REASON.
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(A)   Termination for Cause. The Company may terminate the employment of
      Executive for Cause upon prior written notice at any time during the Term.

      (i)   For purposes of this Agreement, "Cause" shall mean:

            (A)   Executive's willful and continuing failure, that is not
                  remedied within twenty days after receipt of written notice of
                  such failure from the Company, to either (x) perform his
                  obligations hereunder, or (y) follow the Company's Code of
                  Business Conduct

            (B)   Executive's indictment for embezzlement, fraud or felony under
                  the laws of the United States or any state thereof;

            (C)   Executive's breach of fiduciary responsibility;

            (D)   an act of dishonesty by Executive which is materially
                  injurious to the Company;

            (E)   Executive's willful misconduct in connection with his duties;

            (F)   Executive's breach of the confidentiality, non-competition
                  and/or non-solicitation provisions of Sections 8 and 9 of this
                  Agreement; or

            (G)   any material infraction by Executive of any federal securities
                  laws or the rules and regulations promulgated by the SEC
                  thereunder.

      (ii)  Regardless of whether Executive's employment was initially
            considered to be terminated for any reason other than Cause,
            Executive's employment will be considered to have been terminated
            for Cause for purposes of this Agreement if the Board subsequently
            determines that Executive engaged in conduct constituting Cause.

      (iii) Any determination of Cause under this Agreement shall be made by
            resolution adopted by unanimous vote of the Board at a meeting
            called and held for that purpose. Executive shall be provided with
            reasonable notice of such meeting and shall be given the opportunity
            to be heard prior to the vote being taken by the Board.

(B)   Termination By Executive Without Good Reason. Executive may terminate his
      employment hereunder at any time without Good Reason.
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(C)   In the event Executive's employment with Company is terminated by Company
      for Cause or by Executive Without Good Reason or upon Retirement,
      Executive shall receive, as his sole compensation hereunder, all accrued
      but unpaid Base Salary prorated for the year through the date of
      termination, any SERP benefit that may have vested and reimbursement for
      any unreimbursed business expenses and for accrued paid time off. In
      addition, Executive shall be required to exercise all vested Stock Options
      held by him as of the date of termination within one hundred and twenty
      (120) days of the date of termination. Any vested Stock Options not
      exercised within such 120-day period shall expire. All unvested Stock
      Options held by Executive shall be forfeited.

(D)   In the event Executive's employment is terminated by the Company for Cause
      or by Executive Without Good Reason following the IPO, all Restricted
      Shares held by Executive at such time shall be forfeited.

10.4  RETIREMENT.

(A)   Executive may terminate his employment hereunder by reason of Retirement.

(B)   "Retirement" means Executive's retirement from the Company on or after the
      first to occur of (1) Executive's attainment of age 60 and completion of 5
      years of continuous service with the Company; or (2) Executive's
      attainment of age 62.

(C)   On the date of Executive's termination of employment by reason of his
      Retirement (the "Retirement Date"), Executive will be entitled to receive
      the following compensation:

      (i)   Accrued but unpaid Base Salary and Incentive (based on the incentive
            paid to Executive the prior year) prorated through his last day of
            work;

      (ii)  For a period beginning on Executive's Retirement Date and ending
            eighteen (18) months after the last day of the Term (including
            extensions thereof pursuant to Section 1(c), both for periods that
            have begun as of the date of termination as well as periods that
            have not begun but for which the 60 day notice of nonrenewal date
            has passed), Executive and his eligible dependents shall be entitled
            to continue to participate in the Company's group life, medical and
            dental plans on the same basis as immediately prior to Executive's
            Retirement Date. The Company shall pay the entire cost of such
            coverage, including any employee cost-sharing provisions, if any. To
            the extent the terms and conditions of the aforesaid plans do not
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            permit participation by Executive and his eligible dependents,
            Company shall arrange to provide Executive and his eligible
            dependents with the same level of coverage under individual
            policies. Executive shall cease to be covered under the foregoing
            medical and/or dental insurance plans if he obtains other coverage
            under other medical, dental and/or vision insurance plans. After
            expiration of the eighteen month period, if Executive has not
            obtained any other medical, dental and/of vision plans, the Company
            shall offer coverage under COBRA to the maximum allowed and
            Executive shall be responsible for all costs thereof.

      (iii) In addition, all of the Stock Options and/or Restricted Stock
            previously awarded to Executive shall fully vest and be exercisable
            immediately. All such vested Stock Options and Restricted Stock may
            be exercised by Executive in accordance with the terms of the
            applicable Stock Option or Restricted Stock grant to Executive.

      (iv)  On the Retirement Date, any SERP benefits Executive would be
            eligible for will be fully vested and exercisable and payable to
            Executive.

10.5  EXPIRATION OF TERM; NON-RENEWAL.

(A)   The Executive's employment hereunder will terminate upon the expiration of
      the Term by reason of the non-renewal provisions in Section 1(c).

(B)   If Executive's employment is terminated because Executive provides notice
      of his election not to renew the Term in accordance with Section 1(c),
      Executive shall receive, as his sole compensation hereunder, all accrued
      but unpaid Base Salary and Incentive (based on the incentive paid to
      Executive the prior year) prorated for the year through the date of
      termination, any SERP benefit that may have vested and reimbursement for
      any unreimbursed business expenses and for accrued paid time off.

11.   OTHER AGREEMENTS. Executive represents and warrants to the Company that:

(A)   There are no restrictions, agreements or understandings whatsoever to
      which Executive is a party or by which he is bound that would prevent or
      make unlawful Executive's execution of this Agreement or Executive's
      employment hereunder, or which are or would be inconsistent or in conflict
      with this Agreement or Executive's employment hereunder, or which would
      prevent, limit or impair in any way the performance by Executive of his
      obligations hereunder.
<PAGE>
(B)   Executive shall disclose the existence and terms of the restrictive
      covenants set forth in Sections 8 and 9 of this Agreement to any employer
      by whom Executive may be employed during the Term (which employment is not
      hereby authorized) or during the Restricted Period.

12. SURVIVAL OF PROVISIONS. The provisions of this Agreement, including without
limitation those set forth in Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15,
16, 19, 20, 23 and 24 hereof, shall survive the termination of Executive's
employment hereunder and the payment of all amounts payable and delivery of all
post-termination compensation and benefits pursuant to this Agreement incident
to any such termination of employment.

13. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be
binding upon Company and its successors or permitted assigns and Executive and
his executors, administrators or heirs. The Company shall require any successor
or successors expressly to assume the obligations of Company under this
Agreement. For purposes of this Agreement, the term "successor" shall include
the ultimate parent corporation of any corporation involved in a merger,
consolidation, or reorganization with or including the Company that results in
the stockholders of Company immediately before such merger, consolidation or
reorganization owning, directly or indirectly, immediately following such
merger, consolidation or reorganization, securities of another corporation. It
shall also include the Company that results from an initial public offering of
the Company's stock. Executive may not assign any obligations or
responsibilities under this Agreement or any interest herein, by operation of
law or otherwise, without the prior written consent of Company, except that any
benefit to which Executive may be entitled under this Agreement may be
transferred pursuant to the laws of descent and distribution without the prior
written consent of the Company. At any time, the Company may provide, without
the prior written consent of Executive, that Executive shall be employed
pursuant to this Agreement by any of its Affiliates instead of or in addition to
CFS or Company, and in such case all references herein to the "Company" shall be
deemed to include any such entity, provided that (i) such action shall not
relieve Company of any of its obligations under this Agreement, including,
without limitation, the Company's obligation to make or cause an Affiliate to
make or provide for any payment to or on behalf of Executive pursuant to this
Agreement, (ii) Executive's duties and responsibilities shall not be
significantly diminished as a result thereof, and (iii) Executive's rights under
this Agreement shall not be diminished as a result thereof. Except for any
determination that the Board is required to make pursuant to Section
10.3(a)(iii) hereof, the Board may assign any or all of its responsibilities
hereunder to any committee of the Board, in which case references to the Board
shall be deemed to refer to such committee.

14. EXECUTIVE BENEFITS. This Agreement shall not be construed to be in lieu of
or to the exclusion of any other rights, benefits and privileges to which
Executive may be entitled as an executive of Company under any retirement,
pension, profit-
<PAGE>
sharing, insurance, hospitalization or other plans or benefits which may now be
in effect or which may hereafter be adopted.

15. LITIGATION. If Executive is named as a defendant or receives a notice of a
deposition or subpoena concerning his prior employer, Executive shall provide
reasonable notice of such events and copy of such legal notices to the General
Counsel of the Company. If Executive is named as a defendant in a suit by a
third party after the termination of Executive's employment relating to issues
that arose during Executive's employment with the Company or by virtue of
Executive having been an employee of the Company, the Company will defend and
indemnify Executive regardless of whether he is still an active employee of the
Company so long as said Executive would have been covered under the insurance or
indemnification policies of the Company if Executive were still employed.
Nothing in this Section 15 shall limit any other right that Executive may have
under applicable law or otherwise to be indemnified and held harmless by the
Company.

16. NOTICES. All notices required to be given to any of the parties of this
Agreement shall be in writing and shall be deemed to have been sufficiently
given, subject to the further provisions of this Section 16, for all purposes
when presented personally to such party, or sent by facsimile transmission, any
national overnight delivery service, or certified or registered mail, to such
party at its address set forth below:

(A)   If to Executive:


(B)   If to Company:

Collegiate Funding Services, Inc.
c/o Collegiate Funding Services, L.L.C.
100 Riverside Drive
Fredericksburg, VA 22406
Attention: Chief Executive Officer

Fax No. (540) 374-2021

Such notice shall be deemed to be received when delivered if delivered
personally, upon electronic or other confirmation of receipt if delivered by
facsimile transmission, the next business day after the date sent if sent by a
national overnight delivery service, or three (3) business days after the date
mailed if mailed by certified or registered mail. Any notice of any change in
such address shall also be given in the manner set forth above. Whenever the
giving of
<PAGE>
notice is required, the giving of such notice may be waived in writing by the
party entitled to receive such notice.

17. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and any other documents,
instruments or other writings delivered or to be delivered in connection with
this Agreement as specified herein constitute the entire agreement among the
parties with respect to the subject matter of this Agreement and supersede all
prior and contemporaneous agreements, understandings, and negotiations, whether
written or oral, with respect to the terms of Executive's employment by Company.
This Agreement may be amended or modified only by a written instrument signed by
all parties hereto.

18. WAIVER. The waiver of the breach of any term or provision of this Agreement
shall not operate as or be construed to be a waiver of any other or subsequent
breach of this Agreement.

19. GOVERNING LAW. This Agreement shall be governed and construed as to its
validity, interpretation and effect by the laws of the State of New York,
without reference to its conflicts of laws provisions.

20. SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such provisions, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

21. SECTION HEADINGS. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation.

22. SPECIFIC ENFORCEMENT. Executive acknowledges that the restrictions contained
in Sections 8 and 9 hereof are reasonable and necessary to protect the
legitimate interests of Company and its Affiliates and that Company would not
have entered into this Agreement in the absence of such restrictions. Executive
also acknowledges that any breach by him of Sections 8 or 9 hereof will cause
continuing and irreparable injury to Company for which monetary damages would
not be an adequate remedy. Executive shall not, in any action or proceeding by
Company to enforce Sections 8 or 9 of this Agreement, assert the claim or
defense that an adequate remedy at law exists. In the event of such breach by
Executive, Company shall have the right to enforce the provisions of Sections 8
and 9 of this Agreement by seeking injunctive or other relief in any court, and
this Agreement shall not in any way limit remedies at law or in equity otherwise
available to Company. In the event that the provisions of Sections 8 or 9 hereof
should ever be adjudicated to exceed the time, geographic, or other limitations
permitted by applicable law in any applicable jurisdiction, then such provisions
shall be
<PAGE>
deemed reformed in such jurisdiction to the maximum time, geographic, or other
limitations permitted by applicable law.

23. ARBITRATION. Any dispute or claim, other than those referred to in Section
22, arising out of or relating to this Agreement or otherwise relating to the
employment relationship between Executive and Company (including but not limited
to any claims under Title VII of the Civil Rights Act of 1964, as amended; the
Americans with Disabilities Act; the Age Discrimination in Employment Act; the
Family and Medical Leave Act; and the Employee Income Retirement Security Act)
shall be submitted to Arbitration, in New York City, NY, and except as otherwise
provided in this Agreement shall be conducted in accordance with the rules of,
but not under the auspices of, the American Arbitration Association. The
arbitration shall be conducted before an arbitration tribunal comprised of three
individuals, one selected by Company, one selected by Executive, and the third
selected by the first two. The parties and the arbitrators selected by them
shall use their best efforts to reach agreement on the identity of the tribunal
within ten (10) business days of either party to this Agreement submitting to
the other party a written demand for arbitration. The proceedings before the
tribunal shall take place within twenty (20) business days of the selection
thereof. Executive and Company agree that such arbitration will be confidential
and no details, descriptions, settlements or other facts concerning such
arbitration shall be disclosed or released to any third party without the
specific written consent of the other party, unless required by law or court
order or in connection with enforcement of any decision in such arbitration. Any
damages awarded in such arbitration shall be limited to the contract measure of
damages, and shall not include punitive damages. The costs of the arbitrators
shall be paid by the Company, and each party shall bear his or its attorneys'
fees and other costs, except that (1) the arbitrators may specifically direct
one party to bear the entire cost of the arbitration, including all attorneys'
fees, if the arbitrators determine that such party acted in bad faith; or (2)
Executive is successful in which case the Company will pay Executive's attorneys
fees and costs.

24.   EQUITY CALL RIGHTS OF THE COMPANY.

(A)   In the event Executive's employment is terminated for any reason prior to
      the IPO, the Company shall, for a period of up to six (6) months following
      the date of termination, have the option to purchase (the "Call Rights"),
      and Executive shall be required to sell to the Company, if the Company
      exercises the Call Rights, (i) any or all Shares and/or Restricted Shares
      held by Executive and (ii) any or all Shares held by Executive which
      comprise the vested portion of any Stock Options (the "Vested Shares"), at
      a price per share as set forth below.

      (i)   If Executive's employment is terminated due to Executive's death or
            Disability or by the Company without Cause, or if Executive resigns
            for Good Reason,
<PAGE>
            (A)   the price per share for any Shares and Vested Shares shall be
                  the Fair Market Value (as defined below) of the Shares; and

            (B)   any restrictions on Restricted Shares held by Executive shall
                  lapse, and the price per share of such Restricted Shares shall
                  be the Fair Market Value (as defined below) of the Shares.

      (ii)  If Executive resigns without Good Reason,

            (A)   the price per share for any Shares and Vested Shares shall be
                  the lower of the cost of such Shares and Vested Shares to
                  Executive or the Fair Market Value (as defined below) of the
                  Shares; and

            (B)   any Restricted Shares held by Executive shall be forfeited.

      (iii) If Executive's employment is terminated by the Company for Cause,
            any Shares, Vested Shares and Restricted Shares shall be forfeited.

(B)   For purposes of this Agreement, prior to the IPO, "Fair Market Value"
      shall mean the fair market value of the Shares as determined in good faith
      by the Board in consultation with Executive.

25. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the
day and year first written above.

Collegiate Funding Services, Inc.

By: /s/ J. Barry Morrow
    ---------------------------

/s/ John T. Fees
-------------------------------
John T. Fees