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                                                                   Exhibit 10.12


                  THIRD AMENDMENT TO SECURITY AGREEMENT


         This Third Amendment to Security Agreement is entered into as of the
4th day of June, 2003 by and among Education Lending Services, Inc., a Delaware
corporation (formerly known as Grad Partners, Inc.) (the "Borrower"), Fifth
Third Bank, not in its individual capacity, but solely as eligible lender
trustee on behalf of Education Lending Services, Inc. (the "Borrower ELT") and
Fifth Third Bank, an Ohio banking corporation (the "Lender").

         WHEREAS, Borrower, the Borrower ELT and Lender are parties to a
Security Agreement, dated as of September 17, 2001 (the "Original Security
Agreement"); and

         WHEREAS, Borrower, the Borrower ELT and Lender are parties to that
First Amendment to Security Agreement, dated January 7, 2002 (the "First
Amendment") and that Second Amendment to Security Agreement dated as of March
26, 2002 (the "Second Amendment"); and

         WHEREAS, Borrower, the Borrower ELT and Lender now desire to enter into
this Third Amendment to Security Agreement to recognize the change of the name
of Grad Partners, Inc. to Education Lending Services, Inc.

         NOW THEREFORE, in consideration of the mutual promises and covenants
set forth herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, intending to be legally bound, the
parties hereto agree as follows:

         1. Construction. All capitalized terms used herein, unless otherwise
defined herein, shall have the meaning given to such terms in the Original
Security Agreement, as amended by the First Amendment and the Second Amendment
(collectively the "Security Agreement"). By the execution of this Amendment, the
parties hereby ratify, confirm and approve in all respects the Security
Agreement and all its provisions. Except as expressly amended hereby, the
Security Agreement shall continue in full force and effect in accordance with
its terms.

         2. Name Change. The Security Agreement is hereby amended by
substituting Education Lending Services, Inc. for Grad Partners, Inc. wherever
such term appears.

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         IN WITNESS WHEREOF, the parties have executed this Third Amendment to
Security Agreement effective as of the date set forth above.

                                    BORROWER:

                                    Education Lending Services, Inc.

                                    By: /s/ Perry D. Moore
                                       -------------------
                                    Name:  Perry D. Moore
                                         ----------------
                                    Title: SVP - Finance
                                          --------------


                                    BORROWER ELT:

                                    Fifth Third Bank, as eligible trustee on
                                    behalf of Education Lending Services, Inc.


                                    By: /s/ Brian J. Gardner
                                       ---------------------
                                    Name:  Brian J. Gardner
                                         ------------------
                                    Title: Assistant Vice President and Senior
                                          ------------------------------------
                                          Trust Officer
                                          -------------


                                    LENDER:

                                    Fifth Third Bank


                                    By: /s/ Andrew K. Hauck
                                       --------------------
                                    Name:  Andrew K. Hauck
                                         -----------------
                                    Title: Senior Vice President
                                          ----------------------


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