##### 



UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.For
the Quarter Ended September 30, 2005
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from __________ to ____________
 Commission
file number: 000-50846
 Collegiate Funding Services, Inc.
  Delaware
(State of Incorporation)
    
    04-3649118
(I.R.S. Employer
Identification Number)
 
 
  þ o
 þ o
 o þ




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##### 



Table of Contents
 PagePART I.  FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Cautionary Notice Regarding Forward-looking Statements
    
    
    48Item 3. Quantitative and Qualitative Disclosure about Market Risk
    
    
    48Item 4. Controls and Procedures
    
    
    48PART II. Other Information
    
    
    49Item 1. Legal Proceedings
    
    
    49Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    49Item 3. Defaults Upon Senior Securities
    
    
    49Item 4. Submission of Matters to a Vote of Security Holders
    
    
    49Item 5. Other Information
    
    
    49Item 6. Exhibits
    
    
    49Signature
    
    
    50Exhibit Index
 2




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##### 



PART
I.  FINANCIAL INFORMATION
 Item 1. Financial Statements
 COLLEGIATE FUNDING SERVICES, INC.
 CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
 September 30,
    
    
    December 31,2005
    
    
    2004(unaudited)AssetsCash and cash equivalents
    
    $
    17,982
    
    
    $
    12,925Restricted cash
    
    
    84,408
    
    
    
    80,128Accounts receivable, net
    
    
    15,784
    
    
    
    10,353Student loans, net of allowance of $7,995 and $4,961, respectively
    
    
    5,642,706
    
    
    
    4,659,842Accrued interest receivable
    
    
    72,357
    
    
    
    42,844Income taxes receivable
    
    
    1,208
    
    
    
    6,588Property and equipment, net
    
    
    13,731
    
    
    
    14,622Goodwill
    
    
    192,983
    
    
    
    188,729Deferred financing costs, net
    
    
    19,699
    
    
    
    15,560Other assets
    
    
    11,466
    
    
    
    11,200Total assets
    
    $
    6,072,324
    
    
    $
    5,042,791Liabilities and stockholders equityLiabilitiesAsset-backed notes and lines of credit
    
    $
    5,768,690
    
    
    $
    4,782,670Other debt obligations, net
    
    
    14,641
    
    
    
    14,486Capital lease obligations
    
    
    1,383
    
    
    
    1,749Accounts payable
    
    
    1,815
    
    
    
    2,315Accrued interest payable
    
    
    5,373
    
    
    
    5,116Other accrued liabilities
    
    
    40,145
    
    
    
    26,074Deferred income taxes, net
    
    
    22,789
    
    
    
    18,669Total liabilities
    
    
    5,854,836
    
    
    
    4,851,079Stockholders equityCommon stock  par value $0.001, 120,000,000 shares authorized,
32,355,150 and 30,764,848 shares issued and outstanding as of
September 30, 2005 and December 31, 2004, respectively
    
    
    32
    
    
    
    30Additional paid-in capital
    
    
    159,863
    
    
    
    157,823Retained earnings
    
    
    57,593
    
    
    
    33,859Total stockholders equity
    
    
    217,488
    
    
    
    191,712Total liabilities and stockholders equity
    
    $
    6,072,324
    
    
    $
    5,042,791
  3




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
 (unaudited)
 For the three months
    
    
    For the nine monthsended September 30,
    
    
    ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net revenueInterest income
    
    $
    74,454
    
    
    $
    36,738
    
    
    $
    192,336
    
    
    $
    94,796Interest expense
    
    
    55,630
    
    
    
    20,242
    
    
    
    139,487
    
    
    
    48,838Net interest income
    
    
    18,824
    
    
    
    16,496
    
    
    
    52,849
    
    
    
    45,958Provision for loan losses
    
    
    1,451
    
    
    
    726
    
    
    
    4,239
    
    
    
    186Net interest income after provision for loan losses
    
    
    17,373
    
    
    
    15,770
    
    
    
    48,610
    
    
    
    45,772Fee income
    
    
    44,354
    
    
    
    43,310
    
    
    
    113,727
    
    
    
    86,059Net revenue
    
    
    61,727
    
    
    
    59,080
    
    
    
    162,337
    
    
    
    131,831ExpensesSalaries and related benefits
    
    
    18,395
    
    
    
    17,423
    
    
    
    51,675
    
    
    
    47,576Other selling, general and administrative expenses:Marketing and mailing costs
    
    
    15,635
    
    
    
    17,501
    
    
    
    40,321
    
    
    
    34,813Communications and data processing
    
    
    2,002
    
    
    
    2,274
    
    
    
    6,048
    
    
    
    5,781Management and consulting fees
    
    
    313
    
    
    
    600
    
    
    
    1,273
    
    
    
    2,337Professional fees
    
    
    2,450
    
    
    
    1,637
    
    
    
    6,278
    
    
    
    4,066Depreciation and amortization
    
    
    2,051
    
    
    
    1,702
    
    
    
    5,796
    
    
    
    4,299Other general and administrative
    
    
    1,641
    
    
    
    3,499
    
    
    
    8,676
    
    
    
    8,553Total other selling, general and administrative
expenses
    
    
    24,092
    
    
    
    27,213
    
    
    
    68,392
    
    
    
    59,849Swap interest (income) expense
    
    
    (316
    )
    
    
    643
    
    
    
    (1,727
    )
    
    
    4,248Derivative and investment mark-to-market expense
(income)
    
    
    (7
    )
    
    
    245
    
    
    
    506
    
    
    
    (5,869
    )Debt extinguishment
    
    
    4,329
    
    
    
    
    
    
    
    4,329
    
    
    
    Total expenses
    
    
    46,493
    
    
    
    45,524
    
    
    
    123,175
    
    
    
    105,804Income before income tax provision and accretion
of dividends on preferred stock
    
    
    15,234
    
    
    
    13,556
    
    
    
    39,162
    
    
    
    26,027Income tax provision
    
    
    5,950
    
    
    
    5,405
    
    
    
    15,428
    
    
    
    10,314Income before accretion of dividends
    
    
    9,284
    
    
    
    8,151
    
    
    
    23,734
    
    
    
    15,713Accretion of dividends on preferred stock
    
    
    
    
    
    
    507
    
    
    
    
    
    
    
    4,815Net income
    
    $
    9,284
    
    
    $
    7,644
    
    
    $
    23,734
    
    
    $
    10,898Earnings per common share, basic
    
    $
    0.29
    
    
    $
    0.26
    
    
    $
    0.76
    
    
    $
    0.46Earnings per common share, diluted
    
    $
    0.29
    
    
    $
    0.25
    
    
    $
    0.74
    
    
    $
    0.43Weighted average common shares outstanding, basic
    
    
    31,889,552
    
    
    
    28,859,499
    
    
    
    31,298,486
    
    
    
    23,686,464Weighted average common shares outstanding, diluted
    
    
    32,235,057
    
    
    
    30,710,055
    
    
    
    32,237,631
    
    
    
    25,538,837
  4




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 CONSOLIDATED STATEMENT OF EQUITY
(dollars in thousands)
 (unaudited)
 Additionalpaid-inCommon stock
    
    
    capital
    
    
    Retained earnings
    
    
    TotalBalance, December 31, 2004
    
    $
    30
    
    
    $
    157,823
    
    
    $
    33,859
    
    
    $
    191,712Exercise of warrants
    
    
    2
    
    
    
    (2
    )
    
    
    
    
    
    
    Deferred compensation
    
    
    
    
    
    
    2,042
    
    
    
    
    
    
    
    2,042Net income
 January 1, 2005
through September 30, 2005
    
    
    
    
    
    
    
    
    
    
    23,734
    
    
    
    23,734Balance, September 30,
2005
    
    $
    32
    
    
    $
    159,863
    
    
    $
    57,593
    
    
    $
    217,488
  5




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##### 



COLLEGIATE FUNDING SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
  Nine months endedSeptember 30,2005
    
    
    2004Cash flows from operating activitiesNet income
    
    $
    23,734
    
    
    $
    10,898Adjustments to reconcile net income to net cash provided by operating activities:Accretion of dividends on preferred stock
    
    
    
    
    
    
    4,815Depreciation and amortization
    
    
    5,796
    
    
    
    4,299Loss on disposal of property and equipment
    
    
    163
    
    
    
    361(Reversal of) loss on early lease termination
    
    
    (119
    )
    
    
    776(Gain) on sale of student loans
    
    
    (3,349
    )
    
    
    Deferred income tax provision
    
    
    4,120
    
    
    
    6,709Stock compensation
    
    
    
    
    
    
    900Amortization of deferred costs
    
    
    8,612
    
    
    
    4,307Debt extinguishment
    
    
    4,329
    
    
    
    Provision for loan losses
    
    
    4,239
    
    
    
    186Provision for doubtful accounts
    
    
    56
    
    
    
    Changes in:Accrued interest receivable
    
    
    (30,053
    )
    
    
    (15,008
    )Accounts receivable and other assets
    
    
    (4,341
    )
    
    
    (18,595
    )Income taxes receivable
    
    
    5,380
    
    
    
    746Accounts payable
    
    
    (500
    )
    
    
    864Accrued interest payable
    
    
    257
    
    
    
    44Other accrued liabilities
    
    
    13,565
    
    
    
    1,050Net cash provided by operating activities
    
    
    31,889
    
    
    
    2,352Cash flows from investing activitiesOriginations and purchases of student loans
    
    
    (1,460,833
    )
    
    
    (1,405,416
    )Net proceeds from student loan principal payments
    
    
    372,300
    
    
    
    184,063Net proceeds from student loan sales
    
    
    100,918
    
    
    
    Acquisitions, net of cash acquired
    
    
    (5,952
    )
    
    
    (35,185
    )Net proceeds from disposals of property and equipment
    
    
    6
    
    
    
    Purchases of property and equipment
    
    
    (4,163
    )
    
    
    (5,195
    )Net cash used in investing activities
    
    
    (997,724
    )
    
    
    (1,261,733
    )Cash flows from financing activitiesProceeds from asset-backed notes and lines of credit
    
    
    4,064,100
    
    
    
    2,314,000Payments on asset-backed notes and lines of credit
    
    
    (3,078,080
    )
    
    
    (1,090,600
    )Proceeds from other debt obligations
    
    
    
    
    
    
    39,000Payments on other debt obligations
    
    
    
    
    
    
    (52,859
    )Payments on capital lease obligations
    
    
    (366
    )
    
    
    (311
    )Payment of financing costs
    
    
    (10,482
    )
    
    
    (5,126
    )Proceeds from notes receivable
    
    
    
    
    
    
    509Proceeds from stock issuances, net
    
    
    
    
    
    
    135,608Redemption of preferred shares
    
    
    
    
    
    
    (93,951
    )Change in restricted cash
    
    
    (4,280
    )
    
    
    1,084Net cash provided by financing activities
    
    
    970,892
    
    
    
    1,247,354Net increase (decrease) in cash and cash equivalents
    
    
    5,057
    
    
    
    (12,027
    )Cash and cash equivalents:Beginning
    
    
    12,925
    
    
    
    14,436Ending
    
    $
    17,982
    
    
    $
    2,409Supplemental disclosures:Cash payments for interest
    
    $
    136,992
    
    
    $
    43,148Cash payments for income taxes, net
    
    $
    10,129
    
    
    $
    29Capital lease of property and equipment
    
    $
    
    
    
    $
    285
  6




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
 (dollars in thousands, except per share data)
 1. Nature of the Business
   7




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED (Continued)
     Cash and cash equivalents
    
    $
    705Accounts receivable
    
    
    1,034Property and equipment
    
    
    83Contractual relationships
    
    
    2,900Trademarks, copyrights, and domain names
    
    
    1,700Deferred income tax asset
    
    
    2,768Other assets
    
    
    1,198Total assets acquired
    
    
    10,388Accounts payable and other liabilities
    
    
    (2,523
    )Net assets acquired
    
    $
    7,865Allocation of the purchase price:Net assets acquired
    
    $
    7,865Goodwill
    
    
    28,025Total purchase price
    
    $
    35,890
 8




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
 2. Initial Public Offering
  9




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
 3. Summary of Significant Accounting Policies
 Unaudited Interim Financial Statements
   Stock split
  Estimates and assumptions
  Other accounting policies
  10




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
 4. Earnings Per Share
 Earnings Per Share
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(unaudited)Net income
    
    $
    9,284
    
    
    $
    7,644
    
    
    $
    23,734
    
    
    $
    10,898Weighted average common shares calculation:Weighted average common shares outstanding,
basic
    
    
    31,889,552
    
    
    
    28,859,499
    
    
    
    31,298,486
    
    
    
    23,686,464Treasury stock effect of warrants and options
    
    
    345,505
    
    
    
    1,850,556
    
    
    
    939,145
    
    
    
    1,852,373Weighted average common shares
outstanding, diluted
    
    
    32,235,057
    
    
    
    30,710,055
    
    
    
    32,237,631
    
    
    
    25,538,837Earnings per common share:Earnings per common share, basic
    
    $
    0.29
    
    
    $
    0.26
    
    
    $
    0.76
    
    
    $
    0.46Earnings per common share, diluted
    
    $
    0.29
    
    
    $
    0.25
    
    
    $
    0.74
    
    
    $
    0.43
  11




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
 5. Student Loans
         12




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
 6. Allowance for Loan Losses
       Nine months ended September 30,2005
    
    
    2005
    
    
    2005
    
    
    2004FFELP
    
    
    Private
    
    
    Total
    
    
    Total (All FFELP)Beginning balance
    
    $
    4,961
    
    
    $
    
    
    
    $
    4,961
    
    
    $
    4,136Provision
    
    
    3,733
    
    
    
    506
    
    
    
    4,239
    
    
    
    186Charge-offs
    
    
    (1,205
    )
    
    
    
    
    
    
    (1,205
    )
    
    
    (130
    )Ending balance.
    
    $
    7,489
    
    
    $
    506
    
    
    $
    7,995
    
    
    $
    4,192
   13




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
 7. Debt
 Asset-backed notes and lines of credit
    14




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##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED (Continued)
  September 30, 2005
    
    December 31, 2004Principal
    
    
    
    
    Principaloutstanding
    
    
    Interest rate
    
    outstanding
    
    
    Interest rate

    
    Type
    
    Maturity date2005B SeriesClass A-1
    
    $
    411,445
    
    
    4.01%
    
    $
    
    
    
    
    
    %
    
    LIBOR
    
    September 2017Class A-2
    
    
    253,000
    
    
    4.10
    
    
    
    
    
    
    
    
    
    LIBOR
    
    December 2021Class A-3
    
    
    218,000
    
    
    4.12
    
    
    
    
    
    
    
    
    
    LIBOR
    
    December 2024Class A-4
    
    
    360,500
    
    
    4.16
    
    
    
    
    
    
    
    
    
    LIBOR
    
    March 2035Class B
    
    
    45,500
    
    
    4.32
    
    
    
    
    
    
    
    
    
    LIBOR
    
    March 20352005A SeriesClass A-1
    
    $
    258,126
    
    
    4.02%
    
    $
    
    
    
    
    
    %
    
    LIBOR
    
    September 2014Class A-2
    
    
    422,000
    
    
    4.09
    
    
    
    
    
    
    
    
    
    LIBOR
    
    December 2021Class A-3
    
    
    310,000
    
    
    4.13
    
    
    
    
    
    
    
    
    
    LIBOR
    
    March 2027Class A-4
    
    
    282,000
    
    
    4.20
    
    
    
    
    
    
    
    
    
    LIBOR
    
    March 2035Class B
    
    
    56,000
    
    
    4.30
    
    
    
    
    
    
    
    
    
    LIBOR
    
    December 20372004A SeriesClass A-1
    
    
    83,990
    
    
    4.05
    
    
    192,298
    
    
    
    2.60
    
    
    LIBOR
    
    December 2013Class A-2
    
    
    350,000
    
    
    4.17
    
    
    350,000
    
    
    
    2.72
    
    
    LIBOR
    
    June 2021Class A-3
    
    
    207,000
    
    
    4.21
    
    
    207,000
    
    
    
    2.76
    
    
    LIBOR
    
    September 2026Class A-4
    
    
    140,000
    
    
    4.34
    
    
    140,000
    
    
    
    2.89
    
    
    LIBOR
    
    September 2030Class A-5  6
    
    
    111,700
    
    
    3.76-3.78
    
    
    111,700
    
    
    
    2.35-2.37
    

    Auction
    
    December 2043Class B
    
    
    55,700
    
    
    3.78
    
    
    55,700
    
    
    
    2.50
    
    
    Auction
    
    December 20432003B SeriesClass A-1
    
    
    112,947
    
    
    4.10
    
    
    177,936
    
    
    
    2.65
    
    
    LIBOR
    
    September 2013Class A-2
    
    
    250,000
    
    
    4.26
    
    
    250,000
    
    
    
    2.81
    
    
    LIBOR
    
    March 2021Class A-3  7
    
    
    485,000
    
    
    3.65-3.85
    
    
    485,000
    
    
    
    2.33-2.45
    
    Auction
    
    December 2043Class B-1-2
    
    
    52,000
    
    
    3.85-3.90
    
    
    52,000
    
    
    
    2.45-2.50
    
    Auction
    
    December 20432003A SeriesClass A-1
    
    
    
    
    
    
    
    
    5,261
    
    
    
    2.61
    
    
    LIBOR
    
    March 2012Class A-2
    
    
    266,132
    
    
    4.30
    
    
    319,025
    
    
    
    2.85
    
    
    LIBOR
    
    September 2020Class A-3  6
    
    
    352,400
    
    
    3.61-3.84
    
    
    352,400
    
    
    
    2.33-2.50
    
    Auction
    
    March 2042Class B
    
    
    42,350
    
    
    3.92
    
    
    42,350
    
    
    
    2.58
    
    
    Auction
    
    March 20422002 Series(1)Class A-8  15
    
    
    
    
    
    
    
    
    461,100
    
    
    
    2.28-2.50
    
    Auction
    
    July 2042Class B
    
    
    
    
    
    
    
    
    30,000
    
    
    
    2.58
    
    
    Auction
    
    July 20422001 Series(1)Class A-1  7
    
    
    
    
    
    
    
    
    430,500
    
    
    
    2.35-2.52
    
    Auction
    
    December 2041Class B
    
    
    
    
    
    
    
    
    31,600
    
    
    
    2.53
    
    
    Auction
    
    December 2041Warehouse Facility -
FFELP
    
    
    594,200
    
    
    3.99
    
    
    1,088,800
    
    
    
    2.55
    
    
    
    
    July 2006Warehouse Facility -
Private
    
    
    48,700
    
    
    4.10
    
    
    
    
    
    
    
    
    
    
    
    August 2006Total
    
    $
    5,768,690
    
    
    
    
    $
    4,782,670
 
 (1)
    
    In July 2005, a portion of the proceeds from the 2005B Series was used to
redeem the remaining balances on the 2002 Series and the 2001 Series. 15




---



##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED (Continued)
 Other debt
  September 30, 2005
    
    
    December 31, 2004Principal
    
    
    Interest
    
    
    Principal
    
    
    Interestoutstanding
    
    
    rate
    
    
    outstanding
    
    
    rate
    
    
    Maturity dateFixed-rate note
    
    $
    14,641
    
    
    
    4.47
    %
    
    $
    14,486
    
    
    
    4.47
    %
    
    June 2007Revolving line of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    October 2008Total
    
    $
    14,641
    
    
    
    
    
    
    $
    14,486
  16




---



##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
 8. Derivative Financial Instruments
   September 30, 2005
    
    
    December 31, 2004Notional
    
    
    Maturity
    
    
    Pay
    
    
    Receivefloating
    
    
    
    
    
    
    ReceivefloatingDerivative type
    

amount
    
    

date
    
    
    fixed rate
    
    
    rate (LIBOR)
    
    
    Fair value
    
    
    rate (LIBOR)
    
    
    Fair valueSwap
    
    $
    250,000
    
    
    
    01/26/2005
    
    
    
    
    %
    
    
    
    %
    
    $
    
    
    
    
    2.42
    %
    
    $
    96Cap (Sold)
    
    
    250,000
    
    
    
    01/26/2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.23
    
    
    
    (82
    )Swap
    
    
    550,000
    
    
    
    04/28/2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.42
    
    
    
    1,945Swap
    
    
    450,000
    
    
    
    01/25/2006
    
    
    
    3.23
    
    
    
    3.83
    
    
    
    1,276
    
    
    
    
    
    
    
    Total, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,276
    
    
    
    
    
    
    $
    1,959
 17




---



##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED (Continued)
 9. Major Business Customers and Sources of Revenue
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,Customer
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004First
    
    $
    28,900
    
    
    $
    25,737
    
    
    $
    82,448
    
    
    $
    47,245Second
    
    
    6,899
    
    
    
    8,666
    
    
    
    12,443
    
    
    
    11,998
  18




---



##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
 10. Stock Incentive Plan
       19




---



##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
 11. Segment Data
   Loan
    
    
    Loanorigination
    
    
    servicing
    
    
    Eliminations
    
    
    ConsolidatedNet revenueInterest income
    
    $
    74,272
    
    
    $
    182
    
    
    $
    
    
    
    $
    74,454Interest expense
    
    
    55,630
    
    
    
    
    
    
    
    
    
    
    
    55,630Net interest income
    
    
    18,642
    
    
    
    182
    
    
    
    
    
    
    
    18,824Provision for loan losses
    
    
    1,451
    
    
    
    
    
    
    
    
    
    
    
    1,451Net interest income after provision for loan losses
    
    
    17,191
    
    
    
    182
    
    
    
    
    
    
    
    17,373Fee income
    
    
    41,258
    
    
    
    5,400
    
    
    
    (2,304
    )
    
    
    44,354Net revenue
    
    
    58,449
    
    
    
    5,582
    
    
    
    (2,304
    )
    
    
    61,727ExpensesSalaries and related benefits
    
    
    15,581
    
    
    
    2,814
    
    
    
    
    
    
    
    18,395Other selling, general and administrative expenses:Marketing and mailing costs
    
    
    15,622
    
    
    
    13
    
    
    
    
    
    
    
    15,635Communications and data processing
    
    
    1,462
    
    
    
    540
    
    
    
    
    
    
    
    2,002Management and consulting fees
    
    
    313
    
    
    
    
    
    
    
    
    
    
    
    313Professional fees
    
    
    2,242
    
    
    
    208
    
    
    
    
    
    
    
    2,450Depreciation and amortization
    
    
    1,591
    
    
    
    460
    
    
    
    
    
    
    
    2,051Other general and administrative
    
    
    4,820
    
    
    
    (875
    )
    
    
    (2,304
    )
    
    
    1,641Total other selling, general and administrative expenses
    
    
    26,050
    
    
    
    346
    
    
    
    (2,304
    )
    
    
    24,092Swap interest (income)
    
    
    (316
    )
    
    
    
    
    
    
    
    
    
    
    (316
    )Derivative and investment mark-to-market (income)
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    (7
    )Debt extinguishment
    
    
    4,329
    
    
    
    
    
    
    
    
    
    
    
    4,329Total expenses
    
    
    45,637
    
    
    
    3,160
    
    
    
    (2,304
    )
    
    
    46,493Income before income taxes and accretion of dividends
on preferred stock
    
    $
    12,812
    
    
    $
    2,422
    
    
    $
    
    
    
    $
    15,234Total assets  September 30, 2005
    
    $
    6,053,911
    
    
    $
    18,413
    
    
    $
    
    
    
    $
    6,072,324Total assets  December 31, 2004
    
    $
    5,025,992
    
    
    $
    16,799
    
    
    $
    
    
    
    $
    5,042,791
  20




---



##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
  Loan
    
    
    Loanorigination
    
    
    servicing
    
    
    Eliminations
    
    
    ConsolidatedNet revenueInterest income
    
    $
    36,625
    
    
    $
    113
    
    
    $
    
    
    
    $
    36,738Interest expense
    
    
    20,242
    
    
    
    
    
    
    
    
    
    
    
    20,242Net interest income
    
    
    16,383
    
    
    
    113
    
    
    
    
    
    
    
    16,496Provision for loan losses
    
    
    726
    
    
    
    
    
    
    
    
    
    
    
    726Net interest income after provision for loan losses
    
    
    15,657
    
    
    
    113
    
    
    
    
    
    
    
    15,770Fee income
    
    
    40,070
    
    
    
    4,635
    
    
    
    (1,395
    )
    
    
    43,310Net revenue
    
    
    55,727
    
    
    
    4,748
    
    
    
    (1,395
    )
    
    
    59,080ExpensesSalaries and related benefits
    
    
    14,852
    
    
    
    2,571
    
    
    
    
    
    
    
    17,423Other selling, general and administrative expenses:Marketing and mailing costs
    
    
    17,497
    
    
    
    4
    
    
    
    
    
    
    
    17,501Communications and data processing
    
    
    1,828
    
    
    
    446
    
    
    
    
    
    
    
    2,274Management and consulting fees
    
    
    312
    
    
    
    288
    
    
    
    
    
    
    
    600Professional fees
    
    
    1,571
    
    
    
    66
    
    
    
    
    
    
    
    1,637Depreciation and amortization
    
    
    1,219
    
    
    
    483
    
    
    
    
    
    
    
    1,702Other general and administrative
    
    
    4,338
    
    
    
    556
    
    
    
    (1,395
    )
    
    
    3,499Total other selling, general and administrative expenses
    
    
    26,765
    
    
    
    1,843
    
    
    
    (1,395
    )
    
    
    27,213Swap interest expense
    
    
    643
    
    
    
    
    
    
    
    
    
    
    
    643Derivative and investment mark-to-market expense
    
    
    245
    
    
    
    
    
    
    
    
    
    
    
    245Total expenses
    
    
    42,505
    
    
    
    4,414
    
    
    
    (1,395
    )
    
    
    45,524Income before income taxes and accretion of dividends
on preferred stock
    
    $
    13,222
    
    
    $
    334
    
    
    $
    
    
    
    $
    13,556
  21




---



##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
  Loan
    
    
    Loanorigination
    
    
    servicing
    
    
    Eliminations
    
    
    ConsolidatedNet revenueInterest income
    
    $
    191,707
    
    
    $
    629
    
    
    $
    
    
    
    $
    192,336Interest expense
    
    
    139,487
    
    
    
    
    
    
    
    
    
    
    
    139,487Net interest income
    
    
    52,220
    
    
    
    629
    
    
    
    
    
    
    
    52,849Provision for loan losses
    
    
    4,239
    
    
    
    
    
    
    
    
    
    
    
    4,239Net interest income after provision for loan losses
    
    
    47,981
    
    
    
    629
    
    
    
    
    
    
    
    48,610Fee income
    
    
    104,168
    
    
    
    15,705
    
    
    
    (6,146
    )
    
    
    113,727Net revenue
    
    
    152,149
    
    
    
    16,334
    
    
    
    (6,146
    )
    
    
    162,337ExpensesSalaries and related benefits
    
    
    43,732
    
    
    
    7,943
    
    
    
    
    
    
    
    51,675Other selling, general and administrative expenses:Marketing and mailing costs
    
    
    40,306
    
    
    
    15
    
    
    
    
    
    
    
    40,321Communications and data processing
    
    
    4,348
    
    
    
    1,700
    
    
    
    
    
    
    
    6,048Management and consulting fees
    
    
    938
    
    
    
    335
    
    
    
    
    
    
    
    1,273Professional fees
    
    
    5,709
    
    
    
    569
    
    
    
    
    
    
    
    6,278Depreciation and amortization
    
    
    4,424
    
    
    
    1,372
    
    
    
    
    
    
    
    5,796Other general and administrative
    
    
    13,198
    
    
    
    1,624
    
    
    
    (6,146
    )
    
    
    8,676Total other selling, general and administrative expenses
    
    
    68,923
    
    
    
    5,615
    
    
    
    (6,146
    )
    
    
    68,392Swap interest (income)
    
    
    (1,727
    )
    
    
    
    
    
    
    
    
    
    
    (1,727
    )Derivative and investment mark-to-market expense
    
    
    506
    
    
    
    
    
    
    
    
    
    
    
    506Debt extinguishment
    
    
    4,329
    
    
    
    
    
    
    
    
    
    
    
    4,329Total expenses
    
    
    115,763
    
    
    
    13,558
    
    
    
    (6,146
    )
    
    
    123,175Income before income taxes and accretion of dividends
on preferred stock
    
    $
    36,386
    
    
    $
    2,776
    
    
    $
    
    
    
    $
    39,162Total assets  September 30, 2005
    
    $
    6,053,911
    
    
    $
    18,413
    
    
    $
    
    
    
    $
    6,072,324Total assets  December 31, 2004
    
    $
    5,025,992
    
    
    $
    16,799
    
    
    $
    
    
    
    $
    5,042,791
  22




---



##### 



COLLEGIATE FUNDING SERVICES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED  (Continued)
  Loan
    
    
    Loanorigination
    
    
    servicing
    
    
    Eliminations
    
    
    ConsolidatedNet revenueInterest income
    
    $
    94,431
    
    
    $
    365
    
    
    $
    
    
    
    $
    94,796Interest expense
    
    
    48,838
    
    
    
    
    
    
    
    
    
    
    
    48,838Net interest income
    
    
    45,593
    
    
    
    365
    
    
    
    
    
    
    
    45,958Provision for loan losses
    
    
    186
    
    
    
    
    
    
    
    
    
    
    
    186Net interest income after provision for loan losses
    
    
    45,407
    
    
    
    365
    
    
    
    
    
    
    
    45,772Fee income
    
    
    76,439
    
    
    
    13,738
    
    
    
    (4,118
    )
    
    
    86,059Net revenue
    
    
    121,846
    
    
    
    14,103
    
    
    
    (4,118
    )
    
    
    131,831ExpensesSalaries and related benefits
    
    
    40,250
    
    
    
    7,326
    
    
    
    
    
    
    
    47,576Other selling, general and administrative expenses:Marketing and mailing costs
    
    
    34,809
    
    
    
    4
    
    
    
    
    
    
    
    34,813Communications and data processing
    
    
    4,463
    
    
    
    1,318
    
    
    
    
    
    
    
    5,781Management and consulting fees
    
    
    1,372
    
    
    
    965
    
    
    
    
    
    
    
    2,337Professional fees
    
    
    3,823
    
    
    
    243
    
    
    
    
    
    
    
    4,066Depreciation and amortization
    
    
    2,858
    
    
    
    1,441
    
    
    
    
    
    
    
    4,299Other general and administrative
    
    
    11,247
    
    
    
    1,424
    
    
    
    (4,118
    )
    
    
    8,553Total other selling, general and administrative expenses
    
    
    58,572
    
    
    
    5,395
    
    
    
    (4,118
    )
    
    
    59,849Swap interest expense
    
    
    4,248
    
    
    
    
    
    
    
    
    
    
    
    4,248Derivative and investment mark-to-market (income)
    
    
    (5,869
    )
    
    
    
    
    
    
    
    
    
    
    (5,869
    )Total expenses
    
    
    97,201
    
    
    
    12,721
    
    
    
    (4,118
    )
    
    
    105,804Income before income taxes and accretion of dividends
on preferred stock
    
    $
    24,645
    
    
    $
    1,382
    
    
    $
    
    
    
    $
    26,027
  23




---



##### 



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 The following discussion and analysis of our results of operations and financial condition for
the three and nine months ended September 30, 2005 and 2004, should be read in conjunction with our
unaudited consolidated financial statements and the notes to those statements, included in this
report. Our discussion contains forward-looking statements based upon current expectations that
involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual
results and the timing of events could differ materially from those anticipated in these
forward-looking statements as a result of a number of factors. Our results of operations, our
financial condition and the price of our common stock may be affected by many factors, some of
which are outside of our control. For a discussion of these factors, see Exhibit 99.1 to this
report, which is incorporated herein by reference.
 Overview
     24




---



##### 



Loan Originations
 Three months ended September 30,
    
    
    Nine months ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %(dollars in millions)FFELP loans retained
    
    $
    396.5
    
    
    
    38.9
    %
    
    $
    417.8
    
    
    
    42.2
    %
    
    $
    1,346.4
    
    
    
    46.3
    %
    
    $
    1,347.9
    
    
    
    51.4
    %FFELP loans sold(1)
    
    
    622.8
    
    
    
    61.1
    
    
    
    572.3
    
    
    
    57.8
    
    
    
    1,561.1
    
    
    
    53.7
    
    
    
    1,274.2
    
    
    
    48.6Total FFELP loans(2)
    
    $
    1,019.3
    
    
    
    100.0
    %
    
    $
    990.1
    
    
    
    100.0
    %
    
    $
    2,907.5
    
    
    
    100.0
    %
    
    $
    2,622.1
    
    
    
    100.0
    %Private loans retained
    
    $
    51.8
    
    
    
    19.3
    %
    
    $
    
    
    
    
    
    %
    
    $
    53.2
    
    
    
    12.2
    %
    
    $
    
    
    
    
    
    %Private loans sold (2) (3)
    
    
    216.4
    
    
    
    80.7
    
    
    
    198.3
    
    
    
    100.0
    
    
    
    381.3
    
    
    
    87.8
    
    
    
    298.0
    
    
    
    100.0Total private loans
    
    $
    268.2
    
    
    
    100.0
    %
    
    $
    198.3
    
    
    
    100.0
    %
    
    $
    434.5
    
    
    
    100.0
    %
    
    $
    298.0
    
    
    
    100.0
    %Total loan volume
    
    $
    1,287.5
    
    
    
    
    
    
    $
    1,188.4
    
    
    
    
    
    
    $
    3,342.0
    
    
    
    
    
    
    $
    2,920.1
 
 (1)
    

    Reflects the principal balance of loan application sales.(2)
    
    Reflects the principal balance of loans for which we provided origination services
to third-party lenders.(3)
    
    Includes Health Education Assistance consolidation loans of $1.6 million for the
three months ended September 30, 2004, and $2.3 million for the nine months ended September
30, 2004. There have been no Health Education Assistance consolidation loan originations in
2005. Loan Originations by Status
 Three months ended September 30,
    
    
    Nine months ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %(dollars in millions)In-school loans:Private education
    
    $
    259.2
    
    
    
    88.8
    %
    
    $
    181.3
    
    
    
    97.5
    %
    
    $
    394.8
    
    
    
    89.5
    %
    
    $
    247.6
    
    
    
    97.6
    %Plus and Stafford
    
    
    32.6
    
    
    
    11.2
    
    
    
    4.6
    
    
    
    2.5
    
    
    
    46.5
    
    
    
    10.5
    
    
    
    6.2
    
    
    
    2.4Total in-school loans
    
    $
    291.8
    
    
    
    100.0
    %
    
    $
    185.9
    
    
    
    100.0
    %
    
    $
    441.3
    
    
    
    100.0
    %
    
    $
    253.8
    
    
    
    100.0
    %Loans in repayment:Federal consolidations
    
    $
    986.7
    
    
    
    99.1
    %
    
    $
    985.5
    
    
    
    98.3
    %
    
    $
    2,861.0
    
    
    
    98.6
    %
    
    $
    2,615.9
    
    
    
    98.1
    %Private consolidations and other
    
    
    9.0
    
    
    
    0.9
    
    
    
    17.0
    
    
    
    1.7
    
    
    
    39.7
    
    
    
    1.4
    
    
    
    50.4
    
    
    
    1.9Total loans in repayment
    
    $
    995.7
    
    
    
    100.0
    %
    
    $
    1,002.5
    
    
    
    100.0
    %
    
    $
    2,900.7
    
    
    
    100.0
    %
    
    $
    2,666.3
    
    
    
    100.0
    %Total loan volume
    
    $
    1,287.5
    
    
    
    
    
    
    $
    1,188.4
    
    
    
    
    
    
    $
    3,342.0
    
    
    
    
    
    
    $
    2,920.1
  Owned Portfolio
 Three months ended September 30,
    
    
    Nine months ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(dollars in millions)Beginning balance
    
    $
    5,419.7
    
    
    $
    3,739.0
    
    
    $
    4,664.8
    
    
    $
    2,860.6Acquisitions, including capitalized interest and costs
    
    
    457.8
    
    
    
    427.6
    
    
    
    1,460.8
    
    
    
    1,405.4Repayments, claims and other
    
    
    (127.9
    )
    
    
    (86.4
    )
    
    
    (372.3
    )
    
    
    (184.1
    )Charge-offs to reserves
    
    
    (0.4
    )
    
    
    
    
    
    
    (1.2
    )
    
    
    (0.1
    )Amortization of capitalized costs
    
    
    (1.5
    )
    
    
    (1.0
    )
    
    
    (4.4
    )
    
    
    (2.6
    )Loan sales
    
    
    (97.0
    )
    
    
    
    
    
    
    (97.0
    )
    
    
    Ending balance
    
    $
    5,650.7
    
    
    $
    4,079.2
    
    
    $
    5,650.7
    
    
    $
    4,079.2
 25




---



##### 



Loan origination.
 Loan servicing.
  26




---



##### 



27




---



##### 



Quarterly Fluctuations
  
    
    an increase in loan consolidation in November and December, as a result of
the expiration of the six-month grace period for borrowers who graduated in May and
June;
    
    the effects of the July 1 reset in borrower interest rates. We give
borrowers who complete loan applications during the second quarter the option to fund
their loans prior to July 1, when the old rate is effective, or after July 1, when the
new rate is effective. As a result, if any years borrower rate increases from the
prior years borrower rate, a higher percentage of completed applications will be
originated in the second quarter; conversely, if any years borrower rate decreases
over the prior years borrower rate, the origination of a significant portion of the
loan applications completed in the second quarter will be shifted to the third quarter.
    
    seasonal patterns affecting private in-school loans, primarily an increase
in private in-school loan originations in the third and first quarters as students
obtain loans to pay tuition at the start of semesters, and a decrease in private in-school loan activity in the
second quarter;
    
    seasonal patterns affecting marketing expenses, as we generally market most
heavily in the second and third quarters of the year in an effort to inform recent
college graduates of their consolidation options and offer private in-school loans to
students paying tuition;
    
    the impact of general economic conditions;
    
    changes in interest rates; and
    
    the introduction of new product offerings.
 Components of Net Revenue
  Net Interest Income
  Interest income.
 28




---



##### 



Floor income
 Interest expense.
    Provision for loan losses.
 29




---



##### 



Fee Income
 Fees on loan and loan application sales.
  Fees for servicing.
  Advertising income.
 30




---



##### 



Expenses
  Debt extinguishment expenses.
 Derivatives.
 Critical Accounting Policies
  Recent Accounting Pronouncements
 Share-based payment
 Share-Based Payment Accounting for Stock-Based Compensation
 Accounting Changes and Error Corrections
 Accounting Changes and Error Corrections Accounting
Changes Reporting Accounting Changes in Interim Financial Statements
 31




---



##### 



Results of Operations
 Three months ended September 30, 2005, compared with three months ended September 30, 2004
 Net revenue.
 Net interest income
 Interest income.
 Interest expense.
 Provision for loan losses.
 Net portfolio margin and net interest income after provision for loan losses.
 32




---



##### 



Fee income.
  Three months ended
    
    
    IncreaseSeptember 30,
    
    
    (Decrease)2005
     
    
    2004
    
    
    Dollars
    
    
    Percent(dollars in millions)Fee Income:Fees on loan and loan application sales
    
    $
    40.2
    
    
    $
    38.9
    
    
    $
    1.3
    
    
    
    3.3
    %Fees for servicing
    
    
    3.1
    
    
    
    3.2
    
    
    
    (0.1
    )
    
    
    (3.1
    )Advertising income
    
    
    1.0
    
    
    
    1.2
    
    
    
    (0.2
    )
    
    
    (16.7
    )Total
    
    $
    44.3
    
    
    $
    43.3
    
    
    $
    1.0
    
    
    
    2.3
    %
 Fees on loan and loan application sales.
 Fees for servicing.
 Advertising income.
 Expenses.
    33




---



##### 



Derivatives.
 Debt Extinguishment
 Income tax provision.
 Net income.
 Nine months ended September 30, 2005, compared with nine months ended September 30, 2004
 Net revenue.
 Net interest income.
 Interest income.
 34




---



##### 



Interest expense.
 Provision for loan losses.
 Net portfolio margin and net interest income after provision for loan losses.
 Fee income.
  Nine months ended
    
    
    IncreaseSeptember 30,
    
    
    (Decrease)2005
    
    
    2004
    
    
    Dollars
    
    
    Percent(dollars in millions)Fee Income:Fees on loan and loan application sales
    
    $
    100.5
    
    
    $
    74.7
    
    
    $
    25.8
    
    
    
    34.5
    %Fees for servicing
    
    
    9.6
    
    
    
    9.6
    
    
    
    
    
    
    
    Advertising income
    
    
    3.6
    
    
    
    1.8
    
    
    
    1.8
    
    
    
    100.0Total
    
    $
    113.7
    
    
    $
    86.1
    
    
    $
    27.6
    
    
    
    32.1
    %
 Fees
on loan and loan application sales.
 Fees for servicing.
 Advertising income.
 Expenses.
 35




---



##### 



Derivatives.
 Debt Extinguishment
 Income tax provision.
 Net income.
 Financial Condition
 At September 30, 2005, compared with December 31, 2004
    36




---



##### 



Liquidity and Capital Resources
     37




---



##### 



38




---



##### 



As of September 30, 2005Principal
    
    
    
    
    
    
    Interestamount
    
    
    Percent of total
    
    
    rate range
    
    Final maturity(2)(dollars in millions)Warehouse
facility  FFELP loans
    
    $
    594.2
    
    
    
    10.3
    %
    
    3.99%
    
    07/18/06(3)Warehouse
facility  private education loans
    
    
    48.7
    
    
    
    0.8
    
    
    4.10%
    
    08/18/06Asset-backed notes: (1)
Notes based on LIBOR
    
    
    4,026.6
    
    
    
    69.6
    
    
    4.01% - 4.34%
    
    03/01/12 - 12/28/37Notes based on auction rates
    
    
    1,099.2
    
    
    
    19.0
    
    
    3.61% - 3.90%
    
    03/01/42 - 12/28/43Total asset-backed notes and warehouse facility
    
    
    5,768.7
    
    
    
    99.7Revolving line of credit
    
    
    
    
    
    
    
    
    
    
    
    10/07/08Fixed-rate notes
    
    
    14.6
    (4)
    
    
    0.3
    
    
    4.47%
    
    06/30/07Fixed-rate capital leases
    
    
    1.4
    
    
    
    
    
    
    6.00% - 7.82%
    
    05/10/10Total
    
    $
    5,784.7
    
    
    
    100.0
    %As
of December 31, 2004Principal
    
    
    
    
    
    
    Interestamount
    
    
    Percent of total
    
    
    rate range
    
    Final maturity(2)(dollars in millions)Warehouse
facility  FFELP loans
    
    $
    1,088.8
    
    
    
    22.7
    %
    
    2.55%
    
    07/18/06(3)Asset-backed notes: (1)
Notes based on LIBOR
    
    
    1,641.5
    
    
    
    34.2
    
    
    2.60% - 2.85%
    
    03/01/12 - 09/30/30Notes based on auction rates
    
    
    2,052.4
    
    
    
    42.8
    
    
    2.28% - 2.58%
    
    12/01/41 - 12/28/43Total asset-backed notes and warehouse facility
    
    
    4,782.7
    
    
    
    99.7Revolving line of credit
    
    
    
    
    
    
    
    
    
    
    
    07/06/05Fixed-rate notes
    
    
    14.5
    (4)
    
    
    0.3
    
    
    4.47%
    
    06/30/07Fixed-rate capital leases
    
    
    1.7
    
    
    
    
    
    
    6.00% - 7.82%
    
    05/10/10Total
    
    $
    4,798.9
    
    
    
    100.0
    %
 
 (1)
    
    Issued in securitization transactions.(2)
    
    The final maturity date is the stated legal maturity of the applicable class of
notes. However, the principal of the notes is paid based on the receipt of principal payments
under the applicable pools of loans and we expect to pay the principal prior to the final
maturity date.(3)
    
    The FFELP warehouse facility, which was scheduled to expire in July 2005, was
extended for an additional year.(4)
    
    Balances are net of unamortized discount of $0.4 million as of September 30, 2005,
and $0.5 million as of December 31, 2004. 39




---



##### 



Total
    
    
    < 1 year
    
    

1
 3 years
    
    

3
 5 years
    
    
    > 5 years(dollars in millions)Warehouse
facility  FFELP
    
    $
    594.2
    
    
    $
    594.2
    
    
    $
    
    
    
    $
    
    
    
    $
    Warehouse facility  private education loans
    
    
    48.7
    
    
    
    48.7
    
    
    
    
    
    
    
    
    
    
    
    Asset-backed notes(1)
    
    
    5,125.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,125.8Other indebtedness(2)
    
    
    14.6
    
    
    
    
    
    
    
    14.6
    
    
    
    
    
    
    
    Capital lease obligations
    
    
    1.4
    
    
    
    0.5
    
    
    
    0.8
    
    
    
    0.1
    
    
    
    Operating lease obligations
    
    
    8.0
    
    
    
    1.8
    
    
    
    2.6
    
    
    
    2.5
    
    
    
    1.1Total
    
    $
    5,792.7
    
    
    $
    645.2
    
    
    $
    18.0
    
    
    $
    2.6
    
    
    $
    5,126.9
 
 (1)
    
    Principal on our asset-backed notes will be paid based on receipt of principal
payments under the applicable pools of loans, and we expect to pay the principal prior to the
final maturity date of the notes.(2)
    
    Fixed-rate note outstanding of $14.6 million, net of unamortized discount.  Off-Balance-Sheet Arrangements
  Loan Portfolio
  As of September 30,
    
    
    As of December 31,2005
    
    
    2004(dollars in millions)Percent
    
    
    
    
    
    
    PercentPrincipal(1)
    
    
    of total
    
    
    Principal(1)
    
    
    of totalFFELP loans:Consolidation
    
    $
    5,492.8
    
    
    
    98.5
    %
    
    $
    4,601.5
    
    
    
    99.8
    %PLUS
    
    
    10.7
    
    
    
    0.2
    
    
    
    6.3
    
    
    
    0.1Stafford
    
    
    19.4
    
    
    
    0.3
    
    
    
    5.1
    
    
    
    0.1Private
    
    
    56.8
    
    
    
    1.0
    
    
    
    
    
    
    
    Total
    
    $
    5,579.7
    
    
    
    100.0
    %
    
    $
    4,612.9
    
    
    
    100.0
    %
 
 (1)
    
    Amounts reflect principal balance of loans without adjustments for deferred loan
costs, net of deferred revenues, which, as of September 30, 2005, totaled $71.0 million and as of
December 31, 2004, totaled $51.9 million. Amounts also exclude the allowance for loan losses of
$8.0 million as of September 30, 2005, and $5.0 million as of December 31, 2004. 40




---



##### 



As of September 30,
    
    
    As of December 31,2005
    
    
    2004Percent of
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    Percent ofloans
    
    
    loans in
    
    
    
    
    
    
    total loan
    
    
    Loans inPrincipal(1)
    
    
    portfolio
    
    
    repayment
    
    
    Principal(1)
    
    
    portfolio
    
    
    repayment(dollars in millions)Loans in school/grace/deferment(2)
    
    $
    686.4
    
    
    
    12.3
    %
    
    
    
    
    
    $
    536.7
    
    
    
    11.6
    %Loans in forbearance(3)
    
    
    476.0
    
    
    
    8.5
    
    
    
    
    
    
    
    335.8
    
    
    
    7.2Loans in repayment status:Current
    
    
    3,957.7
    
    
    
    71.0
    
    
    
    89.6
    %
    
    
    3,457.0
    
    
    
    75.0
    
    
    
    92.4
    %Delinquent 31-60 days(4)
    
    
    170.0
    
    
    
    3.0
    
    
    
    3.9
    
    
    
    110.5
    
    
    
    2.4
    
    
    
    3.0Delinquent 61-90 days(4)
    
    
    67.7
    
    
    
    1.2
    
    
    
    1.5
    
    
    
    40.4
    
    
    
    0.9
    
    
    
    1.1Delinquent over 90 days(4) (5)
    
    
    221.9
    
    
    
    4.0
    
    
    
    5.0
    
    
    
    132.5
    
    
    
    2.9
    
    
    
    3.5Total loans in repayment
    
    
    4,417.3
    
    
    
    79.2
    
    
    
    100.0
    %
    
    
    3,740.4
    
    
    
    81.2
    
    
    
    100.0
    %Total loan portfolio
    
    $
    5,579.7
    
    
    
    100.0
    %
    
    
    
    
    
    $
    4,612.9
    
    
    
    100.0
    %
 
 (1)
    
    Amounts reflect principal balance of loans without adjustments for deferred loan
costs, net of deferred revenues, which, as of September 30, 2005, totaled $71.0 and as of
December 31, 2004, totaled $51.9 million. Amounts also do not reflect the allowance for loan
losses of $8.0 million as of September 30, 2005, and $5.0 million as of December 31, 2004.(2)
    
    Loans for borrowers who still may be attending school or engaging in other permitted
educational activities and are not yet required to make payments on the loans, e.g., residency
periods for medical students or a grace period for bar exam preparation.(3)
    
    Loans for borrowers who have temporarily ceased making full payments as a result of
hardship or other factors, according to a schedule approved by the servicer consistent with
the established loan program servicing procedures and policies.(4)
    
    The period of delinquency is based on the number of days scheduled payments are
contractually past due and relates to loans in repayment status, that is, receivables not
charged off, and not in school, grace, deferment or forbearance.(5)
    
    Includes loans of $9.1 million as of September 30, 2005, and $13.6 million as of
December 31, 2004, in claim status, which are loans that are more than 270 days past due,
which have gone into default and which have been submitted to the guaranty agency for FFELP
loans to process the claim for payment. 41




---



##### 



The following table summarizes our loan portfolio by interest rate ranges as of September 30,
2005, and December 31, 2004:
 As of September 30, 2005
    
    
    As of December 31, 2004Current
    
    
    
    
    
    
    Currentprincipal
    
    
    
    
    
    
    principalbalance
    
    
    Weighted
    
    
    balance
    
    
    Weightedoutstanding(1)
    
    

average
maturity
    
    
    outstanding(1)
    
    

average maturityInterest rate range
    
    (in millions)
    
    
    (yrs)
    
    
    (in millions)
    
    
    (yrs)2.500%
 2.999%
    
    $
    558.7
    
    
    
    21.2
    
    
    $
    553.0
    
    
    
    22.83.000%
 3.499%
    
    
    936.2
    
    
    
    22.9
    
    
    
    751.6
    
    
    
    23.23.500%
 3.999%
    
    
    1,344.8
    
    
    
    21.6
    
    
    
    1,019.8
    
    
    
    22.04.000%
 4.499%
    
    
    1,026.8
    
    
    
    20.9
    
    
    
    854.5
    
    
    
    21.24.500%
 4.999%
    
    
    455.7
    
    
    
    22.2
    
    
    
    400.7
    
    
    
    22.45.000%
 5.499%
    
    
    225.7
    
    
    
    21.3
    
    
    
    180.8
    
    
    
    22.95.500%
 5.999%
    
    
    215.5
    
    
    
    22.6
    
    
    
    189.4
    
    
    
    22.76.000%
 6.499%
    
    
    240.4
    
    
    
    21.1
    
    
    
    209.1
    
    
    
    21.66.500%
 6.999%
    
    
    200.6
    
    
    
    21.1
    
    
    
    176.6
    
    
    
    21.27.000%
7.499%
    
    
    89.7
    
    
    
    22.8
    
    
    
    81.9
    
    
    
    22.97.500%
7.999%
    
    
    94.8
    
    
    
    22.3
    
    
    
    77.4
    
    
    
    22.78.000%
 8.499%
    
    
    184.2
    
    
    
    21.7
    
    
    
    118.1
    
    
    
    22.38.500%
 8.999%
    
    
    1.9
    
    
    
    21.0
    
    
    
    
    
    
    
    10.500%
 10.999%
    
    
    4.7
    
    
    
    20.6
    
    
    
    
    
    
    
    5,579.7
    
    
    
    21.7
    
    
    $
    4,612.9
    
    
    
    22.2
 
 (1)
    
    Amounts reflect principal balance of loans without adjustments for deferred loan
costs, net of deferred revenues, which, as of September 30, 2005, totaled $71.0 million and as
of December 31, 2004, totaled $51.9 million. Amounts also do not reflect the allowance for
loan losses of $8.0 million as of September 30, 2005, and $5.0 million as of December 31,
2004. 42




---



##### 



Net Portfolio Margin Analysis
  Three months ended September 30,
    
    
    Nine months ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %(dollars in thousands)Student loan and restricted cash yield
    
    $
    91,294
    
    
    
    6.35
    %
    
    $
    48,754
    
    
    
    4.77
    %
    
    $
    240,411
    
    
    
    5.97
    %
    
    $
    127,597
    
    
    
    4.60
    %Borrower benefits
    
    
    (1,209
    )
    
    
    (0.08
    )
    
    
    (801
    )
    
    
    (0.08
    )
    
    
    (3,471
    )
    
    
    (0.09
    )
    
    
    (2,222
    )
    
    
    (0.08
    )Department of Education rebate(1)
    
    
    (14,484
    )
    
    
    (1.01
    )
    
    
    (10,411
    )
    
    
    (1.02
    )
    
    
    (41,215
    )
    
    
    (1.02
    )
    
    
    (28,479
    )
    
    
    (1.03
    )Amortization(2)
    
    
    (1,483
    )
    
    
    (0.10
    )
    
    
    (943
    )
    
    
    (0.09
    )
    
    
    (4,401
    )
    
    
    (0.11
    )
    
    
    (2,544
    )
    
    
    (0.09
    )Net student loan and restricted cash yield
    
    
    74,118
    
    
    
    5.16
    
    
    
    36,599
    
    
    
    3.58
    
    
    
    191,324
    
    
    
    4.75
    
    
    
    94,352
    
    
    
    3.40Asset-backed notes and lines of credit
    
    
    (55,315
    )
    
    
    (3.85
    )
    
    
    (19,511
    )
    
    
    (1.91
    )
    
    
    (138,243
    )
    
    
    (3.43
    )
    
    
    (46,463
    )
    
    
    (1.68
    )Net portfolio margin
    
    
    18,803
    
    
    
    1.31
    
    
    
    17,088
    
    
    
    1.67
    
    
    
    53,081
    
    
    
    1.32
    
    
    
    47,889
    
    
    
    1.72Floor income(3)
    
    
    (874
    )
    
    
    (0.06
    )
    
    
    (5,839
    )
    
    
    (0.57
    )
    
    
    (5,971
    )
    
    
    (0.15
    )
    
    
    (20,155
    )
    
    
    (0.72
    )Net portfolio margin net of floor income
    
    $
    17,929
    
    
    
    1.25
    %
    
    $
    11,249
    
    
    
    1.10
    %
    
    $
    47,110
    
    
    
    1.17
    %
    
    $
    27,734
    
    
    
    1.00
    %Reconciliation to net interest income:Net portfolio margin net of floor income
    
    $
    17,929
    
    
    
    
    
    
    $
    11,249
    
    
    
    
    
    
    $
    47,110
    
    
    
    
    
    
    $
    27,734Plus: interest income on cash and cash
equivalents
    
    
    336
    
    
    
    
    
    
    
    139
    
    
    
    
    
    
    
    1,012
    
    
    
    
    
    
    
    444Less: interest expense on other debt
obligations, net
    
    
    (291
    )
    
    
    
    
    
    
    (703
    )
    
    
    
    
    
    
    (1,164
    )
    
    
    
    
    
    
    (2,273
    )Less: interest expense on capital lease
obligations
    
    
    (24
    )
    
    
    
    
    
    
    (28
    )
    
    
    
    
    
    
    (80
    )
    
    
    
    
    
    
    (102
    )Plus: floor income(3)
    
    
    874
    
    
    
    
    
    
    
    5,839
    
    
    
    
    
    
    
    5,971
    
    
    
    
    
    
    
    20,155Net interest income
    
    $
    18,824
    
    
    
    
    
    
    $
    16,496
    
    
    
    
    
    
    $
    52,849
    
    
    
    
    
    
    $
    45,958Average balance of student loans and
restricted cash
    
    $
    5,697,789
    
    
    
    
    
    
    $
    4,064,496
    
    
    
    
    
    
    $
    5,382,682
    
    
    
    
    
    
    $
    3,703,280
 
 (1)
    
    Reflects the 1.05 percent per annum rebate fee that is paid monthly on FFELP
consolidation loans divided by the average balance of student loans and restricted cash.(2)
    
    Represents the amortization of capitalized origination costs, deferred revenue and
purchase accounting adjustments, including the 0.50 percent fee payable to the Department of
Education on the origination of FFELP loans.(3)
    
    Represents the amount by which fixed rate interest income exceeds the special
allowance payment spread set by the Department of Education plus the applicable variable rate.
The company previously reported this amount net of borrower benefits. 43




---



##### 



Net Interest Margin Analysis
  Three months ended September 30,2005
    
    
    2004Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    rates
    
    
    
    
    
    
    Interest
    
    
    ratesAverage
    
    
    income/
    
    
    earned/
    
    
    Average
    
    
    income/
    
    
    earned/balance
    
    
    expense
    
    
    paid
    
    
    balance
    
    
    expense
    
    
    paid(dollars in thousands)Interest-earning assets:Cash and cash equivalents
    
    $
    17,600
    
    
    $
    336
    
    
    
    7.57
    %
    
    $
    7,389
    
    
    $
    139
    
    
    
    7.48
    %Restricted cash
    
    
    146,364
    
    
    
    1,523
    
    
    
    4.13
    
    
    
    141,298
    
    
    
    586
    
    
    
    1.65Student loans
    
    
    5,551,425
    
    
    
    89,771
    
    
    
    6.42
    
    
    
    3,923,198
    
    
    
    48,168
    
    
    
    4.88Borrower benefits
    
    
    
    
    
    
    (1,209
    )
    
    
    (0.09
    )
    
    
    
    
    
    
    (801
    )
    
    
    (0.08
    )Department of Education rebate(1)
    
    
    
    
    
    
    (14,484
    )
    
    
    (1.04
    )
    
    
    
    
    
    
    (10,411
    )
    
    
    (1.05
    )Amortization(2)
    
    
    
    
    
    
    (1,483
    )
    
    
    (0.11
    )
    
    
    
    
    
    
    (943
    )
    
    
    (0.10
    )Student loans, net of borrower benefits,
Department of Education rebate and
amortization
    
    
    5,551,425
    
    
    
    72,595
    
    
    
    5.18
    
    
    
    3,923,198
    
    
    
    36,013
    
    
    
    3.65Total interest-earning assets
    
    $
    5,715,389
    
    
    $
    74,454
    
    
    
    5.17
    %
    
    $
    4,071,885
    
    
    $
    36,738
    
    
    
    3.59
    %Interest-bearing liabilities:Asset-backed notes and lines of credit
    
    $
    5,720,728
    
    
    $
    55,315
    
    
    
    3.84
    %
    
    $
    4,103,620
    
    
    $
    19,511
    
    
    
    1.89
    %Other debt obligations, net
    
    
    14,615
    
    
    
    291
    
    
    
    7.90
    
    
    
    37,328
    
    
    
    703
    
    
    
    7.49Capital lease obligations
    
    
    1,445
    
    
    
    24
    
    
    
    6.59
    
    
    
    1,709
    
    
    
    28
    
    
    
    6.52Total interest-bearing liabilities
    
    $
    5,736,788
    
    
    $
    55,630
    
    
    
    3.85
    
    
    $
    4,142,657
    
    
    $
    20,242
    
    
    
    1.94Net interest income and net interest margin
    
    
    
    
    
    $
    18,824
    
    
    
    1.31
    %(3)
    
    
    
    
    
    $
    16,496
    
    
    
    1.61
    %(3)
 
 (1)
    Reflects the 1.05 percent per annum rebate fee that is paid monthly on FFELP
consolidation loans divided by the average balance of student loans.(2)
    Represents the amortization of capitalized origination costs, deferred revenue and
purchase accounting adjustments, including the 0.50 percent fee payable to the Department of
Education on the origination of FFELP loans.(3)
    Net interest margin is net interest income divided by the average total
interest-earning assets. 
 44




---



##### 



Nine months ended
    
    September 30,2005
    
    
    2004Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    rates
    
    
    
    
    
    
    Interest
    
    
    ratesAverage
    
    
    income/
    
    
    earned/
    
    
    Average
    
    
    income/
    
    
    earned/balance
    
    
    expense
    
    
    paid
    
    
    balance
    
    
    expense
    
    
    paid(dollars in thousands)Interest-earning assets:Cash and cash equivalents
    
    $
    18,809
    
    
    $
    1,012
    
    
    
    7.19
    %
    
    $
    11,388
    
    
    $
    444
    
    
    
    5.21
    %Restricted cash
    
    
    157,353
    
    
    
    3,883
    
    
    
    3.30
    
    
    
    146,661
    
    
    
    1,160
    
    
    
    1.06Student loans
    
    
    5,225,329
    
    
    
    236,528
    
    
    
    6.05
    
    
    
    3,556,619
    
    
    
    126,437
    
    
    
    4.75Borrower benefits
    
    
    
    
    
    
    (3,471
    )
    
    
    (0.09
    )
    
    
    
    
    
    
    (2,222
    )
    
    
    (0.08
    )Department of Education rebate(1)
    
    
    
    
    
    
    (41,215
    )
    
    
    (1.05
    )
    
    
    
    
    
    
    (28,479
    )
    
    
    (1.07
    )Amortization(2)
    
    
    
    
    
    
    (4,401
    )
    
    
    (0.11
    )
    
    
    
    
    
    
    (2,544
    )
    
    
    (0.10
    )Student loans , net of borrower benefits,
Department of Education rebate and
amortization
    
    
    5,225,329
    
    
    
    187,441
    
    
    
    4.80
    
    
    
    3,556,619
    
    
    
    93,192
    
    
    
    3.50Total interest-earning assets
    
    $
    5,401,491
    
    
    $
    192,336
    
    
    
    4.76
    %
    
    $
    3,714,668
    
    
    $
    94,796
    
    
    
    3.41
    %Interest-bearing liabilities:Asset-backed notes and lines of credit
    
    $
    5,408,695
    
    
    $
    138,243
    
    
    
    3.42
    %
    
    $
    3,742,702
    
    
    $
    46,463
    
    
    
    1.66
    %Other debt obligations, net
    
    
    14,564
    
    
    
    1,164
    
    
    
    10.69
    
    
    
    44,545
    
    
    
    2,273
    
    
    
    6.82Capital lease obligations
    
    
    1,567
    
    
    
    80
    
    
    
    6.83
    
    
    
    1,781
    
    
    
    102
    
    
    
    7.65Total interest-bearing liabilities
    
    $
    5,424,826
    
    
    $
    139,487
    
    
    
    3.44
    
    
    $
    3,789,028
    
    
    $
    48,838
    
    
    
    1.72Net interest income and net interest margin
    
    
    
    
    
    $
    52,849
    
    
    
    1.31
    %(3)
    
    
    
    
    
    $
    45,958
    
    
    
    1.65
    %(3)
 
 (1)
    
    Reflects the 1.05 percent per annum rebate fee that is paid monthly on FFELP
consolidation loans divided by the average balance of student loans.(2)
    
    Represents the amortization of capitalized origination costs, deferred revenue and
purchase accounting adjustments, including the 0.50 percent fee payable to the Department of
Education on the origination of FFELP loans.(3)
    
    Net interest margin is net interest income divided by the average total
interest-earning assets. 45




---



##### 



Interest Rate Risk
     
    
    match-funding of loan assets with associated secured borrowings and
    
    utilizing interest rate swaps and other derivative instruments, described
below, to minimize the adverse effect of interest rate fluctuations in the near term.
  September 30, 2005
    
    
    December 31, 2004Receive
    
    
    
    
    
    
    ReceiveDerivative
    
    Notional
    

    Maturity
    
    
    Pay
    
    
    floating rate
    
    
    
    
    
    floating ratetype
    
    amount
    
    
    Date
    
    
    fixed rate
    
    
    (LIBOR)
    
    
    Fair value(3)
    
    
    (LIBOR)
    
    
    Fair value(3)Swap(1)
    
    $
    250,000
    
    
    
    01/26/2005
    
    
    
    
    %
    
    
    
    %
    
    $
    
    
    
    
    2.42
    %
    
    $
    96Cap (Sold) (2)
    
    
    250,000
    
    
    
    01/26/2005
    
    
    
    
    (2)
    
    
    
    
    
    
    
    
    
    
    2.23
    
    
    
    (82
    )Swap(1)
    
    
    550,000
    
    
    
    04/28/2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.42
    
    
    
    1,945Swap(1)
    
    
    450,000
    
    
    
    01/25/2006
    
    
    
    3.23
    
    
    
    3.83
    
    
    
    1,276
    
    
    
    
    
    
    
    Total, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,276
    
    
    
    
    
    
    $
    1,959
 
 (1)
    
    Under the interest rate swaps, we agree to pay a fixed rate in exchange for a
floating rate. The interest rate swap effectively converts a portion of our variable-rate debt
to a fixed rate for a period of time, thereby fixing the relative spread between a portion of
our loan assets equal to the size of the swap notional amount.(2)
    
    The payments on the cap were to be made only when the 91-day commercial paper rate
exceeded 2.09 percent. Payments of $74 were made in the first quarter of the year 2005 and
payments of $54 were made for the year 2004.(3)
    
    Reflects the value to the company of the interest rate swaps and the cap assuming
the applicable swap or cap was terminated as of September 30, 2005, or December 31, 2004.  46




---



##### 



Forward interest rate sensitivity.
  Twelve months beginning October 1, 2005Decrease
    
    
    Increase
    
    
    Increase
    
    
    Increaseof
    
    
    of
    
    
    of
    
    
    of100 basis
    
    
    100 basis
    
    
    200 basis
    
    
    300 basispoints
    
    
    points
    
    
    points
    
    
    points(dollars in millions)Estimated increase (decrease) in net interest income
    
    $
    7.5
    
    
    $
    (3.9
    )
    
    $
    (5.7
    )
    
    $
    (6.6
    )Estimated (increase) decrease in swap interest expense(1)
    
    
    (1.4
    )
    
    
    1.4
    
    
    
    2.9
    
    
    
    4.3Estimated (increase) in derivative mark-to-market expense(1)(2)
    
    
    (1.3
    )
    
    
    (1.3
    )
    
    
    (1.3
    )
    
    
    (1.3
    )Increase (decrease) in income before income tax provision or benefit
    
    $
    4.8
    
    
    $
    (3.8
    )
    
    $
    (4.1
    )
    
    $
    (3.6
    )
 
 ___(1) Our derivative instrument in effect as of September 30, 2005, matures on January 25,
2006.(2) Represents the aggregate mark-to-market liability as of September 30, 2005, based on
the maturity of the derivative in place at that time. 47




---



##### 



Cautionary Notice Regarding Forward-looking Statements
   Item 3. Quantitative and Qualitative Disclosure about Market Risk
  Item 4. Controls and Procedures
   48




---



##### 



PART II. OTHER INFORMATION
 Item 1. Legal Proceedings
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3. Defaults Upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  Item 5. Other Information
  Item 6. Exhibits
  49




---



##### 



Signature
  COLLEGIATE FUNDING SERVICES, INC.(Registrant)Date: November 07, 2005
    
    By: /s/ Kevin A. LandgraverName: Kevin A. LandgraverTitle: Chief Financial Officer and Executive Vice President(on behalf of the Registrant and as Principal Financial Officer)
 50




---



##### 



EXHIBIT INDEX
 Exhibit No.
    
    Description of Exhibit2.1
    
    Agreement relating to Acquisition of Youth Media & Marketing
Networks, dated as of April 21, 2004, among Collegiate Funding
Services, LLC, Affinity Acquisition Corp., Members Connect Inc.
and the companys stockholders (incorporated by reference to
Exhibit 2.1 to the registration statement on Form S-1 (Reg. No.
333-114466))3.1
    
    Amended and Restated Certificate of Incorporation of Collegiate
Funding Services, Inc. (incorporated by reference to Exhibit 3.1
to the registration statement on Form S-1 (Reg. No. 333-114466))3.2
    
    Amended and Restated By-Laws of Collegiate Funding Services,
Inc. (incorporated by reference to Exhibit 3.2 to the
registration statement on Form S-1 (Reg. No. 333-114466))4.1P
    
    Stockholders Agreement, dated May 17, 2002, by and among CFSL
Holdings Corp., CFSL Acquisition Corp. and the investors listed
on Schedule A thereto (incorporated by reference to Exhibit 4.1
to the registration statement on Form S-1 (Reg. No. 333-114466))4.2
    
    Form of Certificate of Common Stock (incorporated by reference
to Exhibit 4.2 to the registration statement on Form S-1 (Reg.
No. 333-114466))4.3
    
    Indenture of Trust from Collegiate Funding Services Education
Loan Trust I and U.S. Bank National Association, as Eligible
Lender Trustee to U.S. Bank National Association, as Indenture
Trustee, dated as of November 1, 2001, together with First
Supplemental Indenture of Trust, dated November 1, 2001 and
Second Supplemental Indenture of Trust, dated July 1, 2002
(incorporated by reference to Exhibit 4.3 to the registration
statement on Form S-1 (Reg. No. 333-114466))4.4
    
    Indenture of Trust between Collegiate Funding Services Education
Loan Trust 2003-A and U.S. Bank National Association, as
Eligible Lender Trustee and as Trustee, dated as of February 1,
2003 (incorporated by reference to Exhibit 4.4 to the
registration statement on Form S-1 (Reg. No. 333-114466))4.5
    
    Indenture of Trust between Collegiate Funding Services Education
Loan Trust 2003-B and U.S. Bank National Association, as
Eligible Lender Trustee and as Trustee, dated as of November 1,
2003 (incorporated by reference to Exhibit 4.5 to the
registration statement on Form S-1 (Reg. No. 333-114466))4.6
    
    Indenture of Trust between Collegiate Funding Services Education
Loan Trust 2004-A and U.S. Bank National Association, as
Eligible Lender Trustee and as Trustee, dated as of April 1,
2004 (incorporated by reference to Exhibit 4.6 to the
registration statement on Form S-1 (Reg. No. 333-114466))4.6.1
    
    Indenture of Trust between Collegiate Funding Services Education
Loan Trust 2005-A and The Bank of New York, as Eligible Lender
Trustee and as Trustee, dated as of February 1, 2005
(incorporated by reference to Exhibit 4.1 to the current report
on Form 8-K of Collegiate Funding Services Education Loan Trust
2005-A (File No., 333-112232-02))4.7
    
    Indenture of Trust between Collegiate Funding Services Education
Loan Trust 2005-B July 20, 2005 (incorporated by reference to
Exhibit 4.7 to the current report on Form 8-K of Collegiate
Funding Services Education Loan Trust 2005-A (File No.,
333-112232-02))4.8*±
    
    Indenture, dated as of August 19, 2005, by and among Collegiate
Funding Services Resources II, LLC, as issuer, as lenders party
thereto, Citicorp North America, Inc., as funding agent and
administrative agent, the Bank of New York, as indenture trustee
and securities intermediary, Collegiate Funding Portfolio
Administration, LLC as administrator, and Collegiate Funding
Master Servicing, LLC as master10.28
    
    Amendment No. 3, dated as of June 30, 2005, to the Credit
Agreement among Collegiate Funding Services, LLC, Collegiate
Funding Services, Inc. the Subsidiary Guarantors party thereto,
the Lenders party thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent (incorporated by reference to Exhibit 10.28
to the current report on Form 8-K of Collegiate Funding
Services, Inc. (File No. 000-50846))
 51




---



##### 



Exhibit No.
    
    Description of Exhibit10.29
    
    Amendment No. 4, dated as of October 7, 2005, to the Credit
Agreement among Collegiate Funding Services, LLC, Collegiate
Funding Services, Inc. the Subsidiary Guarantors party thereto,
the Lenders party thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent (incorporated by reference to Exhibit 10.28
to the current report on Form 8-K of Collegiate Funding
Services, Inc. (File No. 000-50846))10.30*±
    
    Purchase and Sale Agreement, dated as of September 30, 2005
among Collegiate Funding Services, L.L.C., as seller, The Bank
of New York, as eligible lender trustee for the seller, JPMorgan
Chase Bank, N.A., as purchaser and JPMorgan Chase Bank, N.A., as
eligible lender trustee for the purchaser.31.1*
    
    Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer31.2*
    
    Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer32.1**
    
    Section 1350 Certification by Chief Executive Officer32.2**
    
    Section 1350 Certification by Chief Financial Officer99.1*
    
    Risk Factors relating to the Registrant99.2**
    
    Supplemental information available on the Registrants website
 
 P CFSL Holdings Corp. has subsequently changed its name to Collegiate Funding Services, Inc.*
    
    Filed herewith**
    
    Furnished herewith±
    
    Confidential treatment requested 52