**Exhibit 99.3**

 

**INDEPENDENT ACCOUNTANT’S REPORT**

 

Tricia Heintz 

The Bank of New York 

Corporate Trust Division 

10161 Centurion Parkway 

Jacksonville, FL 32256 

 

Mr. Jack Elam, President 

CFS-SunTech Servicing LLC 

6510 Old Canton Road 

Ridgeland, Mississippi 39157 

 

We have examined management’s assertions, that CFS-SunTech Servicing LLC complied with the assertions in the accompanying supplement tothis report relative to CFS-SunTech Servicing LLC’s administration of the Federal Family Education Loan Program on behalf of its lender clients during the year ended December 31, 2004 and about the effectiveness of CFS-SunTech ServicingLLC’s internal control over compliance with the aforementioned compliance requirements as of December 31, 2004. Management is responsible for CFS-SunTech Servicing LLC’s compliance with—and the effectiveness of CFS-SunTech ServicingLLC’s internal control over compliance with—those requirements. Our responsibility is to express an opinion on management’s assertions about CFS-SunTech Servicing LLC’s compliance with—and the effectiveness of CFS-SunTechServicing LLC’s internal control over compliance with—the specified compliance requirements based on our examination. 

 

Our examination was made in accordance with *Government Auditing Standards,* issued by the Comptroller General of the United States; standards established by theAmerican Institute of Certified Public Accountants; and the 1996 Audit Guide, *Compliance Audits for Lenders and Lender Servicers Participating in the Federal Family Education Loan (FFEL) Program*(the Guide), issued by the U. S. Department ofEducation, Office of Inspector General; and, accordingly, included obtaining an understanding of the internal control over compliance with the specified compliance requirements; testing and evaluating the design and operating effectiveness ofinternal control over compliance; examining, on a test basis, evidence about CFS-SunTech Servicing LLC’s compliance with those requirements; and performing such other procedures as we considered necessary in the circumstances. We believe thatour examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on CFS-SunTech Servicing LLC’s compliance with specified requirements. 

Because of inherent limitations in any internal control structure, errors or irregularities may occur and not bedetected. Also projections of any evaluation of the internal control over compliance with the specified requirements to future years are subject to the risk that internal control over compliance may become inadequate because of changes inconditions, or that the degree of compliance with control policies or procedures may deteriorate. 

 

In our opinion, management’s assertions that CFS-SunTech Servicing LLC complied with the aforementioned requirements for the year ended December 31, 2004 and that CFS-SunTech Servicing LLC maintained an effectiveinternal control over compliance with the aforementioned compliance requirements as of December 31, 2004 are fairly stated, in all material respects. 

 

This report is intended solely for the information of the audit committee, management, and the U. S. Department of Education, however, this report is a matter of publicrecord and its distribution is not limited. 

 

/s/ HORNELLP

 

Jackson, Mississippi 

January 21, 2005 

**SUPPLEMENT**

 

**MANAGEMENT ASSERTIONS**

 
 **1).****ED FORM 799**
 

The loan information (loan types, interest rate, beginning and ending principal loan balances, and loan status (past due, in grace, in deferment) reportedin Parts II, III, IV, V, and VI of either the ED Form 799s prepared by CFS-SunTech Servicing LLC and submitted to ED on behalf of our lender clients or the billing information prepared by CFS-SunTech Servicing LLC and submitted to our lender clientsduring the year ended December 31, 2004 agrees with CFS-SunTech Servicing LLC’s accounting summary records and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal control over compliance with requirements that suchinformation be in agreement. 

 
 **2).****INDIVIDUAL RECORD REVIEW**
 

CFS-SunTech Servicing LLC supported loans reported in either the ED Form 799s prepared by CFS-SunTech Servicing LLC and submitted to ED on behalf of ourlender clients or the billing information prepared by CFS-SunTech Servicing LLC and submitted to our lender clients during the year ended December 31, 2004 with—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internalcontrol over compliance requirements for supporting loans with—loan records that include all applicable documents listed in Section II, Compliance Requirement 2, of the Audit Guide that our lender clients have contracted with CFS-SunTechServicing LLC to store. 

 
 **3).****LOAN ORIGINATION FEES**
 

During the year ended December 31, 2004, CFS-SunTech Servicing LLC completely reported, classified and computed, in accordance with ED Form 799instructions—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal control over compliance with ED Form 799 instructions for classifying and computing—the loan origination information reported in Part II in eitherthe ED Form 799s prepared by CFS-SunTech Servicing LLC and submitted to ED on behalf of our lender clients or the billing information prepared by CFS-SunTech Servicing LLC and submitted to our lender clients. During the year ended December 31, 2004,CFS-SunTech Servicing LLC notified our lender clients to pay ED—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective control over compliance with requirements for payment to ED of— origination fees in excess of interest andspecial allowance. 

 

**SUPPLEMENT - CONTINUED**

**MANAGEMENT ASSERTIONS - CONTINUED**

 
 **4).****INTEREST BENEFITS**
 

Loans included in Part III of either the ED Form 799s prepared by CFS-SunTech Servicing LLC and submitted to ED on behalf of our lender clients or thebilling information prepared by CFS-SunTech Servicing LLC and submitted to our lender clients during the year ended December 31, 2004 were—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal control over compliancewith requirements that loans are—(1) in a status eligible for interest benefits, (2) assigned the correct interest rate in accordance with Section 427A(a)-(i) of the HEA, as amended, and (3) classified in the correct interest rate category inaccordance with ED Form 799 instructions. Ending principal amounts, average daily balances, and interest amounts were calculated in accordance with—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal controls overcompliance with requirements for calculation in accordance with—the ED Form 799 instructions. 

 
 **5).****SPECIAL ALLOWANCE PAYMENTS**
 

Loans included in Part IV of either the ED Form 799s prepared by CFS-SunTech Servicing LLC and submitted to ED on behalf of our lender clients or thebilling information prepared by CFS-SunTech Servicing LLC and submitted to our lender clients during the year ended December 31, 2004 were—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal control over compliancewith requirements that loans are—(1) in a status eligible for special allowance and (2) properly categorized on the ED Form 799 in accordance with the ED Form 799 instructions. Ending principal balances, average daily balances, and adjustmentsfor differences in average daily balances were calculated in accordance with—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal controls over compliance with requirements for calculation in accordance with— theED Form 799 instructions. 

 
 **6).****LOAN PORTFOLIO ANALYSIS**
 

In Parts V and VI of the ED Form 799s prepared by CFS-SunTech Servicing LLC and submitted to ED on behalf of our lender clients or the billing informationprepared by CFS-SunTech Servicing LLC and submitted to our lender clients during the year ended December 31, 2004, CFS-SunTech Servicing LLC properly classified and accurately reported—and, as of December 31, 2004, CFS-SunTech Servicing LLC hadeffective internal control over compliance with requirements to properly classify and report—loan principal balances in accordance with the ED Form 799 instructions and included all outstanding loans (except those for which the guaranty wasvoided are not included in Part VI). 

 

**SUPPLEMENT - CONTINUED**

**MANAGEMENT ASSERTIONS - CONTINUED**

 
 **7).****LOAN SALES AND PURCHASES**
 

Loan purchases and sales made on behalf of our lender clients during the year ended December 31, 2004, were recorded by CFS-SunTech Servicing LLC inaccordance with—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal control over compliance for recording loan purchases/sales in accordance with—the purchase/sales agreements with respect to the start/end date ofeligibility for interest, special allowance and responsibility for payment of loan origination fees. During the year ended December 31, 2004, CFS-SunTech Servicing LLC paid ED—and as of December 31, 2004, CFS-SunTech Servicing LLC had effectiveinternal control over compliance with requirements for payment to ED of—loan origination fees for which we were responsible for paying on behalf of our lender clients in accordance with the agreements. During the year ended December 31, 2004,CFS-SunTech Servicing LLC recorded completely and accurately in the servicer’s loan servicing systems—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal control over compliance with requirements to recordcompletely and accurately in the servicer’s loan servicing systems—all applicable ED Form 799 loan data for loans transferred, including beginning balances. 

 
 **8).****STUDENT STATUS CHANGES**
 

Upon receipt of Student Status Confirmation Reports or other notification of change information for loans serviced during the year ended December 31,2004, CFS-SunTech Servicing LLC accurately updated—and as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal control over compliance with requirements to accurately update—loan records for changes to student status,including conversion to payment status in accordance with 34 CFR 682.401 (b)(20) and 34 CFR 682.209, respectively. 

 
 **9).****PAYMENT PROCESSING**
 

For loans serviced during the year ended December 31, 2004, CFS-SunTech Servicing LLC: (a) calculated—and as of December 31, 2004, CFS-SunTechServicing LLC had effective internal control over compliance with requirements to calculate—interest and principal in accordance with 34 CFR 682.304 and (b) applied—and as of December 31, 2004, CFS-SunTech Servicing LLC had effectiveinternal control over compliance with requirements to apply—(i) loan payments effective with the day of receipt and (ii) prepayments in accordance with 34 CFR 682.209(b) or the documented specific request of the borrower. 

**SUPPLEMENT - CONTINUED**

 

**MANAGEMENT ASSERTIONS - CONTINUED**

 
 **10).****DUE DILIGENCE BY LENDERS OR SERVICERS IN THE COLLECTION OF DELINQUENT LOANS**
 

For loans serviced during the year ended December 31, 2004, CFS-SunTech Servicing LLC complied with—and as of December31, 2004, CFS-SunTech Servicing LLC had effective internal control over compliance with—the due diligence requirements for collection of delinquent loans, including the requirements for skip-tracing or preclaims assistance set forth in 34 CFR682.411 (c)-(m). 

 
 **11).****DUE DILIGENCE - TIMELY CLAIM FILINGS BY LENDERS OR SERVICERS**
 

For loans serviced during the year ended December 31, 2004, CFS-SunTech Servicing LLC complied with - and as of December 31, 2004, CFS-SunTech ServicingLLC had effective internal control over compliance with—deadlines for timely filing of claims with the guaranty agency concerning death, disability, false certification, closed schools, or bankruptcy contained in 34 CFR 682.402(b), (c), (d),(e) and (f) and for default claims contained in 34 CFR 682.406(a)(5). For loans serviced during the year ended December 31, 2004, CFS-SunTech Servicing LLC accurately categorized—and as of December 31, 2004, CFS-SunTech Servicing LLC hadeffective internal control over compliance with requirements for accurately categorizing— amounts pertaining to claims in the ED Form 799. 

 
 **12).****CURES**
 

There are no loans with timely-filing violations or due-diligence violations cured during the year ended December 31, 2004. For loans on which a cure wasrequired but that were not cured during the year ended December 31, 2004, CFS-SunTech Servicing LLC properly categorized—and, as of December 31, 2004, CFS-SunTech Servicing LLC had effective internal control over compliance with requirements toproperly categorize—the loans in the ED Form 799 prepared and submitted to ED on behalf of our lender clients or the billing information prepared by CFS-SunTech Servicing LLC, and submitted to our lender clients.