Document:

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                                                                   Exhibit 10.86

                               GUARANTY AGREEMENT
                                 (Subsidiaries)

                  WHEREAS, NELNET, INC. and NATIONAL EDUCATION LOAN NETWORK,
INC. (together "BORROWERS") have entered into that certain Credit Agreement
dated September 25, 2003, with M&I MARSHALL & ILSLEY BANK, SUNTRUST BANK, FIRST
NATIONAL BANK OF OMAHA and FIFTH THIRD BANK, INDIANA (the "BANKS") (such Credit
Agreement, as it may hereafter be amended or otherwise modified from time to
time, being hereinafter referred to as the "CREDIT AGREEMENT", and capitalized
terms not otherwise defined herein shall have the same meaning as set forth in
the Credit Agreement);

                  WHEREAS, the execution of this Guaranty Agreement is a
condition to the Bank's obligations under the Credit Agreement and an inducement
to the other Secured Parties to extend credit to the Borrowers;

                  NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each of the undersigned Subsidiaries
and any Subsidiary hereafter added as a "GUARANTOR" hereto pursuant to a
Subsidiary Joinder Agreement (individually a "GUARANTOR" and collectively the
"GUARANTORS"), hereby irrevocably and unconditionally guarantees to M&I Marshall
& Ilsley Bank, as agent for itself and the other Secured Parties (the "AGENT")
the full and prompt payment and performance of the Guaranteed Indebtedness
(hereinafter defined), this Guaranty Agreement being upon the following terms:

         1.       The term "GUARANTEED INDEBTEDNESS", as used herein means all
of the "OBLIGATIONS", as defined in the Credit Agreement (which includes both
Article I (the Refinancing Credit Facility) and Article II (the Commercial Paper
Facility)) and shall include any and all post-petition interest and expenses
(including reasonable attorneys' fees) whether or not allowed under any
bankruptcy, insolvency, or other similar law; provided that (a) the Guaranteed
Indebtedness shall be limited, with respect to each Guarantor, to an aggregate
amount equal to the largest amount that would not render such Guarantor's
obligations hereunder subject to avoidance under Section 544 or 548 of the
United States Bankruptcy Code or under any applicable state law relating to
fraudulent transfers or conveyances, and (b) the Guaranteed Indebtedness shall
be limited, with respect to UFS Securities, LLC ("UFS") only, to an aggregate
amount equal to the largest amount that would not put UFS in violation of the
net capital requirements applicable to UFS by reason of UFS's status as a
registered broker dealer.

         2.       This instrument shall be an absolute, continuing, irrevocable
and unconditional guaranty of payment and performance, and not a guaranty of
collection, and each Guarantor shall remain liable on its obligations hereunder
until the payment and performance in full of the Guaranteed Indebtedness. No
set-off, counterclaim, recoupment, reduction, or diminution of any obligation,
or any defense of any kind or nature which either Borrower may have against
Agent, any Secured Party or any other party, or which any Guarantor may have
against either Borrower, Agent, any Secured Party or any other party, shall be
available to, or shall be asserted by, any Guarantor against Agent, any Secured
Party or any subsequent holder of the Guaranteed Indebtedness or any part
thereof or against payment of the Guaranteed Indebtedness or any part thereof.

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         3.       If a Guarantor becomes liable for any indebtedness owing by
either Borrower to Agent or any Secured Party by endorsement or otherwise, other
than under this Guaranty Agreement, such liability shall not be in any manner
impaired or affected hereby, and the rights of Agent and the Secured Parties
hereunder shall be cumulative of any and all other rights that Agent and the
Secured Parties may ever have against such Guarantor. The exercise by Agent and
the Secured Parties of any right or remedy hereunder or under any other
instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.

         4.       In the event of default by either Borrower in payment or
performance of the Guaranteed Indebtedness, or any part thereof, when such
Guaranteed Indebtedness becomes due, whether by its terms, by acceleration, or
otherwise, the Guarantors shall, jointly and severally, promptly pay the amount
due thereon to Agent, without notice or demand, in lawful currency of the United
States of America, and it shall not be necessary for Agent or any Secured Party,
in order to enforce such payment by any Guarantor, first to institute suit or
exhaust its remedies against either Borrower or others liable on such Guaranteed
Indebtedness, or to enforce any rights against any collateral which shall ever
have been given to secure such Guaranteed Indebtedness. In the event such
payment is made by a Guarantor, then such Guarantor shall be subrogated to the
rights then held by Agent and any Secured Party with respect to the Guaranteed
Indebtedness to the extent to which the Guaranteed Indebtedness was discharged
by such Guarantor and, in addition, upon payment by such Guarantor of any sums
to Agent and any Secured Party hereunder, all rights of such Guarantor against
Borrowers, any other guarantor or any Collateral arising as a result therefrom
by way of right of subrogation, reimbursement, or otherwise shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full of the Guaranteed Indebtedness. Each Guarantor also agrees to be
bound by the contribution and subrogation provisions of SECTION 3.7 of the
Credit Agreement.

         5.       If acceleration of the time for payment of any amount payable
by either Borrower under the Guaranteed Indebtedness is stayed upon the
insolvency, bankruptcy, or reorganization of either Borrower, all such amounts
otherwise subject to acceleration under the terms of the Guaranteed Indebtedness
shall nonetheless be payable by the Guarantors hereunder forthwith on demand by
Agent or any Secured Party.

         6.       Each Guarantor hereby agrees that its obligations under this
Guaranty Agreement shall not be released, discharged, diminished, impaired,
reduced, or affected for any reason or by the occurrence of any event,
including, without limitation, one or more of the following events, whether or
not with notice to or the consent of any Guarantor: (a) the taking or accepting
of collateral as security for any or all of the Guaranteed Indebtedness or the
release, surrender, exchange, or subordination of any collateral now or
hereafter securing any or all of the Guaranteed Indebtedness; (b) any partial
release of the liability of any Guarantor hereunder, or the full or partial
release of any other guarantor from liability for any or all of the Guaranteed
Indebtedness; (c) any disability of either Borrower, or the dissolution,
insolvency, or bankruptcy of either Borrower, any Guarantor, or any other party
at any time liable for the payment of any or all of the Guaranteed Indebtedness;
(d) any renewal, extension, modification, waiver, amendment, or rearrangement of
any or all of the Guaranteed Indebtedness or any instrument, document, or
agreement evidencing, securing, or otherwise relating to any or all of the
Guaranteed Indebtedness; (e) any adjustment, indulgence, forbearance, waiver, or
compromise

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that may be granted or given by Agent or any Secured Party to either Borrower,
any Guarantor, or any other party ever liable for any or all of the Guaranteed
Indebtedness; (f) any neglect, delay, omission, failure, or refusal of Agent or
any Secured Party to take or prosecute any action for the collection of any of
the Guaranteed Indebtedness or to foreclose or take or prosecute any action in
connection with any instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Guaranteed Indebtedness; (g) the
unenforceability or invalidity of any or all of the Guaranteed Indebtedness or
of any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (h) any payment by
either Borrower or any other party to Agent or any Secured Party is held to
constitute a preference under applicable bankruptcy or insolvency law or if for
any other reason Agent or any Secured Party is required to refund any payment
or pay the amount thereof to someone else; (i) the settlement or compromise of
any of the Guaranteed Indebtedness; (j) the non-perfection of any security
interest or lien securing any or all of the Guaranteed Indebtedness; (k) any
impairment of any collateral securing any or all of the Guaranteed
Indebtedness; (l) the failure of Agent or any Secured Party to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (m) any change in the
corporate existence, structure, or ownership of either Borrower; or (n) any
other circumstance which might otherwise constitute a defense available to, or
discharge of, either Borrower or any Guarantor (other than payment of the
Guaranteed Indebtedness).

         7.       Each Guarantor represents and warrants to the Agent and the
Secured Parties as follows:

                  (a)      All representations and warranties in the Credit
Agreement relating to it are true and correct as of the date hereof and on each
date the representations and warranties hereunder are restated pursuant to any
of the Loan Documents with the same force and effect as if such representations
and warranties had been made on and as of such date except to the extent that
such representations and warranties relate specifically to another date.

                  (b)      It has, independently and without reliance upon the
Agent or any Secured Party and based upon such documents and information as it
has deemed appropriate, made its own analysis and decision to enter into the
Loan Documents to which it is a party.

                  (c)      It has adequate means to obtain from Borrowers on a
continuing basis information concerning the financial condition and assets of
Borrowers and it is not relying upon the Agent or any Secured Party to provide
(and neither the Agent nor any Secured Party shall have any duty to provide) any
such information to it either now or in the future.

                  (d)      The value of the consideration received and to be
received by each Guarantor as a result of Borrowers' and the Banks' entering
into the Credit Agreement and each Guarantor's executing and delivering the Loan
Documents to which it is a party is reasonably worth at least as much as the
liability and obligation of each Guarantor hereunder, and such liability and
obligation and the Credit Agreement have benefited and may reasonably be
expected to benefit each Guarantor directly or indirectly.

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         8.       Each Guarantor covenants and agrees that, as long as the
Guaranteed Indebtedness or any part thereof is outstanding or the Banks have any
commitment under the Credit Agreement, it will comply with all covenants set
forth in the Credit Agreement specifically applicable to it.

         9.       When an Event of Default exists, each Secured Party shall have
the right to set-off and apply against this Guaranty Agreement or the Guaranteed
Indebtedness or both, at any time and without notice to any Guarantor, any and
all deposits (general or special, time or demand, provisional or final) or other
sums at any time credited by or owing from any Secured Party to any Guarantor
whether or not the Guaranteed Indebtedness is then due and irrespective of
whether or not the Agent shall have made any demand under this Guaranty
Agreement. Each Secured Party agrees promptly to notify Borrowers after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application. The rights and remedies of
the Secured Parties hereunder are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Secured
Parties may have.

         10.      (a) Each Guarantor hereby agrees that the Subordinated
Indebtedness (as defined below) shall be subordinate and junior in right of
payment to the prior payment in full of all Guaranteed Indebtedness as herein
provided. The Subordinated Indebtedness shall not be payable, and no payment of
principal, interest or other amounts on account thereof, and no property or
guarantee of any nature to secure or pay the Subordinated Indebtedness shall be
made or given, directly or indirectly by or on behalf of any Debtor (hereafter
defined) or received, accepted, retained or applied by any Guarantor unless and
until the Guaranteed Indebtedness shall have been paid in full in cash; except
that prior to the occurrence and continuance of a Default, a Guarantor shall
have the right to receive payments on the Subordinated Indebtedness made in the
ordinary course of business. When a Default exists, no payments of principal or
interest may be made or given, directly or indirectly, by or on behalf of any
Debtor or received, accepted, retained or applied by any Guarantor unless and
until the Guaranteed Indebtedness shall have been paid in full in cash. If any
sums shall be paid to a Guarantor by any Debtor or any other Person on account
of the Subordinated Indebtedness when such payment is not permitted hereunder,
such sums shall be held in trust by such Guarantor for the benefit of the Agent
and shall forthwith be paid to Agent without affecting the liability of any
Guarantor under this Guaranty Agreement and may be applied by Agent against the
Guaranteed Indebtedness in accordance with the Credit Agreement. Upon the
request of Agent, a Guarantor shall execute, deliver, and endorse to Agent such
documentation as Agent may request to perfect, preserve, and enforce its rights
hereunder. For purposes of this Guaranty Agreement and with respect to a
Guarantor, the term "SUBORDINATED INDEBTEDNESS" means all indebtedness,
liabilities, and obligations of either Borrower or any Obligated Party other
than such Guarantor (Borrowers and such Obligated Parties herein the "DEBTORS")
to such Guarantor, whether such indebtedness, liabilities, and obligations now
exist or are hereafter incurred or arise, or are direct, indirect, contingent,
primary, secondary, several, joint and several, or otherwise, and irrespective
of whether such indebtedness, liabilities, or obligations are evidenced by a
note, contract, open account, or otherwise, and irrespective of the Person or
Persons in whose favor such indebtedness, obligations, or liabilities may, at
their inception, have been, or may hereafter be created, or the manner in which
they have been or may hereafter be acquired by such Guarantor.

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                  (b) Each Guarantor agrees that any and all Liens (including
any judgment liens), upon any Debtor's assets securing payment of any
Subordinated Indebtedness shall be and remain inferior and subordinate to any
and all Liens upon any Debtor's assets securing payment of the Guaranteed
Indebtedness or any part thereof, regardless of whether such Liens in favor of a
Guarantor, Agent or any Secured Party presently exist or are hereafter created
or attached. Without the prior written consent of Agent, no Guarantor shall (i)
file suit against any Debtor or exercise or enforce any other creditor's right
it may have against any Debtor, or (ii) foreclose, repossess, sequester, or
otherwise take steps or institute any action or proceedings (judicial or
otherwise, including without limitation the commencement of, or joinder in, any
liquidation, bankruptcy, rearrangement, debtor's relief or insolvency
proceeding) to enforce any obligations of any Debtor to such Guarantor or any
Liens held by such Guarantor on assets of any Debtor.

                  (c) In the event of any receivership, bankruptcy,
reorganization, rearrangement, debtor's relief, or other insolvency proceeding
involving any Debtor as debtor, Agent shall have the right to prove any claim
under the Subordinated Indebtedness and to receive directly from the receiver,
trustee or other court custodian all dividends, distributions, and payments made
in respect of the Subordinated Indebtedness until the Guaranteed Indebtedness
has been paid in full in cash. Agent may apply any such dividends,
distributions, and payments against the Guaranteed Indebtedness in accordance
with the Credit Agreement.

                  (d) Each Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of Subordinated Indebtedness
shall contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.

         11.      Except for modifications made pursuant to the execution and
delivery of a Subsidiary Joinder Agreement (which needs to be signed only by the
Subsidiary party thereto), no amendment or waiver of any provision of this
Guaranty Agreement or consent to any departure by any Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed by the
Agent. No failure on the part of the Agent or any Secured Party to exercise, and
no delay in exercising, any right, power, or privilege hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power, or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power, or privilege. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

         12.      To the extent permitted bylaw, any acknowledgment or new
promise, whether by payment of principal or interest or otherwise and whether by
either Borrower or others (including any Guarantor), with respect to any of the
Guaranteed Indebtedness shall, if the statute of limitations in favor of a
Guarantor against the Agent or any Secured Party shall have commenced to run,
toll the running of such statute of limitations and, if the period of such
statute of limitations shall have expired, prevent the operation of such statute
of limitations.

         13.      This Guaranty Agreement is for the benefit of the Agent and
the Secured Parties and their successors and assigns, and in the event of an
assignment of the Guaranteed Indebtedness, or any part thereof, the rights and
benefits hereunder, to the extent applicable to the indebtedness so assigned,
may be transferred with such indebtedness. This Guaranty

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Agreement is binding not only on each Guarantor, but on each Guarantor's
successors and assigns; provided that no Guarantor may assign its rights or
obligations hereunder without the prior written consent of the Bank.

         14.      Each Guarantor recognizes that the Banks are relying upon this
Guaranty Agreement and the undertakings of each Guarantor hereunder and under
the other Loan Documents to which each is a party in making extensions of credit
to Borrowers under the Credit Agreement and further recognizes that the
execution and delivery of this Guaranty Agreement and the other Loan Documents
to which each Guarantor is a party is a material inducement to the Bank in
entering into the Credit Agreement and continuing to extend credit thereunder.
Each Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty Agreement or any other Loan Document to which it
is a party.

         15.      Any notice or demand to any Guarantor under or in connection
with this Guaranty Agreement or any other Loan Document to which it is a party
shall be deemed effective if given to the Guarantor, care of Borrowers in
accordance with the notice provisions in the Credit Agreement.

         16.      The Guarantors shall, jointly and severally, pay on demand all
reasonable attorneys' fees and all other reasonable costs and expenses incurred
by the Agent in connection with the enforcement or collection of this Guaranty
Agreement.

         17.      Each Guarantor hereby waives promptness, diligence, notice of
any default under the Guaranteed Indebtedness, demand of payment, notice of
acceptance of this Guaranty Agreement, presentment, notice of protest, notice of
dishonor, notice of the incurring by either Borrower of additional indebtedness,
and all other notices and demands with respect to the Guaranteed Indebtedness
and this Guaranty Agreement.

         18.      The Credit Agreement, and all of the terms thereof, are
incorporated herein by reference, the same as if stated verbatim herein, and
each Guarantor agrees that the Agent may exercise any and all rights granted to
it under the Credit Agreement and the other Loan Documents without affecting the
validity or enforceability of this Guaranty Agreement.

         19.      THIS GUARANTY AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT
OF EACH GUARANTOR, THE AGENT AND THE SECURED PARTIES WITH RESPECT TO EACH
GUARANTOR'S GUARANTY OF THE GUARANTEED INDEBTEDNESS AND SUPERSEDES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY AGREEMENT
IS INTENDED BY EACH GUARANTOR, THE AGENT AND THE SECURED PARTIES AS A FINAL AND
COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY AGREEMENT, AND NO COURSE OF
DEALING AMONG ANY GUARANTOR, THE AGENT AND THE SECURED PARTIES, NO COURSE OF
PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY
NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
GUARANTY AGREEMENT.

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THERE ARE NO ORAL AGREEMENTS AMONG ANY GUARANTOR, THE AGENT AND THE SECURED
PARTIES.

         20.      This Guaranty Agreement shall be governed by, and construed in
accordance with, the laws of the State of Wisconsin and applicable laws of the
United States of America.

         21.      Each Guarantor waives (a) promptness, diligence, and notice of
acceptance of this Guaranty and notice of the incurring of any obligation,
indebtedness, or liability to which this Guaranty applies or may apply and
waives presentment for payment, notice of nonpayment, protest, demand, notice of
protest, notice of intent to accelerate, notice of acceleration, notice of
dishonor, diligence in enforcement, and indulgences of every kind, and (b) the
taking of any other action by the Agent, including without limitation, giving
any notice of default or any other notice to, or making any demand on,
Borrowers, any other guarantor of all or any part of the Guaranteed Indebtedness
or any other party. To the maximum extent lawful, each Guarantor waives all
rights by which it might be entitled to require suit on an accrued right of
action in respect of any Guaranteed Indebtedness or require suit against either
Borrower or others.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

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                  EXECUTED as of the date first written above.

                                               GUARANTORS:
                                               CHARTER ACCOUNT SYSTEMS, INC.
                                               CLASSCREDIT, INC.
                                               EFS, INC.
                                               EFS SERVICES, INC.
                                               GUARANTEC, LLP
                                               IDAHO FINANCIAL ASSOCIATES, INC.
                                               INTUITION, INC.
                                               NATIONAL HIGHER EDUCATIONAL LOAN
                                                  PROGRAM, INC.
                                               NELNET CANADA, INC.
                                               NELNET CORPORATION
                                               NELNET GUARANTEE SERVICES, INC.
                                               NELNET MARKETING SOLUTIONS, INC.
                                               STUDENT PARTNER SERVICES, INC.

                                               By:  /s/ TERRY HEIMES
                                                  ______________________________

                                               UFS SECURITIES, LLC

                                               By:  /s/ MARK PORTZ
                                                  ______________________________

                                               SHOCKLEY FINANCIAL CORP.

                                               By:  /s/ MARK PORTZ
                                                  ______________________________<PAGE>
                                                                   Exhibit 10.87

                               SECURITY AGREEMENT

                  THIS SECURITY AGREEMENT (the "AGREEMENT") dated as of ____
___, 2003, is by and among NELNET, INC. "DEBTOR" and M&I MARSHALL & ILSLEY BANK,
as agent for itself and the other Secured Parties, as that term is defined in
the Credit Agreement described below (the "AGENT").

                                R E C I T A L S:

                  The Debtor and NATIONAL EDUCATION LOAN NETWORK, INC., as
borrowers (collectively, "BORROWERS"), are entering into that certain Credit
Agreement dated of even date herewith with M&I MARSHALL & ILSLEY BANK, SUNTRUST
BANK, FIRST NATIONAL BANK OF OMAHA and FIFTH THIRD BANK, INDIANA (the "BANKS")
(such agreement, as it may be amended or otherwise modified from time to time,
herein the "CREDIT AGREEMENT"). The execution and delivery of this Agreement is
a condition to the Bank's entering into the Credit Agreement and making the
extensions of credit thereunder.

                  NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the adequacy, receipt and sufficiency of which
are hereby acknowledged, and in order to induce the Banks to make the Loans
under the Credit Agreement and the other Secured Parties to extend credit to
Borrowers, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  Section 1.1. Definitions. As used in this Agreement, the
following terms have the following meanings:

                           "COLLATERAL" has the meaning specified in SECTION 2.1
         of this Agreement.

                           "GENERAL INTANGIBLES" means any "GENERAL
         INTANGIBLES," as such term is defined in Article or Chapter 9 of the
         UCC, now owned or hereafter acquired by the Debtor and, in any event,
         shall include, without limitation, each of the following, whether now
         owned or hereafter acquired by the Debtor: (a) books, records, data,
         plans, manuals, computer software, computer tapes, computer disks,
         computer programs, source codes, object codes and rights of the Debtor
         to retrieve data and other information from third parties; (b) contract
         rights including, without limitation, all right, title and interest in
         and to the Servicing Contracts and any documentation pursuant to which
         any of the other Collateral was acquired which include, without
         limitation, the following: (i) all rights of the Debtor to receive
         moneys due and to become due under or pursuant to such agreements, (ii)
         all rights of the Debtor to receive proceeds of any insurance,
         indemnity, warranty, or guaranty with respect to such agreements, (iii)
         all claims of the Debtor for damages arising out of or for breach of or
         default under such agreements, (iv) all rights of the Debtor to
         terminate such agreements, to perform thereunder and to compel
         performance and otherwise exercise all rights and remedies thereunder,
         and (v) any rights to Liens arising under or as a result of any such
         agreement; (c) all rights of the Debtor to

<PAGE>

         payment under letters of credit and similar agreements, including
         without limitation, all letter of credit rights and other supporting
         obligations; (d) choses in action and causes of action of the Debtor
         (whether arising in contract, tort or otherwise and whether or not
         currently in litigation) and all judgments in favor of the Debtor,
         including without limitation, all commercial tort claims; (e) rights
         and claims of the Debtor under warranties and indemnities; (f) rights
         of the Debtor under any insurance, surety or similar contract or
         arrangement; and (g) all payment intangibles.

                           "OBLIGATIONS" means all "OBLIGATIONS" (as such term
         is defined in the Credit Agreement); provided that the obligations
         secured hereby shall be limited to an aggregate amount equal to the
         largest amount that would not render the Debtor's obligations hereunder
         subject to avoidance under Section 544 or 548 of the United States
         Bankruptcy Code or under any applicable state law relating to
         fraudulent transfers or conveyances.

                           "PROCEEDS" means any "PROCEEDS," as such term is
         defined in Article or Chapter 9 of the UCC and, in any event, shall
         include, but not be limited to: (a) any and all proceeds of any
         insurance, indemnity, warranty or guaranty payable to the Debtor from
         time to time with respect to any of the Collateral; (b) any and all
         payments (in any form whatsoever) made or due and payable to the Debtor
         from time to time in connection with any requisition, confiscation,
         condemnation, seizure or forfeiture of all or any part of the
         Collateral by any Governmental Authority (or any Person acting, or
         purporting to act, for or on behalf of any Governmental Authority); (c)
         all instruments, documents, chattel paper and general intangibles
         received or arising in connection with a disposition of Collateral; (d)
         all dividends or other distributions relating to any of the Collateral;
         and (e) any and all other amounts or property from time to time paid,
         payable, distributed or distributable under, in connection with or in
         exchange for any of the Collateral and all other payment intangibles
         relating thereto.

                           "SERVICING CONTRACT" means an arrangement, whether or
         not in writing, pursuant to which the Debtor has the right to service
         Student Loans for other Persons.

                           "UCC" means the Uniform Commercial Code as in effect
         in the State of Wisconsin from time to time. For purposes of all
         provisions of this agreement, if, by applicable law, the perfection or
         effect of perfection or non-perfection of the security interest created
         hereunder in any Collateral is governed by the Uniform Commercial Code
         as in effect on or after the date hereof in any other jurisdiction,
         "UCC' means the Uniform Commercial Code as in effect in such other
         jurisdiction for purposes of the provisions hereof relating to such
         perfection or the effect of perfection or non-perfection.

                  Section 1.2 Other Definitional Provisions. Terms used herein
that are defined in the Credit Agreement and are not otherwise defined herein
shall have the meanings therefor specified in the Credit Agreement. References
to "SECTIONS," "SUBSECTIONS," "EXHIBITS" and "SCHEDULES" shall be to Sections,
subsections, Exhibits and Schedules, respectively, of this Agreement unless
otherwise specifically provided. All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms defined. All
references to statutes and regulations shall include any amendments of the same
and any successor statutes and

<PAGE>

regulations. References to particular sections of the UCC should be read to
refer also to parallel sections of the Uniform Commercial Code as enacted in
each state or other jurisdiction where any portion of the Collateral is or may
be located. Terms used herein, which are defined in the UCC, unless otherwise
defined herein or in the Credit Agreement, shall have the meanings determined in
accordance with the UCC.

                                   ARTICLE II

                                SECURITY INTEREST

                  Section 2.1 Security Interest. As collateral security for the
prompt payment and performance in full when due of the Obligations (whether at
stated maturity, by acceleration or otherwise), the Debtor hereby pledges and
assigns to the Agent, and grants to the Agent a continuing lien on and security
interest in, all of the Debtor's right, title and interest in and to the
following, whether now owned or hereafter arising or acquired and wherever
located (collectively, the "COLLATERAL"):

                           (a)      all rights of the Debtor under all Servicing
         Contracts now owned or hereafter acquired by the Debtor;

                           (b)      all rights of the Debtor to receive payments
         under or by virtue of the Servicing Contracts described in clause (a)
         preceding, whether as servicing fees, servicing income, damages,
         amounts payable upon the cancellation of termination of any such
         Servicing Contract, or otherwise;

                           (c)      all General Intangibles of the Debtor
         relating to or arising out of the Collateral described in clauses (a)
         and (b) preceding;

                           (d)      all rights of the Debtor under any Hedging
         Agreement now or hereafter entered into by the Debtor to protect the
         Debtor against changes in the value of any of the Collateral described
         in clauses (a), (b) and (c) preceding; and

                           (e)      all products and Proceeds, in cash or
         otherwise, of any of the Collateral described in clauses (a), (b), (c)
         and (d) preceding.

                  Section 2.2 Debtor Remains Liable. Notwithstanding anything to
the contrary contained herein, (a) the Debtor shall remain liable under the
documentation included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent of any of
its rights or remedies hereunder shall not release the Debtor from any of its
duties or obligations under such documentation, (c) the Agent shall not have any
obligation under any of such documentation included in the Collateral by reason
of this Agreement, and (d) the Agent shall not be obligated to perform any of
the obligations of the Debtor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.

<PAGE>

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

                  To induce the Bank to enter into the Credit Agreement and the
other Secured Parties to extend credit to the Borrowers, the Debtor represents
and warrants to the Bank and the other Secured Parties that:

                  Section 3.1 Current Servicing Contracts. Attached hereto as
SCHEDULE 3.1 is a true and complete list of all of its Servicing Contracts in
effect on the date hereof. Each of the Servicing Contracts listed in SCHEDULE
3.1 contain provisions that are consistent with those set forth in the form of
Agreement attached hereto as SCHEDULE 3.1A, except that the life of loan
servicing provision found in SECTION 1.2 of SCHEDULE 3.1A appears only in the
Servicing Contracts so noted. The termination, indemnification, and liability
provision of each Servicing Contract listed in SCHEDULE 3.1 are substantially
similar to those provisions contained in SCHEDULE 3.1A.

                  Section 3.2 Office Locations; Fictitious Names; Tax I.D.
Number. Its principal place of business, chief executive office and jurisdiction
of organization are located at the place or places identified for it on SCHEDULE
3.2. Within the last four months it has not had any other chief place of
business, chief executive office, or jurisdiction of organization except as
disclosed on SCHEDULE 3.2. SCHEDULE 3.2 also sets forth all other places where
it keeps its books and records relating to the Collateral. It does not do
business and has not done business during the past five years under any
trade-name or fictitious business name except as disclosed on SCHEDULE 3.2. Its
United States Federal Income Tax I.D. Number and organizational number is
identified on SCHEDULE 3.2.

                  Section 3.3 Ownership of Collateral. It is the legal and
equitable owner of the Collateral owned by it, free and clear of all Liens,
except the Lien created hereby.

                  Section 3.4 Validity of Service Contracts. Each Servicing
Contract is in full force and effect, each Servicing Contract is legal, valid,
and enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency and similar laws of general application affecting the rights of
creditors and general principles of equity, and, to the best of its knowledge,
no default or event of default exists under any Servicing Contract that could
have a Material Adverse Effect.

                  Section 3.5 Consents; Status. No consent or approval of any
Person, including any Governmental Authority, is required for it to execute,
deliver and perform this Agreement, or for the validity and enforceability of
the Lien and security interest in the Collateral created hereby, that in each
case has not been obtained and is not in full force and effect. It is approved
by, and qualified and in good standing with, all Governmental Authorities
necessary for it to service the Student Loans under the Servicing Contracts.

<PAGE>

                                   ARTICLE IV

                                    COVENANTS

                  The Debtor covenants and agrees with the Agent that until the
Obligations are paid and performed in full and all commitments under the Credit
Agreement have expired or have been terminated:

                  Section 4.1 Payment Obligations. It shall, in accordance with
its customary business practices, endeavor to collect or cause to be collected
from each obligor on the Collateral, as and when due, any and all amounts owing
under the Collateral. Without the prior written consent of the Agent, it shall
not, except in the ordinary course of business, (a) grant any extension of time
for any payment with respect to any of the Collateral, (b) compromise, compound,
or settle any of the Collateral for less than the full amount thereof, (c)
release, in whole or in part, any Person liable for payment of any of the
Collateral, (d) allow any credit or discount for payment with respect to any of
the Collateral, or (e) release any Lien or guaranty securing any payment
obligation under the Collateral.

                  Section 4.2 Further Assurances. At any time and from time to
time, upon the request of the Agent, and at its sole expense, it shall, promptly
execute and deliver all such further agreements, documents and instruments and
take such further action as the Agent may reasonably deem necessary or
appropriate to preserve and perfect its security interest in the Collateral and
carry out the provisions and purposes of this Agreement or to enable the Agent
to exercise and enforce its rights and remedies hereunder with respect to any of
the Collateral. Without limiting the generality of the foregoing, it shall upon
reasonable request by the Agent: (a) authorize the Agent to file such financing
statements as the Agent may from time to time require; (b) take such action as
the Agent may request to permit the Agent to have control over any investment
property; (c) deliver to the Agent all Collateral the possession of which is
necessary to perfect its security interest therein, duly endorsed and/or
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Agent; and (d) execute and deliver to the
Agent such other agreements, documents and instruments as the Agent may
reasonably require to perfect and maintain the validity, effectiveness and
priority of the Liens intended to be created by the Loan Documents.

                  Section 4.3 Corporate Changes. It shall not change its name,
identity, jurisdiction of organization, or corporate structure in any manner
that might make any financing statement filed in connection with this Agreement
seriously misleading or its United States Federal Tax I.D. Number unless such
action is permitted or not restricted by the Credit Agreement and it shall have
given the Agent thirty (30) days prior written notice thereof and shall have
taken all action reasonably deemed necessary or desirable by the Agent to
protect its security interest in the Collateral with the perfection and priority
thereof required by the Loan Documents. It shall not change its principal place
of business, chief executive office or the place where it keeps its books and
records unless it shall have given the Agent thirty (30) days prior written
notice thereof and shall have taken all action deemed necessary or desirable by
the Agent to cause its security interest in the Collateral to be perfected with
the priority required by the Loan Documents.

<PAGE>

                  Section 4.4 Performance of Servicing Contracts. It will, at
its expense: (a) perform and observe all of the material terms and provisions of
the Servicing Contracts to be performed or observed by it in accordance with
their terms and with applicable laws and regulations of Governmental
Authorities, maintain the Servicing Contracts in full force and effect, enforce
the Servicing Contracts in accordance with their respective terms, and take all
action to such end as may be from time to time reasonably requested by the Agent
and (b) from time to time (1) furnish to the Agent such information and requests
regarding the Servicing Contracts as the Agent may reasonably request and (2)
upon reasonable request of the Agent make to any other party to any Servicing
Contract such demands and requests for information and reports or for action as
it is entitled to make thereunder.

                  Section 4.5 Modification to Servicing Contracts. It will not
amend or otherwise modify the terms and conditions of any Servicing Contract if
such amendment or modification could have a Material Adverse Effect.

                                    ARTICLE V

                               RIGHTS OF THE AGENT

                  Section 5.1 POWER OF ATTORNEY. THE DEBTOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS THE AGENT AND ANY OFFICER OR AGENT THEREOF, WITH FULL
POWER OF SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL
IRREVOCABLE POWER AND AUTHORITY IN THE NAME OF THE DEBTOR OR IN ITS OWN NAME, TO
TAKE, WHEN AN EVENT OF DEFAULT EXISTS, ANY AND ALL ACTIONS AND TO EXECUTE ANY
AND ALL DOCUMENTS AND INSTRUMENTS WHICH THE AGENT AT ANY TIME AND FROM TIME TO
TIME DEEMS NECESSARY OR DESIRABLE TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT
AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IT HEREBY GIVES THE AGENT
THE POWER AND RIGHT ON ITS BEHALF AND IN ITS OWN NAME TO DO ANY OF THE FOLLOWING
WHEN AN EVENT OF DEFAULT EXISTS, WITH NOTICE TO THE DEBTOR BUT WITHOUT THE
CONSENT OF THE DEBTOR:

                           (a)      to demand, sue for, collect or receive, in
         the name of it or in its own name, any money or property at any time
         payable or receivable on account of or in exchange for any of the
         Collateral and, in connection therewith, endorse checks, notes, drafts,
         acceptances, money orders, documents of title or any other instruments
         for the payment of money under the Collateral or any policy of
         insurance;

                           (b)      to pay or discharge taxes, Liens or other
         encumbrances levied or placed on or threatened against the Collateral;

                           (c)      to notify post office authorities to change
         the address for delivery of mail of the Debtor to an address designated
         by the Agent and to receive, open, and dispose of mail addressed to the
         Debtor;

<PAGE>

                           (d)      (A) to direct account debtors and any other
         parties liable for any payment under any of the Collateral to make
         payment of any and all monies due and to become due thereunder directly
         to the Agent or as the Agent shall direct (the Debtor agrees that if
         any Proceeds of any Collateral shall be received by it after such a
         direction from the Agent, it shall promptly deliver such Proceeds to
         the Agent with any necessary endorsements, and until such Proceeds are
         delivered to the Agent, such Proceeds shall be held in trust by it for
         the benefit of the Agent and shall not be commingled with any other of
         its funds or property); (B) to receive payment of and receipt for any
         and all monies, claims and other amounts due and to become due at any
         time in respect of or arising out of any Collateral; (C) to sign and
         endorse any assignments, proxies, stock powers, verifications and
         notices in connection with accounts or payment obligations and other
         documents relating to the Collateral; (D) to commence and prosecute any
         suit, action or proceeding at law or in equity in any court of
         competent jurisdiction to collect the Collateral or any part thereof
         and to enforce any other right in respect of any Collateral; (E) to
         defend any suit, action or proceeding brought against it with respect
         to any Collateral; (F) to settle, compromise or adjust any suit, action
         or proceeding described above and, in connection therewith, to give
         such discharges or releases as the Agent may deem appropriate; (G) to
         add or release any guarantor, endorser, surety or other party to any of
         the Collateral; (H) to renew, extend or otherwise change the terms and
         conditions of any of the Collateral; (I) to make, settle, compromise or
         adjust any claims under or pertaining to any of the Collateral
         (including claims under any policy of insurance); and (J) to sell,
         transfer, pledge, convey, make any agreement with respect to or
         otherwise deal with any of the Collateral as fully and completely as
         though the Agent were the absolute owner thereof for all purposes, and
         to do, at the Agent's option and the Debtor's expense, at any time, or
         from time to time, all acts and things which the Agent deems necessary
         to protect, preserve, maintain, or realize upon the Collateral and the
         Agent's security interest therein.

                  THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND
SHALL BE IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH
SECTION 7.11. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Agent in this Agreement, and shall not be liable for
any failure to do so or any delay in doing so. Neither the Agent nor any Person
designated by the Agent shall be liable for any act or omission or for any error
of judgment or any mistake of fact or law, except any of the same resulting from
its or their gross negligence or willful misconduct. This power of attorney is
conferred on the Agent solely to protect, preserve, maintain and realize upon
its security interest in the Collateral. The Agent shall not be responsible for
any decline in the value of the Collateral and shall not be required to take any
steps to preserve rights against prior parties or to protect, preserve or
maintain any Lien given to secure the Collateral.

                  Section 5.2 Assignment by the Agent. The Agent may at anytime
assign or otherwise transfer all or any portion of their rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, the Obligations) to any other Person, to the extent permitted by,
and upon the conditions contained in, the Credit Agreement, and such Person
shall thereupon become vested with all the benefits thereof granted to the
Agent, herein or otherwise.

<PAGE>

                                   ARTICLE VI

                          DEFAULT, RIGHTS AND REMEDIES

                  If an Event of Default exists, the Agent shall have the
following rights and remedies:

                           (a)      In addition to all other rights and remedies
         granted to the Agent in this Agreement or in any other Loan Document or
         by applicable law, the Agent shall have all of the rights and remedies
         of a secured party under the UCC (whether or not the UCC applies to the
         affected Collateral). Without limiting the generality of the foregoing,
         the Agent may (A) without demand or notice to it, collect, receive or
         take possession of the Collateral or any part thereof and for that
         purpose the Agent may enter upon any premises on which the Collateral
         is located and remove the Collateral therefrom or render it inoperable,
         and/or (B) sell, lease or otherwise dispose of the Collateral, or any
         part thereof, in one or more parcels at public or private sale or
         sales, at the Agent's offices or elsewhere, for cash, on credit or for
         future delivery, and upon such other terms as the Agent may deem
         commercially reasonable or otherwise as may be permitted by law. The
         Agent shall have the right at any public sale or sales, and, to the
         extent permitted by applicable law, at any private sale or sales, to
         bid (which bid may be, in whole or in part, in the form of cancellation
         of indebtedness) and become a purchaser of the Collateral or any part
         thereof free of any right or equity of redemption on the part of the
         Debtor, which right or equity of redemption is hereby expressly waived
         and released by the Debtor. Upon the request of the Agent, the Debtor
         shall assemble the Collateral and make it available to the Agent at
         anyplace designated by the Agent that is reasonably convenient to it
         and the Agent. The Debtor agrees that the Agent shall not be obligated
         to give more than ten (10) days prior written notice of the time and
         place of any public sale or of the time after which any private sale
         may take place and that such notice shall constitute reasonable notice
         of such matters. The Agent shall not be obligated to make any sale of
         Collateral if it shall determine not to do so, regardless of the fact
         that notice of sale of Collateral may have been given. The Agent may,
         without notice or publication, adjourn any public or private sale or
         cause the same to be adjourned from time to time by announcement at the
         time and place fixed for sale, and such sale may, without further
         notice, be made at the time and place to which the same was so
         adjourned. The Debtor shall be liable for all reasonable expenses of
         retaking, holding, preparing for sale or the like, and all reasonable
         attorneys' fees, legal expenses and other costs and expenses incurred
         by the Agent in connection with the collection of the Obligations and
         the enforcement of the Agent's rights under this Agreement. The Debtor
         shall remain liable for any deficiency if the Proceeds of any sale or
         other disposition of the Collateral applied to the Obligations are
         insufficient to pay the Obligations in full to the extent provided in
         the Loan Documents. The Agent may apply the Collateral against the
         Obligations as provided in the Credit Agreement. The Debtor waives all
         rights of marshalling, valuation and appraisal in respect of the
         Collateral. Any cash held by the Agent as Collateral and all cash
         proceeds received by the Agent in respect of any sale of, collection
         from or other realization upon all or any part of the Collateral may,
         in the discretion of the Agent, be held by the Agent as collateral for,
         and then or at any time thereafter applied in whole or in part by the
         Agent against, the Obligations in the order

<PAGE>

         permitted by the Credit Agreement. Any surplus of such cash or cash
         proceeds and interest accrued thereon, if any, held by the Agent and
         remaining after payment in full of all the Obligations shall be
         promptly paid over to the Debtor or to whomsoever may be lawfully
         entitled to receive such surplus; provided that the Agent shall have no
         obligation to invest or otherwise pay interest on any amounts held by
         it in connection with or pursuant to this Agreement.

                           (b) The Agent may cause any or all of the Collateral
         held by it to be transferred into the name of the Agent or the name or
         names of the Agent's nominee or nominees.

                           (c) The Agent may exercise any and all of the rights
         and remedies of the Debtor under or in respect of the Collateral,
         including, without limitation, any and all rights of it to demand or
         otherwise require payment of any amount under, or performance of any
         provision of, any of the Collateral.

                           (d) The Agent may collect or receive all money or
         property at any time payable or receivable on account of or in exchange
         for any of the Collateral, but shall be under no obligation to do so.

                           (e) On any sale of the Collateral, the Agent is
         hereby authorized to comply with any limitation or restriction with
         which compliance is necessary, in the view of the Agent's counsel, in
         order to avoid any violation of applicable law or in order to obtain
         any required approval of the purchaser or purchasers by any applicable
         Governmental Authority.

                                   ARTICLE VII

                                  MISCELLANEOUS

                  Section 7.1 No Waiver; Cumulative Remedies. No failure on the
part of the Agent to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.

                  Section 7.2 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Debtor and the Agent and respective
successors and assigns, except that Debtor may not assign any of its rights or
obligations under this Agreement without the prior written consent of the Agent.

                  Section 7.3 AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES
HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS
AND UNDERSTANDINGS,

<PAGE>

WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT OPAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement may be
amended or waived only by an instrument in writing signed by the Debtor and the
Agent.

                  Section 7.4 Notices. All notices and other communications
provided for in this Agreement shall be given or made in accordance with the
Credit Agreement.

                  Section 7.5 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Wisconsin and
applicable laws of the United States of America.

                  Section 7.6 Headings. The headings, captions, and arrangements
used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.

                  Section 7.7 Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by the Agent shall affect the representations
and warranties or the right of the Agent or the Bank to rely upon them.

                  Section 7.8 Counterparts. This Agreement may be executed in
any number of counterparts and on telecopy counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.

                  Section 7.9 Waiver of Bond. In the event the Agent seeks to
take possession of any or all of the Collateral by judicial process, the Debtor
hereby irrevocably waives any bonds and any surety or security relating thereto
that may be required by applicable law as an incident to such possession, and
waives any demand for possession prior to the commencement of any such suit or
action.

                  Section 7.10 Severability. Any provision of this Agreement
which is determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                  Section 7.11 Termination. If all of the Obligations shall have
been paid and performed in full, all commitments of the Bank shall have expired
or terminated, the Agent shall, upon the written request of the Debtor, execute
and deliver to the Debtor a proper instrument or instruments acknowledging the
release and termination of the security interests created by this Agreement, and
shall duly assign and deliver to the Debtor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Agent and has not previously been sold or otherwise applied pursuant to
this Agreement.

<PAGE>

                  Section 7.12 Obligations Absolute. All rights and remedies of
the Agent hereunder, and all obligations of the Debtor hereunder, shall be
absolute and unconditional irrespective of: (a) any lack of validity or
enforceability of any of the Loan Documents; or (b) any change in the time,
manner, or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from any of the Loan Documents; any exchange, release, or non-perfection of any
Collateral, or any release or amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Obligations; or any other circumstance
that might otherwise constitute a defense available to, or a discharge of, a
third party pledgor.

                  Section 7.13 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE DEBTOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE AGENT OR
ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.

                                                DEBTOR:

                                                NELNET, INC.

                                                By:  /s/ TERRY HEIMES
                                                     ___________________________

                                                  Name: Terry Heimes
                                                         _______________________

                                                  Title: Chief Financial Officer
                                                         ______________________

                                                AGENT:

                                                M&I MARSHALL & ILSLEY BANK,
                                                as Agent for the Secured Parties

                                                By:  /s/ JUDE M. CARLIN
                                                     ___________________________

                                                  Name: Jude M. Carlin
                                                         _______________________

                                                  Title: Vice President
                                                         ______________________

               [Signature Page to Nelnet, Inc. Security Agreement]

<PAGE>

                                  SCHEDULE 3.1
                                       TO
                               SECURITY AGREEMENT

                      CURRENT FFELP LOAN SERVICING CLIENTS

   1)      AmSouth Bank of Alabama (Remote)
   2)      Arkansas Student Loan Authority (LIFE OF LOAN)
   3)      Bank of America NT&SA (LIFE OF LOAN)
   4)      Bank One Corporation (LIFE OF LOAN)
   5)      Brazos Higher Education Service Corporation
   6)      California Higher Education Loan Authority (2) (LIFE OF LOAN)
   7)      Citibank, New York State (LIFE OF LOAN)
   8)      Class Credit/Hibernia (LIFE OF LOAN)
   9)      Comerica Bank (LIFE OF LOAN)
  10)      Credit Union of Denver
  11)      College Loan Corporation (LIFE OF LOAN)
  12)      Colorado Student Obligation Bond Authority
  13)      Central Texas Higher Education Authority
  14)      Chase Manhattan Bank, N.A.
  15)      Education Finance Group
  16)      First National Bank of Ft. Collins (LIFE OF LOAN)
  17)      Florida Educational Loan Marketing Corporation (LIFE OF LOAN)
  18)      Greater Texas Student Loan Corporation
  19)      Illinois Designated Account Purchase Program (FFELP Full Service and
           Remote) (LIFE OF LOAN)
  20)      Key Bank (LIFE OF LOAN)
  21)      Louisiana Public Facilities Authority
  22)      Manufacturers and Traders Bank (LIFE OF LOAN)
  23)      Maine Education Loan Marketing Corporation (LIFE OF LOAN)
  24)      Mesa County Teachers Federal Credit Union (LIFE OF LOAN)
  25)      Michigan Higher Education Student Loan Authority
  26)      Michigan National Bank/MN Finance/Standard Federal (LIFE OF LOAN)
  27)      Minnesota Higher Education Services Office
  28)      Mountain States Bank (LIFE OF LOAN)
  29)      Navy Federal Credit Union (LIFE OF LOAN)
  30)      NHELP (LIFE OF LOAN)
  31)      NSA, Bank of Oklahoma (LIFE OF LOAN)
  32)      NES, Bank of Oklahoma (LIFE OF LOAN)
  33)      Norlarco Credit Union (LIFE OF LOAN)
  34)      Northwestern Area Credit Union (LIFE OF LOAN)
  35)      Wells Fargo Bank, N.A. (LIFE OF LOAN)
  36)      North Texas Higher Education Authority
  37)      Orange County Teachers Federal Credit Union (LIFE OF LOAN)
  38)      Pinnacle Bank of Papillion (LIFE OF LOAN)
  39)      North Fork Bank (LIFE OF LOAN)

<PAGE>

  40)      Rhode Island Student Loan Authority (FFELP Full Service and Remote)
  41)      San Antonio Federal Credit Union (LIFE OF LOAN)
  42)      Strident Loan Acquisition Authority (LIFE OF LOAN)
  43)      Student Loan Finance Association
  44)      Student Loan Funding Corporation (LIFE OF LOAN)
  45)      Space Age Federal Credit Union (LIFE OF LOAN)
  46)      Sun Trust Bank (LIFE OF LOAN)
  47)      Union Bank & Trust Company
  48)      University Federal Credit Union (LIFE OF LOAN)
  49)      University of Missouri Kansas City (LIFE OF LOAN)
  50)      NELnet (LIFE OF LOAN)
  51)      U.S. Bank N.A.
  52)      USA Education (LIFE OF LOAN)
  53)      Utah Higher Education Assistance Authority (LIFE OF LOAN IN EVENT OF
           SALE)
  54)      Alabama Higher Education Loan (Remote)
  55)      Colorado Student Loan Program (Remote)
  56)      Regions Financial Corporation (Remote)
  57)      National Higher Education Loan Program (Remote)
  58)      Oklahoma Student Loan Authority (Remote)

<PAGE>

                                  SCHEDULE 3.1A
                                       TO
                               SECURITY AGREEMENT

                          LOAN APPLICATION PROCESSING,
                      DISBURSEMENT AND SERVICING AGREEMENT

                     -FEDERAL FAMILY EDUCATION LOAN PROGRAM-

                  THIS LOAN APPLICATION PROCESSING, DISBURSEMENT AND SERVICING
AGREEMENT (the "Agreement") is entered into as of the _____ day of _________
2001, (the "Effective Date") by and between NELNET, INC. ("Servicer"), and
_____________________, ("Lender").

                  WHEREAS, Servicer is in the loan application processing,
disbursement and servicing business in the States of Colorado, Nebraska and
Florida, and in the ordinary course of such business processes applications,
disburses and services loans to student/parent borrowers (the "Education Loans")
which are made and guaranteed in accordance with the provisions of the Higher
Education Act of 1965, as amended, and rules and regulations promulgated
thereunder as in effect from time to time (collectively, the "Education Act");
and,

                  WHEREAS, Servicer has developed and/or has available to it the
systems and services to enable it to process applications, disburse and service
Education Loans in accordance with the Education Act and with rules and
regulations previously promulgated by _____________________, which constitute
all of the Guarantors for all Education Loans which are to be serviced hereunder
("Guarantor(s)") as in effect from time to time (collectively, "Regulations");
and

                  WHEREAS, Lender in the ordinary course of its business makes
or acquires Education Loans; and

                  WHEREAS, Lender desires to retain Servicer to process
applications, disburse and service its Education Loans.

                  NOW THEREFORE,  in consideration of the premises and the
mutual covenants hereinafter set forth, the parties agree as follows:

                                    AGREEMENT

         1.       TERM; LIFE OF LOAN SERVICING; REMOVAL; SERIAL LOANS.

                  1.1      TERM. With respect to application processing and
disbursements only, the initial term of this Agreement shall be from the
Effective Date for a period of five (5) years ("Initial Term") subject to
earlier termination pursuant to the terms herein. The Initial Term of this
Agreement may be renewed for an additional period of time upon mutual agreement
of the parties ("Additional Term"). Upon expiration of the Initial or Additional
Terms, all terms and conditions of this Agreement with respect to application
processing and disbursements, except

<PAGE>

Section 12, shall continue on a month to month basis until either party
terminates this Agreement, with or without cause, upon sixty (60) days written
notice to the other party. If this Agreement continues on a month to month basis
after expiration, the "Servicing Fees" (as set forth in this Agreement and
Schedule "A") will increase by two percent (2%). Servicer also reserves the
right, at any other time after expiration of the Initial Term or any Additional
Term, to increase, decrease, modify and/or change the Servicing Fees as provided
for in Section 13 and Schedule "A", in such manner as Servicer may determine,
upon sixty (60) days prior written notice to Lender.

                  1.2      LIFE OF LOAN SERVICING. The parties acknowledge that
in order to avoid disruption and maintain continuity of service to the maker(s)
of a note securing an Education Loan ("Borrowers"), it has become customary in
the industry to have Education Loans serviced for the life of the Education Loan
by a single servicer. Accordingly, with respect to all post-disbursement
servicing, Lender hereby agrees that it will ensure that all Education Loans
originated, acquired, held, or sold by the Lender under the Education Act and
subject to this Agreement will remain with Servicer for the life of the loan,
which means until the Education Loan is paid in full by the Borrower or
Guarantor.

                  In the event the Lender desires to sell any of its Education
Loans, the Lender will sell the Education Loans to a purchaser maintaining a
servicing agreement with Servicer which provides for servicing of such Education
Loans on a life of loan basis.

                  If the Lender desires to sell its Education Loans to a
purchaser that does not have such an agreement with Servicer, Lender shall
require such purchaser to execute a servicing agreement with Servicer in order
to have the Education Loans serviced on a life of loan basis by Servicer.

                  The intent of this section is to assure that every Education
Loan will remain with Servicer for servicing for the life of the loan.

                  Notwithstanding the foregoing, this section will not apply in
the event: Servicer is in material breach of this Agreement and fails to cure
such breach under the provisions set forth in Section 23(a) hereof.

                  1.3      APPROVED REMOVAL OF EDUCATION LOANS. If Lender sells
or removes any Education Loan from the Servicer system with Servicer's prior
written approval (i.e., for reasons such as serialization, but subject to
Servicer's sole discretion), Lender agrees to pay to Servicer a removal fee of
Twenty-One dollars ($21.00) per "Account Group" (as defined below) transferred
off the Servicer's servicing system plus any other expenses related to
additional, special or unique requests of the Lender.

                  1.4      SERIAL LOANS. Notwithstanding any other provision to
the contrary in this Agreement, Servicer shall have the right to originate and
service all Education Loans that are "serial" (as that term is commonly
understood with respect to Education Loans) to Education Loans originated and/or
serviced hereunder. This provision shall survive the termination of this
Agreement for so long as Lender is directly or indirectly engaged in the
business of making Education Loans under the FFEL Program; provided, however,
that if an "eligible institution" as

<PAGE>

defined in the Education Act ("Eligible Institution") or a Borrower requests in
writing that Servicer not provide either origination or servicing for a serial
loan, then Lender shall not be required to use Servicer for origination or
servicing for such serial loan as requested by the Eligible Institution or
borrower; Lender shall not request an Eligible Institution or Borrower to give
such request to Sender.

                  APPLICATION PROCESSING AND DISBURSEMENT SERVICES

                  2.1.     APPLICATION PROCESSING. Servicer shall maintain a
special post office drawer or box for purposes of receiving applications
directly from Eligible Institutions, Borrowers or Lender. Servicer shall process
applications received at the drawer or box or otherwise received at Servicer's
office, as follows:

                           (a)      Servicer shall verify that all Education
         Loan applications and supporting documents are complete, provided,
         however, Servicer shall not be required to verify any information
         included in an Education Loan application (except to the extent
         required by the Education Act or applicable Regulations of the
         Guarantor);

                           (b)      Servicer shall perform acts necessary to
         secure disbursement approval and insurance coverage of the principal
         and interest on the Education Loan from the applicable Guarantor and
         shall be responsible for all communication and contact with such
         Guarantor necessary or appropriate to accomplish such approval and
         coverage;

                           (c)      Servicer shall prepare and mail directly to
         Borrower all notices, statements and disclosures required under the
         Education Act;

                           (d)      Servicer shall, if necessary, prepare and
         mail directly to Borrower a replacement or other necessary promissory
         note, together with appropriate instructions for execution and delivery
         of the promissory note and any related documentation;

Lender shall be solely responsible for payment to the U.S. Government of
origination or other fees required by the Education Act, and for all fees
required by any central disbursement agent, unless the parties agree otherwise
in writing.

If Lender is utilizing a third party disbursement agent to disburse its
Education Loans prior to delivery of the Education Loans to Servicer, Servicer
will have no liability or responsibility for the tasks set forth in subsections
(a) - (d) above nor for reconciliation issues arising from such process.

                  2.2.     DISBURSEMENT SERVICES. Servicer shall prepare the
disbursement checks made payable to the appropriate Borrowers, or shall make
other allowable arrangements for the disbursement of Education Loan proceeds,
and shall mail the checks or deliver the funds, to the appropriate location.
Servicer will print Lender's logo on checks if requested.

                  2.3.     PLUS LOAN SERVICES. If applicable, Servicer shall
perform credit review services (as required under the Education Act) on
Borrowers to whom Lender agrees to make Education Loans which are PLUS loans
authorized under Section 428B of the Education Act

<PAGE>

("PLUS Loans"). Servicer agrees to act as Lender's agent for the receipt,
evaluation, handling and maintenance of certain PLUS Loan credit information, in
order to assist Lender in making decisions with respect to the approval or
denial of PLUS Loans, consistent with the terms of the Education Act and
Regulations. Lender will make the final lending decision, according to the
procedures stated in this Agreement and such reasonable appeal processes as
Lender determines and directs. Servicer will, with respect to PLUS Loans:

                  (a)      Accept PLUS Loan applications or pre-approval
                           requests for purposes of performing credit
                           evaluation;

                  (b)      Receive and evaluate (based on Education Act
                           requirements and Lender's reasonable guidelines) a
                           credit report from the credit-reporting agency for
                           each applicant, and report the results of such
                           evaluation to the appropriate Eligible Institution
                           within twenty-four hours of receipt. Servicer may
                           rely upon all information contained in such report or
                           otherwise provided by the credit reporting agency and
                           shall have no liability for inaccurate or erroneous
                           information contained therein.

                  (c)      Identify each applicant for a PLUS Loan who does not
                           have an adverse credit history by generating and
                           providing to Lender a disbursement report related to
                           Education Loan origination.

                  (d)      According to Education Act requirements, generate and
                           provide to the PLUS Loan applicant an "adverse
                           action" letter in compliance with the Equal Credit
                           Opportunity Act on behalf of Lender with respect to
                           each applicant identified as having an adverse credit
                           history, within thirty (30) days after Servicer
                           receives both the completed Education Loan
                           application and the credit history, and provide a
                           copy of such letter or otherwise identify such
                           applicants to Lender.

                  (e)      Lender agrees that with respect to all PLUS Loans
                           processed under this Agreement, it will ensure that
                           all information in Loan applications and other
                           information provided to Servicer in connection with
                           its performance of the services hereunder is accurate
                           and complete.

                  (f)      Lender will be responsible for handling and
                           evaluating all appeals of denied credit, including,
                           if appropriate following appeal, communicating in
                           writing its approval of a PLUS Loan application
                           previously denied, and requesting guarantee of the
                           PLUS Loan due to error or other reasons relating to
                           the original credit history and properly documenting
                           the same.

Nothing in this Agreement shall make Servicer a loan production office or holder
or originator of PLUS Loans processed under this Agreement. Lender acknowledges
its sole liability for the decision to approve or deny PLUS Loan applications,
and will hold Servicer harmless against claims arising out of such decisions.

<PAGE>

                  2.4.     FUNDING OF LOANS.

                  (a)      Servicer shall maintain an account for purposes of
                           disbursing proceeds of Education Loans pursuant to
                           this Agreement. Servicer shall notify Lender each
                           "Business Day" (Monday - Friday, except Federally
                           recognized holidays) of the disbursement amount
                           required to fund the Education Loans processed in
                           accordance with this Agreement. Promptly upon such
                           notification, Lender shall cause such account to be
                           credited with "same day" funds in such amount. If
                           Servicer fails to notify Lender, Lender shall
                           promptly credit such account with the required funds
                           on the next Business Day and shall not be liable to
                           Servicer, the Eligible Institutions or Borrowers for
                           failure to credit the account on such day; provided,
                           however, Lender shall use its best efforts to credit
                           the account with "same day" funds regardless of when
                           notification is received from Servicer. Lender shall
                           cause all Education Loans originated in accordance
                           with this Agreement to be promptly funded as set
                           forth above.

                  (b)      Failure to Fund. If Lender fails to fund the
                           Servicer's account at the instructed level, Lender
                           shall pay Servicer a fee of Two Hundred dollars
                           ($200.00) per day the account is not funded. Should
                           this failure persist for three (3) consecutive days,
                           Servicer reserves the right to terminate its
                           obligation to furnish the funding services. Servicer
                           shall be entitled to earnings, if any, on the funding
                           account.

                  (c)      Return of Deposits. Amounts deposited with Servicer
                           but not disbursed by reason of an Education Loan
                           being canceled, shall be returned to Lender promptly,
                           and in no event later than one (1) week after
                           Servicer's receipt of the written notice of
                           cancellation or return of the check with respect to
                           such cancelled Education Loan.

                  3.       REPORTS.

                  (a)      Standard Reports. Standard reports will be furnished
                           to Lender via U.S. Mail, first class, postage
                           prepaid, or as otherwise mutually agreed.

                  (b)      Special Reports. At Lender's request, Servicer will
                           furnish such special reports as can be reasonably
                           provided by Servicer, provided, however, that Lender
                           will compensate Servicer for such reports as a
                           "Special Service" as indicated in Schedule "A".

                  4.       REVIEW OF OUTPUT AND REPORTS. Servicer shall make
commercially reasonable efforts to verify that all output, including reports,
are correct and complete in all material respects. Lender shall, however, review
each output, especially reports, thoroughly upon receipt to verify completeness
and accuracy. Problems identified with output and/or the underlying Education
Loan data shall be reported by Lender to Servicer within forty-five (45) days of
the date the output was generated. Erroneous data and/or output programs so
reported will be corrected, and affected reports will be rerun at no additional
charge. Problems reported

<PAGE>

to Servicer after forty-five (45) days may be subject to a time and materials
charge at Servicer's option to correct output retroactively. Servicer shall have
no liability for errors that could reasonably be expected to be identified by
Lender personnel familiar with the Education Loan program and Lender's Education
Loan portfolio, or for errors that are not reported within forty-five (45) days.

                           POST-DISBURSEMENT SERVICING

                  5.       DELIVERY AND CONVERSION OF EDUCATION LOANS FOR
SERVICING AND COLLECTION. Subject to Servicer's scheduling requirements, Lender
may from time to time deliver or cause to be delivered Education Loans to
Servicer with respect to which processing has been completed and proceeds have
been disbursed to the Borrowers prior to the date of delivery ("Converted
Education Loans") to be serviced pursuant to the terms of this Agreement. Lender
shall transmit to Servicer all documentation required by Servicer to enable it
to service the Converted Education Loans (the "Loan Documentation"). Upon
receipt of the Loan Documentation, Servicer shall verify only the presence of
the promissory note, the original Borrower application, and proof of
disbursement. Servicer is willing to use reasonable efforts to identify previous
servicing errors or omissions in this process, if requested by Lender, for a fee
to be mutually agreed upon following Servicer's review of the portfolio.
However, Servicer shall not be liable or responsible for the consequences of any
errors it does or does not detect in such file review, nor for missing or
incorrect documentation at conversion.

                  6.       PORTFOLIOS SUBJECT TO REJECTION BY SERVICER. Lender
acknowledges that servicing certain types of Education Loan portfolios poses a
risk of financial hardship for Servicer. Therefore, Servicer may in its
discretion reject certain Education Loans or Education Loan portfolios
("Rejected Loans") prior to placing such loans on the Servicer system. Servicer
shall provide Lender with reasonable notice prior to transfer to Servicer's
system as to Servicer's determination that Education Loans are deemed to be
Rejected Loans. Servicer shall have no right to reject or decline Education
Loans after the loans are transferred to the Servicer system.

                  7.       CONVERSION OF DELINQUENT LOANS. Servicer is agreeable
to the conversion of delinquent Education Loans to its system for servicing. If
a loan is one hundred eighty (180) days or more past due, however, Servicer will
not be responsible for any Guarantor claim rejects or interest denials due to
untimely guarantee claim filing.

                  8.       SERVICING OF EDUCATION LOANS. Upon acceptance of any
Education Loan into Servicer's computer system and after the sale date (if
applicable) of the Education Loan to Lender, or following application processing
arid disbursement of Education Loans originated under this Agreement, Servicer
shall service the Education Loan in accordance with the Education Act, and this
Agreement, including the following:

                  (a)      Servicer will service the Education Loans in such a
                           manner as to maintain the guarantee thereon in full
                           force at all times, subject to Section 16, below.

                  (b)      Servicer shall prepare and mail all required
                           statements, notices, disclosures and demands directly
                           to the Borrower.

<PAGE>

                  (c)      Servicer shall retain records of contacts,
                           follow-ups, collection efforts and correspondence
                           regarding each Education Loan.

                  (d)      Servicer shall provide accounting for all
                           transactions related to individual Education Loans,
                           including, but not limited to, accounting for all
                           payments of principal and interest upon such
                           Education Loans (for Converted Education Loans, from
                           the conversion date to the Servicer system).

                  (e)      Servicer shall process all deferments and
                           forbearances.

                  (f)      Servicer shall process all address changes and update
                           address changes accordingly.

                  (g)      Servicer shall retain all documents it receives
                           pertaining to each Education Loan, in accordance with
                           the filing requirements set forth in the most current
                           "Common Manual - Unified Student Loan Policy". Such
                           retention may be on magnetic tape, microfilm, laser
                           disk or other related medium.

                  (h)      When necessary and allowable by the Education Act,
                           Servicer shall take all steps necessary to file a
                           claim for loss with Guarantor.

                  (i)      Servicer shall provide data as required to Guarantor.
                           Any requirements beyond those found in the Common
                           Manual shall be billed to the Lender at a price to be
                           mutually agreed upon. Servicer shall have no
                           liability for late filing of claims if the
                           information required for such filing has been
                           requested from Lender but not received within seven
                           days of such request.

                  (j)      Servicer shall process and add repurchase Education
                           Loans from the Guarantor to the Servicer Servicing
                           System as required by the Education Act or upon the
                           request of Lender. The fee for such repurchase is
                           provided in Schedule A.

                  (k)      Servicer shall provide such other services as
                           Servicer customarily provides and deems appropriate.

                  9.       SYSTEM UPDATES. Lender agrees that in the course of
its Education Loan servicing activities, Servicer may rely on, without
independently verifying, all data entries, manipulations and representations
provided to Servicer by Lender, Eligible Institutions, and Borrowers with
respect to the Education Loans, including but not limited to, Eligible
Institutions/Borrower certification, eligibility, enrollment, and Eligible
Institution or Borrower demographics, including data entries provided to
Servicer electronically, via the Internet or otherwise, and that Servicer shall
have no liability for incorrect information or the consequences thereof, which
is provided by Lender, Eligible Institutions, or Borrowers.

                  10.      CURE SERVICING. At Lender's request Servicer agrees
to perform additional servicing activities not required under the terms of this
Agreement for Converted Education Loans transferred to Servicer, which have
previously not been serviced in accordance

<PAGE>

with the Education Act and Regulations, and which require additional servicing
activity to attempt to maintain or reinstate the Loans' principal and interest
guarantee from the Guarantor ("Cure Procedures"). Utilizing Cure Procedures
approved by the Guarantor, Servicer will use its best efforts to cure all
defects caused by Lender or unreasonable acts of the Guarantor(s) (as defined in
Section 17 below). Servicer makes no representation or warranty that the
guarantee on any Education Loan will be reinstated regardless of whether
Servicer follows the Cure Procedures approved by the Guarantor.

                  11.      WRITE OFF GUIDELINES. The Servicer shall use the
following guidelines in determining whether to write off and terminate efforts
to collect or service a Borrower's Account:

<TABLE>
<CAPTION>
Account Balance*                               Process Requirements
----------------                               --------------------
<S>                                 <C>
$0 - $100.00                        Writeoff thirty (30) days after the last
                                    payment was made, and if applicable,
                                    forward notes to Borrower.

$100.01 +                           Recover such amount by filing a supplemental
                                    claim, if applicable, or service as
                                    normal.
</TABLE>

*Account Balance includes both principal and interest

If the Borrower's final payment results in an overpayment equal to or greater
than ten dollars ($10.00), the Servicer shall notify the Lender no later than
forty-five (45) days after receipt to refund the entire overpayment to the
Borrower. If the overpayment is less than ten dollars ($10.00), the Servicer
shall write off the amount, but in each case shall notify the Lender by listing
the dollar amount and Borrower Account within thirty (30) days. To the extent a
law requires refunds of less than $10.00, Servicer shall refund such overpayment
upon notification by Lender of such law and the specific requirements thereof.

                  12.      REPORTS TO LENDER. On or before the 15th day of each
month, (or by the 15th day following quarter end, as applicable) unless some
other time is provided herein, Servicer shall prepare and deliver the following
reports to Lender, or to such other person as Lender may designate, with respect
to activity during the preceding month:

                  (a)      Total Principal Report (Daily);

                  (b)      Interest Reconcile Report (Daily)

                  (c)      Refund Reconcile Report (Daily);

                  (d)      Daily Monetary Transaction Summary (Daily, Monthly);

                  (e)      Portfolio Report (Monthly);

                  (f)      Claims Delinquency Detail (Monthly);

<PAGE>

                  (g)      Computation of Interest and Special Allowance
                           Payments (currently reported on E.D. Form 799). Data
                           will be computed commencing with the date Education
                           Loans appear on the records of Servicer (Quarterly).

                  Lender shall receive one copy of each of the above reports at
no cost. Servicer will provide extra copies at the request of Lender, and Lender
will pay the cost of the copies. Any customized reports shall be provided at an
additional cost to be mutually agreed upon by Servicer and Lender.

                  13.      SERVICING FEES.

                  13.1.    Lender shall pay to Servicer, on or before the 15th
day of each month (or within fifteen (15) days of billing statement) the fees
provided in Schedule A ("Servicing Fees") for and in consideration of the
services performed by Servicer hereunder for the preceding month. After the
first twelve (12) months of this Agreement, the Servicing Fees shall be subject
to change by Servicer at any time, upon sixty (60) days written notice, but
changes will not occur more frequently than once every twelve (12) months. No
change will result in an increase that exceeds two percent (2%) for any twelve
(12) month period.

                  In the event Servicing Fees are not paid within thirty (30)
days of the billing statement, Lender agrees to pay a late fee of one and
one-half percent (1 1/2%) per month against the entire outstanding balance of
the account including any prior late fees outstanding. Servicer also reserves
the rights to (a) withhold transfer of borrower payments; (b) withhold reports
otherwise due; and (c) terminate this Agreement without notice if nonpayment
persists for sixty (60) days or more from billing.

                  13.2.    POSTAGE EXPENSES.  In addition to the foregoing,
Lender also agrees that Servicer may pass on to Lender the cost of actual
increases in postage rates by the United States Postal Service.

                  13.3.    MATERIAL CHANGES. The parties agree that should
Servicer be required to make material changes to its current Lender servicing
practices or servicing system due to changes to the Education Act, Regulations
of the Guarantor, and/or business environment, or to other costs beyond
Servicer's control, Servicer may increase the Servicing Fees with Lender to
reasonably reflect those increased costs at any time during this Agreement.

                  13.4.    RIGHT TO OFFSET. In the event that the Servicer does
not receive payment from Lender with respect to any Education Loan or services
provided under this Agreement, or in the event that the Servicer is notified
that funds are owed to the Secretary of Education, the Servicer shall notify
Lender of such nonpayment or monies owed. In such event, the Servicer may, at
its discretion, use funds received on Lender's behalf to offset or pay any
monies due the Secretary of Education or any invoice due the Servicer plus
interest provided that the invoice has not been paid, the amount is undisputed
as of the date of payment, and ninety (90) days have elapsed since the mailing
of the invoice to Lender.

                  14.      LOAN PAYMENTS. Borrowers will be directed to make all
Education Loan payments to a lockbox established by Servicer. All cash receipts
will be remitted once a week to Lender or as Lender may otherwise reasonably
request.

<PAGE>

                  15.      INQUIRIES. Servicer shall answer all inquiries
regarding Education Loans, Eligible Institution status or refunds, and Lender
shall cooperate to the extent necessary to gather the information needed to
answer such inquiries. Such inquiries may be referred to the Eligible
Institution which the student Borrower attended or is attending, if necessary.
Servicer shall have no responsibility for any disputes between Borrowers and
Eligible Institutions regarding tuition, registration, attendance, or quality of
education/training.

                  16.      AGENT AUTHORIZATION. Lender authorizes Servicer to
act as Lender's agent in the processing and servicing of Lender's Education
Loans. This authorization includes but is not limited to all correspondence and
liaison necessary with Guarantor regarding Lender's Education Loans, assignment
of claims to Guarantor and any/or all other communications, correspondence,
signatures or other acts appropriate to service Lender's Education Loans in
accordance with the Education Act and/or Regulations of the Guarantor.

                  17.      LIABILITY OF SERVICER. Servicer assumes no
responsibility or liability for any claims, liabilities, losses, guarantee
rejects, or interest denials that are related to servicing of the Education
Loans prior to (a) Servicer processing the application of the Education Loan,
(b) placing of the Education Loan on Servicer's system, or (c) prior to the date
Lender holds ownership of the Education Loan. Servicer assumes no liability for
the failure of any Borrower to repay their Education Loan, nor for the failure
of the United States government to pay any principal, interest, subsidy or
special allowance, nor for the failure of Guarantor to make a required payment
of any principal and/or interest on any of Lender's Education Loans. Servicer
shall not be responsible for consequences of unreasonable acts of any Guarantor.
For purposes of this Agreement, unreasonable acts of the Guarantor shall include
but not be limited to: Guarantor actions that are outside the scope of industry
custom; oral commitments accepted in practice discontinued without sufficient
advance notice; retroactive implementation of a regulation without sufficient
prior notification or clarification; Guarantor servicing deficiencies that
preclude Servicer from performing requirements correctly or timely; Guarantor
submission of data to the incorrect entity; Guarantor submission of data in a
format that is not usable, legible or readable; refusal of the Guarantor to
acknowledge data or documentation; unscheduled changes in normal business hours;
enforcement of an unwritten policy or standard; interpretation of a policy,
standard or regulation in a manner inconsistent with the Common Manual,
Guarantor's manual or Department of Education clarification; or any other acts
of the Guarantor of a similar nature.

                  If Servicer takes or fails to take any action in connection
with servicing responsibilities under this Agreement (whether or not such action
or inaction amounts to negligence) which causes any Education Loan subject to
this Agreement to be denied the benefit of any applicable guarantee, Servicer
shall have a reasonable time to cause such benefits of the guarantee to be
reinstated. If such benefits are not reinstated within twelve (12) months of
denial by Guarantor or the Department of Education, Lender agrees to sign a Loan
Sale Agreement to sell the Education Loan to another Eligible Lender (as defined
in the Act) of Servicer's choice ("Buyer"). Subject to the terms of the Loan
Sale Agreement, Buyer will purchase the Education Loan from Lender for an amount
equal to the amount the Guarantor would have paid if the Education Loan had been
accepted and paid by the Guarantor as a claim (which may include but is not
limited to lost principal, interest including interest penalties for due
diligence violations, and special allowance payments), and title to the
Education Loan will thereby be transferred to

<PAGE>

Buyer. Lender shall repurchase any Education Loan on which the guarantee is
fully reinstated, from Buyer at an amount equal to the then outstanding
principal balance plus all accrued interest due thereon, less the amount subject
to Lender Risk Sharing under the Education Act. Notwithstanding any other
provision in this Agreement to the contrary, if Servicer performs its duties
under this paragraph, then Servicer shall not be deemed to be in breach of this
Agreement for failure to service properly.

                  Lender's remedies for breach of this Agreement by Servicer
shall be limited to this section. In no event will Servicer be liable under any
theory of tort, contract, strict liability or other legal or equitable theory
for any lost profits or exemplary, punitive, special, incidental, indirect or
consequential damages, each of which is hereby excluded by agreement of the
parties regardless of whether or not Servicer has been advised of the
possibility of such damages. Any action for the breach of any provisions of this
Agreement shall be commenced within one (1) year after the Education Loan leaves
the Servicer's servicing system.

                  18.      INDEMNIFICATION. Lender shall indemnify and hold
Servicer harmless from and against all claims, liabilities, losses, damages,
costs and expenses (including reasonable attorney's fees) asserted against or
incurred by Servicer as a result of Servicer complying with any instruction or
directive by Lender. Lender shall further indemnify and hold Servicer harmless
from and against all claims, liabilities, losses, damages, costs and expenses
(including reasonable attorney's fees) asserted against or incurred by Servicer
as a result of actions not the fault of or not caused solely by a negligent act
of Servicer, its agents or employees, including all claims, liabilities, losses,
damages and costs caused in part or in whole by or the fault of the Lender, a
prior holder, owner or Lender, a prior servicer or any other party connected in
any manner to the Education Loan or Education Loans resulting in the claim,
liability, loss, damage, cost, or expense.

                  19.      DISCLOSURE OF INFORMATION. (a) All data, information,
records, correspondence, reports or other documentation received by Servicer
pursuant to this Agreement from Lender, the Eligible Institution which the
student attended, or the Borrower, or prepared and maintained by Servicer in the
course of its activities under this Agreement shall be released or divulged only
to Lender, Eligible Institutions, guarantee agencies, regulatory bodies, other
parties necessary to accommodate enforceability of the Education Loan,
Servicer's affiliates or as otherwise required by law. With respect to
information or documents relating to a particular Borrower, Servicer may release
or divulge that information or those documents to that Borrower, Eligible
Institutions, or such other parties as Servicer may be directed in writing by
Lender or such Borrower, or as otherwise required by law.

                  (b)      Servicer shall establish and maintain policies and
procedures designed to ensure the confidentiality of the Lender information
(non-public personal information). Among other things, Servicer acknowledges
that it is against Federal law to disclose non-public personal information
received from a financial institution under certain circumstances. Servicer and
Lender agree to comply with the provisions of the Gramm-Leach-Bliley Act and all
implementing rules and regulations (collectively "GLB") regarding consumer
financial privacy, to the extent each of their actions and responsibilities
hereunder are impacted.

<PAGE>

                  (c)      Lender acknowledges that it holds the "Customer
Relationship" (as defined in GLB) with Education Loan borrowers and thereby has
the responsibility to provide required privacy policies and notices to such
borrowers. Upon request, Servicer will assist Lender with such services at an
additional fee to be negotiated separately from this Agreement.

                  20.      CONFIDENTIALITY.

                  20.1.    Lender agrees not to disclose any provisions or
portions of this Agreement, "Trade Secrets" (as defined below) or financial
information (collectively, "Confidential Information") concerning or belonging
to Servicer to any third party or use the same in competition with Servicer. For
purposes of this Agreement, Confidential Information does not include "Nonpublic
Personal Information" as defined in GLB. "Trade Secret" shall mean the whole or
any portion or phase of any technical information, design, process, procedure,
formula, improvement, algorithm, method, technique, confidential business or
financial information, or other information relating to any business of Servicer
that is not generally known by the public. Servicer and Lender specifically
agree that the format used to transfer Lender's data contains confidential and
proprietary trade secret information that is the exclusive property of Servicer.
Servicer makes no claim to the specific data contained in any printout given to
Lender and recognizes that said data is the exclusive property of Lender.
Servicer and Lender agree, however, that all aspects of the underlying computer
program, algorithms, methods of processing, specific design and layout, report
format, and the unique processing techniques and interactions of the various
aspects of Servicer's computer program are trade secrets of, proprietary to, and
owned exclusively by Servicer.

                  20.2.    In accordance with applicable law, the Lender agrees
that in the event Servicer grants access to any Confidential Information, to
forever thereafter keep the same confidential. Lender also agrees to keep
Confidential Information and material (both written and verbal) relating to any
Lender, vendor, or other party transacting business with Servicer. Lender, its
agents and employees, further agrees not to release, share, use, or disclose the
same without the prior written permission of Servicer except to only those of
Lender's employees, agents, or advisors having a need to know the same for
purposes related to this Agreement.

                  20.3.    Lender, its agents, employees, and advisors,
recognize the disclosure of Confidential Information by Lender, or Lender's
agents or advisors may give rise to irreparable injury to Servicer inadequately
compensable in damages and that accordingly, Servicer may seek and obtain
injunctive relief or damages against the disclosure or threatened disclosure, in
addition to any other legal remedies, including attorney's fees, which may be
available. The parties agree, however, that the duty to protect Confidential
Information shall not include data, information, or materials which the Lender
can demonstrate is publicly available by other than unauthorized disclosures by
other parties. All confidentiality requirements shall survive the termination or
cancellation of this Agreement.

                  21.      INTELLECTUAL PROPERTY PROTECTION. The parties agree
that all right, title and interest of whatever nature in Servicer's user
manuals, training materials, computer programs (including both source and object
code), routines, structures, layout, report formats, together with all
subsequent versions, enhancements and supplements to said programs, all
copyright rights, and all oral or written information relating to Servicer's
intellectual property

<PAGE>

conveyed in confidence by Servicer to Lender pursuant to this Agreement which is
not generally known to the public and which gives Servicer an advantage over its
competitors who do not know or use such information are also Confidential
Information. All forms of Servicer's intellectual property of whatever nature is
and shall remain the sole and exclusive property of Servicer. Lender may only
use aforementioned materials and tools in form and manner approved by Servicer
in writing.

                  22.      MODIFICATION OF EQUIPMENT, COMPUTER PROGRAMS AND
PROCEDURES. The Servicer reserves the right to change any part or all of its
equipment and computer programs, and its procedures, reports and services,
relating to the manner of, or the methodology used in, servicing Education Loans
as set forth in this Agreement without the prior consent of the Lender;
provided, however, that in no event shall such change abrogate or in any way
modify the obligations of the Servicer to comply with the Education Act and
Regulations as set forth above. It is specifically understood that the intent of
this paragraph is to allow the Servicer flexibility in the methods and
techniques of servicing subject to full compliance with this Agreement.

                  23.      TERMINATION.

                  a.       If at any time during this Agreement either party
                           refuses or fails to perform in a material fashion any
                           portion of this Agreement, the other party will
                           provide written notice describing the nonperformance.
                           If the nonperforming party fails or refuses to
                           correct the nonperformance within thirty (30) days
                           after receipt of written notice, the other party may
                           terminate this Agreement.

                  b.       If the delinquency rate of the Lender's portfolio of
                           Education Loans being serviced hereunder (as
                           calculated during month-end processing in accordance
                           with the formula described below) exceeds twenty
                           percent (20%) for any three consecutive months during
                           the term of this Agreement, the Servicer may
                           terminate the Agreement by providing sixty (60) days
                           prior written notice to the Lender. The Servicer may,
                           at its option, propose modified servicing fees in
                           lieu of exercising the termination provisions of this
                           section. Delinquency rate is defined as the number of
                           Accounts 31- 270 days delinquent divided by the total
                           number of Accounts in repayment status.

                  24.      PROCEDURES IN EVENT OF SERVICER BREACH. If this
Agreement is terminated by Lender due to a breach by Servicer, a deconversion
fee of Three dollars ($3.00) per Account plus any other reasonable expenses
incurred in connection with the transfer of Lender's files and other required
information and reports off of the Servicer system, shall be paid by Lender. In
such case, Servicer shall turn over to Lender all Education Loan files in
accordance with acceptable standards as described in the Common Manual to
support claims filing function. Servicer shall make available to Lender the
original promissory note, along with an electronic record of Servicer servicing
documenting information related to deferments, forbearances, disbursements, and
guarantees (the "Electronic History"). Electronic History shall be provided in
Servicer's standard format.

<PAGE>

                  25.      NOTICES. All notices or communications between the
parties shall be addressed as follows: If to Servicer: President, Nelnet, Inc.,
6420 Southpoint Parkway, Jacksonville, FL, 32216, with a copy to General
Counsel, Nelnet Corporation, 3015 South Parker Road, Suite 400, Aurora, CO
80014, and if to Lender: _________________ or to such other address as may be
indicated by the parties. Any notice shall be deemed given upon mailing if by
registered or certified mail, and upon receipt in every other case.

                  26.      GOVERNING LAW. This Agreement is executed and
delivered within the State of Colorado. The parties agree this Agreement shall
be construed, interpreted and applied in accordance with the laws of the State
of Colorado, and that the state and Federal courts and authorities within
Colorado shall have sole jurisdiction and venue over all controversies which may
arise with respect to the execution, interpretation and compliance with this
Agreement.

                  27.      CHANGES IN WRITING. This Agreement, including this
provision, shall not be modified or changed except by a writing signed by all
parties hereto.

                  28.      SEVERABILITY. If a court of competent jurisdiction
finds any of the provisions of this Agreement to be so overly broad as to be
unenforceable or invalid for any other reason, the invalid provisions will be
reduced in scope or eliminated by the court to the extent deemed necessary by
the court to render the remaining provisions of this Agreement reasonable and
enforceable.

                  29.      PERSONS BOUND. This Agreement shall be binding upon
and inure to the benefit of the parties hereto, their legal representatives,
successors and assigns.

                  30.      ASSIGNMENT. This Agreement shall not be assigned by
either party without the prior written consent of the other party which consent
shall not be unreasonably withheld. However, notwithstanding the previous
sentence, Servicer may in its sole discretion, without Lender's consent, assign
or delegate any of its duties or obligations hereunder to an entity affiliated
with Servicer. In such case, the assignee or delegate shall be bound by all
terms and conditions of this Agreement related to such assignment or delegation.

                  31.      TITLES. The titles used in this Agreement are
intended for convenience and reference only. They are not intended and shall not
be construed to be a substantive part of this Agreement or in any other way to
affect the validity, construction or effect of any of the provisions of this
Agreement.

                  32.      WAIVER. The waiver or failure of either party to
exercise in any respect any right provided for herein shall not be deemed a
waiver of any further right hereunder.

                  33.      FORCE MAJEURE. The foregoing provisions of this
Agreement are subject to the following limitation: If by reason of a force
majeure Servicer is unable in whole or in part to carry out any agreement on its
part herein contained, Servicer shall not be deemed in default during the
continuance of such inability. The term "force majeure" as used herein shall
mean, without limitation, the following: acts of God, strikes, lockouts, or
other industrial disturbances; acts of public enemies; order or restraint of any
kind of the government of the United States of America or of the States of
Colorado, Nebraska or Florida or Cities of Aurora, Colorado, Lincoln, Nebraska
or Jacksonville, Florida, or any of their departments, agencies or officials, or

<PAGE>

any civil or military authority; insurrections; riots; landslides; earthquakes;
fires; storms; droughts; floods; explosions; breakage or accident to machinery,
equipment, transmission pipes or canals; or any other cause or event not
reasonably within the control of Servicer.

                  34.      HIRING. Lender agrees that during the term of this
Agreement and any extensions or renewals thereof, and for one year thereafter,
Lender shall not solicit for hire, or knowingly allow its employees to solicit
for hire, any employees of Servicer without the prior written consent of
Servicer.

                  35.      AUDITS. Lender, at its own expense, with prior notice
to Servicer and during Servicer's normal business hours, may perform or arrange
to have audits performed of Servicer's servicing activities on Lender's
Education Loans. Servicer shall provide up to forty (40) hours of audit
assistance per year. Lender will reimburse Servicer for its staff time and
expense beyond said forty (40) hours.

                  36.      CORPORATE OBLIGATION. This Agreement is solely a
corporate obligation of Servicer and Lender and no personal liability against
any parent, subsidiary, affiliate, incorporator, member, officer, employee, or
trustee, past present, or future of the parties shall attach to any of the
foregoing as a result of this Agreement, the provision of the Services pursuant
to this Agreement, or any breach of this Agreement; the parties hereto agreeing
that the sole recourse is against the Servicer (or its successors) or the Lender
(or its successors). Notwithstanding the foregoing, any incorporator, member,
officer, employee, or trustee shall have responsibility to the extent such
individual receives a fraudulent conveyance from Servicer or Lender.

                  37.      ENTIRE AGREEMENT. This is the entire and exclusive
statement of the Agreement between the parties, which supersedes and merges all
prior proposals, understandings and all other agreements oral and written,
between the parties relating to this Agreement.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.

                                     NELNET, INC.

                                     By:_____________________________________

                                     Name: Edward P. Martinez

                                     Title: Sr. Vice President/General Counsel

<PAGE>

                                     LENDER

                                     By:_______________________________________

                                     Name:_____________________________________
                                           (Please Print)

                                     Title:____________________________________

<PAGE>

                                   SCHEDULE A
                                       TO

                          LOAN APPLICATION PROCESSING,
                      DISBURSEMENT AND SERVICING AGREEMENT

<PAGE>

                                  SCHEDULE 3.2
                                       TO
                               SECURITY AGREEMENT

   Office Locations; Fictitious Names; Tax I.D. Number; Organizational Number

OFFICE LOCATIONS:

       Headquarters Office:               3015 South Parker Road
                                          Suite 400
                                          Aurora, Colorado 80014

       Other Locations:                   121 South 13th Suite 201
                                          Lincoln Nebraska

                                          First Trust Center
                                          180 East Fifth Street, Suite 1350
                                          St. Paul, Minnesota

                                          6420 Southpoint Parkway
                                          Jacksonville, Florida

NAMES:

       Current Name:                      NELNET, Inc.

       Prior Names:                       NELNET Loan Services, Inc., UNIPAC
                                          Service Corporation

       Fictitious Names:                  None

TAX PAYER I.D. NO.:                       84-0748903

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