Document:

<PAGE>
                                                                   Exhibit 10.16

                                STATE OF COLORADO
                          COLORADO STUDENT LOAN PROGRAM

                     LENDER PROGRAM PARTICIPATION AGREEMENT

<TABLE>
<S>             <C>
Name of Lender: STUDENT LOAN FINANCE CORPORATION & SUBSIDIARIES (US BANK, TRUSTEE)
                --------------------------------------------------------------------

Address of Lender:  105 SOUTHWEST FIRST AVENUE
                    ----------------------------------------------------------------

                    ABERDEEN SD 57401-4173
                    ----------------------------------------------------------------

                    ________________________________________________________________
Office of Postsecondary Education Identification Number(s)
(Lender Code):        833405
                    ----------------------------------------------------------------
</TABLE>

The Lender listed above (hereinafter referred to as "Lender") and the Student
Loan Division of the Colorado Department of Higher Education (hereinafter
referred to as "CSLP"), 999 18th Street, Suite 425, Denver, Colorado 80202-2440
agree that the Lender may participate with CSLP in those student loan programs
authorized by Title IV, Part B, of the Higher Education Act of 1965, as amended
(20 U.S.C. Sec. 1071 et seq.) and Title 23, Article 3.1, of the Colorado Revised
Statutes, and policies, rules, and regulations promulgated thereunder, as in
effect or amended from time to time (all of which are collectively referred to,
hereinafter, as the "Act"), and further agree that such participation is subject
to the terms and conditions set forth in this Agreement.

This Agreement applies to loans made in accordance with the Act, and to Federal
Consolidation Loans made under Section 428C of the Act if Lender has elected to
make such loans by checking the appropriate statement below:

 X   Lender elects to participate in consolidation loans in accordance with this
---
Agreement and the Act.

____ Lender does not elect to participate in consolidation loans.

                                FACTUAL RECITALS

WHEREAS Lender desires to participate, and applies for participation, in CSLP's
program for the purpose of making loans under the Act to eligible borrowers
attending eligible institutions (both as defined by the Act); and

WHEREAS, Lender certifies and warrants, and CSLP has determined, that it
qualifies as an eligible lender as defined by the Act; and

WHEREAS, CSLP wishes to encourage the making of such loans;

NOW, THEREFORE, in consideration of the mutual promises made in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

                                   Page 1 of 6

<PAGE>

                                    AGREEMENT

1. Consistency with the Act. This Agreement shall be construed in light of, and
the parties shall at all times comply with the Act, and all terms used herein
shall have the same meaning as in the Act unless otherwise specified in this
Agreement.

2. Loan Insurance. In accordance with the Act and this Agreement, and within
such limits as may be determined by CSLP, CSLP shall insure all loans, other
than consolidation loans, submitted by Lender to CSLP for guarantee and
subsequently made by Lender in accordance with the Act and this Agreement.

3. Consolidation Loan Insurance. If Lender has elected to participate with CSLP
in the making of Federal Consolidation Loans under Section 428C of the Act, CSLP
will insure eligible consolidation loans made by Lender in accordance with the
Act and this Agreement only to the extent authorized by a Certificate of
Comprehensive Insurance (hereinafter referred to as "Certificate") issued by
CSLP to Lender. Consolidation loans made in the absence of, or contrary to, a
Certificate issued by CSLP, are not eligible for insurance coverage by CSLP. The
Certificate will, among other terms, limit insurance coverage to Lender to the
extent the aggregate of Lender's consolidation loans insured by CSLP do not
exceed the maximum principal amount stated therein. Lender may request that CSLP
increase this amount or issue a new Certificate, either of which CSLP may do in
its sole discretion. CSLP will not insure a consolidation loan made by Lender
unless at least one of the underlying loans to be consolidated is insured by
CSLP; however, CSLP, in its Certificate, or by other written authorization, may
waive this requirement in its sole discretion.

4. Refinanced Loans. Lender is authorized to offer a program of refinancing in
accordance with the Act to borrowers of Federal Supplemental Loans for Students
and Federal PLUS loans made under Sections 428A and 428B of the Act. Lender
shall not charge the borrower an administrative fee for refinancing such loans.
In the case of a refinanced loan made for the purpose of discharging a
fixed-rate loan(s) which another eligible lender that is the holder of that
fixed-rate loan(s) will not refinance with a variable-rate loan, CSLP shall not
insure the refinanced loan made by Lender unless that loan has discharged at
least one loan insured by CSLP. CSLP may waive this requirement in its sole
discretion. CSLP will insure refinanced loans made prior to the execution of
this Agreement which were made in accordance with the Act and this Agreement.

5. Loss of Insurance. In accordance with the Act and this Agreement, CSLP
reserves the right to revoke its insurance on loans previously insured hereunder
if Lender fails to comply with the provisions of this Agreement or of the Act in
a material respect. It is mutually understood and agreed that if any of the
assurances or representations made by Lender in this Agreement are incorrect or
incomplete in any material respect, or if there has been a failure by Lender to
comply with any of the provisions of this Agreement or the Act in a material
respect, CSLP may take corrective action (including termination of this
Agreement and/or ordering reimbursements or refunds of money which Lender
improperly received, disbursed, caused to be disbursed or withheld) in
accordance with the compliance procedures set forth in the Act.

6. Lender Discretion. Unless required by the Act, nothing in this Agreement
shall be construed to compel Lender to make any loan pursuant to this Agreement.

                                   Page 2 of 6

<PAGE>

7.  Recordkeeping and Inspection. Lender shall at all times maintain and submit
to CSLP current records and reports for all loans insured by CSLP in accordance
with the Act, and in a manner, format, and time frame reasonably satisfactory to
CSLP. Lender or its agent shall give CSLP and the United States Secretary of
Education or the Secretary's designee reasonable access to Lender's records for
inspection and copying in order to verify the accuracy of the information
provided by Lender concerning Lender's administration of loans insured by CSLP
and Lender's right to receive or retain payments made under the Act, or to
permit CSLP or the Secretary to enforce any right in connection with loans
acquired by CSLP or by the Secretary under the Act.

8.  Termination. This Agreement shall continue in full force and effect until
Lender terminates the Agreement by giving CSLP sixty (60) days written notice of
Lender's intent to terminate, or until CSLP terminates it in accordance with the
Act. Termination of this Agreement shall not affect rights and obligations of
the parties which have accrued prior to termination.

9.  Notice. Unless otherwise designated in writing by the parties, any notice
concerning changes to, or termination of, this Agreement shall be sent by
certified mail to CSLP at the address indicated above, and to the Lender at the
address indicated above. Lender shall promptly notify CSLP of any change in
name, ownership or location, or of any merger or consolidation involving Lender,
or of any designation of Lender by the US Department of Education as an
exceptional performer or loss of that status, or of any other changes affecting
Lender which may impact CSLP's ability to comply with its obligations under the
Act or this Agreement.

10. Colorado Law. The laws of the State of Colorado and rules and regulations
issued pursuant thereto shall be applied in the interpretation, execution, and
enforcement of this Agreement.

11. Amendments. CSLP may, at any time, amend this Agreement in order to comply
with applicable laws, regulations, or orders. Any such amendment shall become
effective immediately upon written notice to Lender, or upon the effective date
of the amended laws, regulations or orders giving rise to the amendments. Except
for modifications herein to comply with applicable laws, regulations, or orders,
all other amendments to this Agreement shall not be effective unless in writing
and signed by duly authorized representatives of the parties.

12. Service Agreements. Lender shall not enter into any agreement for the first
time with an entity other than the Lender for servicing or management of loans
insured by CSLP, without prior written notice to and approval from CSLP. Lender
must promptly notify CSLP of its intent to execute any such agreement. Lender
shall provide written notice to CSLP, but shall not be required to obtain
approval from CSLP, for any entity servicing or managing loans insured by CSLP
which CSLP has previously provided approved for use by Lender or by another
eligible lender or holder. CSLP shall not unreasonably withhold approval of an
entity that has not previously serviced or managed loans insured by CSLP.

13. Assignment and Delegation. Lender may not assign this Agreement or delegate
any of its functions or obligations hereunder, except to an affiliate or
subsidiary of Lender which is also an eligible Lender under the Act, without the
prior written consent of CSLP, and in the case of assignment or delegation to an
affiliate or subsidiary, without prior written notice to and approval from CSLP.
No assignment or delegation to an affiliate or subsidiary shall relieve Lender
of its responsibilities under this Agreement except with the written consent of
CSLP.

                                   Page 3 of 6

<PAGE>

CSLP shall provide Lender with prior written notice of its assignment of this
Agreement or delegation of any of its functions or obligations hereunder.

14. Successors. This Agreement shall be binding upon and inure to the benefit of
the parties and their permitted successors and assigns.

15. Waiver. No waiver of any right or obligation under this Agreement by any
party on any occasion shall be deemed to operate as a waiver on any subsequent
occasion.

16. Severability. If any provision of this Agreement shall be held to be void or
unenforceable by any court of competent jurisdiction or by any governmental
regulatory agency, such provision shall be considered to have been severed from
this Agreement. All remaining provisions of this Agreement shall remain in full
force and effect.

17. Section Headings. Section headings are intended only to assist in the
organization of this Agreement and do not in any way limit or otherwise define
the rights and liabilities of the parties.

18. Entire Agreement. This Agreement, including any Attachments hereto,
constitutes the entire agreement between the parties and supersedes all other
prior communications, agreements or other arrangements between the parties with
respect to the subject matter of this Agreement.

19. Effective Date. The effective date of this Agreement shall be the date on
which all required signatures have been obtained.

                                   Page 4 of 6

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement:

<TABLE>
<CAPTION>
STATE OF COLORADO                          LENDER:      STUDENT LOAN FINANCE
BILL OWENS, GOVERNOR                                    CORPORATION AND
                                                        SUBSIDIARIES
                                                        (US BANK, TRUSTEE)
<S>                                        <C>       <C>
by:      /s/ Jeanne M. Adkins                        Signature:    Tom Steele
     ----------------------------------------                    ----------------------------
         Jeanne M. Adkins                                          Full Legal Name
         Director                                    of Signatory: Tom Steele
         Student Loan Division                                     --------------------------

         Department of Higher Education              Position of Title: CORPORATE TRUST
                                                                        ---------------
                                                                        OFFICER
                                                                        ---------------------
                                                     Social Security Number
Date: 02/26/2002                                     or Federal ID Number:   41-0256895
                                                                            -----------------

                                                     Date: January 30, 2002

                                                     (If Corporation)
                                                     Attest (seal)

                                                     by: ____________________________________
                                                          Corporate Secretary or Equivalent
                                                          Town/City/County Clerk
</TABLE>

                                   Page 5 of 6

<PAGE>

                          Colorado Student Loan Program

                     CERTIFICATE OF COMPREHENSIVE INSURANCE
                           FEDERAL CONSOLIDATION LOANS

Name of Lender: STUDENT LOAN FINANCE CORPORATION & SUBSIDIARIES (US BANK,
TRUSTEE)

Office of Postsecondary Education Identification Number
(Lender Code):                                                     833405
                                                                 ---------------

Date of Execution of CSLP Participation Agreement for Federal
Consolidation Loans:                                               02/25/02
                                                                 ---------------

Maximum Principal Amount Insured by CSLP under this
Certificate:                                                       $5,000,000
                                                                 ---------------

Effective Date of this Certificate:                                02/25/02
                                                                 ---------------

Whereas the Lender listed above (hereinafter referred to as "Lender") and the
Student Loan Division of the Colorado Department of Higher Education
(hereinafter referred to as "CSLP") have agreed that the Lender may participate
with CSLP in Federal Consolidation Loans authorized by Title IV, Part B, Section
428C, of the Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1071 et
seq.) and Title 23, Article 3.1, of the Colorado Revised Statutes, and policies,
rules, and regulations promulgated thereunder, as in effect or amended from time
to time (all of which are collectively referred to, hereinafter, as the "Act"),
and further agreed that such participation is subject to the terms and
conditions set forth in CSLP's "Lender Program Participation Agreement" and/or
prior consolidation loan agreement (as executed by Lender and CSLP and
hereinafter referred to as the "Agreement"), CSLP issues this "Certificate of
Comprehensive Insurance" (hereinafter referred to as "Certificate") to Lender.

CSLP will insure eligible Federal Consolidation Loans made by Lender in
accordance with the Act and the Agreement only to the extent authorized by this
Certificate. Federal Consolidation Loans made in the absence of, or contrary to,
this Certificate issued by CSLP, are not eligible for insurance coverage by
CSLP. CSLP may revoke insurance coverage for any consolidation loan that is
subsequently determined to have been made contrary to the Act and the Agreement,
or this Certificate. This Certificate applies only to Lender for the Lender Code
listed above. This Certificate supersedes all prior Certificates or other
arrangements made prior to this Certificate for the Lender Code listed above.

This Certificate limits insurance coverage to Lender to the extent the aggregate
of Lender's Federal Consolidation Loans insured by CSLP under this Certificate
does not exceed the dollar amount indicated as the "Maximum Principal Amount
Insured by CSLP under this Certificate" above. Lender's aggregate includes
eligible consolidation loans insured by CSLP under prior certificates or
arrangements. The amount will not exceed Lender's requested amount if such
request has been made. This amount is further limited to 25% of Lender's then
existing net aggregate dollars of Part B loans insured by CSLP, excluding
Federal Consolidation Loans, rounded down to the nearest million dollars, that
CSLP determined is held by Lender as of the effective date of this Certificate,
or $5,000,000, whichever is greater. Lender may request that CSLP increase this
amount or issue a new certificate, either of which CSLP may do in its sole
discretion.

CSLP will not insure a consolidation loan made by Lender unless at least one of
the underlying loans to be consolidated is insured by CSLP; however, CSLP, in
this Certificate, or by other written authorization, may waive this requirement
in its sole discretion.

This Certificate does not insure Federal Consolidation Loans made by Lender
prior to the date that Lender and CSLP executed the Participation Agreement for
Federal Consolidation Loans; however, CSLP may waive this requirement in its
sole discretion. Lender may terminate this Certificate with written notification
to CSLP. Termination solely at the request of Lender does not nullify CSLP's
insurance of eligible Federal Consolidation Loans made prior to Lender's notice.

         /s/ Jeanne M. Adkins                              2-25-02
-----------------------------------------         ------------------------------
Jeanne M. Adkins, Director of CSLP                Date<PAGE>
                                                                   Exhibit 10.17

                 KENTUCKY HIGHER EDUCATION ASSISTANCE AUTHORITY

                         Lender Participation Agreement
                                       and
                              Contract of Insurance

                  Federal Family Education Loan (FFEL) Programs
                        Federal Subsidized Stafford Loans
                       Federal Unsubsidized Stafford Loans
                 Federal Parent Loans for Undergraduate Students
                           Federal Consolidation Loans

         The parties to this contract are Student Loan Finance Corporation &
Subsidiaries (US Bank, Trustee) (hereinafter known as Lender) and the Kentucky
Higher Education Assistance Authority (hereinafter known as Authority).

         The Lender certifies that it is an Eligible Lender in accordance with
Section 435 (20 U.S.C. Section 1085) of the Federal Act. The Lender and the
Authority hereby agree that the Lender is authorized to participate as an
Eligible Lender in the Authority's Insured Student Loan Program for purposes of
making the following types of loans:

Subsidized Federal Stafford Loan Program
--------------------------------------------------------------------------------

Unsubsidized Federal Stafford Loan Program
--------------------------------------------------------------------------------

Federal PLUS Program
--------------------------------------------------------------------------------

Federal Consolidation Loan Program
--------------------------------------------------------------------------------

         Nothing contained in this contract shall obligate the Lender to
certify, acquire, or make any particular loan or number of loans under the
insured student loan programs.

         In consideration of the mutual promises contained herein, the Authority
hereby agrees and covenants to reimburse the Lender in the amount of one hundred
percent of any proven loss incurred by the Lender arising out of or resulting
from default, death, permanent and total disability, closed school, false
certification or, under specified conditions, filing of a petition in bankruptcy
of a borrower on any loan held by the Lender and insured pursuant to the terms
of this contract. Notwithstanding the foregoing sentence, the reimbursement rate
applicable to default on loans made or held by the Lender (other than on a
"Lender-of-Last-Resort" arrangement with the Authority or with respect to an
Exceptional Lender designation under the Federal Acts), on which the first
disbursement is made on or after October l, 1993, shall be not less than
ninety-eight percent. The Lender hereby agrees and covenants to pay an insurance
premium as designated herein, and to abide by and comply with the terms and
conditions of this contract and state and federal statutes and regulations
applicable to the Federal Family Education Loan Programs. The Authority hereby
agrees and covenants to abide by and comply with the terms and conditions of
this contract, and to perform its obligations under this contract according

<PAGE>

to terms established in the Act, regulations and the Authority's policies and
procedures, and in compliance with all other applicable federal and state laws
and regulations.

   _____________________________Terms and Conditions____________________________

                              Incorporation of Law

         This contract is subject to, and hereby incorporates by reference, the
current provisions of, and subsequent amendments to, Title 20 United States Code
(U.S.C.) Section 1071 et seq. (the "Federal Act"); Title 34 Code of Federal
Regulations (CFR) Part 668 and Part 682; Kentucky Revised Statutes (KRS) Chapter
164.740 et seq.; Title 11 of the Kentucky Administrative Regulations (KAR)
Chapter 3; and all other federal law applicable to the lender under this
contract including, but not limited to Title IX of the Education Amendments of
1972 (20 U.S.C. 1681-1683); Section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794) the Age Discrimination Act (42 U.S.C. 6101 et seq.); the Americans
with Disabilities Act of 1990 (42 U.S.C. 12101) and the Equal Credit Opportunity
Act (15 U.S.C. Section 1691 et seq.), as amended. Unless generalized or
discretionary provisions of the above cited material are made specific by the
following paragraphs, including but not limited to items such as time, amount,
rate, place, or manner of performance, nothing in this contract is intended to
abrogate, modify, or limit the applicability of any of the above cited material.
The terms and conditions set forth in this contract shall be subject to
automatic modification and revision from time to time by the process of
amendment and revision of the above cited laws and regulations.

                         Electronically Transmitted Data

         To the extent that the Lender participates in the process of
electronically transmitting data to the Authority in order to expedite the
processing of Authority-insured loans, the following shall apply:

1)       Equipment

           A) The Lender may, at its sole expense, acquire, use, and maintain
           equipment (computer hardware) that is suitable for electronic
           transmission of data to the Authority. If the Authority purchases and
           makes available to the Lender, at the Authority's expense, computer
           equipment identified herein, for electronic transmission of data to
           the Authority, title and ownership of the equipment shall remain with
           the Authority, and replacement or substitution of the equipment shall
           be at the Authority's sole discretion. Repair and maintenance of the
           equipment shall be the responsibility of the Authority.

           B) The Lender shall safeguard all equipment provided by the Authority
           from damage and provide adequate security and control to limit the
           use of the equipment exclusively to the proper transmission of data
           for purposes of the Authority's insured loan programs by authorized
           personnel and to assure that the equipment remains functional.

           C) The computer equipment provided by the Authority pursuant to
           paragraph 1 is listed on Attachment A.

                                       2

<PAGE>

2)       Certification of Data

           A) The Lender hereby represents and warrants absolutely that any and
           all data transmitted electronically to the Authority for each loan is
           true, accurate, and complete to the best knowledge of the Lender and
           the designated Loan Program Officer.

           B) The Lender has and shall retain all documentation necessary to
           verify the data transmitted through this procedure and shall provide
           access to such documentation by the Authority or its agents.

                           Federal Consolidation Loans

         To the extent that the Lender participates in the Authority's program
of Federal Consolidation Loans for eligible borrowers under Title IV, Part B of
the Federal Act, and in that the Authority has found that the Lender qualifies
under the provisions of such Federal Act and KRS 164.740, then it is agreed by
the parties as follows:

1)       The Lender shall obtain from the eligible borrower certification that
no other application is pending for a Federal Consolidation Loan. The Lender
must hold at least one of a borrower's eligible loans for consolidation or
obtain from the borrower a certification that the borrower has been unable to
obtain a Federal Consolidation Loan with income-sensitive repayment terms from
the holders of his/her outstanding loans selected for consolidation.

2)       The Lender must meet the applicable guidelines set forth in the Federal
Act, as amended.

3)       The proceeds of the Federal Consolidation Loan will be paid by the
Lender to the holder(s) of the eligible loans selected for consolidation to
discharge the liability of such loans.

4)       The Lender shall offer an income-sensitive or graduated repayment
schedule, established by the Lender in accordance with the regulations of the
Secretary of the U.S. Department of Education ("Secretary"), to the borrower of
any Federal Consolidation Loan made by the Lender on or after July 1, 1994.

5)       The Lender agrees to follow such other published terms and conditions
as the Secretary or the Authority specifically requires to carry out the Federal
Consolidation Loan Program.

6)       If the Lender no longer intends to make Federal Consolidation Loans
under this contract, the Lender's participation in the Authority's Federal
Consolidation Loan Program shall be terminated 20 days after receipt of the
Lender's written request. The Lender's participation in the Authority's Federal
Consolidation Loan Program under this contract may also be terminated by the
Authority in a manner provided for by regulation. The termination of the
Lender's participation in the Authority's Federal Consolidation Loan Program
under this contract shall not affect the coverage of loans under guarantees
issued prior to such termination.

                                       3

<PAGE>

                     Certificate of Comprehensive Insurance

         For any Federal Consolidation Loans made by the Lender and insured by
the Authority against loss of principal and interest, in accordance with the
Federal Act, as amended, the following provisions apply:

1)       That this certificate of comprehensive insurance shall be effective and
shall expire in accordance with the paragraph of this contract entitled
Effective Date. The Federal Consolidation Loan(s) will be made on or after April
7, 1986, but no later than provided for in the Federal Act, as amended;

2)       That the total unpaid principal amount of all Federal Consolidation
Loans made under this certificate is equal to or less than $100,000,000.00);

3)       That the Lender shall establish repayment terms which shall include the
establishment of graduated or income-sensitive repayment schedules in accordance
with the regulations of the Secretary;

4)       That, if the Lender, prior to the expiration of this certificate, no
longer proposes to make Federal Consolidation Loans, the Lender will so notify
the Authority in order that the certificate may be terminated. Such termination
shall not affect the insurance on any Federal Consolidation Loan made prior to
such termination;

5)       That the Lender's loan consolidation program practices are subject to
the Authority's Insured Student Loan Program Limitation, Suspension or
Termination procedures. The insurance on any Federal Consolidation Loan(s) made
under this certificate prior to the Authority's imposition of a limitation,
suspension or termination action shall not be affected by such action; and,

6)       That the Lender complies with the Authority's reporting requirements.
The Authority's office at 1950 U.S. 127 South, Frankfort, Kentucky, is
designated as the office which will process claims and perform other related
administrative functions.

                                      Forms

         Where particular forms pertaining to the performance of obligations
imposed by this contact are approved by the Authority or by the Secretary of the
U.S. Department of Education as common forms, only those forms shall be used by
the Lender. Any addition, substitution, or alteration of these forms without
express written permission of the Authority shall be grounds for avoidance by
the Authority of any insurance obligation that would otherwise be imposed by
this contract. Except as otherwise provided herein, the Lender may use such
additional forms as it deems appropriate for its own purposes, provided that use
of said forms does not violate state or federal law, and further provided that
said forms shall be maintained with the borrower's records in accordance with
retention schedules prescribed by applicable law.

                                       4

<PAGE>

                                     Premium

         The Lender shall pay to the Authority a per loan premium, which will be
billed on a pro rata basis upon each disbursement of each loan, for the
insurance coverage extended by the Authority on loans, other than Federal
Unsubsidized Stafford Loans insured prior to July 1, 1994, and Federal
Consolidation Loans. The Lender may be required to pay, as specified by the
Authority in writing, a fee to cover the costs of increased or extended
liability with respect to Federal Consolidation loans provided, however, that
the Lender shall receive reasonable prior written notice of its obligation to
pay any such fee and that any such fee shall only be prospective in effect from
the established effective date of such fee. The insurance premium rate on any
loan insured hereunder shall not exceed the amount specified in the Federal Act
(20 U.S.C. 1078(b)(1)(H) and 1078-8(f)) and shall be specified in writing by the
Authority. The Authority shall notify the Lender in writing of any change in the
insurance premium rate prior to the effective date of such rate change unless
the change is mandated by an amendment of the Federal Act. The premium for each
lean insured under this contract shall be paid by or on behalf of the Lender to
the Authority. Nonpayment of the premium as billed will be grounds for the
avoidance by the Authority of any insurance obligation that would otherwise be
imposed pursuant to this contract

                                 Promissory Note

         Loans insured under this contract shall be evidenced by a promissory
note provided or approved by the Authority or approved by the Secretary of the
U.S. Department of Education. Interest on any loan insured hereunder shall be
charged to the borrower at a rate which does not exceed the maximum applicable
rate per annum prescribed by the Federal Act and/or regulations governing the
Federal Family Education Loan Programs.

                                  Insurability

         For all loans, the Lender shall assure, and the Authority shall have
determined to its satisfaction, in accordance with reasonable and prudent
business practices, for each loan that: the loan is a legal, valid, and binding
obligation of the borrower; each such loan was made and serviced in compliance
with applicable laws and regulations; and the insurance on such loan is in full
force and effect

         A Lender shall comply with due diligence requirements established by
the U.S. Department of Education and the Authority in making, disbursing,
servicing, and collecting loans insured pursuant to this contract. Failure to
exercise such due diligence, with regard to any loan insured hereunder, may,
without precluding other remedies, constitute grounds for avoidance by the
Authority of its insurance obligation on that loan. This Lender warrants that it
has and will continue to maintain itself or by contract, sufficient present
capacity to exercise due diligence in the making, servicing, and collection of
student loans and the maintenance of records pertaining thereto.

         Compliance by the Lender with the terms and conditions of this contract
and applicable laws and regulations shall be deemed a condition precedent to the
insurance obligation imposed upon the Authority hereunder.

                                       5

<PAGE>

         The Authority agrees that its insurance on any loan disbursed hereunder
will remain in full force and effect if the loan becomes ineligible for federal
reinsurance due to the Authority's acts or omissions in performing its
obligations under this contract. If, at any time, any loan is determined to be
either ineligible for reinsurance or legally unenforceable due to the Lender's
acts or omissions in performing its obligations under the applicable law or this
contract, then the Authority's insurance shall be voided and revoked and the
Authority may require the Lender to repurchase the loan.

                                     Records

         The lender shall keep complete and accurate records of each loan
guaranteed under this contract.

         The Lender shall, upon reasonable written request, pursuant to a
program review, make avoidable to the Authority, the Secretary, or their duly
designated representative, for inspection and copying, any and all books,
records, documentation (including, but not limited to, memoranda,
correspondence, and computer printouts) necessary to assure compliance with this
contract and any applicable law. Except as otherwise provided below, such books,
records, and documentation shall be available during regular office hours of any
working day, no later than ten (10) working days after the request for
inspection. The Lender shall provide to the Authority loan records of individual
borrowers necessary to respond to borrower disputes, appeals, or inquiries,
within five (5) working days of written request. The material may be made
available in whatever form retained (microfilm, computer data, or print).

         Notwithstanding the foregoing, in the event that the Authority or the
Secretary shall have reasonable cause to believe that there exists a potential,
substantial impairment of the interests of the Commonwealth, the Authority, the
United States Government, or any eligible student, then the Authority, acting
through its Executive Director or his designee, and the Secretary reserve the
right, upon demand, of immediate inspection of such books, records,
documentation, or other materials as may pertain or be relevant to the accuracy
and completeness of the Lender's records and reports and the Lender's compliance
with the terms and conditions of this contract.

                         Termination and Other Remedies

         Unless otherwise provided herein, this contract may be terminated or
suspended by either party upon not less than twenty (20) days written notice,
although such termination or suspension by the Authority shall be for cause and
in accordance with the Federal Act, regulations promulgated thereunder, and the
Authority's policies and procedures, and shall not become final until the Lender
is afforded adequate notice and an opportunity for hearing on the merits of the
Authority's claims and contentions pursuant to the Federal Act and 11 KAR 4:020.
However the Authority shall have the power to take emergency action in
accordance with 11 KAR 4:020 to suspend operation of this contract, pending the
outcome of said hearing, if the Authority determines that such action is
necessary to prevent substantial harm to the interest of the Commonwealth, the
Authority, the United States Government, or any eligible student termination by
either party shall not affect the obligations incurred under this contract prior
to the effective date of the termination.

                                       6

<PAGE>

         In the event that the Authority shall have probable cause to believe
that any of the assurances or representations made by the Lender are incomplete,
inaccurate, or misleading and deceptive, or that there has been a failure by the
lender to comply with the terms and conditions of this contract or applicable
laws or regulations, in any material respect, then short of termination or
suspension, the Executive Director of the Authority or his designee shall have
the right to take any reasonable action necessary including, but not limited to:
litigation, withholding of payments, probation, or limitation of participation,
or requiring reimbursement of any funds expended or obligated to be expended by
the Authority as the result of reliance upon such assurances, representations,
or anticipation of compliance. In the event that the Secretary has assumed the
Authority's functions, and if the Secretary determines that this contract
includes an impermissible transfer of the reserve funds or assets, then the
Secretary may terminate this contract upon 30 days notice.

         Unless otherwise provided, any material noncompliance with the terms
and conditions of this contract shall subject the noncomplying party to any and
all forms of remedial action, legal and equitable. No choice of remedies shall
be required of the injured party.

                                   Assignment

         Except as otherwise specified below, the Lender may, without prior
consent of the Authority, sell, assign, pledge, or otherwise transfer rights,
title, and interests, including specifically the right to receive any insurance
claim payment from the Authority for loans insured pursuant to this contract, to
an Eligible Lender or Holder, as defined in 34 CFR 682.200 and KRS 164.740, that
has in force a Contract of Insurance with the Authority. If the transferee does
not have a Contract of Insurance in place with the Authority, then said transfer
may be made only with the prior written consent of the Authority, which consent
shall not be unreasonably withheld, and in accordance with the Federal Act and
regulations thereunder. If the Lender effects a transfer of title or of other
interests in such loans that include the right to receive insurance payments
from the Authority, the Lender shall give the Authority written notice of having
done so not later than the fifteenth (15) day of the second month of the
calendar quarter that begins after said transfer as a precondition of the
Authority's insurance obligation.

         Except as specified above, the Lender may transfer or assign rights
accruing under this contract, including, particularly the rights to participate
in the Authority's program of Insured Student Loans and to make new loans
insurable under this contract, only to another Eligible Lender as defined in
Section 435 (20 U.S.C. 1085) of the Federal Act, 34 CFR 682.200 and KRS 164.740,
and only with the prior written consent of the Authority.

         The terms and conditions of this agreement shall be binding upon the
heirs and successors in interest of the respective parties as though original
parties to this agreement.

                                    Warranty

         The Lender hereby warrants and covenants that all assurances and
representations, except those specified in applicable regulations on which the
Lender is given the right to rely in good faith, made by the Lender regarding
any transactions, including, but not limited to, the application for and
disbursement and servicing of Insured Student Loans, pursuant to this

                                        7

<PAGE>

contract are complete and accurate statements of fact at the time of making
those assurances and representations. Any assurances or representations made by
the Lender, unless amended, shall be binding upon and against the lender as a
precondition of the insurability of any Insured Student Loan for the duration of
the period of insurance coverage provided for herein.

                            Designated Representative

         Unless otherwise designated at any time over the duration of this
contract, the Person(s) signing this contract on behalf of each party shall be
deemed to be the proper person(s) to whom notices and any other communications
shall be directed.

                                   Subrogation

         Upon filing of a claim for reimbursement, and as a condition precedent
to reimbursement under the terms of this contract, the Lender shall assign to
the Authority all rights and responsibilities accruing to the Lender under the
Insured Student Loan promissory note, and the Authority shall be deemed fully
subrogated to the rights and responsibilities of the Lender pursuant to that
note and to this contract as it pertains to that note.

                                   Procedures

         Subject to this contract, the specific procedures for making,
disbursing, servicing, and collecting loans insured under this contract, as well
as filing claims for insurance reimbursement on such loans are delineated in 34
CFR Part 682.

                          Paragraphs and Defined Terms

         The paragraph headings contained in this document are included for the
sole purpose of facilitating the reading of this document and shall have no
binding, substantive effect.

         Capitalized terms herein shall indicate defined terms. The definition
of terms shall have the meaning specified in 20 U.S.C. Section 1085 and Section
1088, 34 CFR Section 668.2 and Section 682.200, KRS 164.740 and 11 KAR 3:001,
unless otherwise specified in this contract.

                                  Modification

         Unless otherwise provided herein, any modification of the terms and
conditions of this contract shall not be effective unless evidenced by a writing
signed by both parties.

                                  Severability

         Should any provision of this contract be found to be inapplicable or
otherwise not binding on the parties, it is the intention of the parties that
the remainder of the contract shall remain in full force and effect upon the
respective rights and obligations of the parties hereto.

         It is hereby stated as the intention of the parties hereto that all
prior contracts, both written and oral, consistent and inconsistent, are
hereinafter superseded, except as specified below. No prior understanding,
agreement, contract, or representation shall be effective against

                                        8

<PAGE>

either party unless henceforth made a part of this contract as evidenced by this
writing. Assurances and representations heretofore warranted by the Lender in
any prior contract of insurance respecting the eligibility of the Lender and the
insurability of any loan heretofore insured under such prior contract of
insurance are consolidated into the terms and conditions of this contract as
expressed in this document. Any contract of insurance between the parties hereto
outstanding at the time of execution of this contract is herewith terminated and
simultaneously replaced with this contract so as to allow for continued
participation in the Authority's Insured Student Loan Program.

                                  Restrictions

         In accordance with the Federal Act and regulations thereunder, the
Lender shall not accept any financial inducement by any educational institution
to make available Authority insured loans to its students.

                                        9

<PAGE>

                         Effective Date and Signatures
---------------------------                          ---------------------------

         This contract shall be effective from the date of execution by the
Authority. Unless otherwise terminated in accordance with the terms and
conditions set forth heretofore, this contract shall remain effective until and
shall expire upon the expiration of authorization to make Insured Student Loans
under the Federal Act.

<TABLE>
<CAPTION>
                                                 Student Loan Finance Corporation &
                                                 Subsidiaries (U.S. Bank Trustee)
<S>                                              <C>
/s/  Linda L. Wolanin
-----------------------------------------        -----------------------------------------
Authorized Representative                        Lender
Kentucky Higher Education Assistance Authority

7/05/01                                          Tom Steele
-----------------------------------------        -----------------------------------------
Effective Date                                   Authorized Representative (Type or Print)

                                                 /s/ Tom Steele
                                                 -----------------------------------------
                                                 Authorized Representative Signature

                                                 Corporate Trust Officer
                                                 -----------------------------------------
                                                 Title

                                                 P.O. Box 5308, Sioux Falls, SD 57117-5308
                                                 -----------------------------------------
                                                 Address

                                                   833405
                                                 -----------------------------------------
                                                 Lender Identification Number

                                                 _________________________________________
                                                 Designated Lender Representative

                                                 AVP of Compliance & Customer Relations
                                                 -----------------------------------------
                                                 Title

                                                 _________________________________________
                                                 Other Authorized Signatory

                                                 _________________________________________
                                                 Other Authorized Signatory

                                                 _________________________________________
                                                 Other Authorized Signatory

Branch Offices Included in This Contract:

Office Address                                   Designated Lender Representative

_________________________________________        _________________________________________

_________________________________________        _________________________________________
</TABLE>

<PAGE>

For more information, contact:

         KHEAA
         1050 US Highway 127 S
         Frankfort, KY 40601-4323
         Phone: 1-800-928-8926
         Fax: (502) 696-7305

KHEAA does not discriminate on the basis of race, color, national origin, sex,
religion, age, or disability in employment or services and provides, upon
request, reasonable accommodations to afford individuals with disabilities an
equal opportunity to participate in all programs and activities. Printed 3/99
with state funds KRS 57.375.

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