Dear Borrower:

The U.S. Department of Education has implemented a change to the Perkins Student Loan regulations stating that all Lending Institutions participating in the Perkins Loan program are required to establish a loan rehabilitation program for borrowers with defaulted Perkins loans. All borrowers with defaulted loans are to be notified by July 1, 2000 of the option to rehabilitate.

The borrower must do the following:

• Request rehabilitation from the school
• Make twelve (12), consecutive, ON TIME, monthly payments, one of which must be made after July 1, 2000.

Borrowers may receive only one rehabilitation per loan. A loan is considered to be rehabilitated when 12 consecutive payments are made. If a payment is missed you must request rehabilitation again from your school.

The borrower understands that:

• Any missed payments will immediately cancel the Rehabilitation agreement
• This regulation is for Perkins Student Loans only
• Making an accelerated payment will not take the place of 12 consecutive monthly payments

Once a loan is rehabilitated, a borrower:

• Will be returned to current status and will no longer be considered delinquent
• All credit bureau histories, regarding the defaulted loan, will be removed
• Receives flexible repayment options that may extend up to nine years (ten years including the 12 rehabilitated payments) as long as the new monthly payment is greater than or equal to the original payment
• Remaining rights and responsibilities, under the existing promissory note will be available. These include but are not limited to making regular scheduled payments, deferments, cancellations, forbearance and notifying the student loan office of any change of address, phone number and name
• Eligibility for Title IV, student financial assistance will be re-established
• Any hold on transcripts, due to defaulted Perkins loans, will be removed

ECSI has been requested to notify all Perkins Student Loan borrowers that you have the right to rehabilitate your loan in accordance with the above stated regulations. If it is your intent to rehabilitate, please contact your school or ECSI. ECSI's phone number is 412-788-3900.

The information presented above is a summary of the rehabilitation regulation. A more through explanation can be obtained at the COHEAO website: www.coheao.com (click on LEGISLATIVE and then REGULATIONS.

Department of Education Ombudsman

If you are unable to resolve a dispute with your lending institution concerning the terms of your Federal Perkins Student Loan, you may contact the Dept. of Education Ombudsman, three ways:

1. via the Internet, http://ombudsman.ed.gov or http://sfahelp.ed.gov
2. via telephone, 877-557-2575
3. via mail: Office of the Ombudsman