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									  PenFed - Education Loans - Pentagon Federal Education Loans




                 Pentagon Federal Credit Union Private Education Loan Program
                         Application and Solicitation Disclosure Form
                                 (2010-2011 Academic Year)

                           Explanation of the Pentagon Federal Private
                                    Education Loan Program



The Pentagon Federal Credit Union Private Education Loan Program consists of two separate loans. The
first loan is a revolving line of credit. Under the line of credit, you may take advances from time to time
while you are enrolled in school. Advances may only be used for educational expenses as certified by
your school. The total amount outstanding at any one time may not exceed your credit limit. Under the
line of credit, all amounts outstanding will become due and payable six months after you graduate or
otherwise cease attending your school. However, before the end of this grace period, Pentagon Federal
will offer you a fully amortizing, fixed rate loan at the current market rates. This loan will permit you to
repay the amounts outstanding on your line of credit in equal monthly installments over 15 years.

You do not have to accept the installment loan that will be offered to you. You may repay the line of
credit when due, or refinance it with a loan from another creditor. Please note that you may not be able
to refinance the amount outstanding on your line of credit into a federally-insured student loan.

This example is based on the assumption that you will refinance your line of credit with Pentagon Federal
and use the installment loan to repay all amounts outstanding under your line of credit. You may use this
example to compare this program with other ways to finance your education.



               This Example Assumes You Will Refinance Your Line of Credit
           Into a Pentagon Federal Fixed Rate Fully Amortizing Installment Loan


                                                                Pentagon Federal Credit Union
Loan Interest Rate & Fees                                       P.O. Box 1432
                                                                Alexandria, VA 22314


                                                                Your Starting Interest Rate for your line of credit


 Your starting interest rate on your line of                    The starting interest rate you pay on your line of credit
 credit will be between                                         will be determined after you apply. Your starting rate
                                                                will be based on the three-month LIBOR Rate (as
 5.5% APR                     and 18% APR                       published in The Wall Street Journal) the Thursday
 After the starting rate is set, your rate will                 before the start of the most recent calendar quarter in
 then vary with the market.                                     which we approve your loan. To obtain the initial
                                                                interest rate, we will add a 3% margin to the applicable
                                                                three-month LIBOR rate. If approved, we will notify
                                                                you of your initial rate, which will be within the stated
                                                                range.
 Your starting interest rate on your
 installment loan will be between                               Your Interest Rate during the life of the line of
 6.5% APR                     and 18% APR                       credit
 After the starting rate is set, your rate will
 be fixed.                                                      Your rate is variable. This means that your rate
                                                                could move lower or higher than the initial rate. The
                                                                rate can change every quarter based upon the three-
Loan Fees – None                                                month LIBOR Rate (as published in The Wall Street
                                                                Journal). For more information on this rate, see the
                                                                reference notes.

                                                                Your Fixed Interest Rate for your installment loan


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     PenFed - Education Loans - Pentagon Federal Education Loans


Although the rate on the line of credit will
vary after you are approved, it will never                         The fixed interest rate you pay on your installment loan
exceed 18% (the maximum allowable for                              will be based on market conditions in effect on the first
this loan).                                                        day of the 5th month of the Grace Period. However,
                                                                   the fixed rate will not be set below 6.5%. Pentagon
                                                                   Federal will notify you of the fixed rate it will offer on
                                                                   the installment loan before the end of your Grace
                                                                   Period. This rate will be within the stated range.

                                                                   Your Interest Rate during the life of the
                                                                   installment loan

                                                                   Your rate is fixed. This means that the rate will not
                                                                   change.



                                                                      Although the rate on the line of credit will vary
                                                                      after you are approved, it will never exceed 18%
                                                                      (the maximum allowable for this loan).




Loan Cost Examples


The total amount you will pay for the line of credit and the installment loan will vary depending upon
when you start to repay it. This example provides an estimate based upon a repayment option available
to you. It assumes you will refinance your line of credit into an installment loan with Pentagon Federal
after expiration of your Grace Period.

    Repayment Option                                          Amount                Interest Rate Loan              Total Paid over
    (line of credit refinanced into a 15-year                 Provided              (highest        Term            the term of the
    fixed term installment loan at the end of                 (amount               possible        (how            loan
    the Grace Period)                                         provided              starting point) long you        (includes
                                                              directly to you                       have to         associated fees,
                                                              or your school)                       pay off         if any)
                                                                                                    the loan)

    DEFER PAYMENTS UNTIL THE GRACE
    PERIOD EXPIRES

    Make no payments while enrolled in school                                                           15 years
    or during the Grace Period. Interest will be                   $40,000                 18%          after the      $187,732
    charged and added to your loan. When the                                                            Grace
    Grace Period ends, the entire balance,                                                              Period
    including interest, will be refinanced into a                                                       ends
    fixed rate installment loan.

About this example
The examples provided in this Disclosure are based on certain assumptions, as explained below. The
examples will change if the assumptions change.

●    Your maximum line of credit is $40,000.
●    The draw period of your line of credit is four academic years.
●    You will take draws of $5,000 each on September 1 and January 1 during each academic year. You will
     not have any additional draws.
●    Your academic year ends on May 31.
●    The Interest Rate will not change over the term of the line of credit.
●    You will not make any payments on the line of credit prior to the end of the Grace Period. You will
     refinance your educational line of credit with Pentagon Federal at the end of the Grace Period (six
     months after the end of the fourth academic year).




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     PenFed - Education Loans - Pentagon Federal Education Loans


Federal Loan Alternatives



                                                                                                             You may qualify for
 Loan program                   Current Interest Rates by Program Type                                       Federal education
 PERKINS                                                                                                     loans.
                                5.000% fixed
 for Students
                                                                                                             For additional
                                4.500% fixed            Undergraduate subsidized                             information, contact
 STAFFORD
 for Students                   6.830% fixed            Undergraduate unsubsidized &                         your school’s
                                Graduate                                                                     financial aid office or
 PLUS                                                                                                        the Department of
                       8.500% fixed                     Federal Family Education Loan                        Education at:
 for Parents and
 Graduate /
                       7.900% fixed                     Federal Direct Loan                                  www.federalstudentaid.
 Professional Students
                                                                                                             ed.gov




Next Steps

1. Find Out About Other Loan Options.
Some schools have school-specific student loan benefits and terms not detailed on this form. Contact
your school’s financial aid office or visit the Department of Education’s web site at:
www.federalstudentaid.ed.gov for more information about other loans.


2. To Apply for this Loan, Complete the Application and the Self-Certification Form.
You may get the certification form from your school’s financial aid office. If you are approved for this
loan, the loan terms will be available for 30 days (terms will not change during this period, except as
permitted by law and the variable interest rate may change based on the market).


REFERENCE NOTES

Variable Interest Rates


 ●   The line of credit loan has a variable interest rate that is based on a publicly available index, the London Interbank Offered
     Rate (LIBOR). Your rate will be calculated each quarter by adding a margin of 3% to the LIBOR.
 ●   The rate might increase quarterly, based on the rate that is published on the Thursday before the start of each calendar
     quarter on January 1, April 1, July 1, and October 1. There is no limit on the amount that the rate could increase at one time.
 ●   The rate may increase again when the line of credit loan is refinanced by the fixed-rate installment loan.


Eligibility Criteria


 ●   Must be enrolled in a qualified educational institution full-time.
 ●   Must be at least 16 years or older at the time you apply.
 ●   You must be a member of Pentagon Federal Credit Union.


Bankruptcy Limitations


 ●   If you file for bankruptcy you may still be required to pay back this loan.


More information about loan eligibility and repayment deferral or forbearance options is available in your loan application and loan
agreement.
HC# 4840-0533-9909
Application Solicitation Open-End – No Refinancing




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