CFSI Collegiate Funding Services (MM)

FREDERICKSBURG, Va., Sept. 7 /PRNewswire-FirstCall/ -- Collegiate Funding Services, Inc. (NASDAQ:CFSI) announced today that it has agreed to acquire the BabyMint College Savings Program, a loyalty rebate rewards program launched in March 2000, designed to help parents and other family members save for college. (Logo: http://www.newscom.com/cgi-bin/prnh/20050714/DCTH039LOGO ) The loyalty rewards program enables individuals to save towards college tuition as they patronize their favorite businesses participating in the program. BabyMint members can earn rebates on purchases from hundreds of online and brick-and-mortar retailers, including Target.com, Overstock.com and 1-800-FLOWERS.COM(R). BabyMint members also earn an additional 1 percent rebate on net retail purchases made with their BabyMint College Savings Credit Card issued by MBNA America Bank, N.A. These rebates are deposited into the member's choice of tax-free Section 529 college savings plans or Coverdell Education Savings Accounts. In addition, Collegiate Funding Services plans to expand the program to enable members to receive rebates that can be applied towards their education, including in-school Stafford and PLUS Loans, private, credit-based alternative loans as well as both Federal and private, credit- based, consolidation loans. According to a report from Investment Company Institute, twenty percent of parents saving for college participated in education-targeted savings programs, such as 529 college savings plans, with the number of 529 accounts rising to nearly 5.4 million and the average account size of approximately $9,700 at year-end 2004. However, the College Board's Annual Report on College Pricing estimated the average total cost of a college education in the 2004 to 2005 school year grew to more than $110,000 at four-year private institutions and more than $45,000 at four-year public institutions. As a result, today's students and their families find that they need a multitude of resources to finance higher education, including scholarships and grants, special savings programs, federal and private loans and even home equity credit lines and loans. "This acquisition provides CFS an opportunity to differentiate our product offering in the market place while reaching out to students, parents and family members early in the education financing process," said J. Barry Morrow, president and chief executive officer of Collegiate Funding Services. "CFS is well positioned to provide parents and family members, who are facing the rising costs of education, with an attractive and flexible college savings program in addition to our wide variety of more traditional education loan products and services." Collegiate Funding Services is acquiring the BabyMint program from Vesdia Corporation. Vesdia is a global leader in the development of loyalty enhancement technology and services. The company operates more than a dozen loyalty programs in the United States and Canada and maintains numerous relationships with merchants and credit card providers. As part of the sale, Vesdia will be the exclusive loyalty services provider for the BabyMint Program and CFS will license Vesdia's patented loyalty technology platform. Additionally, CFS will become the exclusive education finance provider to all of Vesdia's loyalty programs. Please visit the BabyMint website at http://www.babymint.com/ for complete details of the program, including a list of all participating merchants. About Collegiate Funding Services Collegiate Funding Services is a leading education finance company dedicated to providing students and their families with the practical advice and loan solutions they need to help manage and pay for the cost of higher education. Collegiate Funding Services also offers a comprehensive portfolio of education loan products and services -- including loan origination, loan servicing and campus-based scholarship and affinity marketing tools -- to the higher education community. As of June 30, 2005, Collegiate Funding Services had facilitated the origination of more than $20 billion in education loans; the company currently manages almost $12 billion in student loans for more than 460,000 borrowers. For additional information, visit http://www.cfsloans.com/ or call 1-888-423-7562. About Vesdia Corporation Vesdia Corporation, a privately-held company headquartered in Atlanta, is widely recognized as the global leader in the field of loyalty marketing technology and services. Through its network of top-name retailers and name brands, Vesdia's patent-protected technology enables consumers to earn rebates and similar rewards through their everyday spending. In addition to serving as the "rewards engine" behind its own award-winning coalition loyalty programs, the company's proprietary technology is also licensed by more than a dozen financial institutions and credit card issuers in the U.S. and Canada to facilitate customer loyalty. Aspects of Vesdia's loyalty programs are covered by one or more of the following patents: U.S. Patent No. 6,631,358; U.S. Patent No. 6,345,261; U.S. Patent No. 4,941,090; U.S. Patent No. 5,117,355; U.S. Patent No. 5,202,826; and U.S. Patent No. 5,287,268. For more information please visit http://www.vesdia.com/. Forward-Looking Statements This news release includes "forward-looking statements" about Collegiate Funding Services, Inc. within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this release, the words "looking forward," "expects," "plans," "intends," "believes," "forecasts," or future or conditional verbs, such as "will," "should," "could" or "may," and variations of such words or similar expressions are intended to identify forward-looking statements. Among the key factors that may have a direct bearing on the company's operating results, performance or financial condition are (1) the company's ability to integrate the BabyMint College Savings Program, (2) changes in terms, regulations and laws affecting student loans and the educational credit marketplace; (3) changes in the demand for educational financing or in financing preferences of educational institutions, students and their families; (4) changes in the credit quality or performance of the loans that the company purchases, retains, services and securitizes; or (5) changes in interest rates and in the securitization or secondary markets for education loans. Important factors that could cause the company's actual results to differ materially from the forward-looking statements the company makes in this release are set forth in the company's filings with the Securities and Exchange Commission, including in the section entitled "Risk Factors" in the company's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2005. The company undertakes no obligation to update or revise forward-looking statements which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events unless the company has an obligation to do so under the federal securities laws. http://www.newscom.com/cgi-bin/prnh/20050714/DCTH039LOGO http://photoarchive.ap.org/ DATASOURCE: Collegiate Funding Services, Inc. CONTACT: Ann Collier, Senior Vice President, Corporate Communications, +1-540-368-5970, or fax +1-540-368-5963, or ; or Investor Contact: Gary Tiedemann, Vice President, Investor Relations, +1-540-735-1235, or fax +1-540-735-1239, or , both of Collegiate Funding Services, Inc. Web site: http://www.cfsloans.com/ http://www.babymint.com/ http://www.vesdia.com/

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