2014-05-05T15:22:06-05:00 2013-06-30 ERNST & YOUNG US LLP 401 CONGRESS AVE SUITE 1800 AUSTIN TX 78701 990 2012-07-01 742129255 BRAZOS HIGHER EDUCATION SERVICE CORPORATION % RICKY TURMAN CFO EVP BRAZ 2547530915 PO BOX 1308 Suite WACO TX 76703 Ricky Turman 2014-05-02 5124789881 2012 2015-11-30 17:44:51Z RICKY TURMAN 2600 WASHINGTON AVENUE WACO TX 76710 24768989 false X www.brazos.us.com X 1980 TX To provide management and administrative support for affiliated entities student loan servicing needs. 9 9 74 0 217595 -46299 0 0 21935545 19695194 531208 942797 282757 131998 22749510 20769989 1351797 27910 0 0 9660224 11694433 0 0 0 4813016 4748306 15825037 16470649 6924473 4299340 48267417 57219619 6480185 9304453 41787232 47915166 To provide management and administrative support for affiliated entities student loan servicing needs. false false 13392986 27910 19805170 Administrative and Management services for affiliated non-profit entities. As master servicer, Brazos Higher Education Service Corporation provided management services for 7 nonprofit student loan companies. This included administering almost 1 million loans with outstanding principal in excess of $6 billion under the Federal Family Education Loan Program (FFELP). Heal, TERI, and various other alternative loan programs. 13392986 true false false true false false false false false false true true false true true true true false false false false false false false false false false false true true false false false true false true false false false false false false false true true true false false true 73 0 true 74 true true true false false false false false false false false false X 9 9 true false false false false false false true true false false true true true true true true true true false X RICKY TURMAN CFO EVP 2547530915 2600 Washington Avenue Waco TX 76710 Bob Chambers 1.0 8.0 X 0 0 0 Paul Marable Jr 1.0 7.0 X 0 0 0 Mrs Joyce Packard 1.0 10.0 X 0 0 0 Norman Hay Jr 1.0 2.0 X 0 0 0 David Smith Jr 1.0 7.0 X 0 0 0 John Perry 1.0 4.0 X 0 0 0 Dr Joseph Velez 1.0 3.0 X 0 0 0 Tom Chase 1.0 3.0 X 0 0 0 Wilton Lanning 1.0 8.0 X 0 0 0 Scott Felton 1.0 1.0 X 0 0 0 Murray Watson 40.0 10.0 X 1099551 0 33270 Ricky Turman 40.0 10.0 X 451302 0 45418 Ellis Tredway 40.0 10.0 X 309850 0 38925 Michael Macomber 40.0 0.0 X 343809 0 47589 Thomas Litle 40.0 8.0 X 278512 0 30756 Samuel Redden 40.0 0.0 X 264597 0 37168 Randall Larson 40.0 0.0 X 221285 0 29964 Tammy Harralson 40.0 10.0 X 191285 0 28505 Janice White 40.0 3.0 X 173703 0 20133 Andrew Ellis 40.0 0.0 X 135641 0 25479 Daniel Reyna 40.0 8.0 X 135617 0 20396 James McInnis 40.0 9.0 X 100445 0 19370 Susan Davis 40.0 10.0 X 71168 0 16233 Ray Rushing 40.0 9.0 X 0 0 0 David Horner 40.0 8.0 X 506110 0 41505 Kelli Villarrial 40.0 8.0 X 264781 0 31265 John M Wright 40.0 0.0 X 176450 0 22398 Justin Green 40.0 0.0 X 167573 0 28837 Sarah MacCarthy 40.0 0.0 X 160598 0 22869 Debra Urias 40.0 0.0 X 155771 0 24941 Rebecca Harland 40.0 0.0 X 144201 0 27013 Milicent Larson 40.0 0.0 X 107958 0 28802 5460207 0 620836 23 true true false Murray Watson Jr 2600 Washington Avenue WACO TX 76710 legal 675276 Ernst Young LLP 3712 Solution Center CHICAGO IL 60677 audit and tax fees 542658 Saylor Consulting Services LLC 9 Northview Avenue MONTCLAIR NJ 07043 Legal 430640 Mayer Brown LLP 230 South Lasalle Street CHICAGO IL 60604 Legal 308706 HES New Ventures LLC 245 W Chocolate Avenue HERSHEY PA 17033 mgmt consulting 261799 9 0 Administration Services Income 522294 331552 130000 201552 Beneficial Interest (M&O) 522294 6734700 6734700 Operating Incomes (M&O) 522294 12586658 12586658 Financial Advisory fees 522294 13435 13435 Amortization of deferred income 522294 28849 28849 19695194 684797 16043 668754 0 0 22022 22022 0 22022 22022 4257000 3999000 258000 258000 258000 0 0 0 All other revenue 522294 109976 109976 109976 20769989 19603618 217595 948776 0 27910 27910 0 0 4021397 3619257 402140 0 5999079 5399171 599908 533151 479836 53315 673714 606343 67371 467092 420383 46709 1175202 1175202 746791 672112 74679 406257 365632 40626 348893 348893 0 0 0 85009 85009 570587 524221 46366 237903 214113 23790 0 270293 232571 37722 166549 149894 16655 0 41778 37600 4178 0 0 119789 107810 11979 320781 288703 32078 DUES & SUBSCRIPTIONS 103505 93155 10350 Entertainment 65437 65437 SERVICING EXPENSE 39329 39329 ADMINISTRATIVE EXPENSE 24153 21738 2415 26050 8199 17851 16470649 13392986 3077664 0 7260607 10261251 13288189 302890 0 0 135115 237637 528593 579752 0 0 5525000 7634306 0 0 159695 210844 2843050 1626672 1232082 1216378 4877881 9370535 255753 3323076 0 0 0 0 15004502 24082950 48267417 57219619 1054710 3995758 0 0 139102 110254 0 0 0 0 0 0 0 0 0 0 5286373 5198441 6480185 9304453 X 41787232 47915166 0 0 0 0 41787232 47915166 48267417 57219619 X 4299340 1828594 X false true X true false X 0 0 0 0 0 0 25556405 15372796 17280054 21935545 19493642 99638442 0 0 0 25556405 15372796 17280054 21935545 19493642 99638442 0 0 0 0 0 0 0 0 0 0 0 0 0 99638442 178160 1384038 3131072 549129 690776 5933175 217595 217595 178160 1384038 3131072 549129 908371 6150770 0 0 0 0 0 0 2186 77751 475990 264836 109976 930739 25736751 16834585 20887116 22749510 20511989 106719951 0.93364 0.94960 0.05763 0.04400 X false false false false false false true 348893 false false 348893 false Schedule C, Part II-B Lobbying OUTSIDE LOBBYISTS WERE HIRED TO ADVISE BRAZOS ON APPROPRIATE STRATEGIES AND ACTIONS REGARDING LEGISLATION THAT WOULD HAVE A HARMFUL IMPACT ON BRAZOS INTERESTS. IN ADDITION, LOBBYISTS WERE CHARGED WITH MONITORING THE INTRODUCTION AND THE PROGRESS ON LEGISLATION/RULES THAT REQUIRED BRAZOS COMPLIANCE IN ALL AREAS OF THE BUSINESS. LEGISLATION ISSUES INCLUDED BUDGET RECONCILIATION, REAUTHORIZATION OF THE HIGHER EDUCATION ACT, TAX-EXEMPT ISSUES AND PRIVACY ISSUES. 68000 68000 2013600 1069936 943664 761450 556736 204714 1216378 3323076 C 3323076 Assets Held in Escrow 11161351 DUE FROM AFFILIATES 12501091 Accrued interest receivable 420508 24082950 0 Servicing Recourse Reserve 37322 Prefunded Benefit Payable 5161118 5198441 X 21389824 619835 619835 20769989 20769989 20231468 3760819 3760819 16470649 16470649 SUPPLEMENTAL INFORMATION RECONCILIATION OF REVENUE PER AUDITED FINANCIAL STATEMENTS SCHEDULE D, PART XI, LINE 2D INTERVIEW STREAM INCOME - $619,835 RECONCILIATION OF EXPENSES PER AUDITED FINANCIAL STATEMENTS SCHEDULE D, PART XII, LINE 2D INTERVIEW STREAM EXPENSES - $3,760,819 FIN 48 The Company follows the accounting standard related to the accounting for uncertainty in income taxes. The standard prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company currently has no uncertain tax positions. true Form 990, Schedule I Description of Organization's Procedures for Monitoring the Use of Grants Provided related 501(c)(3) organization with grant funds for initial scholaYship and administration startup and scholarships to qualified students. Monitoring the use of grant funds is not required. X X X true true X X X true false false false false false false false false Murray Watson 603194 0 420756 0 75601 0 25000 0 8270 0 1132821 0 0 0 Ricky Turman 294207 0 150684 0 6411 0 25000 0 20418 0 496720 0 0 0 Ellis Tredway 185324 0 101266 0 23260 0 25000 0 13925 0 348775 0 0 0 Michael Macomber 217500 0 116183 0 10126 0 25000 0 22589 0 391398 0 0 0 Thomas Litle 185601 0 67840 0 25071 0 25000 0 5756 0 309268 0 0 0 Samuel Redden 167001 0 64191 0 33405 0 24540 0 12628 0 301765 0 0 0 Randall Larson 164493 0 56792 0 0 0 22201 0 7763 0 251249 0 0 0 Tammy Harralson 126382 0 50267 0 14636 0 19341 0 9164 0 219790 0 0 0 Janice White 104502 0 44871 0 24330 0 17163 0 2970 0 193836 0 0 0 Andrew Ellis 85741 0 33892 0 16008 0 13639 0 11840 0 161120 0 0 0 Daniel Reyna 92427 0 35082 0 8108 0 13565 0 6831 0 156013 0 0 0 David Horner 256525 0 205287 0 44298 0 24606 0 16899 0 547615 0 0 0 Kelli Villarrial 173411 0 65055 0 26315 0 24547 0 6718 0 296046 0 0 0 John M Wright 108192 0 43103 0 25155 0 16784 0 5614 0 198848 0 0 0 Justin Green 119640 0 43354 0 4579 0 13577 0 15260 0 196410 0 0 0 Sarah MacCarthy 118514 0 31596 0 10488 0 16022 0 6847 0 183467 0 0 0 Debra Urias 114365 0 41406 0 0 0 15788 0 9153 0 180712 0 0 0 Rebecca Harland 101192 0 39307 0 3702 0 14947 0 12066 0 171214 0 0 0 Milicent Larson 78178 0 29780 0 0 0 11793 0 17009 0 136760 0 0 0 Supplemental Compensation Information Travel for Companions - OCCASIONALLY, TRAVEL FOR COMPANIONS FOR BOARD MEMBERS AND OFFICERS IS PAID BY BHESC. IN THESE INSTANCES, UNREIMBURSED TRAVEL IS EITHER REPORTED AS COMPENSATION ON THEIR W-2 OR THROUGH A 1099-MISC, WHICHEVER IS APPLICABLE. MURRAY WATSON RECEIVED THESE BENEFITS. SOCIAL CLUB DUES - SOCIAL CLUB DUES ARE PAID FOR MURRAY WATSON. THE PERSONAL USE OF THESE DUES IS REPORTED AS COMPENSATION ON FORM W-2. PERSONAL SERVICES - A DRIVER IS PROVIDED FOR MURRAY WATSON. THE PERSONAL USE OF THESE SERVICES IS REPORTED AS COMPENSATION ON FORM W-2. Schedule J, Line 4a David Horner received a severance payment in the amount of $287,686. MURRAY WATSON JR PERSONAL LIFE INSUR X 2340 579752 false true true 579752 MURRAY WATSON Associates Murray Watson, officer 686105 LEGAL FEES false Schedule L, Part II LOANS TO AND/OR FROM INTERESTED PERSONS PERSONAL LIFE INSURANCE FOR MR. WATSON AND HIS SPOUSE. BRAZOS HIGHER EDUCATION SERVICE CORPORATION PAYS PREMIUMS FOR A LIFE INSURANCE POLICY OWNED BY MURRAY WATSON AND HIS SPOUSE. THE AGREEMENT BETWEEN THE COMPANY AND MR. WATSON IS THE LOAN IS DUE AND PAYABLE AT THE DEATH OF BOTH HIM AND HIS SPOUSE, PAYABLE FROM THE ESTATE. INTEREST ON THE LOAN IS CALCULATED AND INCLUDED IN MR. WATSON'S ANNUAL W-2 AS TAXABLE INCOME. Supplemental Information Form 990, Part VI, Question 2 MURRY WATSON, JR., RANDALL LARSON AND MILICENT LARSON HAVE A FAMILY RELATIONSHIP. RAY RUSHING AND MURRAY WATSON, JR. HAVE A BUSINESS RELATIONSHIP. Form 990, Part VI, Question 11b Describe the Process used by Management &/or Governing Body to Review 990 The 990 tax return is provided to senior management for their review. After their review, the return is posted on a secure website for review by the board of directors. The Board is notified of the posting and asked to provide comments or questions. Form 990, Part VI, Question 12c Description of Process to Monitor Transactions for Conflicts of Interest The internal audit department annually prepares a conflict of interest survey. This survey is designed for a) board members, officers, directors, and key employees, and b) all other employees. The internal audit department reviews the responses from each group and identifies potential conflicts based on criteria provided in the Conflict Of Interest (COI) policy. These conflicts, if considered material, are tabulated and provided to the board of directors for review and resolution. If these conflicts are considered immaterial, these are provided to executive management for review and resolution. Form 990, Part VI, Question 15a Offices & Positions for Which Process was Used, & Year Process was Begun Brazos Higher Education Service Corporation's Board of Directors uses an independent third party to review the President's compensation. The third party reviews each element of compensation to ensure it is in compliance with IRS regulations as well as compares the compensation to other comparable entities to determine it is in line with their compensation amounts. The salary is reviewed and approved by the board of directors. Form 990, Part VI, Question 15b Offices & Positions for Which Process was Used, & Year Process was Begun An independent third party reviews the compensation of the officers and key employees to ensure it is within IRS guidelines. The third party also performs comparability studies of related organizations to determine whether salaries are reasonable. The salaries are reviewed and approved by the board of directors. Form 990, Part VI, Question 19 Avail of Gov Docs, Conflict of Interest Policy, & Fin Stmts to Gen Public The Governing documents, conflict of interest policy, and financial statements are available to the general public on request. FORM 990, PART XI, LIne 9 Other Changes In Net Assets or Fund Balances Transfer from Affiliate - $1,828,594 Additional Information RECENT LEGISLATIVE DEVELOPMENTS On March 30, 2010, President Obama signed into law the Reconciliation Act of 2010. Effective July 1, 2010, this law prohibits new loan originations under the FFELP and requires that all new federal loan originations be made through the Direct Loan Program. In the event that a first disbursement has been made on a FFELP loan prior to July 1, 2010, subsequent disbursements of that loan may still be made under the FFELP. Additionally, the new law does not alter or affect the terms and conditions of the existing FFELP loans held by affiliated entities for which BHESC serves as master servicer. Acapita Education Finance Corporation PO BOX 1308 WACO TX 76703 742542435 fund std lns TX 501(c)(3) 9 NA true Education Servicing Mgmt Corporation 2600 WASHINGTON AVENUE WACO TX 76710 203870046 fund std lns TX 501(c)(3) 9 NA true Brazos Education Finance Corporation Inc 2600 WASHINGTON AVENUE WACO TX 76710 742539632 fund std lns TX 501(c)(3) 11 type 1 NA true Atlantic Student Finance Corporation 2600 WASHINGTON AVENUE WACO TX 76710 205412189 fund std lns FL 501(c)(3) 7 NA true Brazos Higher Education Authority Inc PO BOX 1308 WACO TX 76703 742099402 fund std lns TX 501(c)(3) 11 type 1 NA true Frio Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203870120 fund std lns TX 501(c)(3) 9 NA true Bosque Higher Education Authority Inc PO BOX 1308 WACO TX 76703 742534099 fund std lns TX 501(c)(3) 9 NA true Brazos Student Finance Corporation PO BOX 1308 WACO TX 76703 742356109 fund std lns TX 501(c)(3) 9 NA true EdInvest Company 2600 WASHINGTON AVENUE WACO TX 76710 742537669 fund std lns TX 501(c)(3) 9 NA true Educational Funding Services Inc PO BOX 1308 WACO TX 76703 330947525 fund std lns CA 501(c)(3) 9 NA true Federated Student Finance Corporation 2600 WASHINGTON AVENUE WACO TX 76710 742536239 fund std lns TX 501(c)(3) 9 NA true Brazos Education Loan Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203868073 fund std lns TX 501(c)(3) 9 NA true Trinity Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 742534486 fund std lns TX 501(c)(3) 9 NA true Angelina Higher Education Authority 2600 WASHINGTON AVENUE WACO TX 76710 200115078 fund std lns TX 501(c)(3) 9 NA true Concho Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203870081 fund std lns TX 501(c)(3) 9 NA true Lavaca Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203870153 fund std lns TX 501(c)(3) 9 NA true Leon Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203870176 fund std lns TX 501(c)(3) 9 NA true Llano Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203870219 fund std lns TX 501(c)(3) 9 NA true Paluxy Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203868139 fund std lns TX 501(c)(3) 9 NA true Rozell Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203867891 fund std lns TX 501(c)(3) 9 NA true Sabine Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203868185 fund std lns TX 501(c)(3) 9 NA true Texoma Higher Education Authority Inc 2600 WASHINGTON AVENUE WACO TX 76710 203868230 fund std lns TX 501(c)(3) 9 NA true Brazos Education Foundation Inc 2612 WASHINGTON AVENUE WACO TX 76710 264562436 grant making TX 501(c)(3) 7 NA true Academic Finance Corporation PO BOX 1308 WACO TX 76703 742540458 fund std lns TX 501(c)(3) 9 NA true Interview Stream Inc 7901 Woodway Drive Suite 200 Waco TX 767123898 461208841 job interview svc TX BHESC C Corp 444875 4832017 0.85000 true true true true true true false false false false false false true false false true false false false false Brazos Higher Education Authority Inc a 146930 fmv InterviewStream Inc a 16043 fmv Brazos Higher Education Authority Inc b 185558 fmv Angelina Higher Education Authority Inc b 380582 fmv Education Funding Services Inc b 628800 fmv Brazos Student Finance Corporation c 3029441 fmv Brazos Higher Education Authority Inc d 1255700 fmv InterviewStream Inc d 1814311 fmv Brazos Higher Education Authority Inc e 558450 fmv Brazos Higher Education Authority Inc l 9468721 fmv Brazos Student Finance Corporation l 1215578 fmv Federated Student Finance Corporation l 225291 fmv Acapita Education Finance Corporation l 1296262 fmv Brazos Education Loan Authority Inc l 227494 fmv Leon Higher Education Authority Inc l 153312 fmv