2011-08-10T18:19:45-05:00 2010-09-30 SQUAR MILNER PETERSON ET AL LLP 14455 VENTURA BLVD SECOND FLOOR SHERMAN OAKS CA 91423 990 2009-10-01 521509402 EDUCAP INC EDUC 7036744718 21680 RIDGETOP CIRCLE STERLING VA 20166 MATTHEW MURRAY 7036744718 2011-08-10 1 William F Wolf 8189812600 2009 2016-02-24 21:20:13Z CATHERINE B REYNOLDS FOUNDATION CATHERINE B REYNOLDS 21680 RIDGETOP CIRCLE STERLING VA 20166 20745777 0 X www.educap.ORG X 1986 MD SEE PART III, LINE 1 AND 4A. 6 4 35 0 -41890 -41890 0 0 23890046 18236842 2432954 2250938 269975 257997 26592975 20745777 1527495 3382777 0 3651102 3596902 0 0 14257364 12132462 19435961 19112141 7157014 1633636 291030608 262660642 251573572 221634523 39457036 41026119 TO HELP STUDENTS GAIN ACCESS TO FUNDS TO PAY FOR COLLEGE COSTS AND TO SUPPORT A VARIETY OF PHILANTHROPIC PROGRAMS. 0 0 13389394 1. TO RECEIVE AND ADMINISTER FUNDS FOR RELIGIOUS, SCIENTIFIC, EDUCATIONAL, AND CHARITABLE PURPOSES WITHIN THE MEANING OF SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS THE SAME MAY BE AMENDED FROM TIME TO TIME ("THE CODE").2. TO CARRY ON A VARIETY OF PROGRAMS RELATING TO, AMONG OTHER THINGS, THE LENDING OF FUNDS TO OR FOR THE BENEFIT OF STUDENTS, FACULTY AND STAFF OF EDUCATIONAL INSTITUTIONS AND OTHERS FOR EDUCATIONAL PURPOSES, INCLUDING SERVICING AND ADMINISTERING STUDENT LOAN PORTFOLIOS.3. TO ADMINISTER PROGRAMS WHEREBY OTHER GOVERNMENTAL OR NONGOVERNMENTAL ENTITIES LEND FUNDS TO OR FOR THE BENEFIT OF, AMONG OTHERS, STUDENTS, FACULTY AND STAFF OF EDUCATIONAL INSTITUTIONS AND NON-PROFIT INSTITUTIONS, IN FURTHERANCE OF RELIGIOUS, SCIENTIFIC, EDUCATIONAL OR CHARITABLE PURPOSES.4. TO DO ANY OTHER ACT OR THING INCIDENTAL TO OR CONNECTED WITH THE FOREGOING PURPOSES OR IN ADVANCEMENT THEREOF.EXEMPT PURPOSE ACHIEVEMENTS:A. EDUCAP INC. HAS PROVIDED OVER $2,500,000,000 IN EDUCATIONAL LOANS TO OVER 350,000 AMERICANS. THESE FUNDS HAVE ALLOWED THESE INDIVUDIALS THE OPPORTUNITY TO FURTHER THEIR EDUCATION AND MEET THE RISING COST OF OBTAINING A HIGHER EDUCATION.TODAY, EDUCAP INC. ADMINISTERS MULTIPLE LOAN PROGRAMS AND SERVICES APPROXIMATELY $435,000,000 IN EDUCATIONAL LOANS FOR OVER 40,000 STUDENTS.IN ORDER TO RECEIVE A LOAN, THE STUDENT MUST BE ACCEPTED FOR ENROLLMENT FULL TIME OR PART TIME IN AN ACCREDITED COLLEGE, UNIVERSITY OR PRIVATE SECONDARY SCHOOL APPROVED BY EDUCAP INC. FOR THE LOAN PROGRAM UNDER WHICH THE APPLICATION IS BEING MADE.THE BORROWER OR COSIGNER MUST:BE CREDIT WORTHY AND BE A U.S. CITIZEN OR PERMANENT RESIDENT ALIEN OR HAVE A CREDITWORTHY COSIGNER WHO IS A U.S. CITIZEN OR PERMANENT RESIDENT ALIEN.BE 18 YEARS OF AGE OR OLDER AT THE TIME OF APPLICATION (19 IN ALABAMA AND NEBRASKA, 21 IN MISSISSIPPI AND PUERTO RICO).HAVE NO ADVERSE PUBLIC RECORDS (E.G. COLLECTIONS, TAX LIENS, ETC.) ON THEIR CREDIT REPORTS.HAVE AN ACCEPTABLE BANKRUPTCY SCORE ASSIGNED BY A CREDIT REPORTING AGENCY.HAVE AN ACCEPTABLE CREDIT SCORE (AS DETERMINED BY EDUCAP INC.'S CREDIT SCORING MODEL) FOR THE LOAN PROGRAM UNDER WHICH THE APPLICATION IS BEING MADE.HAVE NEVER DEFAULTED ON A STUDENT LOAN.SUBMIT INCOME VERIFICATION DOCUMENTS.MAXIMUM LOAN AMOUNTS ARE BASED ON:SCHOOL COSTSINCOME AND DEBT TO INCOME RATIOB. DURING ITS FISCAL YEAR ENDING SEPTEMBER 30, 2010, EDUCAP INC. HAS MADE GRANTS TOTALING $3,382,777 AND HAS PAID OUT $4,904,525 IN CASH CONTRIBUTIONS TO 31 DIFFERENT CHARITABLE ORGANIZATIONS EXEMPT FROM FEDERAL INCOME TAXATION UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE. 3382777 3382777 TO MAKE GRANTS TO OTHER 501(C)(3) ORGANIZATIONS IN FURTHERANCE OF ITS MISSION, FOCUSED UPON FOSTERING AN EDUCATED CITIZENRY THROUGH SUPPORT OF EDUCATION, THE ARTS, RESEARCH AND A VARIETY OF OTHER CHARITABLE AND EDUCATIONAL ACTIVITIES. 16772171 1 0 0 1 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 1 1 1 0 0 0 0 1 0 0 0 0 1 83 0 1 35 1 0 1 CJ 0 0 0 0 0 0 0 0 0 6 4 1 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 X EDUCAP INC 7036744718 21680 RIDGETOP CIRCLE STERLING VA 20166 CATHERINE REYNOLDS 50.00 X X 491311 0 42473 WAYNE REYNOLDS 2.00 X 0 0 0 JOSEPH RALSTON 2.00 X 0 0 0 WILLIAM SESSIONS 2.00 X 0 0 0 STEPHEN GLOVER 2.00 X 0 0 0 MARGERY KRAUS 2.00 X 0 0 0 MATTHEW MURRAY 50.00 X 254788 0 32600 ALI ERSHEID 50.00 X 244238 0 32600 STEVEN GOLSCH 40.00 X 180963 0 16202 JOHN EGNER 40.00 X 107720 0 6941 PATRICIA JEAVONS 40.00 X 130471 0 15729 MARK MAIORCA 40.00 X 106317 0 680 VANESSA MOORE 40.00 X 98968 0 23010 1515808 0 147225 7 0 1 0 FISERV 75 REMITTANCE DR STE 6955 CHICAGO IL 606756955 PROCESSING SERVICES 930661 WHITE ZUCKERMAN WARSAVSY LUNA WOLF & 14455 VENTURA BLVD THIRD FLOOR SHERMAN OAKS CA 94123 AUDIT AND TAX SERVICES 258636 JAFFE RAITT HEUER & WEISS 27777 FRANKLIN RD STE 2500 SOUTHFIELD MI 48034 LEGAL SERVICES 247959 NCO PO BOX 73518 CLEVELAND OH 44193 COLLECTION SERVICES 191016 CREDIT CONTROL LLC 5757 PHANTOM DR STE 330 HAZELWOOD MO 63042 COLLECTION SERVICES 182799 7 INTEREST ON LOANS 525990 14719738 14719738 ADMINISTRATION FEES 525990 3517104 3517104 18236842 2250938 -41890 2292828 REIMBURSED EXPENSES 541900 257997 257997 257997 20745777 18236842 -41890 2550825 3382777 3382777 1142920 914335 228585 1774842 1440783 334059 115410 93697 21713 362809 294550 68259 200921 163120 37801 1047362 615977 431385 319542 319542 385244 9576 375668 258959 124664 134295 31503 25576 5927 433028 351558 81470 75551 61337 14214 3264 2650 614 2220203 2220203 9642 7828 1814 271172 271172 PROVISION FOR CREDIT LO 4384484 4384484 SERVICING FEES 1774128 1774128 COLLECTION FEES 406764 406764 BANK CHARGES 129112 125497 3615 REPAIRS & MAINTENANCE 52286 42449 9837 330218 330218 19112141 16772171 2339970 0 2857627 1805120 21875653 15717498 467116 849603 241722632 220103572 1692306 1564689 20755872 20410705 354809 345167 4979725 5360576 17080740 16914417 291030608 262660642 2620021 2335980 7014904 5483156 237424406 210437506 4514241 3377881 251573572 221634523 X 39457036 41026119 39457036 41026119 291030608 262660642 X 0 1 1 X 0 X 30132989 44805765 34985601 23890046 18236842 152051243 30132989 44805765 34985601 23890046 18236842 152051243 0 0 0 152051243 821119 827092 791415 296156 319257 3055039 821119 827092 791415 296156 319257 3055039 48530 30758 18922 -5698 -41890 50622 126925 236556 367330 269975 257997 1258783 31129563 45900171 36163268 24450479 18772206 156415687 0.97210 0.96330 0.01950 0.02890 X 0 0 0 0 0 0 1 150000 0 0 150000 0 Part IV, Supplemental Information: EDUCAP INC. CONTACTED FEDERAL LEGISLATORS AND THEIR STAFF MEMBERS REGARDING LEGISLATION AFFECTING STUDENT LOANS FOR HIGHER EDUCATION. EDUCAP INC. ALSO CONTACTED FEDERAL LEGISLATORS AND THEIR STAFF MEMBERS TO EDUCATE THEM ON PRIVATE STUDENT LOANS AND EDUCAP'S HISTORY OF FULFILLING THE NEEDS OF STUDENTS AND THEIR FAMILIES TO PAY FOR HIGHER EDUCATION. EDUCAP INC. ENGAGED A THIRD-PARTY SERVICE PROVIDER TO ASSIST WITH THESE LEGISLATIVE ACTIVITIES. 3579735 3579735 0 6836156 6490989 345167 10339981 10339981 0 345167 HEDGED EQUITY 4466364 F INVESTMENTS IN PRIVATE EQUITY PARTNERSHIPS 10511596 F INVESTMENTS IN REAL ESTATE LIMITED PARTNERSHIP 1295582 F ABSOLUTE RETURN 640875 F 16914417 RESERVE FOR PURCHASE OF DEFAULTED LOANS 2172866 RESTRUCTURING RESERVE 915272 PROGRAM RELATED INTEREST RATE SWAP INSTRUMENT 289743 3377881 20745777 19112141 1633636 795622 -860174 -64552 1569084 20423348 795622 109035 904657 19518691 1227086 1227086 20745777 18854144 0 18854144 257997 257997 19112141 PART X, LINE 2: FIN 48 FOOTNOTE THE COMPANY ACCOUNTS FOR UNCERTAINTIES IN INCOME TAXES BASED ON THRESHOLD OF MORE-LIKELY THAN-NOT FOR RECOGNITION AND DERECOGNITION OF TAX POSITIONS TAKEN OR EXPECTED TO BE TAKEN IN A TAX RETURN. THE COMPANY HAS NO UNCERTAIN TAX POSITIONS MEETING THIS THRESHOLD. PART XI, LINE 8: THE BOOK TO TAX DIFFERENCE FROM PASS-THROUGH ACTIVITIES IN THE AMOUNT OF $969,089 AROSE DUE TO THE PASS THROUGH ENTITIES HAVING A CALENDAR YEAR END OF DECEMBER 31, 2009 AND THE ORGANIZATION HAVING A FISCAL YEAR END OF SEPTEMBER 30, 2010. THE AMOUNT OF $109,035 IS THE UNREALIZED GAIN DUE TO THE RISE OF THE FAIR VALUE OF THE DERIVATIVE INSTRUMENT. PART XII, LINE 2D: THE AMOUNT OF $109,035 IS THE UNREALIZED GAIN DUE TO THE RISE OF THE FAIR VALUE OF THE DERIVATIVE INSTRUMENT. PART XII, LINE 4B: THE BOOK TO TAX DIFFERENCE FROM PASS-THROUGH ACTIVITIES IN THE AMOUNT OF $969,089 AROSE DUE TO THE PASS THROUGH ENTITIES HAVING A CALENDAR YEAR END OF DECEMBER 31, 2009 AND THE ORGANIZATION HAVING A FISCAL YEAR END OF SEPTEMBER 30, 2010. THE AMOUNT OF $257,997 IS MISCELLANEOUS INCOME THAT WAS TREATED AS A CONTRA EXPENSE ON THE AUDITED FINANCIAL STATEMENTS. PART XIII, LINE 4B: THE AMOUNT OF $257,997 IS MISCELLANEOUS INCOME THAT WAS TREATED AS A CONTRA EXPENSE ON THE AUDITED FINANCIAL STATEMENTS. 1 American Academy of Achievement 1222 16th Street NW Washington DC 20036 756042129 501(c)(3) 2650000 2010 ACHIEVEMENT SUMMIT FOR SOCIAL ENTREPRENEURSHIP Close Up Foundation 44 Canal Center Plaza Alexandria VA 22314 237122882 501(c)(3) 10000 GENERAL SUPPORT Ford's Theatre Society 511 Tenth Street NW Washington DC 20004 526073157 501(c)(3) 100000 SUPPORT OF HISTORIC FORD'S THEATRE EDUCATION INITIATIVES Foundation Fighting Blindness 11435 Cronhill Drive Owings Mills MD 21117 237135845 501(c)(3) 10000 GENERAL SUPPORT HARVARD UNIVERSITY 124 MOUNT AUBURN STREET CAMBRIDGE MA 02138 042103580 501(c)(3) 517239 CATHERINE B REYNOLDS FOUNDATION FELLOWSHIPS IN SOCIAL ENTREPRENEURSHIP NATIONAL GEOGRAPHIC SOCIETY 1145 17TH STREET NW Washington DC 20036 530193519 501(c)(3) 50000 GENERAL SUPPORT THE John F Kennedy Center for the Performing Arts 2700 F Street NW WAshington DC 20566 530245017 501(c)(3) 500000 CATHERINE B REYNOLDS FOUNDATION PLEDGE FOR ARTISTIC EXCELLENCE SERIES THE John F Kennedy Center for the Performing Arts 2700 F Street NW Washington DC 20566 530245017 501(c)(3) 40000 GENERAL SUPPORT Teach For America 315 West 36th Street 6TH FLOOR New York NY 10018 133541913 501(c)(3) 50000 SUPPORTING YOUNG LEADERS TO BECOME TEACHERS IN THE LOWEST-INCOME COMMUNITIES INOVA HEALTH SYSTEM FOUNDATION 8110 GATEHOUSE RD SUITE 200E FALLS CHURCH VA 22042 541071867 501(c)(3) 25000 INOVA KELLER CENTER PLEDGE PANETTA INSTITUTE FOR PUBLIC POLICY 100 CAMPUS CENTER BLDG 86-E CSU MONTEREY BAY SEASIDE CA 93955 770495799 501(c)(3) 7000 GENERAL SUPPORT DC CAP 1029 VERMONT AVENUE NW SUITE 400 WAshington DC 20005 522132835 501(c)(3) 50000 GENERAL SUPPORT NEW YORK UNIVERSITY 726 BROADWAY 2ND FLOOR NEW York NY 10003 135562308 501(c)(3) 500000 CATHERINE B. REYNOLDS FOUNDATION FELLOWSHIPS IN SOCIAL ENTREPRENEURSHIP DC CAP 1029 VERMONT AVENUE NW SUITE 400 Washington DC 20005 522132835 501(c)(3) 100000 SCHOLARSHIPS FOR DC STUDENTS NEW YORK UNIVERSITY 25 WEST 4TH STREET ROOM 301 NEW York NY 10012 135562308 501(c)(3) 4286 GENERAL SUPPORT CENTER FOR AMERICAN PROGRESS 1333 H STREET NW 10TH FLOOR Washington DC 20005 300126510 501(c)(3) 100000 A WOMEN'S NATION PROJECT DC PUBLIC EDUCATION FUND 1534 14TH STREET NW Washington DC 20005 261607955 501(c)(3) 25000 GENERAL SUPPORT ELIE WIESEL FOUNDATION FOR HUMANITY 555 MADISON AVE 20TH FLOOR NEW York NY 10022 133398151 501(c)(3) 25000 GENERAL SUPPORT INTERNATIONAL PARTNERS CASSIE STERN MEMORIAL INC 1320 FINWICK LANE SUITE 400 SILVER SPRINGS MD 20910 550888960 501(c)(3) 25000 GENERAL SUPPORT KUWAIT AMERICA FOUNDATION 910 17TH STREET NW SUITE 200 WAshington DC 20006 521730454 501(c)(3) 25000 TO ESTABLISH SCHOOLS AND PROMOTE GIRL'S EDUCATION IN REMOTE REGIONS OF PAKISTAN AND AFGHANISTAN WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS 2150 WISCONSIN AVE NW Washington DC 20007 521067541 501(c)(3) 15000 GENERAL SUPPORT ANCHORAGE MUSEUM 121 WEST SEVENTH AVE ANCHORAGE AK 99501 926009317 501(c)(3) 10000 GENERAL SUPPORT CENTER FOR THE STUDY OF RESPONSIVE LAW 1530 P STREET NW WAshington DC 20005 526082290 501(c)(3) 10000 GENERAL SUPPORT CENTRO NIA 1420 COLUMBIA ROAD NW WAShington DC 20009 251689720 501(c)(3) 10000 YOUTH EDUCATION FUND 21 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: EDUCAP INC. MONITORS THE USE OF FUNDS IT GRANTS TO OTHER NON-PROFIT ORGANIZATIONS IN A VARIETY OF WAYS, INCLUDING FIRST-HAND MONITORING, BOARD AFFILIATIONS, AND REPUTATIONAL AND OTHER FEEDBACK. X 1 1 X X X X X X 1 0 0 0 0 0 0 0 0 CATHERINE REYNOLDS 468750 0 0 0 22561 0 22000 0 20473 0 533784 0 532468 0 MATTHEW MURRAY 200000 0 0 0 54788 0 11539 0 21061 0 287388 0 431051 0 ALI ERSHEID 200000 0 0 0 44238 0 11539 0 21061 0 276838 0 394039 0 STEVEN GOLSCH 150833 0 0 0 30130 0 8888 0 7314 0 197165 0 289084 0 JOHN EGNER 107000 0 523 0 197 0 5350 0 1591 0 114661 0 0 0 PATRICIA JEAVONS 129375 0 519 0 577 0 6469 0 9260 0 146200 0 0 0 MARK MAIORCA 105577 0 556 0 184 0 0 0 680 0 106997 0 0 0 Part I, Line 1a EDUCAP INC. PROVIDES FIRST CLASS TRAVEL FOR ITS SENIOR EXECUTIVES WHEN APPROPRIATE PURSUANT TO EDUCAP INC.'S TRAVEL POLICY. Supplemental Information Part III PART II, COLUMN F: COMPENSATION REPORTED IN PRIOR FORM 990: THE AMOUNTS REPORTED IN COLUMN F FOR MATTHEW MURRAY, ALI ERSHEID, AND STEVEN GOLSCH INCLUDE THE RETENTION PAYMENTS AND SEVERANCE PAYMENTS THAT WERE REPORTED ON THE INDIVIDUALS' FORM W-2 FOR THE CALENDAR YEAR ENDING DECEMBER 31, 2009. WAYNE REYNOLDS THE AMERICAN ACADEMY OF ACHIEVEMENT'S PRESIDENT & CHAIRMAN IS MR. REYNOLDS 2650000 GRANTS ARE PROVIDED FROM EDUCAP INC. TO THE AMERICAN ACADEMY OF ACHIEVEMENT. 0 WAYNE REYNOLDS THE AMERICAN ACADEMY OF ACHIEVEMENT'S PRESIDENT & CHAIRMAN IS MR. REYNOLDS 76568 OFFICE RENT IS PAID BY EDUCAP INC. TO THE AMERICAN ACADEMY OF ACHIEVEMENT. 0 WAYNE REYNOLDS THE AMERICAN ACADEMY OF ACHIEVEMENT'S PRESIDENT & CHAIRMAN IS MR. REYNOLDS 257997 ACCOUNTING AND ADMINISTRATIVE SERVICES ARE PROVIDED BY EDUCAP INC. TO THE AMERICAN ACADEMY OF ACHIEVEMENT. 0 Form 990, Part VI, Section A, line 2 CATHERINE REYNOLDS AND WAYNE REYNOLDS, FAMILY RELATIONSHIP. Form 990, Part VI, Section B, line 11 EduCap INC.'s Form 990 Review Policy is as follows: 1. EduCap INC. provides its Board of Directors with EduCap inc.'s Form 990 each year prior to filing the Form 990 with the IRS. 2. The Audit Committee or a special committee of the Board of Directors reviews and approves the Form 990 prior to its filing with the IRS. To assist the Audit Committee or a Special Committee with its review of the Form 990, the Audit Committee or a Special Committee may, among other things, speak with the accountant who prepared the Form 990 and counsel who reviewed the form 990. Form 990, Part VI, Section B, line 12c MONITORING, COMPLIANCE ENFORCEMENT, AND Procedures for Addressing the Conflict of Interest MONITORING AND COMPLIANCE ENFORCEMENT - EACH DIRECTOR, PRINCIPAL OFFICER, KEY EMPLOYEE, AND MEMBER OF A COMMITTEE WITH BOARD-DELEGATED POWERS SHALL ANNUALLY SIGN A STATEMENT WHICH AFFIRMS THAT SUCH PERSON: A. HAS RECEIVED A COPY OF THE CONFLICTS OF INTEREST POLICY. B. HAS READ AND UNDERSTANDS THE POLICY. C. HAS AGREED TO COMPLY WITH THE POLICY. D. UNDERSTANDS THAT EDUCAP Inc. IS A TAX-EXEMPT ORGANIZATION AND IN ORDER TO MAINTAIN ITS FEDERAL TAX EXEMPTION, IT MUST ENGAGE IN PRIMARILY ACTVITIES THAT ACCOMPLISH ONE OR MORE OF ITS TAX-EXEMPT PURPOSES. TO ENSURE THAT EDUCAP OPERATES IN A MANNER CONSISTENT WITH TAX-EXEMPT PURPOSES AND DOES NOT ENGAGE IN ACTIVITIES THAT COULD JEOPARDIZE ITS TAX-EXEMPT STATUS, PERIODIC REVIEWS SHALL BE CONDUCTED. THE PERIODIC REVIEWS SHALL, AT A MINIMUM, INCLUDE THE FOLLOWING SUBJECTS: A. WHETHER COMPENSATION ARRANGEMENTS AND BENEFITS ARE REASONABLE, BASED ON COMPETENT SURVEY INFORMATION, AND THE RESULT OF ARM'S LENGTH BARGAINING. B. WHETHER PARTNERSHIPS, JOINT VENTURES, AND ARRANGEMENTS WITH MANAGEMENT ORGANIZATIONS CONFORM TO EDUCAP Inc.'S WRITTEN POLICIES, ARE PROPERLY RECORDED, REFLECT REASONABLE INVESTMENT OR PAYMENTS FOR GOODS AND SERVICES, FURTHER TAX-EXEMPT PURPOSES AND DO NOT RESULT IN INUREMENT, IMPERMISSABLE PRIVATE BENEFIT OR IN AN EXCESS BENEFIT TRANSACTION. PROCEDURES FOR ADDRESSING THE CONFLICT OF INTEREST: a. An interested person may make a presentation at the board or committee meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest. b. The chairperson of the board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement. c. After exercising due diligence, the board or committee shall determine whether EduCap can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest. d. If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in EduCap's best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination it shall make its decision as to whether to enter into the transaction or arrangement. Violations of the Conflicts of Interest Policy a. If the board or committee has reasonable cause to believe that a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose. b. If, after hearing the member's response and after making further investigation as warranted by the circumstances, the board or committee determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action. Form 990, Part VI, Section B, line 15 THE COMPENSATION FOR OFFICERS AND KEY EMPLOYEES IS APPROVED ANNUALLY BY INDEPENDENT MEMBERS OF EDUCAP INC.'S BOARD OF DIRECTORS AND THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS. ADDITIONALLY, THE INDEPENDENT MEMBERS UTILIZE THE EXPERTISE OF AN INDEPENDENT COMPENSATION EXPERT WHO MEETS WITH THE INDEPENDENT MEMBERS AND PROVIDES AND REVIEWS A COMPENSATION COMPARABILITY REPORT. Form 990, Part VI, Section C, line 19 TO THE EXTENT REQUIRED BY LAW, THE FORM 990 AND FINANCIAL STATEMENTS ARE AVAILABLE BY REQUEST. EDUCAP INC. HAS AN AUDIT COMMITTEE THAT ASSUMES OVERSIGHT OF THE AUDIT. THIS PROCESS HAS NOT CHANGED FROM THE PRIOR FISCAL YEAR. FORM 990, PART I, DOING BUSINESS AS: EDUCAP INC. ALSO DOES BUSINESS USING THE NAME LOAN TO LEARN. FORM 990, PART X, LINE 7 DETAIL OF OTHER NOTES AND LOANS RECEIVABLE STUDENT LOANS RECEIVABLE AS OF SEPTEMBER 30, 2010, CONSISTED OF THE FOLLOWING: PRIVATE STUDENT LOANS 219,825,487 FEDERALLY GUARANTEED STUDENT LOANS 34,947,569 ------------ STUDENT LOAN PRINCIPAL RECEIVABLE 254,773,056 DEFERRED LOAN ORIGINATION INCOME -5,665,408 UNAMORTIZED PREMIUMS ON PURCHASE 926,110 ------------ 250,033,758 LESS: ALLOWANCE FOR LOAN LOSSES -30,777,785 ------------ 219,255,973 STUDENT LOAN INTEREST RECEIVABLE 922,887 LESS: ALLOWANCE FOR UNCOLLECTABLE INTEREST -75,288 ------------ STUDENT LOANS RECEIVABLE 220,103,572 ============ FORM 990, PART X, LINE 23 DETAIL OF MORTGAGES AND OTHER NOTES PAYABLE EDUCATION LOAN NOTES PAYABLE AS OF SEPTEMBER 30, 2010, CONSISTED OF THE FOLLOWING: SENIOR NOTES SERIES 2004A, DUE 2019 10,402,570 SERIES 2006 AB, DUE 2031 159,100,836 SUBORDINATE NOTES: SERIES 2004B, DUE 2038 25,750,000 SERIES 2006C, DUE 2027 15,420,000 LESS ORIGINAL ISSUE DISCOUNT -235,900 ------------ TOTAL EDUCATION LOAN NOTES PAYABLE 210,437,506 ============ L2L Funding LLC 21680 RIDGETOP CIRCLE STERLING VA 20166 203957613 FINANCING THE PURCHASE OF STUDENT LOANS VA -300 0 EDUCAP INC L2L education Loan Trust 2006-1 21680 RIDGETOP CIRCLE STERLING VA 20166 026182050 FINANCING THE PURCHASE OF STUDENT LOANS VA 4140211 181197417 EDUCAP INC L2l education Loan Funding LLC 21680 RIDGETOP CIRCLE STERLING VA 20166 205944194 FINANCING THE PURCHASE OF STUDENT LOANS VA -8950 -170093 EDUCAP INC