Chase to Acquire Collegiate Funding Services.

NEW YORK -- Lightyear Capital LLC ("Lightyear"), a private equity firm that focuses on financial services, today announced that Collegiate Funding Services, Inc. (NASDAQ: CFSI) ("CFS"), a leader in the direct-to-consumer education finance industry, has signed a definitive agreement to be acquired by JPMorgan Chase Bank, N.A. (NYSE: JPM) ("Chase"). Chase will acquire CFS for $20 per share in cash, for a total consideration of approximately $663 million.

Lightyear, whose affiliated private equity fund, The Lightyear Fund, L.P., is the largest shareholder of CFS, has agreed to vote its shares in favor of the transaction. The Lightyear Fund acquired control of CFS in 2002. The company went public in July 2004.

Commenting on the transaction, Donald B. Marron, CEO of Lightyear Capital, said, "We initially invested in CFS as a result of our work in the student lending space and because of the strength of the management team. We are pleased with today's announcement." Mr. Marron is also Chairman of CFS.

The transaction, which is subject to CFS shareholder and regulatory approval, is expected to close in the first quarter of 2006.

ABOUT LIGHTYEAR

Lightyear Capital is a private equity investment firm providing buyout and growth capital to companies in the financial services industry. Based in New York, Lightyear manages approximately $2 billion in assets, including The Lightyear Fund, L.P., with investments across the financial services spectrum including brokerage, insurance, leasing, specialty finance, wholesale and consumer banking, and financial technology. Lightyear brings unique strengths and discipline to its investment process, as well as operating, transaction and strategic management experience, along with significant contacts and resources beyond capital. The senior team of professionals has an average of 20 years of financial services-related experience and includes David Glenn, Stewart Gross, Richard Sterne, Donald Marron (the former Chairman and CEO of PaineWebber Group) and Mark Vassallo.

For more information, please visit www.lycap.com.

Important Legal Information

In connection with the proposed merger, Collegiate Funding Services will file a proxy statement with the Securities and Exchange Commission ("SEC"). Before making any voting decision, Collegiate Funding Services' stockholders and investors are urged to read the proxy statement regarding the merger and any other relevant documents carefully in their entirety when they become available because they will contain important information about the proposed merger. The proxy statement and other documents will be available free of charge at the SEC's Web site, www.sec.gov. Stockholders and investors in Collegiate Funding Services will also be able to obtain the proxy statement and other documents free of charge by directing their requests to Collegiate Funding Services, Office of the Corporate Secretary, 1-800-762-6441, ext. 5329.

Collegiate Funding Services and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed merger. Information regarding Collegiate Funding Services' directors and executive officers is available in Collegiate Funding Services' proxy statements and Annual Report on Form 10-K, previously filed with the SEC. Additional information regarding the interests of such potential participants will be included in the proxy statement and the other relevant documents filed with the SEC when they become available.