Brazos Student Finance Corporation has commenced an offer to exchange new floating rate notes for any and all of its outstanding student loan asset-backed auction rate notes. The offer comprises senior notes from the series 2004A-5 to A-8 and subordinate notes from the series 2004B-1 and B-2.

For each US$1,000 principal amount of the senior series auction rate notes that it accepts for exchange, the Corporation is offering US$1,000 principal amount of new floating rate Class A notes. For each US$1,000 principal amount of subordinate series auction rate notes that it accepts for exchange, it will offer US$536 principal amount of new floating rate Class A-S notes and US$291 principal amount of new floating rate Class B notes.

The new floating rate Class A and Class A-S notes are expected to be rated triple-A by Fitch and Moody's. The new floating rate Class B notes being offered will not be rated by any rating agency.

The Corporation says it will also pay for all auction rate notes that it accepts for exchange cash in an amount equal to accrued but unpaid interest (other than carry-over interest) to but excluding the settlement date, which is expected to be the fifth business day following the expiration of the exchange offer. The exchange offer will expire on 11 December, unless extended or terminated by the Corporation in its sole discretion.