EDUCATION LENDING GROUP, INC. ANNOUNCES

SECOND QUARTER RESULTS

COMPANY RECORDS 52% INCREASE IN PROFIT OVER FIRST QUARTER

San Diego, CA. August 9, 2004 Education Lending Group, Inc., (NASDAQ:EDLG) today announced results for its second quarter ended June 30, 2004. During the second quarter of 2004, the Company recorded net income of $4.5 million, or $0.27 per share (basic) and $0.24 per share (diluted), compared to a net loss of $(1.8) million, or $(0.15) per share (basic and diluted) during the second quarter of 2003. This represents a 52% increase over the $3.0 million net income reported for the quarter ended March 31, 2004. On a non-GAAP basis, net income for the quarter, excluding the non-cash charges for stock based compensation was $4.6 million or $0.28 per share (basic) and $0.25 per share (diluted) compared to a non-GAAP net loss of $(10,000) or ($0.00) per share (basic and diluted) for the quarter ended June 30, 2003. Additionally during the quarter we completed our fourth securitization, bringing our total Education Loan Backed Note issuances to $4 billion.

For the six months ended June 30, 2004 the Company reported net income of $7.5 million, or $0.46 per share (basic) and $0.40 per share (diluted), compared to a loss of ($3.4) million, or ($0.30) per share (basic and diluted) for the six months ended June 30, 2003. On a non-GAAP basis, net income for the six months ended June 30, 2004, excluding the non-cash charges for stock based compensation was $8.4 million or $0.52 per share (basic) and $0.45 per share (diluted) compared to a non-GAAP net loss of $(1.6) million or ($0.14) per share (basic and diluted) for the six months ended June 30, 2003.

Robert deRose, Chief Executive Officer, stated We are pleased to report our second quarter of profitability. Our Company continues to strive to provide excellence in loan products and services to students, parents and schools. We had exciting developments in this second quarter that include new marketing initiatives as we roll out our Plus marketing campaign and continued growth of our preferred lender list at schools to 551 schools. To bolster this effort, during the quarter we added a number of new employees who will be actively engaged in expanding the number of schools who include us on their preferred lender lists. In addition, we have also increased the resources we are devoting to our direct marketing efforts for the Plus loan business. We expect to see the fruition of these investments in the coming months.

Mike Shaut, President and Chief Operating Officer, talked about the Companys shift in focus toward the traditional (Stafford and Plus) business. Our Company continues to focus and build toward the traditional Stafford and Plus student loan business. As we continue to implement our business model we see the expected leveling off of our consolidation loan business and a strong growth increase in our Stafford and Plus business, an 84% increase from the second quarter of 2003. This shift will continue as the Stafford and Plus loans move to a greater percentage of our loan originations in the coming months as we enter the season for the Stafford and Plus business. Loan originations for the quarter were $292 million as we held off funding loans in June (as we have done the past two years) to provide students the benefit of the lower interest rate they could obtain from the July 1^st reset.

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