424B5 1 a68054_424b5.htm a68054_424b5.htm
Prospectus Supplement To Prospectus dated February 12, 2015

 
Prospectus Supplement
relating to the reoffering of
$46,450,000
 
Class A-3 Notes
 
SLM Private Credit Student Loan Trust 2003-B
Issuing Entity
 
Navient Credit Funding, LLC
Depositor
 
Navient Solutions, Inc.
Sponsor, Servicer and Administrator
 
Student Loan-Backed Notes
 
SLM Private Credit Student Loan ABS Repackaging Trust 2013-R1 (the “selling securitiesholder”) is reoffering the class A-3 notes (the “offered notes”).  The offered notes were originally issued by SLM Private Credit Student Loan Trust 2003-B (the “trust” or the “issuing entity”) on June 27, 2003.  The selling securitiesholder owns approximately 42.61% of the offered notes all of which are being offered for sale hereunder. The remaining approximately 57.39% of the offered notes are not being offered for sale.  Navient Credit Funding, LLC, the depositor of the trust (the “depositor”) or an affiliate, purchased the offered notes in one or more open market purchases and subsequently sold them to the selling securitiesholder.  The selling securitiesholder is reoffering the offered notes pursuant to the terms set forth herein.  The trust will make payments primarily from collections on a pool of private education loans.  Private education loans are education loans generally made to students or parents of students that are not guaranteed or reinsured under the Federal Family Education Loan Program or any other federal student loan program.  The trust has also entered into interest rate swap agreements on the original closing date.  Credit enhancement for the offered notes consists of excess interest on the trust student loans, subordination of the class B notes to the class A notes and subordination of the class C notes to both the class A and the class B notes and the reserve account.
 
Class
 
Outstanding Principal Amount
 
Interest Rate
 
Legal Maturity Date
Auction Rate Class A-3 Notes
 
$109,000,000
 
Auction
 
March 15, 2033

Other than as provided herein, no person has been authorized to give any information or to make any representations other than those contained in this prospectus supplement and, if given or made, such information or representations must not be relied upon. This prospectus supplement does not constitute an offer to sell, or a solicitation of an offer to buy, any securities other than the offered notes nor an offer of such securities to any person in any state or other jurisdiction in which it is unlawful to make such offer or solicitation. The delivery of this prospectus supplement at any time does not imply that the information herein is correct as of any time after its date.  The selling securitiesholder is offering the offered notes at the prices shown below when and if issued.  We are not offering the notes in any state or other jurisdiction where the offer is prohibited.
 

 
You should consider carefully the risk factors on page S-19 of this prospectus supplement and on page 15 of the base prospectus.  The offered notes are asset-backed securities issued by and are obligations of the issuing entity, which is a trust. They are not obligations of or interests in Navient Corporation, the sponsor, administrator, servicer, depositor, the selling securitiesholder, or any of their affiliates.  The notes are not guaranteed or insured by the United States or any governmental agency.
 
Price to Public
Proceeds to the Selling Securitiesholder
Per Auction Rate Class A-3 Note
100%
100%
 
We expect the proceeds to the selling securitiesholder in respect of the notes to be $46,450,000 exclusive of expenses in respect of the notes, payable by, or on behalf of, the selling securitiesholder.
Neither the Unites States Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved the securities or determined whether this prospectus supplement or the base prospectus is accurate or complete.  Any contrary representation is a criminal offense.
 
SLM Private Credit Student Loan ABS Repackaging Trust 2013-R1
Selling Securitiesholder
 
March 11, 2015
 
 
 

 

INTRODUCTION
 
The Student Loan-Backed Notes issued by SLM Private Credit Student Loan Trust 2003-B originally consisted of the auction rate class A-3 notes (the “offered notes”) and the class A-1 and class A-2 notes (collectively referred to as the “floating rate class A notes”), the auction rate class A-4 notes (which, together with the offered notes, are referred to as the “auction rate notes” and the auction rate notes, together with the floating rate class A notes, are referred to as the “class A notes”), the class B notes (the “class B notes”) and the class C notes (which, together with the floating rate class A notes and the class B notes, are referred to as the “floating rate notes” and the floating rate notes, together with the auction rate notes, are referred to as the “notes”).  As of the date of this prospectus supplement, the class A-1 notes have been paid in full and are no longer outstanding.  No class of notes other than the auction rate class A-3 notes is being offered under this prospectus supplement.  Any information contained herein with respect to the notes other than the offered notes is provided only to present a better understanding of the offered notes.  The offered notes and the other notes were originally offered for sale pursuant to the prospectus supplement, dated June 18, 2003 and the related prospectus, dated June 18, 2003.
 
The notes, issued on June 27, 2003 (referred to as the “original closing date”), are obligations of a trust known as SLM Private Credit Student Loan Trust 2003-B (referred to as the “trust”) and are secured by the assets of the trust, which consist primarily of a pool of private education student loans (the “trust student loans”).  Private education student loans are education loans made to students or parents of students that are not guaranteed or reinsured under the Federal Family Education Loan Program or any other federal student loan program.  Principal of the notes (including the offered notes) are generally payable as described herein on the 15th day of each March, June, September and December or, if such day is not a business day, then on the next business day (each, a “quarterly distribution date”).  Interest on the auction rate notes will generally be paid interest monthly (each an “auction rate distribution date").
 
Over the past several years, the offered notes experienced a period of continuous failed auctions, which includes successful auctions at rates which were not qualifying rates, and during this time, the depositor and its affiliates made purchases of the offered notes which were subsequently sold to the selling securitiesholder.  The selling securitiesholder has held the offered notes continuously through the date hereof.  Following this period of consecutive failed auctions, the offered notes had their first successful auction at a qualifying rate on January 16, 2015 and were also successfully auctioned at a qualifying rate on February 13, 2015.  The selling securitiesholder retained its ownership interest in the offered notes in these auctions.  The next auction date is March 13, 2015 (the “reoffering date”).
 
The selling securitiesholder will place a bid offer in this auction.  If the auction is successful and the clearing bid is less than the bid placed by the selling securitiesholder, the offered notes will be sold pursuant to the applicable auction procedures.  If the auction fails or the clearing bid is set at or higher than the bid placed

 
ii

 
 
by the selling securitiesholder, the selling securitiesholder will retain its ownership of the offered notes pursuant to the applicable auction procedures.
 
The selling securitiesholder owns approximately 42.61% of the offered notes, all of which are being offered for sale hereunder. The remaining approximately 57.39% of the offered notes are owned by third-parties and are not being offered for sale.  Subsequent to the successful close of this reoffering (upon a successful auction at a clearing bid less than the bid placed by the selling securitiesholder) the selling securitiesholder will not own any of the outstanding offered notes.
 
 
 
 
 
 
 
 

 

 
iii

 
 
 
TABLE OF CONTENTS
Prospectus Supplement
Page
Summary of Note Terms
S-1
· Issuing Entity
S-1
· Depositor
S-1
· Selling Securitiesholder
S-1
· Sponsor, Servicer and Administrator
S-1
· Indenture Trustee
S-1
· Trustee
S-1
· Delaware Trustee
S-1
· Broker Dealer
S-1
· Auction Agent
S-2
· Original Closing Date
S-2
· Reoffering Closing Date
S-2
· Statistical Disclosure Date
S-2
· Auction Rate Notes
S-2
· Prepayments, Extensions, Weighted Average Lives And Expected Maturities Of The Auction Rate Notes
S-3
· The Other Notes
S-3
· All Notes
S-4
· Security for the Notes
S-5
· Undercollateralization
S-5
· Indenture Trustee And Paying Agent
S-6
· Trustee
S-6
· Delaware Trustee
S-6
· Auction Agent
S-6
· Broker-Dealer
S-6
· Administrator And Sponsor
S-6
· Information About The Trust
S-6
· Administration Of The Trust
S-9
· Termination Of The Trust
S-15
· Swap Agreement
S-16
· Tax Considerations
S-17
· ERISA Considerations
S-17
· Ratings
S-18
· Listing Information
S-18
· Risk Factors
S-18
· Identification Numbers
S-18
Risk Factors
S-19
· Federal Financial Regulatory Legislation Could Have An Adverse Effect On Navient Corporation, Navient Solutions, The Servicer, The Administrator, The Depositor, The Selling Securitiesholder, The Seller And The Trust, Which Could Result In Losses Or Delays In Payments On Your Notes
S-19
· Illiquidity; Illiquid Market Conditions May Occur From Time To Time
S-20
· The Notes Are Not Suitable Investments For All Investors
S-21
· Sequential Payment Of The Notes Results In A Greater Risk Of Loss
S-21
· Risk Of Bankruptcy Discharge Of Private Education Student Loans
S-21
· School Closures And  Unlicensed Schools May  Result In Losses On  Your Notes
S-21
· Your Notes May Have A Degree Of Basis Risk And The Swap Agreements Do Not Eliminate All Of This Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal Of And Interest On Your Notes
S-22
· The Trust Does Not Have the Benefit Of Any Guarantees Or Insurance On The Trust  Student Loans
S-23
· The Trust Is Currently Undercollateralized
S-24
 
 
 
iv

 
 
TABLE OF CONTENTS
Prospectus Supplement
Page
 
· Certain Actions Can Be Taken Without Noteholder Approval
S-24
· The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
S-24
· The Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
S-24
· Rating Agencies May Have A Conflict Of Interest
S-25
· A Lowering Of The Credit Rating Of The United States of America May Adversely Affect The Market Value of Your Notes
S-25
· The Interest Rates On The Offered Notes Are Subject To Limitations Which Could Reduce Your Yield
S-25
· Auction Procedures And Transfer Requirements May Limit The Liquidity And Marketability Of Your Offered Notes
S-26
· Actions By A Broker-Dealer Could Affect Interest Rates On Your Offered Notes
S-26
· The Lack Of A Market for Auction Rate Securities Could Again In The Future Result In Prolonged Periods Of Failed Auctions And A Loss Of Liquidity
S-27
· The Interests Of The Swap Counterparties May Differ From Those Of The Noteholders
S-28
Defined Terms
S-29
The Trust
S-29
· General
S-29
· Capitalization of the Trust
S-30
· Trustee
S-31
· Indenture Trustee
S-31
· Delaware Trustee
S-32
· The Depositor
S-33
· The Selling Securitiesholder
S-33
Use Of Proceeds
S-33
The Trust Student Loan Pool
S-34
· General
S-34
· Eligible Trust Student Loans
S-34
· Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions
S-34
· Characteristics of the Trust Student Loans
S-38
· Insurance of Student Loans
S-39
· Cure Period for Trust Student Loans
S-39
Description Of The Notes
S-39
· General
S-39
· Interest
S-39
· The Auction Rate Notes
S-40
· Notice of Interest Rates
S-47
· Trust Accounts
S-47
· Distributions
S-47
· Principal Distributions
S-50
· Priority of Payments Following Certain Events of Default Under the Indenture
S-52
· Voting Rights and Remedies
S-53
· Credit Enhancement
S-54
· Undercollateralization
S-56
· Administration Fee
S-56
· Servicing Compensation
S-56
· Trust Fees
S-57
· Determination of Indices
S-57
· Optional Purchase
S-57
· Auction of Trust Assets
S-58
Static Pool
S-59
Prepayments, Extensions, Weighted Average Lives And Expected Maturities Of The Offered Notes
S-59
Swap Agreements
S-61
 
 
 
v

 
 
TABLE OF CONTENTS
Prospectus Supplement
Page
 
U.S. Federal Income Tax Consequences
S-65
Erisa Considerations
S-65
Accounting Considerations
S-67
Reports To Noteholders
S-67
Plan Of Distribution
S-67
Listing Information
S-68
Ratings
S-68
Requirements for EEA Regulated Investors and Regulatory Capital Treatment of Notes
S-68
Legal Matters
S-69
Glossary
S-70
   
Annex A  The Trust Student Loan Pool as of the Original Closing Date
A-1
Annex B  Characteristics of the Trust Student Loan Pool
B-1
Annex C  SLM Private Credit Student Loan Trust 2003-B Static Pool Information
C-1
   
Exhibit I  Prepayments, Extensions, Weighted Average Lives And Expected Maturities Of The Notes
I-1
   
Appendix A: Signature Education Loan® Program
App. A-1
Appendix B:  LAWLOANS® Program
App. B-1
Appendix C:  MBALoans® Program
App. C-1
Appendix D:  MEDLOANSSM Program
App. D-1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
vi

 
 
 
TABLE OF CONTENTS
Base Prospectus
Page
 
Prospectus Summary
1
Risk Factors
15
Formation of the Issuing Entities
39
Use of Proceeds
41
The Depositor
42
Navient Credit Funding, LLC
44
Navient Corporation
45
The Sponsor, Servicer and Administrator 45
The Sellers
47
The Student Loan Pools
48
The Companies’ Student Loan Financing Business
51
Transfer and Servicing Agreements
62
Servicing and Administration
65
Trading Information
79
Description of the Notes
80
Additional Information Regarding the Notes
87
Certain Legal Aspects of the Student Loans
132
U.S. Federal Income Tax Consequences
138
European Union Directive on the Taxation of Savings Income
151
State Tax Consequences
152
ERISA Considerations
152
Reports to Noteholders
155
Incorporation of Documents by Reference
156
The Plan of Distribution
156
Legal Matters
159
   
Appendix A: Federal Family Education Loan Program
A-1
Appendix B:  Undergraduate and Graduate Loan Programs
B-1
Appendix C:  Law Loan Programs
C-1
Appendix D:  MBA Loan Programs
D-1
Appendix E:  Medical Loan Programs
E-1
Appendix F:  Dental Loan Programs
F-1
Appendix G:  Direct-to-Consumer Loan Programs
G-1
Appendix H:  Private Consolidation Loan Program
H-1
Appendix I:  Career Training Loan Program
I-1
Appendix J:  EFG Loan Programs
J-1
Appendix K:  Smart Option Student Loan® Program
K-1
Appendix L: Global Clearance, Settlement and Tax Documentation Procedures
L-1






 
 
vii

 
 
INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND ATTACHED BASE PROSPECTUS
 
We provide information to you about the offered notes in two separate sections of this document that provide progressively more detailed information.  These two sections are: (a) the accompanying base prospectus (referred to as the “base prospectus”), which begins after the end of this prospectus supplement and which provides general information about the issuing entity, the trust student loans and the notes, some of which will not apply to the offered notes, and (b) this prospectus supplement, which describes the specific terms of the offered notes that are being offered hereby and provides information about the trust student loans as of March 13, 2015.  You should read both the base prospectus and this prospectus supplement to fully understand the offered notes.
 
For your convenience, we include cross-references in this prospectus supplement and in the base prospectus to captions in these materials where you can find related information.  The Table of Contents beginning on page iv provides the pages on which you can find these captions.
 
FORWARD-LOOKING STATEMENTS
 
Certain statements contained in or incorporated by reference in this prospectus supplement and the base prospectus consist of forward-looking statements relating to future economic performance or projections and other financial items.  These statements can be identified by the use of forward-looking words such as “may,” “will,” “should,” “expects,” “believes,” “anticipates,” “estimates,” or other comparable words.  Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual results to differ from the projected results.  Those risks and uncertainties include, among others, general economic and business conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond our control.  Because we cannot predict the future, what actually happens may be very different from what is contained in our forward-looking statements.
 
 
 
 
 

 
 
viii

 

 
 
 
ix

 
 
 
 
 
 
x

 
 
 
 
 
xi

 
 

 
xii

 

SUMMARY OF NOTE TERMS
 
This summary highlights selected information about the offered notes. It does not contain all of the information that you might find important in making your investment decision.  It provides only an overview to aid your understanding.  You should read the full description of this information appearing elsewhere in this document and in the attached base prospectus.  We have provided information in this prospectus supplement with respect to the other notes in order to further the understanding by potential investors of the offered notes.
 
ISSUING ENTITY
 
SLM Private Credit Student Loan Trust 2003-B, which is a Delaware statutory trust.  It was formed on June 1, 2003, under a trust agreement dated the same date.  Its principal address is in care of the trustee, at The Bank of New York Mellon Trust Company, National Association, 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602.  We sometimes refer to the issuing entity as the trust.
 
DEPOSITOR
 
Navient Credit Funding, LLC, which is a Delaware limited liability company.  Its principal address is 2001 Edmund Halley Drive, Reston, Virginia 20191.
 
SELLING SECURITIESHOLDER
 
SLM Private Credit Student Loan ABS Repackaging Trust 2013-R1, which is a Delaware statutory trust.  Its principal address is in care of The Bank of New York Mellon Trust Company, National Association, 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602.
 
SPONSOR, SERVICER AND ADMINISTRATOR
 
Navient Solutions, Inc., which is a Delaware corporation.  Its principal address is 2001 Edmund Halley Drive, Reston, Virginia 20191.  We sometimes refer to Navient Solutions, Inc. as either the Administrator or the Servicer, as applicable.
 
INDENTURE TRUSTEE
 
The Bank of New York Mellon, which is a New York banking corporation.  Its principal corporate trust address is 101 Barclay Street, 4 West, New York, New York 10286.
 
TRUSTEE
 
The Bank of New York Mellon Trust Company, National Association, which is a national banking association.  It maintains an address at 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602.
 
DELAWARE TRUSTEE
 
BNY Mellon Trust of Delaware, which is a Delaware banking corporation.  Its principal Delaware address is 100 White Clay Center, Suite 102, Newark, Delaware 19711.
 
BROKER DEALER
 
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
 

 
S-1

 

AUCTION AGENT
 
The Bank of New York Mellon.
 
ORIGINAL CLOSING DATE
 
June 27, 2003.
 
REOFFERING CLOSING DATE
 
On or about March 13, 2015.
 
STATISTICAL DISCLOSURE DATE
 
February 28, 2015.
 
AUCTION RATE NOTES
 
Interest will accrue generally on the principal balance of the auction rate notes during the related accrual period and will be paid on the related auction rate distribution date.
 
An accrual period for the auction rate notes begins on each auction rate distribution date for the auction rate notes and ends on the day before the next auction rate distribution date.
 
The interest rate for the auction rate notes is determined at auction.  For each applicable auction period, the interest rate for the auction rate notes will equal the least of:
 
 
·
the rate determined pursuant to the auction procedures described under “Description of the Notes—The Notes—The Auction Rate Notes” in this prospectus supplement;
 
 
·
a maximum rate, equal to the least of:
 
 
·
LIBOR for a period comparable to the auction period plus a margin depending upon the ratings of the auction rate notes;
 
 
·
18%; and
 
 
·
the maximum rate permitted by law; and
 
 
·
the auction student loan rate, which is the weighted average interest rate of the trust student loans, minus specified administrative expenses.
 
For the auction rate notes, we will calculate interest based on the actual number of days elapsed in each accrual period divided by 360.
 
The period between auctions for the auction rate notes will generally be 28 days, subject to adjustment if the auction period would begin or end on a non-business day.  The length of the auction period or the auction date for the auction rate notes may change as described under “Description of the Notes—The Notes—The Auction Rate Notes” in this prospectus supplement.
 
If, on the first day of any auction period, a payment default on the auction rate notes has occurred and is continuing, the interest rate for that accrual period will be the non-payment rate, which is one-month LIBOR plus 1.50% per annum.
 
If, in any auction, all the auction rate notes subject to the auction are subject to hold orders, the interest rate for that accrual period will equal the all-hold rate, which is the LIBOR rate for a period comparable to the auction period less 0.20%.
 
Denominations.  The auction rate notes will be available for purchase in

 
S-2

 

minimum denominations of $50,000 and additional increments of $50,000.  The notes are available only in book-entry form through The Depository Trust Company, Clearstream, Luxembourg and the Euroclear System.  You will not receive a certificate representing your auction rate notes except in very limited circumstances.

PREPAYMENTS, EXTENSIONS, WEIGHTED AVERAGE LIVES AND EXPECTED MATURITIES OF THE AUCTION RATE NOTES
 
The projected weighted average lives of the auction rate notes to maturity under various usual and customary prepayment scenarios may be found under “Prepayments, Extensions, Weighted Average Lives and Expected Maturities of the Auction Rate notes, included as Exhibit I to this prospectus supplement.
 
THE OTHER NOTES
 
On the original closing date, the trust also issued its class A-1, class A-2, class A-3, class B and class C notes, as more specifically described below.
 
Floating Rate Class A Notes:
 
·
Class A-1 Student Loan-Backed Notes in the original principal amount of $580,000,000, none of which remain outstanding;
 
·
Class A-2 Student Loan-Backed Notes in the original principal amount of $440,506,000,  which, as of December 15, 2014, remain outstanding in the amount of $143,086,231.18;
 
Class A-3 Notes:
 
·
Class A-3 Student Loan-Backed Notes in the original principal amount of $109,000,000, which, as of December 15, 2014, remain outstanding in the amount of $109,000,000;
 
Class B Notes:
 
·
Class B Student Loan-Backed Notes in the original principal amount of $43,871,000, which, as of December 15, 2014, remain outstanding in the amount of $25,157,349.29;
 
Class C Notes:
 
·
Class C Student Loan-Backed Notes in the original principal amount of $60,744,000, which, as of December 15, 2014, remain outstanding in the amount of $57,545,976.61;
 
We sometimes refer to:
 
·
class A-3 notes as the offered notes;
 
·
the floating rate class A notes and the auction rate notes collectively as the class A notes;
 
·
the floating rate class A notes, the class B notes and the class C notes collectively as the floating rate notes; and
 
·
the floating rate notes and the auction rate notes as the notes.
 
Interest Rates.  The outstanding floating rate notes bear interest at an annual rate equal to the sum of three-month LIBOR and the applicable spread listed in the table below:
 

 
S-3

 

 
Class
 
Spread
Class A-2                                
 
plus 0.40%
Class B                                
 
plus 0.70%
Class C                                
 
plus 1.60%

For all classes of floating rate notes, the administrator determines LIBOR as specified under “Additional Information Regarding the Notes—Determination of Indices—LIBOR” in the base prospectus.  For the floating rate notes, interest is calculated based on the actual number of days elapsed in each accrual period and a 360-day year.  An accrual period for the floating rate notes begins on a quarterly distribution date and ends on the day before the next quarterly distribution date.
 
ALL NOTES
 
Interest Payments.  Interest accrues on the outstanding principal balance of the notes during each accrual period and is payable on the related quarterly distribution date for each class of floating rate notes and each auction rate distribution date for the auction rate notes.
 
Principal Payments.  Principal is payable or allocable on each quarterly distribution date in an amount generally equal to (a) the principal distribution amount for that quarterly distribution date plus (b) any shortfall in the payment of principal as of the preceding quarterly distribution date.
 
Priority of Principal Payments.   In general, so long as cumulative realized losses on the trust student loans do not exceed specified levels, principal on the notes is paid or allocated sequentially on each quarterly distribution date as follows:
 
·
first, the class A noteholders’ principal distribution amount, sequentially, first to the class A-2 notes and second to the auction rate notes, pro rata based on their respective class principal balances, until their respective class principal balances are reduced to zero;
 
·
second, the class B noteholders’ principal distribution amount, to the class B notes until their class principal balance is reduced to zero;
 
·
third, the class C noteholders’ principal distribution amounts, to the class C notes until their principal class balance is reduced to zero; and
 
·
fourth, amounts remaining in the principal distribution account after making all of the distributions or allocations, as applicable, in clauses first, second and third, above will be paid or allocated, as applicable, sequentially, to the class C notes, the class B notes and the class A notes, in that order, until their class respective balances are reduced to zero.
 
On each quarterly distribution date described in the preceding paragraph, the class A, class B and class C notes generally will be allocated a share of the principal distribution amount sufficient to cause the principal balances of the class A, class B and class C notes, as applicable, to equal specified percentages of the asset balance.  See “Description of the Notes—Distributions” and “—Principal Distributions” in this prospectus supplement for a more detailed description of principal payments.  See also “Description of the Notes—Priority of Payments Following

 
S-4

 

Certain Events of Default Under the Indenture” in this prospectus supplement for a description of the cashflows on each quarterly distribution date following the occurrence of an event of default and the acceleration of the notes.
 
See “Description of the Notes—Distributions” in this prospectus supplement for a more detailed description of principal payments.
 
Legal Maturity Dates.
 
The class A-1 notes were repaid in full on the March 15, 2010 quarterly distribution date.
 
Each class of outstanding notes will mature no later than the date set forth in the table below for that class:
 
Class
 
Maturity Date
Class A-2
 
March 15, 2022
Class A-3
 
March 15, 2033
Class B
 
March 15, 2033
Class C
 
March 15, 2033

The offered notes will mature on March 15, 2033.

The actual maturity of any class of outstanding notes could occur earlier if, for example:
 
·
there are prepayments on the trust student loans;
 
·
the servicer exercises its option to purchase all remaining trust student loans, which will not occur until the first quarterly distribution date on which the pool balance is 10% or less of the initial pool balance; or
 
·
the servicer has exercised its purchase option described above, the indenture trustee auctions the remaining trust student loans, which absent an event of default under the indenture, will not occur until the first quarterly distribution date on which the pool balance is 10% or less of the initial pool balance.
 
The initial pool balance is equal to the pool balance as of the original closing date.
 
SECURITY FOR THE NOTES
 
The notes are secured by the assets of the trust, primarily the trust student loans.
 
Subordination of the Class B Notes.  Payments of interest on the class B notes will be subordinate to payments of interest on the class A notes.  In general, payments of principal of the class B notes will be subordinate to the payment of both interest on and principal of the class A notes.  See “Description of the Notes—The Notes— The Class B Notes—Subordination of the Class B Notes” in this prospectus supplement.  
 
Subordination of the Class C Notes.  Payments of interest on the class C notes will be subordinate to payments of interest on both the class A notes and the class B notes.  In general, payments of principal of the class C notes will be subordinate to the payment of both interest on and principal of the class A notes and the class B notes.  See “Description of the Notes—The Notes— The Class C Notes—Subordination of the Class C Notes” in this prospectus supplement. 
 
UNDERCOLLATERALIZATION
 
The class C notes will be undercollateralized on the reoffering
 

 
S-5

 
 
closing date. If there is not sufficient excess interest or recoveries on the trust student loans in subsequent collection periods to reduce such undercollateralization to zero, holders of the class C notes and, if losses continue to accrue or the level of undercollateralization otherwise increases, possibly holders of the class B notes and, if further losses or increases in the level of undercollateralization are incurred, holders of the class A notes, will not receive their entire principal amount at their respective stated maturity dates. As of the December 2014 quarterly distribution date, the asset balance of the trust was approximately 96.43% of the aggregate outstanding principal balance of the notes.
 
INDENTURE TRUSTEE AND PAYING AGENT
 
The trust issued the notes under an indenture dated as of June 1, 2003.  Under the indenture, The Bank of New York Mellon acts as successor indenture trustee for the benefit of, and to protect the interests of, the noteholders and acts as paying agent for the notes.
 
TRUSTEE
 
The trust was created under a trust agreement dated as of June 1, 2003.  The Bank of New York Mellon Trust Company, National Association is the successor trustee under the trust agreement.  It holds legal title to the assets of the trust.
 
DELAWARE TRUSTEE
 
BNY Mellon Trust of Delaware is the Delaware trustee and will act in the capacities required under the Delaware Statutory Trust Act and under the trust agreement.
 
AUCTION AGENT
 
The Bank of New York Mellon will act as auction agent with respect to the auction rate notes.
 
BROKER-DEALER
 
Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as a broker-dealer with respect to the auction rate notes.
 
The broker-dealer will be entitled to fees in connection with an auction of the auction rate notes, which together with the auction agent fees will not exceed the product of 0.15% per annum and the outstanding principal balance of the auction rate notes.
 
ADMINISTRATOR AND SPONSOR
 
Navient Solutions, Inc. (“Navient Solutions”) is the sponsor of the trust and acts as the administrator of the trust under an administration agreement dated as of the original closing date.  Navient Solutions is a Delaware corporation and a wholly-owned subsidiary of Navient Corporation.  Subject to certain conditions, Navient Solutions may transfer its obligations as administrator to an affiliate.
 
INFORMATION ABOUT THE TRUST
 
The trust is a Delaware statutory trust.
 
The only activities of the trust that are currently permitted are acquiring, owning and managing the trust student loans and the other assets of the trust, issuing and making payments on the notes, having entered into the swap agreements and making payments thereunder and other related activities.  

 
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See “The Trust—General” in this prospectus supplement.
 
Navient Credit Funding, LLC (formerly known as SLM Education Credit Funding LLC), as depositor, after acquiring the student loans from Navient Credit Finance Corporation (formerly known as SLM Education Credit Finance Corporation) (“Navient CFC”) under a purchase agreement, sold them to the trust under a sale agreement (we sometimes refer to Navient CFC as the “seller”), dated as of the original closing date.  The depositor is a limited liability company of which Navient CFC is the sole member.
 
Trust Assets
 
The assets of the trust include:
 
 
·
the trust student loans;
 
 
·
collections and other payments on the trust student loans;
 
 
·
funds it currently holds or will hold from time to time in its trust accounts, including the collection account and the reserve account;
 
 
·
its rights under the transfer and servicing agreements, including the right to require Navient CFC, the depositor or the servicer to repurchase trust student loans from it or to substitute loans under certain conditions; and
 
 
·
its rights under the swap agreements described under “—Swap Agreements” below.
 
The rest of this section describes the trust student loans and trust accounts more fully.
 
Trust Student Loans.  The trust student loans are private education loans, which are education loans generally made to students or parents of students that are not guaranteed or reinsured under the Federal Family Education Loan Program, also known as the “FFELP,” or under any other federal student loan program, or otherwise insured by any private third-party insurance provider.  The private education loans were made and underwritten under various loan programs administered or sponsored by Navient Solutions, Inc. or its affiliates, including the Signature Education Loan® Program, the LAWLOANS® Program, the MBALoans® Program and the MEDLOANSSM Program. They are summarized in Appendices A through D to this prospectus supplement.
 
The applicable borrower payment status of each trust student loan, either in-school, grace, deferment, forbearance or repayment, will affect the timing of payment of interest on and principal of the trust student loans as described in Appendices A through D, as applicable, to this prospectus supplement.
 
The trust student loans are not guaranteed, insured or reinsured by the United States, any state-sponsored guarantee agency or any private insurer.
 
The trust student loans were selected from the student loans owned by the seller or have been acquired by the seller either (1) solely with respect to Navient CFC, directly from commercial banks that originated the loans or (2) from one or more of other affiliates of Navient Corporation, based on the criteria established by the sponsor, as described in this prospectus supplement and the base prospectus.  The criteria are described in this prospectus

 
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supplement under “The Trust Student Loan Pool.”
 
Initial Trust Student Loans.  The depositor acquired the trust student loans from the seller on the original closing date.
 
The initial trust student loans had a pool balance of approximately $1,247,280,318 as of the original cutoff date.  The trust student loans have a pool balance of approximately $409,929,298 as of the statistical disclosure date.
 
As of the statistical disclosure date, (i) the weighted average annual borrower interest rate of the trust student loans was approximately 3.94% and (ii) the weighted average remaining term of the trust student loans to scheduled maturity was approximately 136 months.
 
For more details concerning the trust student loans, see “Annex A—The Trust Student Loan Pool as of the Original Closing Date” and “Annex B—The Trust Student Loan Pool as of the Statistical Disclosure Date” attached to this prospectus supplement.
 
Collection Account. The administrator established and maintains the collection account as an asset of the trust in the name of the indenture trustee.  The administrator will deposit collections on the trust student loans, interest subsidy payments and special allowance payments into the collection account, as described in this prospectus supplement and the base prospectus.
 
Reserve Account.    The administrator established and maintains the reserve account as an asset of the trust in the name of the indenture trustee.  As of the December 2014 quarterly distribution date, the amount on deposit in the reserve account was $3,118,201.  Funds in the reserve account may be replenished on each quarterly distribution date by additional funds available from the trust after all prior required distributions have been made.  See “Description of the Notes—Distributions.”
 
Amounts in the reserve account in excess of the specified reserve account balance (as described below) on any quarterly distribution date, after the payments described below, will be deposited into the collection account for distribution on that quarterly distribution date.
 
The specified reserve account balance is the amount required to be maintained in the reserve account.  The specified reserve account balance for any quarterly distribution date will be equal to the lesser of:
 
·
$3,118,201; and
 
·
the outstanding balance of the notes.
 
The specified reserve account balance will be subject to adjustment as described in this prospectus supplement.  In no event will it exceed the outstanding principal balance of the notes.
 
The administrator will instruct the indenture trustee to withdraw funds from the reserve account to cover shortfalls, if any, in (a) the payments described in the 1st through 5th, 7th and 9th items in the chart on page S-12 of this prospectus supplement, to the extent such shortfalls are not covered by amounts on deposit in the collection account, and (b) the 6th, 8th and 10th items in the chart on page S-12 of this prospectus supplement on the

 
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respective legal maturity dates of each class of notes, to cover the unpaid principal balance of the maturing class of notes to the extent such principal payment is not covered by amounts on deposit in the collection account.
 
As of the December 2014 quarterly distribution date, amounts on deposit in the reserve account have not been required for these purposes.
 
The reserve account enhances the likelihood of payment to noteholders.  In certain circumstances, however, the reserve account could be depleted.  This depletion could result in shortfalls in distributions to noteholders.
 
If the market value of the reserve account, on any quarterly distribution date, is sufficient to pay the remaining principal and interest accrued on the notes and any carryover servicing fee, amounts on deposit in those accounts will be so applied on that quarterly distribution date.  See “Description of the NotesCredit Enhancement—Reserve Account” in this prospectus supplement.
 
Cash Capitalization Account.  All funds on deposit in the cash capitalization account that was created and funded on the original closing date were transferred to the collection account on the December 15, 2006 quarterly distribution date.  No additional sums were subsequently or will be deposited into this account.
 
Interest Rate Cap Agreement.  On the original closing date, the trust entered into an interest rate cap agreement with a cap counterparty for the benefit of the noteholders to protect against certain increases in the rate of three-month LIBOR.  By its terms, the interest rate cap agreement was terminated on the distribution date in June 2006.  The trust has not and will not enter into another interest rate cap agreement.
 
ADMINISTRATION OF THE TRUST
 
Distributions
 
Navient Solutions, Inc., as administrator, will instruct the indenture trustee to withdraw funds on deposit in the collection account, future distribution account and, to the extent required, the reserve account on each monthly allocation date and/or quarterly distribution date, as applicable.  To the extent the auction rate notes do not have an auction rate distribution date that is also a quarterly distribution date, that class will be allocated the applicable amount but will not be paid until the next applicable auction rate distribution date.  Available funds will be applied on each applicable auction rate distribution date and quarterly distribution date generally as shown in the charts on pages S-12 and S-13 of this prospectus supplement.
 
On or prior to the fifth business day of each month, the administrator will instruct the indenture trustee to make the following allocations on or prior to the fifteenth calendar of the same month, which we refer to in this prospectus supplement as a “monthly allocation date,” with funds on deposit in the collection account:
 
 
·
first, deposit into the future distribution account for the servicer and administrator, pro rata, the amounts of the primary servicing fee and administration fee that will accrue for the related calendar month plus previously
 

 
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accrued and unpaid or set aside amounts;
 
 
·
second, deposit into the future distribution account, pro rata for the auction agent and the broker-dealer, an amount equal to their respective fees expected to be payable from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts;
 
 
·
third, deposit into the future distribution account, for the swap counterparties, an amount equal to swap payments to the swap counterparties expected to accrue from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts net of payments expected to accrue for this period from the swap counterparties; and
 
 
·
fourth, deposit into the future distribution account, pro rata, for (a) each class of class A notes an amount equal to interest expected to accrue on the class A notes from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts, and (b) the swap counterparties, certain swap termination payments due.
 
On each auction rate distribution date that is not also a quarterly distribution date, the indenture trustee will make the following distributions:
 
 
·
first, from amounts deposited in the future distribution account that were allocated to the auction agent and the broker-dealer, and then from amounts on deposit in the collection account, pro rata, to the auction agent and the broker-dealer; the respective fees of the auction agent and the broker-dealer; and
 
 
·
second, from amounts deposited in the future distribution account that were allocated to the auction rate notes, and then from amounts on deposit in the collection account, to the auction rate class A-3 noteholders and class A-4 noteholders, an amount equal to interest payable thereon.
 
On each quarterly distribution date that is not also an auction rate distribution date for any class of auction rate notes, in lieu of making payments on that date of principal and carryover amounts to that class of auction rate notes, these amounts will be deposited into the future distribution account.  Amounts on deposit in the future distribution account with respect to principal and carryover amounts allocated to any class of auction rate notes will be paid to the auction rate notes on their next related auction rate distribution date.

 
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If an auction rate distribution date for the auction rate notes coincides with a quarterly distribution date, all previously deposited funds in the future distribution account that are required to be disbursed to the auction agent, broker-dealer and related auction rate noteholders on such quarterly distribution date will be transferred to the collection account and will become part of available funds on such date.
 
See “Description of the Notes— Distributions” in this prospectus supplement for a more detailed description of distributions.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 

 
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Transfer of the Assets to the Trust
 
Under a sale agreement, the depositor sold the trust student loans to the trust, with the trustee holding legal title to the trust student loans.
 
If the depositor breaches a representation under the sale agreement regarding a trust student loan, generally the depositor will have to cure the breach, repurchase or replace that trust student loan or reimburse the trust for losses resulting from the breach.
 
The seller has similar obligations under the related purchase agreement.  See “Transfer and Servicing Agreements—Purchase of Student Loans by the Depositor; Representations and Warranties of the Seller” in the base prospectus.
 
Servicing of the Assets
 
Under a servicing agreement, Navient Solutions, as servicer, is responsible for servicing, maintaining custody of and making collections on the trust student loans.  See “Servicing and Administration” in the base prospectus.
 
The servicer manages and operates the loan servicing functions for the Navient Solutions family of companies.  The servicer may enter into subservicing agreements with respect to some or all of its servicing obligations, but these arrangements will not affect the servicer’s obligations to the trust.  Under some circumstances, the servicer may transfer its obligations as servicer.  See “Servicing and Administration—Certain Matters Regarding the Servicer” in the base prospectus.
 
If the servicer breaches a covenant under the servicing agreement regarding a trust student loan, generally it will have to cure the breach, purchase that trust student loan or reimburse the trust for losses resulting from the breach.  See “The Trust Student Loan Pool—Insurance of Student Loans; Guarantors of Student Loans” in this prospectus supplement.
 
Optional Purchase of Delinquent Loans
 
The servicer has the option, but not the obligation, to purchase from the trust any trust student loan that becomes 180 or more days delinquent. There can be no assurances that the servicer will exercise its option.
 
Compensation of the Servicer
 
The servicer receives two separate fees: a primary servicing fee and a carryover servicing fee.
 
The primary servicing for any month is equal to 1/12th of an amount not to exceed 0.70% of the outstanding principal balance of the trust student loans as of the last day of the preceding calendar month.
 
The primary servicing fee is payable in arrears out of available funds and amounts on deposit in the reserve account on the 15th day of each month, or if the 15th day is not a business day, then on the next business day.  Fees include amounts from any prior monthly allocation dates that remain unpaid.
 
The carryover servicing fee is payable to the servicer on each quarterly distribution date out of available funds.
 

 
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The carryover servicing fee is the sum of:
 
·
the amount of specified increases in the costs incurred by the servicer;
 
·
the amount of specified conversion, transfer and removal fees;
 
·
any amounts described in the first two bullets that remain unpaid from prior quarterly distribution dates; and
 
·
interest on any unpaid amounts.
 
See “Description of the Notes—Servicing Compensation” in this prospectus supplement.
 
TERMINATION OF THE TRUST
 
The trust will terminate upon:
 
·
the maturity or other liquidation of the last trust student loan and the disposition of any amount received upon its liquidation; and
 
·
the payment of all amounts required to be paid to the noteholders.
 
See “The Student Loan Pools—Termination” in the base prospectus.
 
Optional Purchase
 
The servicer may purchase or arrange for the purchase of all remaining trust student loans on any quarterly distribution date when the pool balance is 10% or less of the initial pool balance.
 
The exercise of this purchase option will result in the early retirement of the remaining notes.  The purchase price will equal the amount required to prepay in full, including all accrued and unpaid interest, the remaining trust student loans as of the end of the preceding collection period, but will not be less than a prescribed minimum purchase amount.
 
This prescribed minimum purchase amount is the amount that would be sufficient to:
 
·
pay to noteholders the interest payable on the related quarterly distribution date;
 
·
reduce the outstanding principal amount of each class of notes then outstanding on the related quarterly distribution date to zero; and
 
·
pay any amount owing to the swap counterparties; and
 
·
in the case of the auction rate notes, pay any carryover amounts and interest on any carryover amounts with respect to the auction rate notes.
 
The pool balance as of the statistical disclosure date is approximately 34.06% of the initial pool balance.
 
Auction of Trust Assets
 
The indenture trustee will offer for sale all remaining trust student loans on the first quarterly distribution date on which the pool balance is less than or equal to 10% of the initial pool balance.
 
The trust auction date will be the third business day before the related quarterly distribution date.  An auction will be consummated only if the servicer has first waived its optional purchase right as described under “—Optional Purchase” above.  The servicer will waive its option to purchase the
 

 
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remaining trust student loans if it fails to notify the trustee and the indenture trustee, in writing, that it intends to exercise its purchase option before the indenture trustee accepts a bid to purchase the trust student loans.  The selling securitiesholder, the depositor and their affiliates, including Navient Solutions, Navient CFC and unrelated third parties may offer bids to purchase the trust student loans.  The depositor or any affiliate may not submit a bid representing greater than fair market value of the trust student loans.
 
If at least two bids are received, the indenture trustee will solicit and re-solicit new bids from all participating bidders until only one bid remains or the remaining bidders decline to resubmit bids.  The indenture trustee will accept the highest of the remaining bids if it equals or exceeds the higher of:
 
·
the minimum purchase amount described under “—Optional Purchase” above (plus any amounts owed to the servicer as carryover servicing fees); and
 
·
the fair market value of the trust student loans as of the end of the related collection period.
 
If at least two bids are not received or the highest bid after the re-solicitation process does not equal or exceed that amount, the indenture trustee will not complete the sale.  The indenture trustee may, and at the direction of the depositor will be required to, consult with a financial advisor, including any of the original underwriters of the notes, or the administrator, to determine if the fair market value of the trust student loans has been offered.  See “The Student Loan Pools—Termination” in the base prospectus.
 
The net proceeds of any auction sale, will be used to retire any outstanding notes on the related quarterly distribution date.
 
If the sale is not completed, the indenture trustee may, but will not be under any obligation to, solicit bids for sale of the trust student loans after future collection periods upon terms similar to those described above, including the servicer’s waiver of its option to purchase remaining trust student loans.
 
If the trust student loans are not sold as described above, on each subsequent quarterly distribution date, if the amount on deposit in the reserve account after giving effect to all withdrawals, except withdrawals payable to the depositor, exceeds the specified reserve account balance, the administrator will direct the indenture trustee to distribute the amount of the excess as accelerated payments or allocations of note principal.
 
The indenture trustee may or may not succeed in soliciting acceptable bids for the trust student loans either on the trust auction date or on subsequent quarterly distribution dates.
 
See “The Student Loan Pools— Termination” in the base prospectus.
 
SWAP AGREEMENT
 
The trust entered into interest rate swap agreements as of the original closing date with Citibank, N.A. and Merrill Lynch Derivative Products AG.
 

 
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Under the interest rate swap agreements, each swap counterparty is required to pay to the trust, on or before the third business day preceding each distribution date, an amount based upon three-month LIBOR, determined in the same manner as applies to the notes.
 
For each distribution date, the trust is required to pay to the swap counterparties from the collection account and, if necessary, the reserve account, prior to interest payments on the notes, an amount based upon the prime rate.
 
Each interest rate swap agreement is scheduled to terminate on the June 2018 distribution date.
 
See “Swap Agreements” in this prospectus supplement.
 
TAX CONSIDERATIONS
 
Subject to important considerations described in the base prospectus:
 
·
Federal tax counsel on the original closing date opined that the offered notes would be characterized as debt for federal income tax purposes.
 
·
Federal tax counsel on the original closing date opined that the trust would not be characterized as an association or a publicly traded partnership taxable as a corporation for federal income tax purposes.
 
·
For U.S. federal income tax purposes, the reoffering of the offered notes will be treated as a reissuance of the offered notes, which are being offered for sale hereunder.
 
·
Delaware tax counsel for the trust on the original closing date opined that the same characterizations would apply for Delaware state income tax purposes as for federal income tax purposes and that noteholders who were not otherwise subject to Delaware taxation on income would not become subject to Delaware taxation as a result of their ownership of notes.
 
See “U.S. Federal Income Tax Consequences” in this prospectus supplement and in the base prospectus.
 
ERISA CONSIDERATIONS
 
Subject to important considerations and conditions described in this prospectus supplement and the base prospectus, the offered notes may, in general, be purchased by or on behalf of an employee benefit plan or other retirement arrangement, including an insurance company general account, only if:
 
·
an exemption from the prohibited transaction provisions of Section 406 of the Employee Retirement Income Security Act of 1974, as amended, and Section 4975 of the Internal Revenue Code of 1986, as amended, applies, so that the purchase or holding of the notes; and
 
·
the purchase or holding of the notes will not cause a non-exempt violation of any substantially similar federal, state, local or foreign laws.
 
Each fiduciary who purchases a note will be deemed to represent that an exemption exists and applies to it and

 
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that no non-exempt violations of any substantially similar laws will occur.
 
See “ERISA Considerations” in this prospectus supplement and the base prospectus for additional information concerning the application of ERISA.
 
RATINGS
 
The offered notes are currently rated by two or more rating agencies.  A rating addresses only the likelihood of
the timely payment of stated interest and the payment of principal at final maturity, and does not address the timing or likelihood of principal distributions prior to final maturity. See “Ratings” in this prospectus supplement.
 
LISTING INFORMATION
 
The offered notes are currently able to be cleared and settled through Clearstream, Luxembourg and Euroclear.
 
RISK FACTORS
 
Some of the factors you should consider before making an investment in the offered notes are described in this prospectus supplement and in the base prospectus under “Risk Factors.”
 
IDENTIFICATION NUMBERS
 
The offered notes have the following identification numbers:
 
CUSIP Number: 78443C ANA
 
International Securities Identification Number (ISIN): US78443C AN48
 






 










 
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RISK FACTORS
 
You should carefully consider the following factors in deciding whether to purchase the offered notes.  The base prospectus describes additional risk factors that you should also consider beginning on page 15.  These risk factors could affect your investment in or return on the offered notes.
 
Federal Financial Regulatory Legislation Could Have An Adverse Effect On Navient Corporation, Navient Solutions, The Servicer, The Administrator, The Depositor, The Selling Securitiesholder, The Seller And The Trust, Which Could Result In Losses Or Delays In Payments On Your Notes
 
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) to reform and strengthen supervision of the U.S. financial services industry.  The Dodd-Frank Act represents a comprehensive change to existing laws, imposing significant new regulation on almost every aspect of the U.S. financial services industry.
 
The Dodd-Frank Act will result in significant new regulation in key areas of the business of Navient Corporation, the parent of the sponsor, the sponsor and their affiliates and the markets in which Navient Corporation, the sponsor and their affiliates operate.  Pursuant to the Dodd-Frank Act, Navient Corporation and many of its subsidiaries are subject to regulations promulgated by the Consumer Financial Protection Bureau (the “CFPB”).  The CFPB will have substantial power to define the rights of consumers and the responsibilities of lending institutions, including Navient Corporation’s private education lending and retail banking businesses.  The CFPB began exercising its authority on July 21, 2011.
 
Most of the component parts of the Dodd-Frank Act will be subject to intensive rulemaking and public comment over the coming months and none of Navient Corporation, Navient Solutions or their affiliates can predict the ultimate effect the Dodd-Frank Act or required examinations of the private education loan market could have on their operations at this time.  It is likely, however, that operational expenses will increase if new or additional compliance requirements are imposed on their operations and their competitiveness could be significantly affected if they are subjected to supervision and regulatory standards not otherwise applicable to their competitors.
 
The Dodd-Frank Act also creates a liquidation framework for the resolution of bank holding companies and other non-bank financial companies determined to be “covered financial companies.”  Under that liquidation framework, it is possible that the Federal Deposit Insurance Corporation
 

 
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(the “FDIC”) could be appointed receiver of Navient Corporation, Navient Solutions or any of their affiliates under the Orderly Liquidation Authority (“OLA”) provisions of the Dodd-Frank Act.  If that occurred, the FDIC could repudiate contracts deemed burdensome to the estate, including secured debt.  Navient Solutions has structured the transfers of the student loans to the depositor and the trust as a valid and perfected sale under applicable state law and under the United States Bankruptcy Code to mitigate the risk of the recharacterization of the sale as a security interest to secure debt of Navient Solutions.  Any attempt by the FDIC to recharacterize the securitization transaction as a secured loan (which the FDIC could then repudiate) could cause delays in payments or losses on the notes.  In addition, if the trust were to become subject to the OLA, the FDIC could repudiate the debt of the trust with the result that the noteholders would have a secured claim in the receivership of the trust. Also, if the trust were subject to OLA, noteholders would not be permitted to accelerate the debt, exercise remedies against the collateral or replace the servicer without the FDIC’s consent for 90 days after the receiver is appointed.  As a result of any of these events, delays in payments on the notes and reductions in the amount of those payments could occur.  See “The Trust Student Loan Pool—Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions—FDIC’s Repudiation Power Under the OLA” in this prospectus supplement.
 
Illiquidity; Illiquid Market Conditions May Occur From Time To Time
 
Despite federal market interventions and programs, periods of general market illiquidity may occur from time to time and may adversely affect the secondary market for your offered notes, as applicable.  Accordingly, you may not be able to sell your offered notes when you want to do so or you may be unable to obtain the price that you wish to receive for your offered notes and, as a result, you may suffer a loss on your investment.
 
Any downgrade, withdrawal or qualification of the ratings of your notes, as a result of a change or deterioration in the performance of the trust student loans, errors in analysis or otherwise, may adversely affect the market value of your notes and/or limit your ability to resell your notes.
 

 
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The Notes Are Not Suitable Investments For All Investors
 
The offered notes are complex investments that should be considered only by investors who, either alone or with their financial, tax and legal advisors, have the expertise to analyze the prepayment, reinvestment, default and market risk, and tax consequences of an investment, as well as the interaction of these factors.
Sequential Payment Of The Notes Results In A Greater Risk Of Loss
 
Holders of the offered notes bear a greater risk of loss than do holders of the class A-2 and class A-3 notes because no principal will be paid to any offered noteholders until the class A-2 and class A-3 notes have been paid in full.  If a failed auction occurs, the offered notes would become subject to the failed auction rate, which may be higher than the interest rate that would otherwise be applicable to such class of notes.  This would reduce the amount of available funds to pay interest on other classes of notes and principal on the offered notes.  In that case, or if prepayments are much higher than anticipated, or if losses on the trust student loans are greater than expected, you may suffer a loss.
 
Risk Of Bankruptcy Discharge Of Private Education Student Loans
 
Private education student loans made for qualified education expenses are generally not dischargeable by a borrower in bankruptcy.  Private education student loans can become dischargeable if the borrower proves that keeping the loans non-dischargeable would impose an undue hardship on the debtor and the debtor’s dependents.  If you own any notes, you will bear any risk of loss resulting from the discharge of any borrower of a private education student loan to the extent the amount of the default is not covered by the trust’s credit enhancement.
 
School Closures And Unlicensed Schools May Result In Losses On Your Notes
 
Most of the trust student loans are subject to the so-called “Holder-in-Due-Course” rule of the Federal Trade Commission, the provisions of which are similar to those contained in the Uniform Consumer Credit Code and in state statutes and common law of many states.  The effect of these laws is to subject a seller (and certain lenders and their assignees, such as the trust) in a consumer credit transaction to all claims and defenses which the obligor in the transaction can assert against the sellers of the goods or services.  Under these laws, the trust as holder of the trust student loans will be subject to any claims or defenses that the student borrower may assert against its school for failure of the school to satisfy its obligations
 

 
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under the enrollment agreement with the student as a result of a school closure or otherwise.  If a student is successful in making such a claim against the school, the student may have the right to recover from the trust payments previously made on the related trust student loan and have a defense against making further payments.  In this event, to the extent available funds and credit enhancement is insufficient to cover such amounts, you may suffer a loss on your investment.
 
In addition, generally, state law requires schools engaged in providing educational services in that state to be licensed by a state regulatory authority in that state.  In most states, if a school is not licensed at the time the student signs the enrollment agreement, the enrollment agreement may be void and, as a result, the student will have a defense against repayment of the loan.  Although the seller has represented as an original condition to the sale of the trust student loans that, as of the original closing date, all of the related schools were licensed under applicable law, to the extent that a related school became unlicensed prior to the student signing the enrollment agreement, the related borrower will have the right to recover payments previously made on the related trust student loan and will have a defense against further payment.  In this event, to the extent available funds and credit enhancement are insufficient to cover such amounts, you may suffer a loss on your investment.
 
Your Notes May Have A Degree Of Basis Risk And The Swap Agreements Do Not Eliminate All Of This Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal Of And Interest On Your Notes
 
The trust has entered into interest rate swap agreements with the swap counterparties.  The swap agreements are intended to mitigate a specific type or amount of the basis risk associated with the notes.
 
However, there remains a degree of basis risk associated with the offered notes.  Basis risk is the risk that shortfalls might occur because, among other things, the interest rates of the trust student loans adjust on the basis of specified indices and those of the notes adjust on the basis of different indices.  If a shortfall were to occur, the trust’s ability to pay principal of and/or interest on the notes could be compromised.  See “Annex B—The Trust Student Loan Pool as of the Statistical Disclosure Date” in this prospectus supplement which specifies the percentages of trust student loans that adjust based on the LIBOR rate,

 
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the 91-day Treasury bill rate or that bear a fixed rate of interest, as applicable.
 
The notional amount of the swap agreements equals the aggregate principal balance of the prime rate-based trust student loans that are reset monthly, as determined periodically.  The notional amount of the swap agreements does not include the principal balances of the fixed rate-based, the T-bill rate-based or the other types of prime rate-based trust student loans.
 
Each swap agreements is scheduled to terminate, by its terms, on the June 2018 quarterly distribution date.  In addition, an early termination of the swap agreement may occur upon the occurrence of certain events.  See “Swap Agreement—Default Under the Swap Agreement” and “—Termination Events.
 
Upon the early termination of a swap agreement, you cannot be certain that the trust will be able to enter into a substitute swap agreement.  In addition, the trust will not enter into any substitute swap agreement after the swap agreement terminates on the June 2018 quarterly distribution date.  In this event, there can be no assurance that the amount of credit enhancement will be sufficient to cover the basis risk associated with the notes.
 
Consequently, you must rely on other forms of credit enhancement, to the extent available, to mitigate that portion of the basis risk not covered by the swap agreements.   There can be no assurance that the amount of credit enhancement will be sufficient to cover the remaining basis risk associated with the notes.
 
The Trust Does Not Have the Benefit Of Any Guarantees Or Insurance On The Trust
Student Loans
 
The trust student loans are not guaranteed, insured or reinsured by the United States or any state-sponsored guarantee agency or private insurer or by any other insurance or external credit enhancement.  The primary credit enhancement for the notes is the reserve account, and, in the case of the class A notes, the subordination of the class B and class C notes and, in the case of the class B notes, the subordination of the class C notes.  The amount of credit enhancement is limited and can be depleted over time.  In this event, you may suffer a loss.
 

 
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The Trust Is Currently Undercollateralized

 
As of the December 2014 quarterly distribution date, the asset balance of the trust was approximately 96.43% of the aggregate outstanding principal balance of the notes. As of the reoffering closing date, the class C notes will be undercollateralized. If there is not sufficient excess interest or recoveries on the student loans in subsequent collection periods to reduce such undercollateralization to zero, holders of the class C notes will not receive their entire principal amount at their legal maturity date and if future losses are incurred or the level of undercollateralization otherwise increases, holders of the class B notes may incur a loss, and if the credit support afforded to the class A notes by the subordination of the class B notes and the class C notes, together with amounts on deposit in the reserve account are not sufficient, holders of the class A notes (including holders of the offered notes) may suffer a loss.
 
Certain Actions Can Be Taken Without Noteholder Approval
 
The transaction documents provide that certain actions may be taken based upon receipt by the indenture trustee of a confirmation from each of the rating agencies that the then-current ratings assigned by the rating agencies then rating the notes will not be downgraded or withdrawn by those actions.   In this event, such actions may be taken without the consent of noteholders.
The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
 
 
In the event of default by the servicer resulting solely from certain events of insolvency or the bankruptcy of the servicer, a court, conservator, receiver or liquidator may have the power to prevent any of the servicer, indenture trustee or the noteholders, as applicable, from appointing a successor and delays in the collection of payments on the related trust student loans may occur. Any delay in the collection of payments on the affected trust student loans may delay or reduce payments to noteholders. In addition, in the event of an insolvency or a bankruptcy of the servicer, a court, conservator, receiver or liquidator may permit the servicer to assign its rights and obligations as servicer to a third party without complying with the provisions of the transaction documents.
 
The Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
 
 
The Higher Education Act, the Servicemembers Civil Relief Act and similar state and local laws provide payment relief to borrowers who enter active military service and to borrowers in reserve status who are called to active duty after the origination of their trust student loans.   Recent and

 
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ongoing military operations by the United States have increased the number of citizens who are in active military service, including persons in reserve status who have been called or may be called to active duty.
 
We do not know how many trust student loans have been or may be affected by the application of these laws. As a result, there may be unanticipated delays in payment and losses on the trust student loans.
 
Rating Agencies May Have A Conflict Of Interest
 
Navient Solutions, or an affiliate, paid a fee to two or more rating agencies to assign the initial credit ratings to the notes on or before the original closing date. The SEC has said that being paid by the sponsor, the issuer or an underwriter to issue and/or maintain a credit rating on asset backed securities creates a conflict of interest for rating agencies, and that this conflict is particularly acute because arrangers of asset-backed securities transactions provide repeat business to such rating agencies.
 
A Lowering Of The Credit Rating Of The United States of America May Adversely Affect The Market Value of Your Notes
 
The credit rating of the United States was downgraded by a nationally recognized statistical rating organization (“NRSRO”) and may potentially be downgraded by other NRSROs in the future.  The impact of any such downgrade is not yet clear, and depending on the ratings assigned, the stated reasons for a lower rating and other factors, the liquidity, market value and regulatory characteristics of your notes could be materially and adversely affected.
The Interest Rates On The Offered Notes Are Subject To Limitations Which Could Reduce Your Yield
 
The interest rates on the offered notes may be limited by the maximum rate, which will be based on the least of the maximum auction rate, the maximum interest rate (generally, 18% per annum) or, in certain circumstances, the auction student loan rate (which is the weighted average interest rate of the trust student loans, minus specified administrative expenses).  If, for any accrual period, the maximum rate is less than the auction rate determined in accordance with the auction procedures, interest will be paid on the offered notes at the maximum rate even though there may be sufficient available funds to pay interest at the auction rate.
 
   
For an auction rate distribution date on which the interest rate for the offered notes is equal to the auction student loan rate, the excess of (a) the lower of (1) the amount of interest at the auction rate determined pursuant to the

 
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auction procedures for the offered notes and (2) the amount of interest at the maximum auction rate which would have been applied if the auction student loan rate were not a component of the maximum auction rate, over (b) the auction student loan rate will become a carryover amount, and will be allocated to the offered notes on the succeeding quarterly distribution date (and paid on the succeeding auction rate distribution date), but only to the extent that there are funds available for that purpose and other conditions are met.  It is possible that such carryover amount may never be paid.  Any carryover amount not paid at the time of final maturity of the offered notes will be extinguished.  See “Description of the Notes—The Notes—The Auction Rate Notes—Maximum Auction Rate and Interest Carryovers” in this prospectus supplement.
 
Auction Procedures And Transfer Requirements May Limit The Liquidity And Marketability Of Your Offered Notes
 
The auction procedures and transfer requirements described in this prospectus supplement and the attached base prospectus may limit the liquidity and marketability of the offered notes and therefore may not yield an owner the best possible price for an offered note.  In particular, if an existing holder of an offered note were to submit a sell order or a hold order subject to an interest rate that is determined to be greater than the maximum rate for the auction date, and sufficient clearing bids were not obtained on such auction date, the existing owner would not have its offered notes purchased through the auction procedures on the auction date.  In that event, no assurance can be given that a broker-dealer would purchase the offered note or would otherwise be able to locate a purchaser prior to the auction date or that sufficient clearing bids would be obtained on any succeeding auction date.
 
Actions By A Broker-Dealer Could Affect Interest Rates On Your Offered Notes
 
Each broker-dealer agreement now and in the future will provide that a broker-dealer may submit orders in auctions for its own account.  Each broker-dealer also agrees in the related broker-dealer agreement to handle customers' orders in accordance with its duties under applicable securities laws and rules.  Any broker-dealer submitting an order for its own account in any auction could have an advantage over other potential holders in that the broker-dealer would have knowledge of other orders placed through

 
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it in that auction.  Also, a broker-dealer may exercise discretion regarding client orders, which could be an advantage to certain clients because the broker-dealer would have knowledge of the other orders placed through it in the auction.  As a result of bidding by a broker-dealer in an auction, the auction rate may be higher or lower than the rate that would have prevailed had the broker-dealer not bid.  A broker-dealer may also bid in an auction in order to prevent what would otherwise be (a) a failed auction, (b) an "all-hold" auction, or (c) the implementation of an auction rate that the broker-dealer believes, in its sole judgment, does not reflect the market for such notes at the time of the auction.  A broker-dealer may also encourage additional investor bidding in order to prevent an "all-hold" auction.  One or more of the original underwriters of the notes or their affiliates may act as broker-dealers with respect to the offered notes. These multiple responsibilities could result in conflicts of interest.
 
   
For further information regarding broker-dealers and auction rate note procedures, please see “Description of the Notes—The Auction Rate Notes” in this prospectus supplement and “Additional Information Regarding the Notes—The Auction Rate Notes” in the base prospectus.
 
The Lack Of A Market for Auction Rate Securities Could Again In The Future Result In Prolonged Periods Of Failed Auctions And A Loss Of Liquidity
 
An economic downturn may cause the market for auction rate notes to cease to exist which may result in outstanding classes of auction rate notes experiencing a prolonged period of ongoing failed auctions.  Holders of auction rate securities may be unable to sell their securities and may experience a potentially significant loss of market value.  Although the offered notes are currently being successfully auctioned on each recent auction date, we cannot give any assurance whether in the future a functioning market for auction rate notes may once again disappear and your offered notes may be subject to an ongoing period of failed auctions.  Investors in offered notes need to be aware that they may be required to hold their notes without an ability to liquidate their investments unless they are willing to sell such offered notes at a loss and possibly a significant loss.
 
 
 
 
 
 
 
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The Interests Of The Swap Counterparties May Differ From Those Of The Noteholders
 
Citibank, N.A. and Merrill Lynch Derivative Products AG serve as swap counterparties and also as valuation agents pursuant to the terms of the swap agreements.  In those capacities, the swap counterparties calculate collateral values and the mid-market value of the swap agreements and make other determinations that may be material to investors in the notes.  The manner in which Citibank, N.A. and Merrill Lynch Derivative Products AG make such determinations or otherwise exercise their discretion may adversely affect investors in the notes.  In addition, Citibank, N.A. and Merrill Lynch Derivative Products AG may have the right to cease serving in these capacities or to delegate certain responsibilities to third parties, who may have interests and incentives that differ from those of investors in the notes.  In their capacities as swap counterparties, Citibank, N.A. and Merrill Lynch Derivative Products AG owe no fiduciary duty to the noteholders.

 
 
 
 
 
 
 

 






 
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DEFINED TERMS
 
In later sections, we use a few terms that we define in the Glossary at the end of this prospectus supplement.  These terms appear in bold face on their first use and in initial capital letters in all cases.
 
THE TRUST
 
General
 
SLM Private Credit Student Loan Trust 2003-B (the “trust”) is a Delaware statutory trust formed under, and is currently operating pursuant to, a trust agreement dated as of June 1, 2003 (the “trust agreement”) between the depositor and the trustee.
 
The trust has not engaged and will not engage in any activity other than:
 
 
·
acquiring, holding and managing the trust student loans and the other assets of the trust and related proceeds;
 
 
·
issuing the notes;
 
 
·
making payments on the notes;
 
 
·
entering into the interest rate cap agreement on the original closing date;
 
 
·
having entered into the swap agreements and making the payments required thereunder; and
 
 
·
engaging in other activities that are necessary, suitable or convenient to accomplish, or are incidental to, the foregoing.
 
The trust was initially capitalized with nominal equity of $100, excluding amounts that were deposited into the reserve account, the cash capitalization account and the collection account by the trust on the original closing date.  The proceeds from the original sale of the notes were used by the trustee to make the initial deposits into the reserve account, the cash capitalization account and the collection account, and to purchase, on behalf of the trust, the initial trust student loans.  The trust purchased the initial trust student loans from the depositor under a sale agreement dated as of June 27, 2003, among the depositor, the trust and the trustee.  The depositor used the net proceeds it received from the sale of the initial trust student loans to pay the seller the purchase price for the initial trust student loans acquired from it under the purchase agreement dated June 27, 2003.  See “Use of Proceeds” in this prospectus supplement for more information.  In the event of a breach of a representation or warranty regarding any trust student loan, the depositor will have the right to require the seller to cure the breach, repurchase or substitute with respect to each such deficient trust student loan.
 

 
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The property of the trust consists of:
 
 
·
the pool of trust student loans, legal title to which is held by the trustee on behalf of the trust;
 
 
·
all funds collected on the trust student loans, received on or after on or after the original closing date;
 
 
·
all moneys and investments from time to time on deposit in the Trust Accounts;
 
 
·
its rights under the swap agreements and the related documents; and
 
 
·
its rights under the transfer and servicing agreements, including the right to require Navient CFC, the depositor or the servicer to repurchase trust student loans from it or to substitute student loans under certain conditions.
 
The notes are secured by the property of the trust.  The collection account, the reserve account and the future distribution account are maintained in the name of the indenture trustee for the benefit of the noteholders.  To facilitate servicing and to minimize administrative burden and expense, the servicer will act as custodian of the promissory notes representing the trust student loans and other related documents.
 
The trust’s principal offices are at 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602, in care of The Bank of New York Mellon Trust Company, National Association, as successor trustee, at its address shown below under “—Trustee”.
 
Capitalization of the Trust
The following table sets forth the outstanding principal balances of the notes as of the December 2014 quarterly distribution date:
Floating Rate Class A-2 Student Loan-Backed Notes
    143,086,231  
Auction Rate Class A-3 Student Loan-Backed Notes
    109,000,000  
Auction Rate Class A-4 Student Loan-Backed Notes
    109,000,000  
Floating Rate Class B Student Loan-Backed Notes
    25,157,349  
Floating Rate Class C Student Loan-Backed Notes
    57,545,977  
Initial Equity
    100  
Total
  $ 443,789,657  
 
The following table sets forth the assets of the trust as of February 28, 2015:
 
Collection Account
 
14,834,175
 
Reserve Account
    3,118,201  
Aggregate Pool Balance
    409,929,298  
Total
  $ 427,881,674  
 

 
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Trustee
 
The trustee is currently The Bank of New York Mellon Trust Company, National Association (the “trustee”).  The trustee is a national banking association.  Its address is 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602.  The trustee has been, and currently is, serving as trustee for numerous securitization transactions and programs involving pools of student loan receivables.  The trustee has not participated in the preparation of, and is not responsible for, any other information contained in this prospectus supplement or the base prospectus.
 
The trustee holds on behalf of the trust legal title to all the trust student loans acquired under the sale agreement.
 
The trustee acts on behalf of the certificateholder and represents and exercises the rights and interests of the certificateholder under the trust agreement.  Except as specifically delegated to the administrator in the administration agreement, the trustee will also execute and deliver all agreements required to be entered into on behalf of the trust.
 
The liability of the trustee in connection with the issuance and sale of the notes will consist solely of the express obligations specified in the trust agreement and sale agreement.  The trustee is not personally liable for any actions or omissions that were not the result of its own bad faith, willful misconduct or negligence.  The trustee is entitled to be indemnified by the administrator for any loss, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the performance of its duties under the indenture and the other transaction documents (including any supplemental indenture and/or amended administration agreement).  See “Description of the Notes” in this prospectus supplement and “Transfer and Servicing Agreements” in the base prospectus.  Affiliates of the depositor maintain banking relations with the trustee.
 
The trustee may resign at any time. The administrator may also remove the trustee if it becomes insolvent or ceases to be eligible to continue as trustee.  In the event of such a resignation or removal, the administrator will appoint a successor. The resignation or removal of the trustee and the appointment of a successor will become effective only when a successor accepts its appointment.  To the extent expenses incurred in connection with the replacement of the trustee are not paid by the successor trustee, the depositor will be responsible for the payment of such expenses.
 
 
Indenture Trustee
 
The trust issued the notes under an indenture dated as of June 1, 2003.  Under the indenture, The Bank of New York Mellon (the “indenture trustee”), a New York banking corporation, is currently the indenture trustee.  Its address is 101 Barclay Street, 4 West, New York, New York 10286.  The indenture trustee has acted as trustee on numerous asset-backed securities transactions involving pools of student loans.
 

 
 
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Affiliates of the depositor maintain customary banking relations on arms-length terms with the indenture trustee.
 
The indenture trustee acts on behalf of the noteholders and represents their interests in the exercise of their rights under the indenture.
 
To the extent expenses incurred in connection with the replacement of an indenture trustee are not paid by the indenture trustee that is being replaced, the depositor will be responsible for the payment of such expenses.
 
The indenture trustee will not be personally liable for any actions or omissions that were not the result of its own bad faith, willful misconduct or negligence.  The indenture trustee is entitled to be indemnified by the administrator (at the direction of the trust) for any loss, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the performance of its duties under the indenture and the other transaction documents.  Upon the occurrence of an event of default, and in the event the administrator fails to reimburse the indenture trustee, the indenture trustee is entitled to receive all such amounts owed from cashflow on the trust student loans prior to any amounts being distributed to the noteholders.
 
 
Delaware Trustee
 
BNY Mellon Trust of Delaware will be the Delaware trustee under the trust agreement.  The Delaware trustee will act in the capacities required for a Delaware trust under the Delaware Statutory Trust Act.
 
BNY Mellon Trust of Delaware is a Delaware banking corporation with its principal place of business located at 100 White Clay Center, Suite 102, Newark, Delaware 19711.  BNY Mellon Trust of Delaware has and is currently serving as Delaware trustee for numerous securitization transactions and programs involving pools of student loan receivables.
 
The liability of the Delaware trustee in connection with the issuance and sale of the notes will consist solely of the express obligations specified in the trust agreement.  The Delaware trustee will not be personally liable for any actions or omissions that were not the result of its own willful misconduct or negligence.  The Delaware trustee will be entitled to be indemnified by the administrator (at the direction of the depositor) for any loss, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the performance of its duties under the trust agreement.  The depositor and its affiliates maintain banking relations with the Delaware trustee and/or its affiliates.
 
The Delaware trustee may resign at any time.  The administrator may also remove the Delaware trustee if it becomes insolvent or ceases to be eligible to continue as Delaware trustee.  In the event of such a resignation or removal, the administrator will appoint a successor.  The resignation or removal of the Delaware trustee and the appointment of a successor will become effective only when a successor accepts its appointment.  To the extent expenses incurred in connection with the replacement of

 
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the Delaware trustee are not paid by the successor trustee, the depositor will be responsible for the payment of such expenses.
 
The Depositor
 
Navient Credit Funding, LLC (“Navient CF”) is the depositor of the trust and is a limited liability company whose sole member is Navient CFC. It was formed in Delaware on July 22, 2002.  Navient CF is a limited purpose, bankruptcy remote entity formed to purchase and securitize education loans (including ownership interests in debt and equity asset-backed securities collateralized by education loans), whether originated under the FFELP loan program or other private education loan programs, for re-sale in various securitization transactions.  Navient Solutions, Inc. services all loans owned by Navient CF.
 
The Selling Securitiesholder
 
Navient CF or its affiliates purchased the offered notes in one or more open market purchases and subsequently sold them to SLM Private Credit Student Loan ABS Repackaging Trust 2013-R1 (the “R1 Trust”), which is a Delaware statutory trust.  Navient CF (or an affiliate) is the sole holder of the equity in the R1 Trust.  The R1 Trust in its capacity as the selling securitiesholder owns approximately 42.61% of the offered notes, all of which are being offered for sale hereunder.  The remaining approximately 57.39% of the offered notes are owned by third-parties and are not being offered for sale.  The selling securitiesholder will place a bid offer in this auction.  If the auction is successful and the clearing bid is less than the bid placed by the selling securitiesholder, the offered notes will be sold pursuant to the applicable auction procedures.  If the auction fails or the clearing bid is set at or higher than the bid placed by the selling securitiesholder, the selling securitiesholder will retain its ownership of the offered notes pursuant to the applicable auction procedures.  Subsequent to the successful close of this reoffering (upon a successful auction at a clearing bid less than the bid placed by the selling securitiesholder) the selling securitiesholder will not own any of the outstanding offered notes.
 
USE OF PROCEEDS
 
A successful reoffering of the offered notes will not result in any proceeds to the trust.  Rather all proceeds (net of expenses) from the reoffering will be transferred to the selling securitiesholder to be used to repay, in part, certain of its outstanding notes, in accordance with the provisions of the related indenture.
 
The trust used the original net proceeds from the sale of the notes to make the initial deposits into the reserve account, the add-on consolidation loan account, the collection account and the capitalized interest account and to purchase the initial trust student loans from the depositor on the original closing date under the sale agreement.  The depositor then used the proceeds paid to the depositor by the trust to pay to the seller the purchase price for the initial trust student loans purchased by the depositor.  See “The Trust—General” in this prospectus supplement.
 

 
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THE TRUST STUDENT LOAN POOL
 
 
General
 
On June 27, 2003, the original closing date, the trustee, on behalf of the trust, purchased the pool of initial trust student loans from the depositor.  The information about the trust student loans was originally calculated and presented as of May 12, 2003, the original cutoff date.
 
Eligible Trust Student Loans
 
The trust student loans were selected by employing several criteria, including requirements that each trust student loan as of the original closing date:
 
 
·
contains terms in accordance with those required by the loan program under which it was originated, whether the Signature Education Loan® Program, the LAWLOANS® Program, the MBALoans® Program or the MEDLOANSSM Program, the loan purchase agreements, and other applicable requirements;
 
 
·
was not more than 60 days past due; and
 
 
·
did not have a borrower who is noted in the related records of the servicer as being currently involved in a bankruptcy proceeding.
 
No trust student loan, as of the original closing date, was subject to any prior obligation to sell that loan to a third party.
 
For a description of each loan program under which the private education loans were originated, see Appendices A through D to this prospectus supplement.
 
 
Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions
 
General. On July 21, 2010, President Obama signed into law the Dodd-Frank Act which, among other things, gives the FDIC authority to act as receiver of certain bank holding companies, financial companies and their respective subsidiaries (other than an insured depository institution) in specific situations under its Orderly Liquidation Authority (the “OLA”) provisions.  The proceedings, standards, powers of the receiver and many other substantive provisions of the OLA differ from those of the United States Bankruptcy Code in several respects.  To the extent those differences may affect Navient Corporation, Navient Solutions and their affiliates, they are discussed in this section below.  In addition, because the OLA provisions of the Dodd-Frank Act remain subject to clarification through FDIC regulations and have yet to be applied by the FDIC in any receivership, it is unclear what impact these provisions will have on any particular company, including Navient Corporation, Navient Solutions, the depositor, the seller, the trust, the servicer, the administrator, or any of their respective creditors.
 
Potential Applicability to Navient Corporation, Navient Solutions and their Affiliates.  The Dodd-Frank Act creates uncertainty as to whether certain companies

 
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may be subject to liquidation in a receivership under the OLA rather than bankruptcy proceedings under the United States Bankruptcy Code.  For a company to become subject to the OLA, the Secretary of the Treasury (in consultation with the President of the United States) must determine, among other things, that such company is or is likely to be in bankruptcy, insolvent, or unable to pay its obligations when due, that the company’s failure and its resolution under the United States Bankruptcy Code “would have serious adverse effects on financial stability in the United States,” that an OLA proceeding would mitigate these adverse effects, and that no viable private sector alternative is available to prevent the default of the company.
 
If the OLA is determined to apply to Navient Corporation or Navient Solutions, the trust, the depositor, Navient CFC, the servicer or the administrator could be deemed a “covered subsidiary” of Navient Corporation or Navient Solutions.  For the trust, the depositor, Navient CFC, the servicer or the administrator to be subject to receivership under the OLA as a “covered subsidiary” of Navient Corporation or Navient Solutions (1) the FDIC would have to be appointed as receiver for Navient Corporation or Navient Solutions, as applicable, under the OLA as described above, (2) the FDIC and the Secretary of the Treasury would have to jointly determine that (a) such covered subsidiary is or is likely to be in bankruptcy, insolvent, or unable to pay its obligations when due, (b) appointment of the FDIC as receiver of such covered subsidiary would avoid or mitigate serious adverse effects on the financial stability or economic conditions of the United States, and (c) such appointment would facilitate the orderly liquidation of Navient Corporation or Navient Solutions, as applicable.  To mitigate the likelihood that the trust, the depositor, Navient CFC, the servicer or the administrator would be subject to the OLA, the trust does not intend to issue non-investment grade debt and the depositor, Navient CFC, the servicer and the administrator will not issue any debt.  Moreover, the trust owns a relatively small amount of the student loans originated by Navient CFC and serviced by the servicer, and each of the trust, the depositor, Navient CFC, the servicer or the administrator is structured as a separate legal entity from Navient Solutions and any other trust sponsored by Navient Solutions.  Notwithstanding the foregoing, because of the novelty of the Dodd-Frank Act and the OLA provisions, the uncertainty surrounding how the Secretary of the Treasury’s determination will be made and the fact that such determination would be made in the future under potentially different circumstances, no assurance can be given that the OLA provisions would not apply to Navient Corporation, Navient Solutions or their covered subsidiaries or, if it were to apply, that the timing and amounts of payments to the noteholders would not be less favorable than under the United States Bankruptcy Code.
 
FDIC’s Repudiation Power Under the OLA.  Under the OLA, if the FDIC were appointed receiver of Navient Corporation, Navient Solutions or a covered subsidiary, including the trust or the depositor, the FDIC would have various powers, including the power to repudiate any contract to which Navient Corporation, Navient Solutions or such covered subsidiary was a party, if the FDIC determined that performance of the contract was burdensome to the estate and that repudiation would promote the orderly administration of Navient Corporation’s, Navient Solutions’s or such covered subsidiary’s affairs, as applicable.
 
 

 
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In January 2011, the Acting General Counsel of the FDIC issued an advisory opinion (the “January 2011 Opinion”) confirming, among other things, its intended application of the FDIC’s repudiation power under the OLA.  In the January 2011 Opinion, the Acting General Counsel stated that nothing in the Dodd-Frank Act changes the existing law governing the separate existence of separate entities under other applicable law. As a result, the Acting General Counsel was of the opinion that the FDIC as receiver for a covered financial company (as defined in the Dodd-Frank Act), which could include Navient Corporation, Navient Solutions or their covered subsidiaries (including the trust or the depositor), cannot repudiate a contract or lease unless it has been appointed as receiver for that entity or the separate existence of that entity may be disregarded under other applicable law.  In addition, the Acting General Counsel was of the opinion that until such time as the FDIC Board of Directors adopts a regulation further addressing the application of Section 210(c) of the Dodd-Frank Act, which relates to contracts that are entered into prior to the appointment of a receiver, if the FDIC were to become receiver for a covered financial company, which could include Navient Corporation, Navient Solutions or their covered subsidiaries (including the trust or the depositor), the FDIC will not, in the exercise of its authority under Section 210(c) of the Dodd-Frank Act, reclaim, recover or recharacterize as property of that covered financial company or the receivership any asset transferred by that covered financial company prior to the end of the applicable transition period of a regulation, provided that such transfer satisfies the conditions for the exclusion of such assets from the property of the estate of that covered financial company under the United States Bankruptcy Code.  Although the January 2011 Opinion does not bind the FDIC or its Board of Directors, or any court or any governmental entity, and could be modified or withdrawn in the future, it also states that the Acting General Counsel will recommend that the FDIC Board of Directors incorporate a transition period of 90 days for any provisions in any further regulations affecting the statutory power to disaffirm or repudiate contracts.  On July 15, 2011, the FDIC published a final rule regarding the OLA and the Priorities and Claims Process under the OLA, including issues regarding preferential and fraudulent transfers; however, the FDIC did not address any of the aforementioned repudiation issues in the final rule.  To date, the FDIC has not proposed or adopted any regulations addressing these issues.
 
The January 2011 Opinion also states that the FDIC anticipates recommending consideration of future regulations related to the Dodd-Frank Act.  To the extent any future regulations or subsequent FDIC actions or court rulings in an OLA proceeding involving Navient Corporation, Navient Solutions or their covered subsidiaries (including the trust or the depositor), are contrary to the January 2011 Opinion, payment or distributions of principal and interest on the notes issued by the trust could be delayed and/or reduced.  We have structured the transfers of student loans under the purchase agreements and sale agreements with the intent that they would be characterized as legal true sales under applicable state law and that the student loans would not be included in the related transferor’s bankruptcy estate under the United States Bankruptcy Code.  If the transfers are so characterized in a FDIC OLA receivership, based on the January 2011 Opinion and other applicable law, the FDIC would not be able to recover the transferred student loans using its repudiation power.  However, if the FDIC were to successfully assert that the transfers of student loans were not legal
 

 
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true sales and should instead be characterized as a security interest to secure a loan, and if the FDIC repudiated those loans, the purchasers of the student loans or the noteholders, as applicable, would have a claim for their “actual direct compensatory damages,” which claim would be no less than the initial principal balance of the loan plus interest accrued to the date the FDIC was appointed receiver.
 
In addition, to the extent that the value of the collateral securing the loan exceeds such amount, the purchaser or the noteholders, as applicable, would also have a claim for any interest that accrued after such appointment at least through the date of repudiation or disaffirmance.  In addition, noteholders could suffer delays in payments on their notes even if the FDIC was unsuccessful in challenging that the transfers were not legal true sales or if it ultimately did not repudiate a legal true sale.
 
Also assuming that the FDIC were appointed receiver of Navient Corporation, Navient Solutions or a covered subsidiary, including the trust or the depositor, under the OLA, the FDIC’s repudiation power would extend to continuing obligations of the applicable entity or entities under receivership, as applicable, including any obligation to repurchase student loans for a breach of representation or warranty as well as, with respect to the servicer, its obligation to service the student loans.  If the FDIC were to exercise this repudiation power, noteholders would not be able to compel Navient Solutions or any applicable covered subsidiary to repurchase student loans for a breach of representation and warranty and instead would have a claim for damages in Navient Solutions’s, or that covered subsidiary’s, receivership, as applicable, and thus would suffer delays and may suffer losses of payments on their notes.  Noteholders would also be prevented from replacing the servicer during the stay.  In addition, if the FDIC were to repudiate Navient Solutions’s obligations as servicer, there may be disruptions in servicing as a result of a transfer of servicing to a third party and noteholders may suffer delays or losses of payments on their notes.  In addition, there are other statutory provisions enforceable by the FDIC under which, if the FDIC takes action, payments or distributions of principal of and interest on the notes issued by the trust would be delayed and may be reduced.
 
In addition, under the OLA, none of the parties to the purchase agreements, sale agreement, servicing agreement, administration agreement or the indenture could exercise any right or power to terminate, accelerate, or declare a default under those contracts, or otherwise affect Navient Solutions’s or a covered subsidiary’s rights under those contracts without the FDIC’s consent for 90 days after the receiver is appointed.  For at least the same period, and possibly longer, the FDIC’s consent would also be needed for any attempt to obtain possession of or exercise control over any property of Navient Corporation, Navient Solutions or of a covered subsidiary.  The requirement to obtain the FDIC’s consent before taking these actions relating to a covered financial company’s or covered subsidiary’s contracts or property is comparable to the “automatic stay” under the United States Bankruptcy Code.
 
If the trust were to become subject to the OLA, the FDIC may repudiate the debt of the trust.  In such an event, the noteholders would have a secured claim in the receivership of the trust for “actual direct compensatory damages” as described above,
 

 
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but delays in payments on the notes would occur and possible reductions in the amount of those payments could occur.  In addition, for a period of at least 90 days after a receiver was appointed, noteholders would be stayed from accelerating the debt or exercising any remedies under the indenture.
 
FDIC’s Avoidance Power Under the OLA. Under statutory provisions of the OLA similar to those of the United States Bankruptcy Code, the FDIC could avoid transfers of student loans that are deemed “preferential.”  Under one potential interpretation of these provisions, the FDIC could avoid as a preference transfers of student loans evidenced by certain written contracts and perfected either automatically upon the transfer (in the case of a sale) or by the filing of a uniform commercial code (“UCC”) financing statement against the applicable transferor (in the case of a pledge to secure a debt), unless the contracts were physically delivered to the transferee or its custodian or were marked in a manner legally sufficient to indicate the rights of the indenture trustee. If a transfer of student loans were avoided as preferential, the transferee would have only an unsecured claim in the receivership for the purchase price of the student loans.
 
However, on July 15, 2011, the FDIC Board of Directors published a final rule which, among other things, states that the FDIC is interpreting the OLA’s provisions regarding the treatment of preferential transfers in a manner comparable to the relevant provisions of the United States Bankruptcy Code so that transferees will have the same treatment under the OLA as they would have in a bankruptcy proceeding. Under such a construction, a transfer of student loans perfected either automatically upon the transfer (in the case of a sale) or by the filing of a UCC financing statement against a transferor (in the case of a pledge to secure a debt) as provided in the applicable transfer agreement would not be avoidable by the FDIC as a preference under the OLA.  If a court were to conclude, however, that this FDIC rule is not consistent with the statute, then if a transfer were avoided as a preference under the OLA, noteholders would only have an unsecured claim in the receivership for the purchase price of the receivables and payments or distributions of principal of and interest on the notes issued by your issuing entity could be delayed or reduced.
 
Characteristics of the Trust Student Loans
 
The tables contained in Annex A to this prospectus supplement provide a description of specified characteristics of the trust student loans as of the original closing date.  The tables contained in Annex B to this prospectus supplement provide a description of specified characteristics of the trust student loans as of the statistical disclosure date.  Unless otherwise specified, all information with respect to the trust student loans presented in this prospectus supplement or in Annex B is presented as of February 28, 2015, which is the “statistical disclosure date.”
 
The aggregate outstanding principal balance of the loans in each of the tables in both Annex A and Annex B include the principal balance due from then borrowers, plus accrued interest of $834,798 to be capitalized as of the original closing date or $739,269 to be capitalized as of the statistical disclosure date, as applicable.  

 
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Percentages and dollar amounts in any table may not total 100% or whole dollars due to rounding.  The tables in Annex A and Annex B also contain information concerning the total number of loans and total number of borrowers in the portfolio of trust student loans.  
 
Insurance of Student Loans
 
The trust student loans are not guaranteed, insured or reinsured by the United States or any state-sponsored guarantee agency or private insurer.
 
Cure Period for Trust Student Loans
 
The seller, the depositor or the servicer, as applicable, will be obligated to purchase, or to substitute qualified substitute student loans for, any trust student loan in the event of a material breach of certain representations, warranties or covenants concerning such trust student loan, following a period during which the breach may be cured.  The cure period will be 270 days.  In each case the cure period begins on the date on which the breach is discovered.  The purchase or substitution will be made not later than the end of the 270-day cure period.
 
DESCRIPTION OF THE NOTES
 
General
 
The notes were issued under an indenture dated as of June 1, 2003.  The following summary describes some terms of the notes, the indenture, the trust agreement and the swap agreement.  The base prospectus describes other terms of the notes.  See “Description of the Notes” and “Additional Information Regarding the Notes” in the base prospectus.  The following summary does not cover every detail and is subject to the provisions of the notes, the indenture, the trust agreement and the swap agreement.
 
Interest
 
Interest accrues on the outstanding principal balances of the class A, class B and class C notes at their respective interest rates.  Interest accrues during each accrual period and is generally payable quarterly to the floating rate noteholders on each quarterly distribution date or, with respect to auction rate noteholders, monthly on each auction rate distribution date, as applicable.   Interest accrued as of any applicable distribution date but not paid on that distribution date will be due on the next applicable distribution date together with an amount equal to interest on the unpaid amount at the applicable rate per annum.  Interest payments on the notes entitled to distributions for any applicable distribution date are generally funded from Available Funds; from amounts on deposit in the reserve account to the extent necessary and available; and from the future distribution account for the applicable notes.  See “—Distributions” and “—Credit Enhancement.”  If these sources are insufficient to pay the Class A Noteholders’ Interest Distribution Amount for that distribution date, the shortfall will be allocated pro rata to the class A noteholders entitled to distributions on that
 

 
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distribution date, based upon the total amount of interest then payable on each class of the class A notes entitled to distributions on that distribution date.
 
Depending on the allocations of the administrator at the beginning of each month, the rate and timing of collections and the different distribution dates for different classes of notes, interest may be paid in full on one or more classes of class A notes, on the class B notes or on one or more classes of class C notes on a given distribution date while interest is not paid in full on all of the class A, class B or class C notes, or on certain classes thereof, on a later distribution date.
 
The interest rate for each class of floating rate notes for each accrual period will be equal to the sum of three-month LIBOR and the following applicable spread:
 
Class of Notes
 
Spread
Class A-2
 
plus 0.40%
Class B
 
plus 0.70%
Class C
 
plus 1.60%

 
The interest rate for the auction rate notes will be determined on each applicable auction date as described under “—The Auction Rate Notes.”
 
The administrator will determine LIBOR for the specified maturity for each accrual period on the second business day before the beginning of that accrual period, as described under “Additional Information Regarding the Notes—Determination of Indices—LIBOR” in the base prospectus.
 
 
The Auction Rate Notes
 
The interest rate for the auction rate notes will be reset on the interest rate adjustment date to the interest rate determined pursuant to the auction procedures described below.  Interest on the auction rate notes will accrue daily and will be computed for the actual number of days elapsed on the basis of a year consisting of 360 days.  Interest and, if applicable, principal on the auction rate notes will be payable on the first business day following the expiration of each applicable accrual period.  Determination of Interest Rates.  The procedures that will be used in determining the interest rate on the auction rate notes are summarized in the following paragraphs.
 
The interest rate on the auction rate notes will be determined periodically by means of a “Dutch Auction.”  In this Dutch Auction, investors and potential investors submit orders through an eligible broker-dealer as to the principal amount of auction rate notes that they wish to buy, hold or sell at various interest rates.  The broker-dealers submit their clients’ orders to the auction agent.  The auction agent processes all orders submitted by all eligible broker-dealers and determines the interest rate for the upcoming accrual period.  The broker-dealers are notified by the auction agent of the interest rate for the upcoming accrual period and are provided with settlement instructions relating to purchases and sales of auction rate notes.  Auction rate notes will be purchased and sold between investors and potential investors at a price equal to
 

 
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their then-outstanding principal balance plus any accrued interest.  The Bank of New York Mellon is currently servicing as auction agent for the auction rate notes and Merrill Lynch, Pierce, Fenner & Smith Incorporated is currently serving as a broker-dealer for the auction rate notes.  The auction agent may also enter into broker-dealer agreements with additional broker-dealers.  The auction agent fees and broker-dealers fees per year will not exceed the product of 0.26% and the outstanding principal balance of the auction rate notes.
 
In the auction, the following types of orders may be submitted:
 
 
·
“bid/hold orders”—specify the minimum interest rate that a current investor is willing to accept in order to continue to hold its auction rate notes for the upcoming accrual period;
 
 
·
“sell orders”—an order by a current investor to sell a specified principal amount of its auction rate notes, regardless of the upcoming interest rate; and
 
 
·
“potential bid orders”—specify the minimum interest rate that a potential investor, or a current investor wishing to purchase additional auction rate notes of a specific class of auction rate notes, is willing to accept in order to buy a specified principal amount of that class of auction rate notes.
 
If an existing investor does not submit orders with respect to all its auction rate notes, the investor will be deemed to have submitted a hold order at the new interest rate for that portion of its auction rate notes for which no order was received.
 
See “Additional Information Regarding the Notes—Auction Rate Notes” in the base prospectus for an example that illustrates how the auction procedures are used in determining the interest rate on the auction rate notes.
 
Maximum Auction Rate And Interest Carryovers.  If the auction rate is greater than the maximum auction rate, then the interest rate for the auction rate notes will be the maximum auction rate.
 
In such event, if the interest rate for the auction rate notes is set at the auction student loan rate (which is the weighted average interest rate of the trust student loans, minus specified administrative expenses), the excess of (a) the lower of (1) the auction rate and (2) the maximum auction rate which would have been applied if the auction student loan rate were not a component of the maximum auction rate, over (b) the auction student loan rate will be carried over.  If there are insufficient bid orders to purchase all the auction rate notes offered for sale in an auction and the interest rate is set at the auction student loan rate, the excess of the maximum auction rate which would have been applied if the auction student loan rate was not a component of the maximum auction rate over the auction student loan rate will be carried over.  The carryover amount will bear interest calculated at a rate equal to one-month LIBOR.  The ratings of the notes do not address the payment of carryover amounts or interest accrued on carryover amounts.
 
 

 
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The carryover amount plus any interest accrued thereon will be allocated to the auction rate notes pursuant to clause (14) under “—Distributions—Quarterly Distributions from the Collection Account” on a quarterly distribution date to the extent funds are available after the application of clauses (1) through (13) on that quarterly distribution date.  Any carryover amount and interest accrued on the carryover amount so allocated will be paid to the registered owner on the record date with respect to which the carryover amount accrued on the immediately succeeding auction rate distribution date.  Any carryover amount not paid at the time of final payment of the auction rate notes will be extinguished.
 
Changes in Auction Period.  The broker-dealers may, from time to time, change the length of the auction period for the auction rate notes in order to conform with then current market practice with respect to similar securities or to accommodate economic and financial factors that may affect or be relevant to the length of the auction period and the interest rate borne by the auction rate notes.  The broker-dealers will initiate the auction period adjustment by giving written notice to the indenture trustee, the auction agent, each rating agency and the registered owners of the auction rate notes at least 10 days prior to the auction date for the auction rate notes.  Any adjusted auction period will be at least 7 days but not more than 270 days.  The auction period adjustment will take effect only if approved by the broker-dealers and if the auction agent receives orders sufficient to complete the auction for the new auction period at a rate of interest below the maximum auction rate.
 
Changes in the Auction Date.  The broker-dealers may specify a different auction date for a class of auction rate notes in order to conform with then current market practice with respect to similar securities or to accommodate economic and financial factors that may affect or be relevant to the day of the week constituting an auction date for that class of auction rate notes.  The broker-dealers will provide notice of their determination to specify an earlier auction date in writing at least 10 days prior to the proposed changed auction date to the indenture trustee, the auction agent, each rating agency and the registered owner.
 
Bidding by Broker-Dealers. The broker-dealers are permitted, but not obligated, to submit sell orders or bid/hold orders (“orders”) in auctions for their own accounts either as a bidder or as a seller, and they routinely do so in the auction rate securities market in their sole discretion.  If a broker-dealer submits an order for its own account, it would likely have an advantage over other bidders because that broker-dealer would have knowledge of some or all of the other orders placed through broker-dealers in that auction and, thus, could determine the rate and size of its order so as to ensure that its order is likely to be accepted in the auction and that the auction is likely to clear at a particular rate.  For this reason, and because the broker-dealers are appointed and paid by the trust to serve as broker-dealers in the auction, the broker-dealers’ interests in conducting an auction may differ from those of existing auction rate noteholders and prospective auction rate noteholders who participate in auctions.  See “—Auction Dealer Fees” below.  A broker-dealer would not have knowledge of orders submitted to the auction agent by any other firm that is, or may in the future be, appointed to accept orders pursuant to a broker-dealer agreement.
 
 

 
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A broker-dealer may routinely place one or more bids in an auction for its own account to acquire auction rate notes for its inventory, to prevent an “auction failure event” (i.e., an event where there are insufficient clearing bids which would result in the auction rate being set at the maximum rate) or an auction from clearing at a rate that it believes does not reflect the market for the auction rate notes.  A broker-dealer may place such bids even after obtaining knowledge of some or all of the other orders submitted through it.  When bidding for its own account, a broker-dealer may also bid outside or inside the range of rates that it posts in its price talk.  See —Price Talk” below.
 
A broker-dealer also may routinely encourage bidding by others in auctions, including to prevent an auction failure event or an auction from clearing at a rate that it believes does not reflect the market for the auction rate notes.  A broker-dealer may routinely encourage such bids even after obtaining knowledge of some or all of the other orders submitted through it.
 
Bids by a broker-dealer or by those it may encourage to place bids are likely to affect (i) the auction rate — including preventing the auction rate from being set at the maximum rate or otherwise causing bidders to receive a higher or lower rate than they might have received had a broker-dealer not bid or not encouraged others to bid and (ii) the allocation of auction rate notes being auctioned — including displacing some bidders who may have their bids rejected or receive fewer auction rate notes than they would have received if a broker-dealer had not bid or encouraged others to bid.  Because of these practices, the fact that an auction clears successfully does not mean that an investment in the auction rate notes involves no significant liquidity or credit risk.  The broker-dealers are not obligated to continue to place such bids or encourage other bidders to do so in any particular auction to prevent an auction from failing or clearing at a rate the broker-dealers believe does not reflect the market for the auction rate notes.  Investors should not assume that any broker-dealer will do so or that auction failure events and unfavorable auction rates will not occur. Investors should also be aware that bids by the broker-dealers or by those they may encourage to place bids may cause unfavorable auction rates to occur.
 
In any particular auction, if all the auction rate notes are subject to hold orders (i.e., each holder of auction rate notes wishes to continue holding its auction rate notes, regardless of the interest rate), the interest rate for the upcoming accrual period will equal the all-hold rate (such a situation is called an “all-hold auction”).  When an all-hold auction is likely, a broker-dealer may, but is not obligated to, advise its customers that are existing auction rate noteholders of that fact, which might facilitate the submission of bids by such existing auction rate noteholders that would avoid the occurrence of an all-hold auction.  If a broker-dealer decides to inform any of its customers that are existing auction rate noteholders of the likelihood of an all-hold auction, it will make that information available to all of its customers that are existing auction rate noteholders at the same time.
 
If a broker-dealer holds any auction rate notes for its own account on an auction date, it will submit a sell order into the auction with respect to such auction rate notes,
 

 
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which would prevent that auction from being an all-hold auction.  A broker-dealer may, but is not obligated to, submit bids for its own account in that same auction, as set forth above.
 
Auction Dealer Fees.  For many auction rate securities, the broker-dealers have been appointed by the issuers of the securities to serve as dealers for the related auctions and are paid by those issuers for their services.  With respect to the auction rate notes, each broker-dealer has been appointed to serve as a broker-dealer in the auctions pursuant to a broker-dealer agreement among the trust, the auction agent and the applicable broker-dealer, which provides that each broker-dealer will receive broker-dealer fees from the trust at an annual rate not to exceed 0.16% of the principal amount of the auction rate notes sold or successfully placed through that broker-dealer. As a result, the broker-dealer’s interests in conducting auctions may differ from those of investors who participate in auctions.
 
Each broker-dealer may share a portion of the broker-dealer fees it receives from the trust with other brokers or dealers (“non-program broker-dealers”) that submit orders through that broker-dealer that it successfully places in auctions.  Similarly, with respect to auctions for other auction rate securities for which a broker-dealer does not serve as a dealer, the non-program broker-dealers who serve as dealers in those auctions may share auction dealer fees with that broker-dealer for orders that such broker-dealer submits through those non-program broker-dealers that those non-program broker-dealers successfully place in those auctions.
 
Price Talk.  Before the start of an auction, any broker-dealer, in its discretion, may make available to its customers that are existing auction rate noteholders and prospective auction rate noteholders its good faith judgment of the range of likely clearing rates for the auction based on market and other information.  This is known as “price talk.”  Price talk is not a guaranty, and existing auction rate noteholders and prospective auction rate noteholders are free to use it or ignore it.  If a broker-dealer provides price talk, it will make the price talk available to all of its customers that are existing auction rate noteholders and prospective auction rate noteholders.  A broker-dealer may occasionally update and change the price talk based on changes in the trust’s credit quality or macroeconomic factors that are likely to result in a change in interest rate levels, such as an announcement by the Federal Reserve Board of a change in the Federal Funds rate or an announcement by the Bureau of Labor Statistics of unemployment numbers.  Such broker-dealer will make such changes available to all of its customers that are existing auction rate noteholders and prospective auction rate noteholders that were given the original price talk.
 
All-or-Nothing Bids.  The broker-dealers do not accept all-or-nothing bids (i.e., bids whereby the bidder proposes to reject an allocation smaller than the entire quantity bid) or any other type of bid that allows the bidder to avoid auction procedures that require the pro rata allocation of auction rate notes where there are not sufficient sell orders to fill all bids at the clearing rate.
 

 
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No Assurances Regarding Auction Outcomes.  No broker-dealer provides assurance as to the outcome of any auction.  Nor does any broker-dealer provide any assurance that any bid will be accepted or that the auction will clear at a rate that a bidder considers acceptable.  Bids may be rejected or may be only partially filled.
 
Deadlines/Auction Periods.  Each particular auction has a formal time deadline by which all bids must be submitted by the broker-dealers to the auction agent.  This deadline is called the auction submission deadline.  To provide sufficient time to process and submit customer bids to the auction agent before the auction submission deadline, each broker-dealer imposes an earlier deadline — called the broker-dealer deadline — by which bidders must submit bids to that broker-dealer.  Each broker-dealer’s broker-dealer deadline is subject to change by the applicable broker-deal. The broker-dealers may allow for correction of clerical errors after the broker-dealer deadline and prior to the auction submission deadline.  The broker-dealer may submit bids for their own account at any time until the auction submission deadline.  The auction agent may allow for the correction of clerical errors for a specified period of time after the auction submission deadline.
 
During any auction period, the broker-dealers may change the length of the next auction period.  In auctions that are subject to the changed auction period, the broker-dealers may place a bid to buy auction rate notes that may effectively place an upper limit on the rate that can be set at the auction rate that is below the maximum rate.  Each broker-dealer may negotiate a separate fee from the trust in such circumstances.
 
Existing Offered Noteholders’ Ability to Resell Offered Notes May Be Limited.  Over the past several years, the offered notes experienced a period of continuous failed auctions, which include successful auctions at rates that were not qualifying rates.  Beginning on January 16, 2015, the offered notes began to be successfully auctioned at qualifying rates on each related auction date.  During the prolonged period when the offered notes experienced failed auctions, existing offered noteholders were not able and may not in the future be able be able to sell all of the offered notes that are the subject of submitted sell orders unless there are sufficient bidders willing to purchase all the offered notes in the auction.  If sufficient clearing bids have not been made, existing offered noteholders that have submitted sell orders will not be able to sell in the auction all, and may not be able to sell any, of the offered notes subject to such submitted sell orders.  As discussed above under “—Bidding By Broker-Dealers”, a broker-dealer may submit a bid in an auction to keep it from failing, but it is not obligated to do so and have not been submitting bids in the recent past.  As has happened in the recent past, there may not be enough bidders to prevent an auction from failing in the absence of the broker-dealers bidding in the auction for their own account or encouraging others to bid.  Therefore, auction failure events are possible, especially if the trust’s credit were to deteriorate, another market disruption were to occur or if, for any reason, the broker-dealers were unable or unwilling to bid.  See “Risk Factors—The Lack Of A Market for Auction Rate Securities Could Again In The Future Result In Prolonged Periods Of Failed Auctions And A Loss Of Liquidity” above.
 
 

 
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Between auctions, there can be no assurance that a secondary market for the offered notes will develop or, if it does develop, that it will provide existing offered noteholders the ability to resell the offered notes on the terms or at the times desired by an existing offered noteholder.  A broker-dealer may, in its own discretion, decide to buy or sell offered notes in the secondary market for its own account to or from investors at any time and at any price, including at prices equivalent to, below, or above the par value of the offered notes.  However, broker-dealers are not obligated to make a market in the offered notes, and may discontinue trading in the offered notes without notice for any reason at any time.  Existing offered noteholders who resell between auctions may receive less than par value, depending on market conditions.
 
The ability to resell the offered notes will depend on various factors affecting the market for the offered notes, including news relating to the trust, the attractiveness of alternative investments, the perceived risk of owning the offered notes (whether related to credit, liquidity or any other risk), the tax or accounting treatment accorded the offered notes, reactions of market participants to regulatory actions or press reports, financial reporting cycles and market conditions generally.  Demand for the offered notes may change without warning, and declines in demand may be short-lived or continue for longer periods.
 
Resignation of the Auction Agent Under the Auction Agent Agreement or a Broker-Dealer Under the Broker-Dealer Agreement Could Impact the Ability to Hold Auctions.  The auction agent agreement provides that the auction agent may resign from its duties as auction agent by giving at least 30 days’ notice to the indenture trustee, the trust and each broker-dealer and does not require, as a condition to the effectiveness of such resignation, that a replacement auction agent be in place if its fee has not been paid. The auction agent may terminate the auction agent agreement if, after notifying the indenture trustee and the trust that it has not received payment of any auction agent fee due it in accordance with the terms hereof, the auction agent does not receive such payment within 25 days.  Any resignation or termination of the auction agent, other than as described in the immediately preceding sentence, shall not become effective until a successor auction agent has been appointed and such successor auction agent has accepted such position; provided, however, that if a successor auction agent has not been appointed within 60 days after the date specified in its notice of resignation, then the auction agent may petition a court of competent jurisdiction for a replacement.
 
The broker-dealer agreements provide that a broker-dealer thereunder may resign upon 30 days’ notice or immediately, in certain circumstances, and does not require, as a condition to the effectiveness of such resignation, that a replacement broker-dealer be in place.  For any auction period during which there is no duly appointed auction agent, or during which there is no duly appointed broker-dealer, it will not be possible to hold auctions, with the result that the interest rate on the auction rate notes will be determined by a securities dealer appointed by the trust (or the administrator acting on its behalf) capable of making such a determination in accordance with the applicable auction rate note procedures and shall equal the lesser of (1) the applicable maximum rate in effect for that accrual period and (2) the auction
 

 
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student loan rate (which is the weighted average interest rate of the trust student loans, minus specified administrative expenses) in effect for that accrual period.
 
Notice of Interest Rates
 
Information concerning past and current LIBOR, any other applicable index, and the interest rates applicable to the offered notes, will be available on the administrator’s website at http://www.navient.com/about/investors/debtasset/navientsltrusts or by telephoning the administrator at 1-800-321-7179 between the hours of 9:00 a.m. and 4:00 p.m. Eastern time on any business day and will also be available through Moneyline Telerate Service or Bloomberg L.P.
 
Trust Accounts
 
The administrator has established and maintains in the name of the indenture trustee the collection account, the principal distribution account, the cash capitalization account, the future distribution account and the reserve account for the benefit of the noteholders.
 
Funds in the Trust Accounts are invested as provided in the indenture in eligible investments.  See “Servicing and Administration—Accounts—Eligible Investments” in the base prospectus.
 
Distributions
 
Deposits into the Collection Account.  On or before the business day immediately prior to each quarterly distribution date, the servicer and the administrator will provide the indenture trustee with certain information as to the preceding collection period, including the amount of Available Funds.  The servicer will deposit all payments on trust student loans and all proceeds of trust student loans collected by it during each collection period into the collection account within two business days of receipt.
 
Monthly Distributions from the Collection Account.  On or before the fifth business day of each month, the administrator will instruct the indenture trustee to make the following allocations on or before the related monthly allocation date with funds on deposit in the collection account:
 
 
·
first, deposit into the future distribution account for the servicer and administrator, pro rata, the amounts of the servicing fee and administration fee that will accrue for the related calendar month plus previously accrued and unpaid or set aside amounts,
 
 
·
second, deposit into the future distribution account, for the auction agent and the broker-dealers, pro rata, an amount equal to the sum of the auction agent’s and broker-dealers’ auction fees expected to be payable from the calendar day after the current calendar month’s quarterly distribution date or
 

 
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monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts,
 
 
·
third, deposit into the future distribution account for the swap counterparty an amount equal to swap payments to the swap counterparty expected to accrue from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts, net of payments expected to accrue for this period from the swap counterparty, and
 
 
·
fourth, deposit into the future distribution account, pro rata, for (a) each class of class A notes an amount equal to interest expected to accrue on the class A notes from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts, and (b) the swap counterparties certain swap termination payments due to the swap counterparties under the swap agreement.
 
Quarterly Distributions from the Collection Account.  On or before each monthly allocation date that is not a quarterly distribution date, the administrator will instruct the indenture trustee to pay to the servicer the primary servicing fee due for the period from and including the preceding monthly allocation date from amounts on deposit in the future distribution account (with respect to funds allocated to the servicer) and, if amounts on deposit therein are insufficient, from the collection account.
 
On each quarterly distribution date, the administrator will instruct the indenture trustee to make the deposits and distributions set forth in items (1) through (17) below with respect to notes that have a distribution date on the quarterly distribution date and, in the case of a quarterly distribution date that is not an auction rate distribution date for a class of auction rate notes, allocations to the future distribution account with respect to that class of auction rate notes (for principal and any carryover amounts), in the amounts and in the order of priority shown below, except as otherwise provided under “—Principal Distributions.”

These deposits and distributions will be made to the extent of the Available Funds for that quarterly distribution date, plus funds (A) deposited into the collection account from the reserve account, if any, for payment of items (1) through (5), (7) and (9) and on the respective legal maturity date of each class of notes, items (6), (8) and (10) to the extent necessary to reduce the outstanding principal balance of the related class of notes to zero, and, in the case of the final distribution upon termination of the trust, item (13), and (B) on deposit in the future distribution account, as applicable:

 
(1)
to the servicer, the primary servicing fee due on that distribution date;

 
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(2)
to the administrator, the administration fee due on that distribution date plus any unpaid administration fees from previous distribution dates;
 
 
(3)
pro rata, to the auction agent for its auction fees and to the broker-dealers for their broker-dealer fees;
 
 
(4)
to the swap counterparties, any swap payments payable to the swap counterparties by the trust under the swap agreements;
 
 
(5)
pro rata, based on the aggregate principal balance of the notes and the amount of any swap termination payments due and payable by the trust to the swap counterparties under this item (5):
 
 
(a)
to the class A noteholders, the Class A Noteholders’ Interest Distribution Amount; and
 
 
(b)
to the swap counterparties, the amount of any swap termination payments due to the swap counterparties under the swap agreement due to a swap termination event resulting from a payment default by the trust or the insolvency of the trust; provided, that if any amounts allocable to the class A notes are not needed to pay the Class A Noteholders’ Interest Distribution Amount as of such distribution date, such amounts will be applied to pay the portion, if any, of any swap termination payments referred to above remaining unpaid;
 
 
(6)
to the principal distribution account (for distribution as described under “—Principal Distributions” below), the First Priority Principal Distribution Amount, if any;
 
 
(7)
to the class B noteholders, the Class B Noteholders’ Interest Distribution Amount;
 
 
(8)
to the principal distribution account (for distribution as described under “—Principal Distributions” below), the Second Priority Principal Distribution Amount, if any;
 
 
(9)
to the class C noteholders, the Class C Noteholders’ Interest Distribution Amount;
 
 
(10)
to the principal distribution account (for distribution as described under “—Principal Distributions” below), the Third Priority Principal Distribution Amount, if any;
 

 
 
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(11)
to the reserve account, the amount required to reinstate the amount in the reserve account up to the Specified Reserve Account Balance;
 
 
(12)
to the principal distribution account (for distribution as described under “—Principal Distributions” below), the Regular Principal Distribution Amount;
 
 
(13)
to the servicer, all carryover servicing fees, if any;
 
 
(14)
to the auction rate noteholders, any carryover amounts, until paid in full;
 
 
(15)
to each swap counterparty, the amount of any swap termination payments owed by the trust to that swap counterparty under its swap agreement and not payable in item (5) above;
 
 
(16)
to the principal distribution account (for distribution as described under “—Principal Distributions” below), the Additional Principal Distribution Amount, if any; and
 
 
(17)
to the certificateholder, any remaining funds.
 
On each quarterly distribution date that is not also a distribution date for the auction rate notes, in lieu of making payments on that date of principal and carryover amounts to the auction rate notes, these amounts will be deposited into the future distribution account.
 
Distributions from the Future Distribution Account.  On each auction rate distribution date for the auction rate notes that is not also a quarterly distribution date, the administrator will instruct the indenture trustee, in writing, to make the following distributions:
 
 
·
first, from amounts deposited in the future distribution account that were allocated to the auction agent and the broker-dealers, and then from amounts on deposit in the collection account, pro rata, to the auction agent and the broker-dealers, the respective fees of the auction agent and the broker-dealers; and
 
 
·
second, from amounts deposited in the future distribution account that were allocated to the auction rate notes, and then from amounts on deposit in the collection account, pro rata, to the auction rate notes, an amount equal to interest payable thereon.
 
Principal Distributions
 
On each quarterly distribution date, the indenture trustee will make the following distributions and allocations from the principal distribution account.  Principal will be paid on the floating rate notes on each quarterly distribution date.  Principal payable

 
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to the auction rate notes will be allocated to the auction rate notes on a quarterly distribution date and deposited in the principal distribution account together with amounts on deposit in the future distribution account allocated to payments of principal from the future distribution account and then paid to the auction rate notes on the applicable auction rate distribution date in lots of $50,000.
 
With respect to each quarterly distribution date with respect to which a Trigger Event is in effect, the holders of the class A notes will be entitled to receive (or be allocated) 100% of the Principal Distribution Amount for such quarterly distribution date, paid sequentially, first, to the class A-2 notes and second, pro rata based on their respective class principal balances, to the class A-3 notes and class A-4 notes, until the principal balances thereof have been reduced to zero; provided, however, that on any quarterly distribution date on which the Class A Note Parity Trigger is in effect, the Principal Distribution Amount will be distributed pro rata (or with respect to the auction rate notes, allocated) pro rata, based on their respective class principal balances, to the class A-2 notes, class A-3 notes and class A-4 notes, until the principal balances thereof have been reduced to zero.  Once the principal balances of the class A notes have been reduced to zero, the holders of the class B notes will be entitled to receive 100% of the Principal Distribution Amount for that quarterly distribution date.  Similarly, if the principal balance of the class B notes have been reduced to zero, the holders of the class C notes will be entitled to receive 100% of the Principal Distribution Amount for that quarterly distribution date until the principal balances of the class C notes have been reduced to zero.
 
On each quarterly distribution date as long as a Trigger Event is not in effect, the holders of all classes of notes will be entitled to receive (or be allocated) payments of principal, in the order of priority and in the amounts set forth below and to the extent of the funds in the principal distribution account:
 
First, an amount up to the Class A Noteholders’ Principal Distribution Amount will be distributed (or with respect to the auction rate notes, allocated) sequentially, first, to the class A-2 notes and second, pro rata, based on their respective class principal balances, to the class A-3 notes and class A-4 notes, until the balances thereof have been reduced to zero;
 
Second, amounts remaining in the principal distribution account up to the Class B Noteholders’ Principal Distribution Amount will be distributed to the class B notes until the principal balances thereof have been reduced to zero;
 
Third, amounts remaining in the principal distribution account up to the Class C Noteholders’ Principal Distribution Amount will be distributed to the class C notes until the principal balances thereof have been reduced to zero; and
 
Fourth, amounts remaining in the principal distribution account after making all of the distributions in clauses First, Second and Third, above will be paid to the class C notes until the balance of the class C notes has been reduced to zero. Once the balance of the class C notes has been reduced to zero, holders of the

 
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class B notes will be entitled to receive all remaining amounts until the balance of the class B notes has been reduced to zero. Similarly, once the balance of the class B notes has been reduced to zero, the holders of the class A notes will be entitled to receive (or with respect to the auction rate notes, be allocated) all remaining amounts, on a pro rata basis, until the balance of the class A notes has been reduced to zero.
 
Priority of Payments Following Certain Events of Default Under the Indenture
 
After any of the following:
 
 
·
an event of default under the indenture relating to the payment of principal on any class at its legal maturity date or to the payment of interest on the controlling class of notes which in either case has resulted in an acceleration of the notes;
 
 
·
an event of default under the indenture relating to an insolvency event or a bankruptcy with respect to the trust which has resulted in an acceleration of the notes; or
 
 
·
a liquidation of the trust assets following any event of default under the indenture;
 
the priority of the payment of the notes changes.  In particular, payments on the notes on each quarterly distribution date following the acceleration of the notes as provided above will be made in the following order of priority:
 
 
(1)
to the servicer, the primary servicing fee due on that quarterly distribution date;
 
 
(2)
to the administrator, the administration fee due on that quarterly distribution date plus any unpaid administration fees from previous quarterly distribution dates;
 
 
(3)
pro rata, to the auction agent its auction fees and the broker-dealers their broker-dealer fees;
 
 
(4)
to the swap counterparties, any swap payments payable to the swap counterparties by the trust under the swap agreements;
 
 
(5)
pro rata, based on the aggregate principal balance of the notes and the amount of any swap termination payment due and payable by the trust to the swap counterparty under this item (5):
 
 
(a)
to the class A noteholders, pro rata, the Class A Noteholders’ Interest Distribution Amount; and
 

 
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(b)
to the swap counterparties, the amount of any swap termination payments due to the swap counterparties under the swap agreements due to a swap termination event resulting from a payment default by the trust or the insolvency of the trust; provided, that if any amounts allocable to the class A notes are not needed to pay the Class A Noteholders’ Interest Distribution Amount as of such quarterly distribution date, such amounts will be applied to pay the portion, if any, of any swap termination payments referred to above remaining unpaid;
 
 
(6)
pro rata, to the class A noteholders, an amount sufficient to reduce the principal balances of the class A notes to zero;
 
 
(7)
pro rata, to the class B noteholders, all accrued and unpaid interest;
 
 
(8)
to the class B noteholders, an amount sufficient to reduce the principal balance of the class B notes to zero;
 
 
(9)
pro rata, to the class C noteholders, all accrued and unpaid interest;
 
 
(10)
pro rata, to the class C noteholders, an amount sufficient to reduce the principal balances of the class C notes to zero;
 
 
(11)
to the servicer, all carryover servicing fees, if any;
 
 
(12)
to the auction rate noteholders, any carryover amounts, until paid in full;
 
 
(13)
to each swap counterparty, the amount of any swap termination payments owed by the trust to that swap counterparty under its swap agreement and not payable in item (5) above; and
 
 
(14)
to the certificateholder, any remaining funds.
 
Voting Rights and Remedies
 
Noteholders will have the voting rights and remedies described in the base prospectus.  The notes will all vote and exercise remedies together as if they were a single class other than with respect to exercising the right to liquidate collateral, in which case the class A notes, the class B notes and the class C notes have different rights.  See “Description of the Notes—The Indenture—Events of Default; Rights Upon Event of Default” in the base prospectus.
 
 
 

 
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Credit Enhancement
 
Reserve Account.  The reserve account was created with an initial deposit by the trust on the original closing date and, as of the December 2014 quarterly distribution date, it had a balance of $3,118,201.  The reserve account will be replenished on each quarterly distribution date, by deposit into it of the amount, if any, necessary to reinstate the balance of the reserve account to the Specified Reserve Account Balance from the amount of Available Funds remaining after payment for that quarterly distribution date under clauses (1) through (10) under “—Distributions—Distributions from the Collection Account” above.
 
If the market value of eligible investments and cash in the reserve account on any quarterly distribution date is sufficient to pay the remaining principal amount of and interest accrued on the notes, fees due and owing to the auction agent and the broker-dealer, any servicing and administration fees, any payments owed to the swap counterparties and any carryover servicing fee, these assets will be so applied on that quarterly distribution date.
 
If the amount on deposit in the reserve account on any quarterly distribution date after giving effect to all deposits or withdrawals from the reserve account on that quarterly distribution date is greater than the Specified Reserve Account Balance for that quarterly distribution date, subject to certain limitations, the administrator will instruct the indenture trustee to deposit the amount of the excess into the collection account for distribution on that quarterly distribution date.
 
Amounts held from time to time in the reserve account will continue to be held for the benefit of the trust.  Funds will be withdrawn from the reserve account on any quarterly distribution date or, in the case of the payment of the primary servicing fee, on any monthly allocation date, to the extent that the amount of Available Funds on that quarterly distribution date or monthly allocation date is insufficient to pay any of the items specified in clauses (1) through (5), (7) and (9) under “—Distributions— Quarterly Distributions from the Collection Account” above.  Except on the final distribution upon termination of the trust, amounts on deposit in the reserve account, other than amounts in excess of the Specified Reserve Account Balance, will not be available to cover any carryover servicing fees.  These funds also will be withdrawn at maturity of a class of notes or on the final distribution upon termination of the trust to the extent that the amount of Available Funds at that time is insufficient to pay any of the items specified in clauses (6), (8) and (10) and, in the case of the final distribution upon termination of the trust, clause (13) under “—Distributions— Quarterly Distributions from the Collection Account” above.
 
The reserve account is intended to enhance the likelihood of timely distributions of interest to the noteholders and their payment in full at their respective legal maturity dates and to decrease the likelihood that the noteholders will experience losses.  In some circumstances, however, the reserve account could be reduced to zero.  In addition, amounts on deposit in the reserve account will be available to pay unpaid swap termination payments, carryover amounts and the carryover servicing fee on the

 
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final quarterly distribution date upon termination of the trust.  See “Swap Agreements” in this prospectus supplement.
 
Subordination.  The class B notes are subordinate to the class A notes and the class C notes are subordinate to the class A notes and class B notes as described below.  In addition, an event of default under the indenture will occur if the full amount of interest due on the most senior class of notes outstanding at any time is not paid within five days of the related quarterly distribution date.  The failure to pay interest on any other class of notes will not be an event of default.
 
Priority of Notes.  On any quarterly distribution date, distributions of interest on the class B notes will be subordinated to the payment of interest on the class A notes and to the payment of the First Priority Principal Distribution Amount.  Principal payments on the class B notes will be subordinated to the payment of both interest and principal on the class A notes.  Consequently, on any quarterly distribution date, funds available to pay interest on and principal of the notes (after payment of items with a higher priority) will be applied to the payment of interest on the class A notes prior to any payment of interest on the class B notes, and no payments of the principal balance of the class B notes will be made until the class A notes have been paid the full amount of the Class A Noteholders’ Principal Distribution Amount to which they are entitled for such quarterly distribution date.
 
On any quarterly distribution date, distributions of interest on the class C notes will be subordinated to the payment of interest on the class A and class B notes and to the payment of the First Priority and Second Priority Principal Distribution Amounts.  Principal payments on the class C notes will be subordinated to the payment of both interest and principal on the class A and class B notes.  Consequently, on any quarterly distribution date, funds available to pay interest on and principal of the notes (after payment of items with a higher priority) will be applied to the payment of interest on the class A and class B notes prior to any payment of interest on the class C notes, and no payments of the principal balance on the class C notes will be made until the class A and class B notes have been paid the full portion of the Class A Noteholders’ Principal Distribution Amount and the Class B Noteholders’ Principal Distribution Amount to which they are entitled for such quarterly distribution date.
 
Cash Capitalization Account.  All funds on deposit in the cash capitalization account that was created and funded on the original closing date were released to the certificateholder on the quarterly distribution date that occurred in December 15, 2006.  No additional sums have been or will be deposited into this account.
 
Interest Rate Cap Agreement.  On the original closing date, the trust entered into an interest rate cap agreement with a cap counterparty for the benefit of the noteholders to protect against certain increases in the rate of three-month LIBOR.  By its terms, the interest rate cap agreement was terminated on the distribution date in June 2006.  The trust has not and will not enter into another interest rate cap agreement.
 

 
 
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Undercollateralization

The class C notes will be undercollateralized on the reoffering closing date. If there is not sufficient excess interest or recoveries on the trust student loans in subsequent collection periods to reduce such undercollateralization to zero, holders of the class C notes and, if losses continue to accrue or the level of undercollateralization otherwise increases, possibly holders of the class B notes and, if further losses or increases in the level of undercollateralization are incurred, holders of the class A notes, will not receive their entire principal amount at their respective legal maturity dates. As of the December 2014 quarterly distribution date, the asset balance of the trust was approximately 96.43% of the aggregate outstanding principal balance of the notes.
 
Administration Fee
 
As compensation for the performance of the administrator’s obligations under the administration agreement and as reimbursement for its related expenses, the administrator is entitled to an administration fee in an amount equal to $20,000 per collection period payable in arrears on each quarterly distribution date.
 
 
Servicing Compensation
 
The servicer is entitled to receive the servicing fee in an amount equal to the primary servicing fee and the carryover servicing fee as compensation for performing the functions as servicer for the trust.  The primary servicing fee is payable on each monthly allocation date and will be paid solely out of Available Funds and amounts on deposit in the reserve account on that date.  The carryover servicing fee is payable to the servicer on each quarterly distribution date out of Available Funds after payment on that quarterly distribution date of clauses (1) through (12) under “—Distributions—Distributions from the Collection Account”  above.  The carryover servicing fee will be subject to increase agreed to by the administrator, the trustee and the servicer to the extent that a demonstrable and significant increase occurs in the costs incurred by the servicer in providing the services to be provided under the servicing agreement, whether due to changes in applicable governmental regulations, guarantor program requirements or regulations, or postal rates.
 

 
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Trust Fees
 
The table below sets forth the fees payable by or on behalf of the trust.
 
Party
 
Amount
Servicer
 
The primary servicing fee(1) for any month is equal to 1/12th of an amount not to exceed 0.70% of the outstanding principal amount of the trust student loans, calculated as of the last day of the preceding calendar month, plus the amount of any carryover servicing fee.
 
Indenture Trustee(2) 
 
$3,180 per annum, payable in advance.
 
Trustee(3) 
 
$1,590 per annum, payable in advance.
 
Administrator(1) 
 
$20,000 per quarter, payable in arrears.
 
Auction Agent Fees(1) 
 
Not to exceed 0.0085% per annum of the outstanding principal amount of the auction rate notes.
 
Broker-Dealer Fees(1) 
 
Not to exceed 0.20% per annum of the outstanding principal amount of the auction rate notes.
 
(1)   To be paid before any amounts are distributed to the noteholders.
(2)   To be paid by the depositor pursuant to a separate agreement with the indenture trustee, and may be paid by the trust if there is an event of default on the notes, and such amount has not previously been paid.
(3)   To be paid by the depositor pursuant to a separate agreement with the trustee, and may be paid by the trust if there is an event of default on the notes, and such amount has not previously been paid.
 
 
Determination of Indices
 
For a discussion of the day count basis, interest rate determination dates, interest rate change dates and possible interest rate indices applicable for a class of notes, see “Additional Information Regarding the Notes—Determination of Indices” in the base prospectus.
 
Optional Purchase of Delinquent Loans
 
The servicer has the option, but not the obligation, to purchase from the trust any trust student loan that becomes 180 or more days delinquent. There can be no assurances that the servicer will exercise its option.
 
 
Optional Purchase
 
The servicer may purchase or arrange for the purchase of all remaining trust student loans on any quarterly distribution date on or after the first quarterly distribution date when the Pool Balance is 10% or less of the Initial Pool Balance.
 

 
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The exercise of this purchase option will result in the early retirement of the remaining notes. The purchase price will equal the amount required to prepay in full, including all accrued and unpaid interest, the remaining trust student loans as of the end of the preceding collection period, but not less than a prescribed minimum purchase amount.
 
This prescribed minimum purchase amount is the amount that would be sufficient to:
 
 
·
pay to noteholders the interest payable on the related quarterly distribution date;
 
 
·
reduce the outstanding principal amount of each class of notes then outstanding on the related quarterly distribution date to zero;
 
 
·
pay any amount owing to the swap counterparties; and
 
 
·
in the case of the auction rate notes, pay any carryover amounts and interest on any carryover amounts with respect to the auction rate notes.
 
See “The Student Loan Pools—Termination” in the base prospectus.
 
Auction of Trust Assets
 
The indenture trustee will offer for sale all remaining trust student loans at the end of the first collection period when the Pool Balance is 10% or less of the Initial Pool Balance.
 
The trust auction date will be the third business day before the related quarterly distribution date.  An auction will be consummated only if the servicer has first waived its optional right to purchase all of the remaining trust student loans.  The servicer will waive its option to purchase all of the remaining trust student loans if it fails to notify the trustee and the indenture trustee, in writing, that it intends to exercise its purchase option before the indenture trustee accepts a bid to purchase the trust student loans.  The depositor and its affiliates, including Navient CFC and the servicer, and unrelated third parties may offer bids to purchase the trust student loans.  The depositor or any affiliate may not submit a bid representing greater than fair market value of the trust student loans.
 
If at least two bids are received, the indenture trustee will solicit and re-solicit new bids from all participating bidders until only one bid remains or the remaining bidders decline to resubmit bids.  The indenture trustee will accept the highest of the remaining bids if it equals or exceeds the higher of:
 
 
·
the minimum purchase amount described under “—Optional Purchase” above (plus any amounts owed to the servicer as carryover servicing fees); or
 

 
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·
the fair market value of the trust student loans as of the end of the related collection period.
 
If at least two bids are not received or the highest bid after the re-solicitation process does not equal or exceed that amount, the indenture trustee will not complete the sale.  The indenture trustee may, and at the direction of the depositor will be required to, consult with a financial advisor, including any of the original underwriters of the notes, or the administrator, to determine if the fair market value of the trust student loans has been offered.  See “The Student Loan Pools— Termination” in the base prospectus.
 
The net proceeds of any auction sale will be used to retire any outstanding notes on the related quarterly distribution date.
 
If the sale is not completed, the indenture trustee may, but will not be under any obligation to, solicit bids for sale of the trust student loans after future collection periods upon terms similar to those described above, including the servicer’s waiver of its option to purchase all of the remaining trust student loans.  The indenture trustee may or may not succeed in soliciting acceptable bids for the trust student loans either on the trust auction date or subsequently.
 
If the trust student loans are not sold as described above, on each subsequent quarterly distribution date, if the amount on deposit in the reserve account after giving effect to all withdrawals, except withdrawals payable to the depositor, exceeds the specified reserve account balance, the administrator will direct the indenture trustee to distribute the amount of the excess as accelerated payments of note principal.
 
See “The Student Loan Pools—Termination” in the base prospectus.
 
STATIC POOL
 
Information concerning static pool data for the trust student loans since their original acquisition by the trust is attached hereto as Annex C in the form of tables. We caution you that this pool of trust student loans may not continue to perform in the same manner in the future as it has since 2003.
 
PREPAYMENTS, EXTENSIONS, WEIGHTED AVERAGE LIVES AND EXPECTED MATURITIES OF THE OFFERED NOTES
 
The rate of payment of principal of the offered notes and the yield on the offered notes will be affected by prepayments of the trust student loans that may occur as described below.  Therefore, payments on the offered notes could occur significantly earlier than expected.  Consequently, the actual maturity of the offered notes could be significantly earlier, the weighted average life of the offered notes could be significantly shorter, and periodic balances could be significantly lower, than expected.  Each trust student loan is prepayable in whole or in part, without penalty, by the borrowers at any time, or as a result of a borrower’s default, death, disability or bankruptcy and subsequent liquidation or collection of guarantee payments with respect thereto.  The
 

 
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rate of such prepayments cannot be predicted and may be influenced by a variety of economic, social, competitive and other factors, including as described below.  In general, the rate of prepayments may tend to increase to the extent that alternative financing becomes available on more favorable terms or at interest rates significantly below the interest rates applicable to the trust student loans.  Prepayments could increase as a result of certain borrower benefit programs, among other factors.  In addition, the depositor is obligated to repurchase any trust student loan (or substitute an eligible student loan) as a result of a breach of any of its representations and warranties relating to trust student loans contained in the sale agreement, and the servicer is obligated to purchase any trust student loan pursuant to the servicing agreement as a result of a breach of certain covenants with respect to such trust student loan, in each case where such breach materially and adversely affects the interests of the trust in that trust student loan and is not cured within the applicable cure period.  See “Transfer and Servicing Agreements—Purchase of Student Loans by the Depositor; Representations and Warranties of the Seller” and “Servicing and Administration—Servicer Covenants” in the base prospectus.
 
On the other hand, the rate of principal payments and the yield on the notes will be affected by scheduled payments with respect to, and maturities and average lives of, the trust student loans.  These may be lengthened as a result of, among other things, grace periods, deferral periods, forbearance periods, or repayment term or monthly payment amount modifications agreed to by the servicer.  Therefore, payments on the offered notes could occur significantly later than expected.  Consequently, the actual maturity and the weighted average life of the offered notes could be significantly longer than expected and periodic balances could be significantly higher than expected.  The rate of payment of principal of the offered notes and the yield on the offered notes may also be affected by the rate of defaults resulting in losses on defaulted trust student loans which have been liquidated, by the severity of those losses and by the timing of those losses, which may affect the ability of the guarantors to make timely guarantee payments with respect thereto.  In addition, the maturity of certain of the trust student loans could extend beyond the legal maturity date for the offered notes.
 
The rate of prepayments on the trust student loans cannot be predicted due to a variety of factors, some of which are described above, and any reinvestment risks resulting from a faster or slower incidence of prepayment on trust student loans will be borne entirely by the noteholders.  Such reinvestment risks may include the risk that interest rates and the relevant spreads above particular interest rate indices are lower at the time noteholders receive payments from the trust than such interest rates and such spreads would otherwise have been if such prepayments had not been made or had such prepayments been made at a different time.
 
The projected weighted average lives of the offered notes to maturity under various usual and customary prepayment scenarios may be found under “Prepayments, Extensions, Weighted Average Lives and Expected Maturities of the Offered Notes,” included as Exhibit I to this prospectus supplement.
 

 
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SWAP AGREEMENTS
 
On the original closing date, the trust entered into two interest rate swap agreements with Citibank, N.A. and Merrill Lynch Derivative Products AG, each of which is an Eligible Swap Counterparty.  We sometimes refer to the interest rate swap agreements as the “swap agreements.”  Neither swap counterpary has been involved in the preparation of this prospectus supplement.
 
Each swap agreement will be documented under a 1992 ISDA Master Agreement (Multicurrency-Cross Border) modified to reflect the terms of the notes, the indenture and the trust agreement. Each swap agreement will terminate on the earlier of the June 2018 quarterly distribution date and the date on which that swap agreement terminates in accordance with its terms due to an early termination.
 
Under the swap agreements, each swap counterparty will pay to the administrator on behalf of the trust, on or before the third business day preceding each quarterly distribution date while that swap counterparty’s swap agreement is still in effect, its percentage share (50% each) of an amount equal to the product of:
 
 
·
three-month LIBOR (determined as of the same time and in the same manner as for the floating rate notes for the related accrual period);
 
 
·
the aggregate principal balance, as of the last day of the collection period preceding the beginning of the related accrual period (or, for the initial distribution date, the cutoff date), of the trust student loans bearing interest based upon the prime rate (provided that at no time shall such balance exceed the aggregate balance of the notes outstanding as of the end of the first day of the related accrual period); and
 
 
·
a fraction, the numerator of which is the actual number of days elapsed in the related accrual period and the denominator of which is 360.
 
In exchange for a swap counterparty’s payments, the trust will pay to that swap counterparty, on each quarterly distribution date while its swap agreement is still in effect, prior to interest payments on the class A notes, that counterparty’s percentage share of an amount equal to the product of:
 
 
·
the prime rate published in The Wall Street Journal in the “Credit Markets” section, “Money Rates” table as of the 15th of the immediately preceding March, June, September or December (or if The Wall Street Journal is not published on that date the first preceding day for which that rate is published in The Wall Street Journal) minus 2.63%;
 
 
·
the aggregate principal balance, as of the last day of the collection period preceding the beginning of the related accrual period (or, for the initial distribution date, the cutoff date), of the trust student loans bearing interest based upon the prime rate (provided that at no time will such balance exceed
 

 
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the aggregate balance of the notes outstanding as of the end of the first day of the related accrual period); and
 
 
·
a fraction, the numerator of which is the actual number of days elapsed in the related accrual period and the denominator of which is 365 or 366, as the case may be.
 
In the event that the prime rate as of any date of determination is less than 2.63%, the rate applicable to each swap counterparty will be correspondingly increased.
 
For purposes of the swap agreements, LIBOR each accrual period is determined as of the LIBOR determination date for the applicable accrual period in the same manner as applies to the notes, as described under “Additional Information Regarding the Notes—Determination of Indices—LIBOR” in the base prospectus.
 
Modifications and Amendment of the Swap Agreements. The trust agreement and the indenture will contain provisions permitting the trustee, with the consent of the indenture trustee, to enter into an amendment to a swap agreement to cure any ambiguity in, or correct or supplement any provision of that swap agreement, so long as the trustee determines, and the indenture trustee agrees in writing, that the amendment will not adversely affect the interest of the noteholders.
 
Conditions Precedent. The obligation of the trust to pay amounts due under any swap agreement will be subject to the conditions that (1) no event of default under that swap agreement by the swap counterparty and (2) no event that with the giving of notice or lapse of time or both would become an event of default under that swap agreement by the swap counterparty, has occurred and is continuing.
 
Each swap counterparty’s obligation to pay amounts it owes will not be subject to any condition precedent, other than where an early termination under the related swap agreement has occurred or been designated and the trust is the sole “Affected Party” (as defined in the 1992 ISDA Master Agreement).
 
Default Under the Swap Agreements. Events of default under each swap agreement are limited to:
 
 
·
the failure of the trust or the swap counterparty to pay any amount when due under the swap agreement after giving effect to the applicable grace period; provided, that with respect to the trust, the trust has available, after all prior obligations of the trust, sufficient funds to make the payment,
 
 
·
the occurrence of events of insolvency or bankruptcy of the trust or the swap counterparty,
 
 
·
an acceleration of the principal of the notes following an event of default under the indenture,
 

 
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·
the following other standard events of default under the 1992 ISDA Master Agreement: “Cross-Default” (not applicable to the trust) and “Merger Without Assumption” (not applicable to the trust), as described in Sections 5(a)(iii), 5(a)(vi) and 5(a)(viii), respectively, of the 1992 ISDA Master Agreement.
 
Termination Events. Termination events under each swap agreement include the following standard events under the 1992 ISDA Master Agreement: “Illegality,” which generally relates to changes in law causing it to become unlawful for either party to perform its obligations under the swap agreement; “Tax Event,” which generally relates to either party to the swap agreement receiving a payment under the swap agreement from which an amount has been deducted or withheld for or on account of taxes; “Tax Event Upon Merger”—not applicable to the trust; “Credit Event Upon Merger”—not applicable to the trust; and the additional termination event described below.

Additional Termination Event. Each swap agreement will include an additional termination event relating to withdrawal or downgrade of the swap counterparty’s credit rating. This additional termination event will occur if:
 
 
·
(1) the short-term debt rating of the swap counterparty or its credit support provider, as the case may be, is withdrawn or downgraded below “A-1+” (or in the absence of a short-term debt rating, the long-term senior or counterparty debt rating is withdrawn or downgraded below “A+”) by S&P; (2) (a) the long-term senior debt rating or counterparty rating of the swap counterparty or its credit support provider, as the case may be, is withdrawn, downgraded or put on watch for downgrade by Moody’s below “Aa3” where the swap counterparty or its credit support provider, as the case may be, has only a long-term debt rating or counterparty rating, or (b) the long-term senior debt rating and the short-term debt rating of the swap counterparty or its credit support provider, as the case may be, is withdrawn, downgraded or put on watch for downgrade by Moody’s below “A1” or P-1”, respectively, where the swap counterparty or its credit support provider, as the case may be, has both long-term and short-term debt ratings; or (3) the short-term debt rating or counterparty rating of the swap counterparty or its credit support provider, as the case may be, is withdrawn or downgraded below “F-1” or “A—” by Fitch; and
 
 
·
the swap counterparty has not, within 30 days of the withdrawal or downgrade, procured a collateral arrangement, a replacement transaction or a rating affirmation.
 
For purposes of this additional termination event:
 
 
·
A “collateral arrangement” means any of:
 
 
·
A collateral agreement executed between the parties naming a third-party collateral agent, providing for the collateralization of the swap counterparty’s obligations under the swap agreement as measured by the
 

 
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net present value of the swap counterparty’s marked-to-market obligations, together with a rating affirmation from the applicable rating agency.
 
 
·
A letter of credit, guaranty or surety bond or insurance policy covering the swap counterparty’s obligations under the swap agreement from a bank, guarantor or insurer having: (1) a short-term or long-term debt rating, or a financial program or counterparty rating or claims paying rating, of at least “A-1+” or “A+” by S&P, (2)(a) a long-term senior debt rating of at least “Aa3” where the bank, guarantor or insurer has only a long-term rating or (b) a long-term senior debt rating of at least “A1” and a short-term debt rating of at least “P-1” by Moody’s, where the bank, guarantor or insurer has both long-term and short-term ratings and (c) a short-term debt rating of at least “F-1” by Fitch.
 
 
·
A “replacement transaction” means a transaction with a replacement counterparty (which replacement counterparty must meet the ratings criteria described in the preceding paragraph) who assumes the swap counterparty’s position under the swap agreement on substantially the same terms or with such other amendments to the terms of the swap agreement as may be approved by the parties and each of the rating agencies.
 
 
·
A “rating affirmation” means a written acknowledgment from the rating agency whose rating was lowered or withdrawn that, notwithstanding the withdrawal or downgrade, the then-current ratings of the notes will not be lowered.
 
Early Termination of the Swap Agreements. Upon the occurrence of any event of default under a swap agreement or a termination event, the non-defaulting party or the non-affected party, as the case may be, will have the right to designate an early termination date. The trust may not designate an early termination date without the consent of the administrator.
 
Upon any early termination of a swap agreement, either the trust or the swap counterparty, as the case may be, may be liable to make a termination payment to the other, regardless of which party has caused that termination. The amount of that termination payment will be based on the value of the swap transaction under that swap agreement computed in accordance with the procedures in the swap agreement. In the event that the trust is required to make a termination payment following a swap default resulting from a payment default by the trust or the bankruptcy of the trust, the payment will be payable pari passu with the Class A Noteholders’ Interest Distribution Amount. If a termination payment is owed to the applicable swap counterparty by the trust following an event of default under the indenture relating to an acceleration of the notes, the trust will pay that termination payment pari passu with principal on the class A notes. However, in the event that a termination payment is owed to the applicable swap counterparty following any other event of default under the swap agreement by the trust, an event of default resulting from a default of that swap counterparty or a termination event, the termination payment will be subordinate to the right of the noteholders to receive or be allocated full payment of principal of and interest on the notes including

 
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any applicable carry­over amounts, on that quarterly distribution date and to the replenishment of the reserve account to the Specified Reserve Account Balance.
 
Swap Counterparties
 
Citibank, N.A. (“Citibank”), one of the swap counterparties, was originally organized on June 16, 1812, and now is a national banking association organized under the National Bank Act of 1864. Citibank is a wholly owned subsidiary of Citicorp, a Delaware corporation, and is Citicorp’s principal subsidiary. Citicorp is an indirect, wholly owned subsidiary of Citigroup Inc. (“Citigroup”), a Delaware holding company.
 
Merrill Lynch Derivatives Products AG, one of the swap counterparties, is a Swiss share company with its principal place of business located at Stauffacherstrasse 5, CH 8004, Zurich, Switzerland. It is a subsidiary of Merrill Lynch & Co., Inc., a Delaware corporation with its principal place of business located at World Financial Center, North Tower, 250 Vesey Street, New York, New York 10080.
 
U.S. FEDERAL INCOME TAX CONSEQUENCES
 
Under the applicable Treasury regulations, upon their sale on the reoffering closing date, the offered notes which are being offered for sale will be deemed reissued as new notes for U.S. federal income tax purposes.  For a further discussion of U.S. federal income tax consequences to holders of the offered notes, noteholders should refer to the section entitled “U.S. Federal Income Tax Consequences” in the base prospectus.
 
ERISA CONSIDERATIONS
 
The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and Section 4975 of the Code impose certain restrictions on employee benefit plans or other retirement arrangements (including individual retirement accounts and Keogh plans) and any entities whose underlying assets include plan assets by reason of a plan’s investment in these plans or arrangements (including certain insurance company general accounts) (collectively, “Plans”).
 
ERISA also imposes various duties on persons who are fiduciaries of Plans subject to ERISA and prohibits certain transactions between a Plan and its so-called Parties in Interest under ERISA or Disqualified Persons under the Code (“Parties in Interest”). Particularly, the depositor, the servicer, the selling securitiesholder, the sponsor, the administrator, the trustee, the indenture trustee, the Delaware trustee, the administrator, each swap counterparty, if any, or any of their respective affiliates may be the fiduciary for one or more Plans. In addition, because these parties may receive certain benefits from the sales of the notes, the purchase of the notes using Plan assets over which any of them has investment authority should not be made if it could be deemed a violation of the prohibited transaction rules of ERISA and the Code for which no exemption is available.
 

 
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If the notes were treated as “equity” for purposes of the Plan Asset Regulations (as defined in the base prospectus), a Plan purchasing the offered notes could be treated as holding the trust student loans and the other assets of the trust as further described under “ERISA Considerations” in the base prospectus.  If, however, the offered notes are treated as debt for purposes of the Plan Asset Regulations, the trust student loans and the other assets of the trust should not be deemed to be assets of an investing Plan.  Although there is little guidance on this, the offered notes, which are denominated as debt, should be treated as debt and not as “equity interests” for purposes of the Plan Asset Regulations, as further described in the base prospectus.  However, acquisition of the offered notes could still cause prohibited transactions under Section 406 of ERISA and Section 4975 of the Code if an offered note is acquired or held by a Plan with respect to which any of the trust, the depositor, the selling securitiesholder, the trustee, the indenture trustee, the Delaware trustee or certain of their respective affiliates is a Party in Interest.
 
Some employee benefit plans, such as governmental plans described in Section 3(32) of ERISA, certain church plans described in Section 3(33) of ERISA and foreign plans, are not subject to the prohibited transaction provisions of ERISA and Section 4975 of the Code. However, these plans may be subject to the provisions of other applicable federal, state, local or foreign law similar to the provisions of ERISA and Section 4975 of the Code (“Similar Law”). Moreover, if a plan is not subject to ERISA requirements but is qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code, the prohibited transaction rules in Section 503 of the Code will apply.
 
Before making an investment in the offered notes, a Plan or other employee benefit plan investor must determine whether, and each fiduciary causing the offered notes to be purchased by, on behalf of or using the assets of a Plan or other employee benefit plan, will be deemed to have represented that:
 
 
·
the Plan’s purchase or holding of the offered notes will not constitute or otherwise result in a non-exempt prohibited transaction in violation of Section 406 of ERISA or Section 4975 of the Code which is not covered by a statutory exemption or a class or other applicable exemption from the prohibited transaction rules as described in the base prospectus; and
 
 
·
the purchase or holding of the offered notes by any employee benefit plan subject to a Similar Law will not cause a non-exempt violation of that Similar Law.
 
 
 

 
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Before making an investment in the offered notes, Plan fiduciaries are strongly encouraged to consult with their legal advisors concerning the impact of ERISA and the Code and the potential consequences of the investment in their specific circumstances. Moreover, in addition to determining whether the investment constitutes a direct or indirect prohibited transaction with a Party in Interest and whether exemptive relief is available to cover that transaction, each Plan fiduciary should take into account, among other considerations:
 
 
·
whether the fiduciary has the authority to make the investment;
 
 
·
the diversification by type of asset of the Plan’s portfolio;
 
 
·
the Plan’s funding objective; and
 
 
·
whether under the fiduciary standards of investment prudence and diversification an investment in the offered notes is appropriate for the Plan, also taking into account the overall investment policy of the Plan and the composition of the Plan’s investment portfolio.
 
ACCOUNTING CONSIDERATIONS
 
Various factors may influence the accounting treatment applicable to an investor’s acquisition and holding of asset-backed securities.  Accounting standards, and the application and interpretation of such standards, are subject to change from time to time.  Before making an investment in the notes, potential investors are strongly encouraged to consult their own accountants for advice as to the appropriate accounting treatment for their class of notes.
 
REPORTS TO NOTEHOLDERS
 
Quarterly and annual reports concerning the Trust will be delivered to noteholders.  See “Reports to Noteholders” in the base prospectus.  See “Reports to Noteholders” in the base prospectus.
 
Except in very limited circumstances, you will not receive these reports directly from the trust.  Instead, you will receive them through Cede & Co., as nominee of DTC and registered holder of the notes.  See “Certain Information Regarding the Notes—Book-Entry Registration” in the base prospectus.
 
PLAN OF DISTRIBUTION
 
The offered notes are being reoffered by the selling securitiesholder as part of a public auction process at the price set forth on the cover to this prospectus supplement.  The proceeds shown are exclusive of expenses in respect of the notes payable by, or on behalf of, the selling securitiesholder.
 

 
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The offered notes offered hereunder are a reoffering of a previously issued class of debt securities which currently have no established trading market and no assurance can be given as to the liquidity of the trading market for the notes in the future.
 
LISTING INFORMATION
 
The offered notes are currently able to be cleared and settled through Clearstream, Luxembourg and Euroclear.
 
The notes, the indenture and the administration agreement are governed by the laws of the State of New York.  The trust agreement is governed by the laws of the State of Delaware.
 
As of the date of this prospectus supplement, none of the trust, the trustee nor the indenture trustee is involved in any litigation or arbitration proceeding relating to the notes.  The depositor is not aware of any proceedings relating to the notes, whether pending or threatened.
 
The depositor has taken all reasonable care to confirm that the information contained in this prospectus supplement is true and accurate in all material respects.  In relation to the depositor, the trust, Navient Solutions or the offered notes, the selling securitiesholder accepts full responsibility for the accuracy of the information contained in this prospectus supplement.  Having made all reasonable inquiries, the selling securitiesholder confirms that, to the best of its knowledge, there have not been omitted material facts the omission of which would make misleading any statements of fact or opinion contained in this prospectus supplement, when taken as a whole.
 
The depositor confirms that there has been no material adverse change in the assets of the trust since the statistical disclosure date.
 
RATINGS
 
The offered notes are currently rated by two or more rating agencies.  A rating addresses only the likelihood of the timely payment of stated interest and the payment of principal at final maturity, and does not address the timing or likelihood of principal distributions prior to final maturity.  A rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.

REQUIREMENTS FOR EEA REGULATED INVESTORS AND REGULATORY CAPITAL TREATMENT OF NOTES
 
None of the selling securitiesholder, the depositor or any of their respective affiliates commits: (i) to retain a material net economic interest in the securitization transaction constituted by the issue of the offered notes that would satisfy the retention requirement that applies to credit institutions and investment firms which are subject to the requirements of Article 405 of Regulation (EU) 575/2013 or similar retention requirements that apply, or that will apply in the future, to other types of investors or

 
 
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alternative investment fund managers which are incorporated in or otherwise subject to regulation in a Member State of the European Economic Area; or (ii) to take any other action which may be required by any such credit institution, investment firm or investor for the purposes of its compliance with due diligence requirements applicable to it in relation to investment in securitizations.
 
None of the sponsor, the administrator, the servicer, the depositor, the selling securitiesholder, any other transaction party or any of their respective affiliates makes any representation to any prospective investor or purchaser of the notes regarding the regulatory capital treatment of their investment on the closing date or at any time in the future.  Noteholders are responsible for analyzing their own regulatory position and are advised to consult with their own advisors regarding the suitability of the notes for investment.  Investors who are uncertain as to the requirements which apply to them in respect of their relevant jurisdiction should seek guidance from their regulator.
 
LEGAL MATTERS
 
On the original closing date, a Vice President and Deputy General Counsel of Navient Solutions, Inc., acting as counsel to Navient CFC, the servicer, the administrator, and the depositor, and McKee Nelson LLP, New York, New York, as special counsel to Navient CFC, the trust, the servicer, the administrator and the depositor, gave opinions on specified legal matters for Navient CFC, the trust, the depositor, the servicer and the administrator.  Shearman & Sterling LLP gave opinions on specified federal income tax matters for the trust. Richards, Layton & Finger, P.A., as Delaware counsel for the trust, gave opinions on specified legal matters for the trust, including specified Delaware state income tax matters.
 
 
 
 
 
 
 
 
 

 
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GLOSSARY
 
Additional Principal Distribution Amount” means, as of any quarterly distribution date after the last day of the collection period on which the Pool Balance has declined to 10% or less of the initial Pool Balance, an amount equal to the lesser of (i) amounts available to be distributed on such distribution date after payment of items (1) through (15) under “Description of the Notes—Distributions—Distributions from Collection Account” and (ii) the aggregate unpaid balance of the notes after giving effect to all prior distributions and allocations on that quarterly distribution date.
 
“Act” means the Securities Act of 1933, as amended.
 
Asset Balance” means, for any distribution date the Pool Balance as of the last day of the related collection period.
 
Available Funds” means, as to a distribution date or any related monthly allocation date, the sum of the following amounts received with respect to the related collection period or, in the case of a monthly allocation date, the applicable portion of these amounts:
 
 
·
all collections on the trust student loans, including any guarantee payments received on the trust student loans,
 
 
·
all Recoveries received during that collection period;
 
 
·
the aggregate purchase amounts received during that collection period for those trust student loans repurchased by the depositor or purchased by the servicer or for trust student loans sold pursuant to the servicing agreement;
 
 
·
the aggregate purchase amounts received during that collection period for those trust student loans purchased by the seller;
 
 
·
amounts received by the trust pursuant to the servicing agreement during that collection period as to yield or principal adjustments;
 
 
·
any interest remitted by the administrator to the collection account prior to that distribution date or monthly servicing date;
 
 
·
investment earnings for that distribution date earned on amounts on deposit in each Trust Account;
 
 
·
amounts transferred from the reserve account in excess of the Specified Reserve Account Balance as of that distribution date;
 
 
·
on each quarterly distribution date, all funds then on deposit in the future distribution account that are required to be disbursed on that quarterly distribution date; and
 

 
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·
all amounts received by the trust from the swap counterparties, for deposit into the collection account for that quarterly distribution date.
 
provided that if on any quarterly distribution date there would not be sufficient funds to pay all of the items specified in clauses (1) through (12) under “Description of the Notes—Distributions— Quarterly Distributions from the Collection Account” in this prospectus supplement, after application of Available Funds, as defined above, and application of amounts available from the reserve account to pay any of the items specified in clauses (1) through (5), (7) and (9) and on the respective legal maturity dates of each class of notes, clauses (6), (8) and (10), then Available Funds for that quarterly distribution date will include, in addition to the Available Funds as defined above, amounts on deposit in the collection account, or amounts held by the administrator, or which the administrator reasonably estimates to be held by the administrator, for deposit into the collection account which would have constituted Available Funds for the quarterly distribution date succeeding that quarterly distribution date, up to the amount necessary to pay such items, and the Available Funds for the succeeding quarterly distribution date will be adjusted accordingly.
 
Charged-Off Loan” means a trust student loan which is written-off in accordance with the servicer’s policies and procedures, but in any event, not later than the date such loan becomes 271 days past due.
 
Class A Enhancement” means, for any quarterly distribution date, the excess of (i) the Asset Balance as of the prior quarterly distribution date (or as of the original closing date, in the case of the first quarterly distribution date) over (ii) the aggregate outstanding principal balance of the class A notes immediately prior to any distributions of principal for such quarterly distribution date.
 
Class A Note Interest Shortfall” means, for any distribution date, the excess of:
 
 
·
the Class A Noteholders’ Interest Distribution Amount on the preceding distribution date, over
 
 
·
the amount of interest actually distributed to the class A noteholders on that preceding distribution date,
 
plus interest on the amount of that excess, to the extent permitted by law, at the interest rate applicable for each related class of notes from that preceding distribution date to the current distribution date.
 
Class A Note Parity Trigger” means, with respect to any quarterly distribution date, that (i) the aggregate outstanding principal balance of the class A notes (prior to giving effect to distributions on such date) is in excess of the sum of (a) the Pool Balance as of the last day of the related collection period and (b) amounts on deposit in the collection account after payment of items (1) through (5) under “Description of the Notes—Distributions—Quarterly Distributions from the Collection Account” in this prospectus supplement or (ii) the aggregate outstanding principal balance of the class A notes as of

 
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such related quarterly distribution date (prior to giving effect to any distributions on that date) is greater than or equal to the Asset Balance for the prior quarterly distribution date.  The Class A Note Parity Trigger will remain in effect until the Class A Enhancement is greater than or equal to the Specified Class A Enhancement.
 
Class A Noteholders’ Distribution Amount” means, for any distribution date, the sum of the Class A Noteholders’ Interest Distribution Amount and the Class A Noteholders’ Principal Distribution Amount for that distribution date.
 
Class A Noteholders’ Interest Distribution Amount” means, for any distribution date, the sum of:
 
 
·
the amount of interest accrued at the class A note interest rates for the related accrual period on the aggregate outstanding principal balances of all classes of class A notes on the immediately preceding distribution date, after giving effect to all principal distributions to class A noteholders on that preceding distribution date; and
 
 
·
the Class A Note Interest Shortfall for that distribution date.
 
Class A Noteholders’ Principal Distribution Amount” means (a) as of any quarterly distribution date on which a Trigger Event is in effect, the lesser of (i) 100% of the excess, if any, of (x) the aggregate outstanding principal balance of all classes of notes immediately prior to any distributions of principal for such quarterly distribution date over (y) the excess, if any, of (1) the Asset Balance for such quarterly distribution date over (2) the Specified Overcollateralization Amount and (ii) the aggregate outstanding principal balance of the class A notes immediately prior to any distributions for such quarterly distribution date and (b) as long as a Trigger Event is not in effect for such quarterly distribution date, the excess, if any, of (x) the aggregate outstanding principal balance of the class A notes immediately prior to any distributions of principal for such quarterly distribution date over (y) the lesser of (A) the product of (i) 85.0% and (ii) the Asset Balance as of such quarterly distribution date and (B) the excess, if any, of the Asset Balance for such quarterly distribution date over the Specified Overcollateralization Amount.
 
In addition, on the legal maturity date for any class of class A notes, the principal required to be distributed to the related noteholders will include the amount required to reduce the outstanding principal balance of that class to zero.
 
Class B Enhancement” means for any quarterly distribution date, the excess of (i) the Asset Balance as of the prior quarterly distribution date (or as of the original closing date, in the case of the first quarterly distribution date) over (ii) the sum of the aggregate outstanding principal balance of the class A notes and class B notes immediately prior to any distributions of principal for such quarterly distribution date.
 
Class B Note Interest Shortfall” means, for any distribution date, the excess of:

 
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·
the Class B Noteholders’ Interest Distribution Amount on the preceding distribution date, over
 
 
·
the amount of interest actually distributed to the class B noteholders on that preceding distribution date,
 
plus interest on the amount of that excess, to the extent permitted by law, at the class B note interest rate from that preceding distribution date to the current distribution date.
 
Class B Note Parity Trigger” means, with respect to any quarterly distribution date, that (i) the aggregate outstanding principal balance of the class A and class B notes (prior to giving effect to any distributions on such date) is in excess of the sum of (a) the Pool Balance as of the last day of the related collection period and (b) amounts on deposit in the collection account after payment of items (1) through (7) under “Description of the Notes—Distributions— Quarterly Distributions from the Collection Account” in this prospectus supplement or (ii) the aggregate outstanding principal balance of the class A and class B notes as of the related quarterly distribution date (prior to giving effect to any distributions on that date) is greater than or equal to the Asset Balance for the prior quarterly distribution date.  The Class B Note Parity Trigger will remain in effect until the Class B Enhancement is greater than or equal to the Specified Class B Enhancement.
 
Class B Noteholders’ Distribution Amount” means, for any distribution date, the sum of the Class B Noteholders’ Interest Distribution Amount and the Class B Noteholders’ Principal Distribution Amount for that distribution date.
 
Class B Noteholders’ Interest Distribution Amount” means, for any distribution date, the sum of:
 
 
·
the amount of interest accrued at the class B note rate for the related accrual period on the outstanding principal balance of the class B notes on the immediately preceding distribution date, after giving effect to all principal distributions to class B noteholders on that preceding distribution date, and
 
 
·
the Class B Note Interest Shortfall for that distribution date.
 
Class B Noteholders’ Principal Distribution Amount” means, as of any quarterly distribution date as long as a Trigger Event is not in effect on such quarterly distribution date, the excess, if any, of (x) the sum of (i) the aggregate outstanding principal balance of the class A notes (after taking into account the Class A Noteholders’ Principal Distribution Amount due on such quarterly distribution date) and (ii) the outstanding principal balance of the class B notes immediately prior to such quarterly distribution date over (y) the lesser of (A) the product of (i) 89.875% and (ii) the Asset Balance for such quarterly distribution date and (B) the excess, if any, of the Asset Balance for such quarterly distribution date over the Specified Overcollateralization Amount.  On any quarterly distribution date for which a Trigger Event is in effect, the excess, if any, of (i) the amounts in clause (a)(i) of the definition of Class A Noteholders’ Principal Distribution Amount over (ii) the aggregate outstanding principal balance of the class A notes.
 

 
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In addition, on the legal maturity date for any class of class B notes, the principal required to be distributed to the related noteholders will include the amount required to reduce the outstanding principal balance of that class to zero.
 
Class C Enhancement” means, for any quarterly distribution date, the excess of (i) the Asset Balance as of the prior quarterly distribution date (or as of the original closing date, in the case of the first quarterly distribution date) over (ii) the aggregate outstanding principal balance of the class A, class B and class C notes immediately prior to any distributions (or allocations) of principal for such quarterly distribution date.
 
Class C Note Interest Shortfall” means, for any distribution date, the sum for all of the class C notes with a distribution date on this distribution date, of the excess of:
 
 
·
(a)
Class C Noteholders’ Interest Distribution Amount on the preceding distribution date, over
 
 
·
(b)
the amount of interest actually distributed with respect to such class C notes on that preceding distribution date,
 
plus interest on the amount of that excess, to the extent permitted by law, at the weighted average interest rate on such class C notes from that preceding distribution date to the current distribution date.
 
Class C Note Parity Trigger” means, with respect to any quarterly distribution date, that (i) the aggregate outstanding principal balance of the class A, class B and class C notes (prior to giving effect to any distributions (or allocations) on such date) is in excess of the sum of (a) the Pool Balance as of the last day of the related collection period and (b) amounts on deposit in the collection account after payment of items (1) through (8) under “Description of the Notes—Distributions—Quarterly Distributions from the Collection Account” in this prospectus supplement or (ii) the aggregate outstanding principal balance of the class A, class B and class C notes as of the related quarterly distribution date (prior to giving effect to any distributions (or allocations) on that date) is greater than or equal to the Asset Balance for the prior quarterly distribution date.  The Class C Note Parity Trigger will remain in effect until the Class C Enhancement is greater than or equal to the Specified Class C Enhancement.
 
Class C Noteholders’ Interest Distribution Amount” means, for any distribution date, the sum of:
 
 
·
the amount of interest accrued at the class C note rate for the related accrual period on the outstanding principal balance of the class C notes on the immediately preceding distribution date, after giving effect to all principal distributions to class C noteholders on that preceding distribution date, and
 
 
·
the Class C Note Interest Shortfall for that distribution date.
 
Class C Noteholders’ Principal Distribution Amount” means, as of any quarterly distribution date as long as a Trigger Event is not in effect on such quarterly distribution

 
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date, the excess, if any, of (x) the sum of (i) the aggregate outstanding principal balance of the class A notes (after taking into account the Class A Noteholders’ Principal Distribution Amount due on such quarterly distribution date), (ii) the outstanding principal balance of the class B notes (after taking into account the Class B Noteholders’ Principal Distribution Amount due on such quarterly distribution date) and (iii) the outstanding principal balance of the class C notes immediately prior to such quarterly distribution date over (y) the lesser of (A) the product of (i) 97.0% and (ii) the Asset Balance for such quarterly distribution date and (B) the excess, if any, of the Asset Balance for such quarterly distribution date over the Specified Overcollateralization Amount.  On any quarterly distribution date for which a Trigger Event is in effect, the excess, if any, of (i) the amounts in clause (a)(i) of the definition of Class A Noteholders’ Principal Distribution Amount over (ii) the aggregate outstanding principal balance of the class A and class B notes.
 
In addition, on the legal maturity date for any class of class C notes, the principal required to be distributed to the related noteholders will include the amount required to reduce the outstanding principal balance of that class to zero.
 
Clearstream, Luxembourg” means Clearstream Banking, société anonyme (formerly known as Cedelbank, société anonyme), or any successor thereto.
 
Code” means The Internal Revenue Code of 1986, as amended.
 
The “Cumulative Realized Losses Test” is satisfied for any quarterly distribution date on which the cumulative principal amount of Charged-Off Loans, net of Recoveries, is equal to or less than 20%.
 
DTC” means The Depository Trust Company, or any successor thereto.
 
Eligible Swap Counterparty” means an entity engaged in the business of entering into derivative instrument contracts that satisfies the Rating Agency Condition.
 
Euroclear” means the Euroclear System in Europe, or any successor thereto.
 
FFELP” means the Federal Family Education Loan Program.
 
First Priority Principal Distribution Amount” means, with respect to any quarterly distribution date, an amount not less than zero equal to:
 
AN – AB
 
Where:
 
AN = the aggregate outstanding principal balance of the class A notes as of such quarterly distribution date (before giving effect to any distributions on such quarterly distribution date); and
 
AB = the Asset Balance for such quarterly distribution date;

 
S-75

 
 
provided, however, that:
 
 
·
if a Class A Note Parity Trigger is in effect, then the First Priority Principal Distribution Amount shall equal the Class A Noteholders’ Principal Distribution Amount;
 
 
·
on or after the legal maturity date of the class A-1 notes, the First Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding balance of the class A-1 notes to zero;
 
 
·
on or after the legal maturity date of the class A-2 notes, the First Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding balance of the class A-2 notes to zero; and
 
 
·
on or after the legal maturity date of the class A-3 notes and class A-4 notes, the First Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding balance of the class A-3 and class A-4 notes to zero.
 
Fitch” means Fitch Ratings, Inc., also known as Fitch Ratings, or any successor rating agency.
 
Initial Pool Balance” means the sum of the Pool Balance of the initial trust student loans as of the original closing date and all amounts deposited into the add-on consolidation loan account on the original closing date.
 
Moody’s” means Moody’s Investors Service, Inc., or any successor rating agency.
 
Pool Balance” means, as of the last day of a collection period, the aggregate principal balance of the trust student loans as of the beginning of such collection period, including accrued interest as of the beginning of such collection period that is expected to be capitalized, plus interest and fees that accrue during such collection period that are capitalized or are to be capitalized and which were not included in the prior Pool Balance, as reduced by:
 
 
·
all payments received by the trust through the last day of such collection period from borrowers (other than Recoveries);
 
 
·
all amounts received by the trust through that date for trust student loans repurchased by the depositor or purchased by Navient CFC or the servicer;
 
 
·
the aggregate principal balance of all trust student loans that became Charged-Off Loans during such collection period; and
 
 
·
the amount of any adjustments to balances of the trust student loans that the servicer makes under the servicing agreement through the last day of such collection period.
 

 
S-76

 
 
Principal Distribution Amount” means the sum of the First Priority Principal Distribution Amount, the Second Priority Principal Distribution Amount, the Third Priority Principal Distribution Amount and the Regular Principal Distribution Amount:
 
Rating Agency Condition” means the written confirmation or reaffirmation, as the case may be, from each rating agency then rating the notes that any intended action will not result in the downgrading of its then-current rating of any class of notes.
 
Realized Loss” means the excess of the principal balance, including any interest that had been or had been expected to be capitalized, of any liquidated student loan over liquidation proceeds for a student loan to the extent allocable to principal, including any interest that had been or had been expected to be capitalized.
 
Recoveries” means, as of any date of determination, all amounts received by the trust in respect of a Charged-Off Loan after such trust student loan became a Charged-Off Loan.
 
Regular Principal Distribution Amount” means, with respect to any quarterly distribution date, an amount not less than zero equal to:
 
(N – (AB – SOA)) – (FPDA + SPDA + TPDA)
 
Where:
 
N = the sum of the aggregate outstanding principal balance of all of the notes as of such quarterly distribution date (before giving effect to any distributions on such quarterly distribution date);
 
AB = the Asset Balance for such quarterly distribution date;
 
SOA = the Specified Overcollateralization Amount for such quarterly distribution date;
 
FPDA = the First Priority Principal Distribution Amount, if any, for such quarterly distribution date;
 
SPDA = the Second Priority Principal Distribution Amount, if any, for such quarterly distribution date; and
 
TPDA = the Third Priority Principal Distribution Amount, if any, for such quarterly distribution date;
 
provided, however, that the Regular Principal Distribution Amount shall not exceed the sum of the aggregate outstanding principal balance of all of the notes (after taking into account the allocation of the First Priority Principal Distribution Amount, the Second Priority Principal Distribution Amount and the Third Priority Principal Distribution Amount, if any, on such quarterly distribution date and, in the case of the auction rate notes, principal allocated but not yet paid).

 
S-77

 
 
S&P” means Standard & Poor’s Rating Services, or any successor rating agency.
 
SEC” means the United States Securities and Exchange Commission.
 
Second Priority Principal Distribution Amount” means, with respect to any quarterly distribution date, an amount not less than zero equal to:
 
(ABN – AB) – FPDA
 
Where:
 
ABN = the aggregate outstanding principal balance of the class A and class B notes as of such quarterly distribution date (before giving effect to any distributions on such quarterly distribution date);
 
AB = the Asset Balance for such quarterly distribution date; and
 
FPDA = the First Priority Principal Distribution Amount, if any, with respect to such quarterly distribution date;
 
provided, however, that:
 
 
·
if a Class B Note Parity Trigger is in effect, then the Second Priority Principal Distribution Amount shall equal (a) the sum of (i) the Class A Noteholders’ Principal Distribution Amount and (ii) the Class B Noteholders’ Principal Distribution Amount less (b) the First Priority Principal Distribution Amount;
 
 
·
on or after the maturity date for the class B notes, the Second Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding principal balance of the class B notes to zero; and
 
 
·
the Second Priority Principal Distribution Amount shall not exceed the aggregate outstanding principal balance of the class A and class B notes (after taking into account the allocation of the First Priority Principal Distribution Amount, if any, on such quarterly distribution date).
 
Specified Class A Enhancement” means, for any quarterly distribution date, the greater of (a) 15.0% of the Asset Balance for such quarterly distribution date or (b) the Specified Overcollateralization Amount for such quarterly distribution date.
 
Specified Class B Enhancement” means, for any quarterly distribution date, the greater of (a) 10.125% of the Asset Balance for such quarterly distribution date or (b) the Specified Overcollateralization Amount for such quarterly distribution date.
 
Specified Class C Enhancement” means, for any quarterly distribution date, the greater of (a) 3.0% of the Asset Balance for such quarterly distribution date or (b) the Specified Overcollateralization Amount for such quarterly distribution date.
 

 
S-78

 
 
 “Specified Overcollateralization Amount” means, as of any quarterly distribution date, 2.0% of the initial Asset Balance.
 
Specified Reserve Account Balance” means the lesser of $3,118,201 and the outstanding balance of the notes.
 
Third Priority Principal Distribution Amount” means, with respect to any quarterly distribution date, an amount not less than zero equal to:(N – AB) – (FPDA + SPDA)
 
Where:
 
N = the aggregate outstanding principal balance of all of the notes as of such quarterly distribution date (before giving effect to any distributions on such quarterly distribution date);
 
AB = the Asset Balance for such quarterly distribution date;
 
FPDA = the First Priority Principal Distribution Amount, if any, for such quarterly distribution date; and
 
SPDA = the Second Priority Principal Distribution Amount, if any, for such quarterly distribution date;
 
provided, however, that:
 
 
·
if a Class C Note Parity Trigger is in effect, then the Third Priority Principal Distribution Amount shall equal (a) the sum of (i) the Class A Noteholders’ Principal Distribution Amount, (ii) the Class B Noteholders’ Principal Distribution Amount and (iii) the Class C Noteholders’ Principal Distribution Amount less (b) the First Priority Principal Distribution Amount plus the Second Priority Principal Distribution Amount;
 
 
·
on or after the maturity date for the class C notes, the Third Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding principal balance of the class C notes to zero; and
 
 
·
the Third Priority Principal Distribution Amount shall not exceed the aggregate outstanding principal balance of all of the notes on such quarterly distribution date (after taking into account the allocation of the First Priority Principal Distribution Amount and the Second Priority Principal Distribution Amount, if any, on such quarterly distribution date).
 
Trigger Event” means, with respect to any quarterly distribution date, that the Cumulative Realized Losses Test is not satisfied.
 

 
S-79

 
 
Trust Accounts” means, collectively, the collection account, the principal distribution account, the reserve account, the cash capitalization account, and the future distribution account.
 

 

 

 

 

 

 
S-80

 

ANNEX A
 
 
THE TRUST STUDENT LOAN POOL
 
AS OF THE ORIGINAL CLOSING DATE
 
 

The trust student loans were selected by employing several criteria, including requirements that each trust student loan as of the original cutoff date:
 
·
contains terms in accordance with those required by the loan program under which it was originated, whether the Signature Education Loan Program, the LAWLOANS Program, the MBALoans Program or the MEDLOANS Program, the loan purchase agreements and other applicable requirements;
 
·
is not more than 60 days past due; and
 
·
does not have a borrower who is noted in the related records of the servicer as being currently involved in a bankruptcy proceeding.
 
No trust student loan, as of the original cutoff date, was subject to our or any seller’s prior obligation to sell that loan to a third party.
 
For a description of each loan program under which the private credit student loans were originated, see Appendices A through D to this prospectus supplement.
 
The following tables provide a description of specified characteristics of the trust student loans as of the original cutoff date. The aggregate outstanding principal balance of the trust student loans in each of the following tables includes the principal balance due from borrowers, plus accrued interest of $33,696,137 as of the original cutoff date to be capitalized upon commencement of repayment. Percentages and dollar amounts in any table may not total 100% or the trust student loan balance, as applicable, due to rounding.
 
The distribution by interest rates applicable to the trust student loans on any date following the original cutoff date may vary significantly from that in the following tables as a result of variations in the rates of interest applicable to the trust student loans. Moreover, the information below about the remaining terms to maturity of the trust student loans as of the original cutoff date may vary significantly from the actual terms to maturity of the trust student loans as a result of defaults or prepayments or of the granting of deferral and forbearance periods.
 


 
A-1

 

COMPOSITION OF THE TRUST STUDENT LOANS
AS OF THE ORIGINAL CUTOFF DATE
 
Aggregate Outstanding Principal Balance—Treasury Bill                                                                                                
  $ 253,845,947  
Aggregate Outstanding Principal Balance—Prime                                                                                                
  $ 989,669,707  
Aggregate Outstanding Principal Balance—Fixed                                                                                                
  $ 3,764,664  
Number of Borrowers                                                                                                
    103,358  
Average Outstanding Principal Balance Per Borrower                                                                                                
  $ 12,068  
Number of Loans                                                                                                
    143,265  
Weighted Average Remaining Term to Maturity                                                                                                
 
189 months
 
Weighted Average Annual Interest Rate                                                                                                
    5.05 %
Weighted Average Margin—Treasury Bill                                                                                                
    3.28 %
Weighted Average Margin—Prime                                                                                                
    0.91 %
Weighted Average Annual Borrower Interest Rate—Fixed                                                                                                
    10.71 %

 
We determined the weighted average remaining term to maturity shown in the table above from the original cutoff date to the stated maturity dates of the trust student loans without giving effect to any deferral or forbearance periods that may be granted in the future.
 

DISTRIBUTION OF THE TRUST STUDENT LOANS
BY LOAN PROGRAM AS OF THE ORIGINAL CUTOFF DATE
Loan Program
 
Number
of
Loans
   
Aggregate
Outstanding
Principal Balance
   
Percent of
Pool by
Outstanding
Principal
Balance
 
Signature Education Loans Program1 
    108,361     $ 951,183,050       76.3 %
LAWLOANS Program
    24,043       177,860,139       14.3  
MBALoans Program
    3,906       55,885,315       4.5  
MEDLOANS Program
    6,955       62,351,814       5.0  
Total
    143,265     $ 1,247,280,318       100.0 %
 
____________
 
1 Includes approximately $37,934,135 of Signature Loans for students attending 2-year institutions.
 

DISTRIBUTION OF THE TRUST STUDENT LOANS
BY INTEREST RATES AS OF THE ORIGINAL CUTOFF DATE
 
Loan Program
 
Number
of
Loans
   
Aggregate
Outstanding
Principal Balance
   
Percent of
Pool by
Outstanding
Principal
Balance
 
Less than 4.50%
    43,837     $ 423,074,668       33.9 %
4.50% to 5.74%
    70,828       576,151,387       46.2  
5.75% to 7.25%
    24,164       209,337,428       16.8  
Greater than 7.25%
    4,436       38,716,835       3.1  
Total
    143,265     $ 1,247,280,318       100.0 %

 
A-2

 

We determined the interest rates shown in the table using the interest rates applicable to the trust student loans as of the original cutoff date. Because most of the trust student loans bear interest at rates that reset quarterly, the above information will not necessarily remain applicable to the trust student loans on the closing date or any later date.
 
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY OUTSTANDING PRINCIPAL BALANCE PER BORROWER AS OF
THE ORIGINAL CUTOFF DATE

Range of Outstanding Principal Balance
   
Number of Borrowers
   
Aggregate
Outstanding
Principal
Balance
   
Percent of
Pool by
Outstanding
Principal
Balance
 
Less than $5,000
      25,829     $ 77,416,145       6.2 %
$5,000 to $9,999       32,116       231,022,700       18.5  
$10, 000 to $14,999       18,259       220, 455,178       17.7  
$15,000 to $19,999       10,531       180, 982, 623       14.5  
$20,000 to $24,999       6,161       136, 321, 808       10.9  
$25,000 to $29,999       3,538       96,372,864       7.7  
$30,000 to $34,999       2,202       70,934,809       5.7  
$35,000 to $39,999       1,427       53,191,724       4.3  
$40,000 to $44,999       924       39,140,943       3.1  
$45,000 to $49,999       693       32, 790, 559       2.6  
$50,000 to $54,999       479       25,081,874       2.0  
$55,000 to $59,999       365       20,928,875       1.7  
$60,000 to $64,999       250       15,625,514       1.3  
$65,000 to $69,999       170       11,453,510       0.9  
$70,000 to $74,999       130       9,410,470       0.8  
$75,000 to $79,999       59       4,573,212       0.4  
$80,000 to $84,999       66       5,429,104       0.4  
$85,000 to $89,999       34       2,966,714       0.2  
$90,000 to $94,999       37       3,431,661       0.3  
$95,000 to $99,999       20       1,938,914       0.2  
$100,000 and greater
      68       7,811,118       0.6  
Total
      103,358     $ 1,247,280,318       100.0 %

 
A-3

 

DISTRIBUTION OF THE TRUST STUDENT LOANS
BY REMAINING TERM TO SCHEDULED MATURITY AS OF THE
ORIGINAL CUTOFF DATE
Number of Months Remaining to Scheduled Maturity
 
Number
of
Loans
   
Aggregate
Outstanding
Principal Balance
   
Percent of
Pool by
Outstanding
Principal
Balance
 
1 to 84
    10,525     $ 30,018,169       2.4 %
85 to 144
    15,289       107, 367, 904       8.6  
145 to 192
    43,829       429, 807, 985       34.5  
193 to 228
    64,148       592, 425, 074       47.5  
229 to 276
    8,474       73, 450, 058       5.9  
277 to 348
    999       14,205,058       1.1  
349 and greater
    1       6,069       *  
Total
    143,265     $ 1,247,280,318       100.0 %

* Represents a percentage greater than 0% but less than 0.05%.
 
We have determined the numbers of months remaining to scheduled maturity shown in the table from the original cutoff date to the stated maturity dates of the applicable trust student loans without giving effect to any deferral or forbearance periods that may be granted in the future. See “Risk Factors—You Will Bear Prepayment And Extension Risk Due To Actions Taken By Individual Borrowers And Other Variables Beyond Our Control” in the prospectus.
 
DISTRIBUTION OF THE TRUST STUDENT LOANS BY CURRENT
BORROWER PAYMENT STATUS AS OF THE ORIGINAL CUTOFF DATE
 
Current Borrower Payment Status
 
Number
of
Loans
   
Aggregate
Outstanding
Principal Balance
   
Percent of
Pool by
Outstanding
Principal
Balance
 
In-School
    82,728     $ 764,860,398       61.3 %
Grace
    12,478       90,559,819       7.3  
Deferral
    9       110,497       *  
Forbearance
    3,499       29, 418, 915       2.4  
Repayment
                       
First year in repayment
    6,482       51,135,881       4.1  
Second year in repayment
    11,421       120,426,643       9.7  
Third year in repayment
    6,167       56,164,251       4.5  
More than 3 years in repayment
    20,481       134,603,916       10.8  
Total
    143,265     $ 1,247,280,318       100.0 %
 
* Represents a percentage greater than 0% but less than 0.05%.
 
 
A-4

 
 
Current borrower payment status refers to the status of the borrower of each trust student loan as of the original cutoff date. The borrower:
·
may still be attending school—in-school;
 
·
may be in a grace period after completing school and prior to repayment commencing—grace;
 
·
may be currently required to repay the loan—repayment; or
 
·
may have temporarily ceased repaying the loan through a deferral or a forbearance period.
 
The weighted average number of months in repayment for all trust student loans currently in repayment is approximately 35, calculated as the term to scheduled maturity at the commencement of repayment less the number of months remaining to scheduled maturity as of the original cutoff date.
 
SCHEDULED WEIGHTED AVERAGE REMAINING MONTHS IN
STATUS OF THE TRUST STUDENT LOANS BY CURRENT
BORROWER PAYMENT STATUS AS OF THE ORIGINAL CUTOFF DATE
 
   
Scheduled Remaining Months in Status
 
Current Borrower Payment Status
 
In-School
   
Grace
   
Deferral
   
Forbearance
   
Repayment
 
In-School                                                                  
    21.4       6.0                   179.9  
Grace                                                                  
          2.6                   173.9  
Deferral                                                                  
                5.5             176.6  
Forbearance                                                                  
                      6.2       172.7  
Repayment                                                                  
                            155.4  

We have determined the scheduled months in status shown in the table without giving effect to any deferral or forbearance periods that may be granted in the future.

 

 
A-5

 

GEOGRAPHIC DISTRIBUTION OF THE
TRUST STUDENT LOANS AS OF THE ORIGINAL CUTOFF DATE
Current Borrower Payment Status
 
Number
of
Loans
   
Aggregate
Outstanding
Principal Balance
   
Percent of
Pool by
Outstanding
Principal
Balance
 
Alabama
    1,592     $ 11,088,256       0.9 %
Alaska
    139       1,111,057       0.1  
Arizona
    2,232       21,032,547       1.7  
Arkansas
    499       3,172,334       0.3  
California
    18,085       171,544,550       13.8  
Colorado
    1,936       16,137,900       1.3  
Connecticut
    2,947       28,317,689       2.3  
Delaware
    398       3,461,140       0.3  
District of Columbia
    1,009       9,814,577       0.8  
Florida
    8,295       76,247,195       6.1  
Georgia
    3,531       30,845,026       2.5  
Hawaii
    422       3,512,003       0.3  
Idaho
    340       2,484,163       0.2  
Illinois
    7,117       56,601,293       4.5  
Indiana
    3,084       22,240,787       1.8  
Iowa
    748       5,220,476       0.4  
Kansas
    1,104       7,180,245       0.6  
Kentucky
    896       6,210,779       0.5  
Louisiana
    1,667       12,199,579       1.0  
Maine
    667       5,680,196       0.5  
Maryland
    3,791       33,600,458       2.7  
Massachusetts
    5,427       53,945,307       4.3  
Michigan
    3,813       28,876,440       2.3  
Minnesota
    1,703       12,899,036       1.0  
Mississippi
    632       4,026,209