DELAWARE
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333-103545/
333-103545-05
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04-3480392
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(State or other jurisdiction of formation)
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(Commission File Numbers)
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(I.R.S. Employer Identification Number)
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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registered
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Item 8.01 |
Other Events
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Item 9.01 |
Financial Statements, Pro Forma Financial Statements and Exhibits
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(a) |
Not applicable
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(b) |
Not applicable
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(c) |
Not applicable
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(d) |
Exhibits
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99.1 |
Remarketing Memorandum for SLM Student Loan Trust 2005-7 dated April 14, 2021.
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SLM STUDENT LOAN TRUST 2005-7
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By: NAVIENT SOLUTIONS, LLC, in its capacity as administrator of the Trust
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Dated: April 14, 2021
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By:
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/s/ C. Scott Booher
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Name:
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C. Scott Booher
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Title:
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Vice President
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Exhibit
Number
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Description
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Remarketing Memorandum for SLM Student Loan Trust 2005-7 dated April 14, 2021.
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Class
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Outstanding
Principal Amount
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Interest Rate
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Price
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Next Reset Date
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Legal Maturity
Date
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|||||||
Class A-5 Notes
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$
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180,000,000
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3-month LIBOR plus %
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100.00
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%
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July 26, 2021
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January 25, 2040
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Original principal amount
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$
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180,000,000
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||
Current outstanding principal balance
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$
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180,000,000
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Principal amount being remarketed
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$
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180,000,000
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(1)
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Remarketing Terms Determination Date
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April 14, 2021
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Notice Date(2)
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April 16, 2021
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Spread Determination Date(3)
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On or before April 21, 2021
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Current Reset Date
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April 26, 2021
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All Hold Rate
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Three-Month LIBOR plus 0.75%
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Next applicable reset date
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July 26, 2021
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Interest rate mode
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Floating
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Index
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Three-Month LIBOR(4)
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|||
Spread(5)
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Plus %
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|||
Day-count basis
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Actual/360
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|||
Weighted average remaining life
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(6)
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REMARKETING TERMS SUMMARY
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i
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INTRODUCTION
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ii
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NOTICES TO INVESTORS
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vi
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FORWARD-LOOKING STATEMENTS
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viii |
SUMMARY OF NOTE TERMS
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1
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RISK FACTORS
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21
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DEFINED TERMS
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47
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THE TRUST
|
47
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AFFILIATIONS AND RELATIONS
|
52
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THE DEPOSITOR
|
52
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NAVIENT CORPORATION
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54
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THE SPONSOR, SERVICER AND ADMINISTRATOR
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56
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THE SELLERS
|
58
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USE OF PROCEEDS
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59
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THE TRUST STUDENT LOAN POOL
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59
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THE COMPANIES’ STUDENT LOAN FINANCING BUSINESS
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64
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TRANSFER AGREEMENTS
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68
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SERVICING AND ADMINISTRATION
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71
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TRADING INFORMATION
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81
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DESCRIPTION OF THE NOTES
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83
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INDENTURE
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119
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CERTAIN LEGAL ASPECTS OF THE STUDENT LOANS
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124
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STATIC POOLS
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129
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PREPAYMENTS, EXTENSIONS, WEIGHTED AVERAGE REMAINING LIFE AND EXPECTED MATURITY OF THE CLASS A-5 NOTES
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129
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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
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131
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STATE AND LOCAL TAX CONSEQUENCES
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141
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ERISA CONSIDERATIONS
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142
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ACCOUNTING CONSIDERATIONS
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145
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REPORTS TO NOTEHOLDERS
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145
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REMARKETING
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146
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NOTICES TO INVESTORS
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146
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LISTING INFORMATION
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148
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DEPOSITOR AFFIRMATIONS
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148
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CERTAIN INVESTMENT COMPANY ACT CONSIDERATIONS
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149
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RATINGS
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149
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LEGAL PROCEEDINGS
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150
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LEGAL MATTERS
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154
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GLOSSARY
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155
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ANNEX A:
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The Trust Student Loan Pool as of February 28, 2021
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APPENDIX A:
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Federal Family Education Loan Program
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APPENDIX B:
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Global Clearance, Settlement and Tax Documentation Procedures
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EXHIBIT I:
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Prepayments, Extensions, Weighted Average Remaining Life and Expected Maturity of the Class A-5 Notes
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• |
the remarketing agent cannot determine the applicable required reset terms on or before the remarketing terms determination date;
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• |
the remarketing agent cannot establish the required spread on the spread determination date;
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• |
either sufficient committed purchasers cannot be obtained for all of the class A-5 notes at the spread set by the remarketing agent, or committed purchasers default on their purchase obligations and the remarketing agent
chooses not to purchase the class A-5 notes itself;
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• |
any rating agency then rating the notes has not confirmed or upgraded its then-current rating of any class of notes, if such confirmation is required; or
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• |
certain other conditions specified in the remarketing agreement are not satisfied.
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• |
all holders of the class A-5 notes will retain their notes, including in all deemed mandatory tender situations;
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• |
the related interest rate for the class A-5 notes will be reset to a failed remarketing rate of three-month LIBOR plus 0.75% per annum; and
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• |
the related reset period will be set at three months.
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Class A-1 Student Loan-Backed Notes in the original principal amount of $453,000,000, none of which remain outstanding;
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• |
Class A-2 Student Loan-Backed Notes in the original principal amount of $315,000,000, none of which remain outstanding; and
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• |
Class A-4 Student Loan-Backed Notes in the original principal amount of $307,339,000, and currently outstanding in the amount of $128,744,580.16.
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• |
Class A-3 Student Loan-Backed Notes in the original principal amount of $266,000,000.00, none of which remain outstanding.
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• |
Class B Student Loan-Backed Notes in the original principal amount of $47,052,000.00, and currently outstanding in the amount of $17,669,533.60.
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• |
the floating rate class A notes and the reset rate class A notes collectively as the class A notes;
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• |
the floating rate class A notes and the class B notes as the floating rate notes; and
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• |
the floating rate notes and the reset rate notes as the notes.
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Class
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Spread
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Class A‑4
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plus 0.15%
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Class B
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plus 0.31%
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• |
first, the class A noteholders’ principal distribution amount, sequentially to the class A-4 notes and class A-5 notes, in that order, until their respective principal balances are reduced to zero; and
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• |
second, on each distribution date on and after the stepdown date, and provided that no trigger event is in effect on
such distribution date, the class B noteholders’ principal distribution amount, to the class B notes, until their principal balance is reduced to zero.
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Class
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Maturity Date
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Class A-4
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October 25, 2029
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Class A-5
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January 25, 2040
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Class B
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January 25, 2040
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• |
the trust student loans;
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• |
collections and other payments on the trust student loans;
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• |
funds it currently holds or will hold from time to time in its trust accounts, including a collection account; a reserve account; an accumulation account; a supplemental interest account; an investment reserve account; an
investment premium purchase account; a remarketing fee account; and if the class A-5 notes are denominated in a currency other than U.S. Dollars, a currency account;
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• |
its rights under the transfer and servicing agreements, including the right to require VG Funding (or Navient Solutions, LLC, as servicer, acting on its behalf), Navient CFC, the depositor or the servicer to repurchase trust
student loans from it or to substitute loans under certain conditions;
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• |
its rights under any swap agreement or potential future interest rate cap agreement, as applicable; and
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• |
its rights under the guarantee agreements with guarantors.
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• |
on the related maturity date for each class of class A notes and upon termination of the trust, to cover shortfalls in payments of the class A noteholders’ principal and accrued interest to the related class of notes; and
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• |
on the class B maturity date and upon termination of the trust, to cover shortfalls in payments of the class B noteholders’ principal and accrued interest, any carryover servicing fees, any remaining swap termination payments
and remarketing fees and expenses.
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• |
if the class A-5 notes are then denominated in U.S. Dollars, on the next reset date, to the reset rate noteholders, after all other required distributions have
been made on that reset date; or
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• |
if the class A-5 notes are then denominated in a currency other than U.S. Dollars, on or about the next reset date, to the currency swap counterparty or
counterparties, which will in turn pay the applicable currency equivalent of those amounts to the trust, for payment to the reset rate noteholders on the second business day following the related reset date, after all other
required distributions have been made on that reset date.
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• |
the amount of specified increases in the costs incurred by the servicer;
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• |
the amount of specified conversion, transfer and removal fees;
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• |
any amounts described in the first two bullets that remain unpaid from prior distribution dates; and
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• |
interest on any unpaid amounts.
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• |
the maturity or other liquidation of the last trust student loan and the disposition of any amount received upon its liquidation; and
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• |
the payment of all amounts required to be paid to the noteholders.
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• |
pay to noteholders the interest payable on the related distribution date; and
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• |
reduce the outstanding principal amount of each class of notes then outstanding on the related distribution date to zero, taking into account all amounts then on deposit in the accumulation account.
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• |
are then structured not to receive a payment of principal until the end of the related reset period, the outstanding principal balance of the class A-5 notes will be deemed to have been reduced by any amounts on deposit,
exclusive of any investment earnings, in the accumulation account; and/or
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• |
are then denominated in a non-U.S. Dollar currency, the U.S. Dollar equivalent of the then-outstanding principal balance of the class A-5 notes will be determined based upon the exchange rate provided for in the currency swap
agreement or agreements.
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• |
Special tax counsel to the trust is of the opinion that the class A-5 notes will be characterized as debt for United States federal income tax purposes.
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• |
Special tax counsel to the trust is of the opinion that the trust will not be characterized as an association or a publicly traded partnership taxable as a corporation for United States federal income tax purposes.
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• |
Delaware tax counsel for the trust is of the opinion that the same characterizations will apply for Delaware state income tax purposes as for federal income tax purposes and noteholders who were not otherwise subject to
Delaware tax on income would not become subject to Delaware taxation as a result of their ownership of notes.
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• |
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 class A-5 notes will not result in a non-exempt prohibited transaction; and
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• |
the purchase or holding of the class A-5 notes will not cause a non-exempt violation of any substantially similar federal, state, local or foreign laws.
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• |
class A-4 notes: “AAAsf” by Fitch, “Aaa (sf)” by Moody’s and “AAA (sf)” by S&P.
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• |
class A-5 notes: “AAAsf” by Fitch, “Aa2 (sf)” by Moody’s and “AA+ (sf)” by S&P.
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• |
class B notes: “Asf” by Fitch, “Baa3 (sf)” by Moody’s and “AA (sf)” by S&P.
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CUSIP Number
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78442G QK 5
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International Securities Identification Number (ISIN)
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US78442GQK57
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European Common Code
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022702858
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General Risks
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Federal Financial Regulatory Legislation or Economic Relief Legislation Could Have An Adverse Effect On Navient Corporation, The
Sponsor, The Servicer, The Depositor, The Sellers And The Trust, Which Could Result In Losses Or Delays In Payments On Your Notes
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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 has resulted in significant new regulation in key areas of the business of Navient Corporation (formerly known as SLM
Corporation), the direct parent of Navient Solutions, LLC and the indirect parent of Navient Funding, LLC, and its 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 has substantial power to define the rights of consumers and the
responsibilities of certain institutions, including Navient Corporation, the sponsor and their affiliates, in connection with their education loan origination and servicing businesses. In addition, the CFPB has the authority to bring
enforcement actions against student lenders and student loan servicers for violations of federal consumer protection regulations and with respect to acts or practices that the CFPB determines to be unfair, deceptive or abusive.
It is likely that operational expenses of Navient Corporation, the sponsor or their affiliates will increase if new or additional compliance
requirements under the Dodd-Frank Act 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.
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On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act provides relief to
borrowers under federal direct student loans and FFELP loans owned by the U.S. Department of Education, in the form of a 0% interest rate and a suspension of payments, until September 30, 2020 and this period has been extended by the
executive order to September 30, 2021. On March 30, 2021, the U.S. Department of Education announced an expansion of this relief on federal student loan interest and collections to all defaulted FFELP loans retroactive to March 13,
2020, the start of the COVID-19 national emergency. FFELP Loans are transferred from the lender to a guaranty agency after they enter default. Although these borrower relief programs have not been extended to borrowers of FFELP loans
held by entities other than the U.S. Department of Education or FFELP Loans that are not in default, including the trust student loans, there is no assurance that future financial regulatory legislation, economic relief legislation or
executive orders will not directly or indirectly affect the trust student loans, or otherwise affect the servicer’s business.
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The Bankruptcy Of The Depositor, Navient CFC Or Any Other Seller Could Delay Or Reduce Payments On Your Notes
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We have taken steps to assure that the voluntary or involuntary application for relief by the depositor, Navient CFC, which is the sole member of
the depositor, or any other applicable seller under the United States Bankruptcy Code or other insolvency laws will not result in consolidation of the assets and liabilities of the trust with those of the depositor, Navient CFC and the
other sellers. However, we cannot guarantee that the activities of the depositor, the sellers, the sponsor or the trust will not result in a court concluding that the trust’s assets and liabilities should be consolidated with those of
the depositor, Navient CFC or any other seller in a proceeding under any insolvency law. If a court were to reach this conclusion or a filing were made under any insolvency law by or against us, or if an attempt were made to litigate
this issue, then delays in distributions on the notes or reductions in these amounts could result.
Navient CFC, the other sellers of the student loans and the depositor intend that each transfer of student loans to the trust will constitute a
true sale. If such transfer constitutes a true sale, the student loans and their proceeds would no longer be considered property of the depositor, Navient CFC or the other sellers should any such seller become subject to an insolvency
law.
If the depositor, Navient CFC or any other seller were to become subject to an insolvency law, and a creditor, a trustee-in-bankruptcy or the
seller itself were to take the position that the sale of student loans from the related seller to the depositor should instead be treated as a pledge of the student loans to secure a borrowing of that seller, delays in payments on the
notes could occur.
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In addition, if the court ruled in favor of this position, reductions in the amount of payments on the notes could result.
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The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
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In the event of a default by the servicer resulting
solely from certain events of insolvency
or the bankruptcy of the servicer, a court, conservator, receiver or liquidator (including the FDIC) may have the power to prevent any of the servicer, the trust, the indenture trustee or the noteholders, as applicable, from appointing a successor servicer and delays in the collection of payments on the trust student loans may occur. It may also be difficult to find a
third party to act as successor servicer, and the trust may have to increase the servicing fee in order to obtain such successor servicer. Any resulting 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.
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Risks Related To The Notes
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Because The Notes May Not Provide Regular Or Predictable Payments, You May Not Receive The Return On Your Investment That You
Expected
|
The notes may not provide a regular or predictable schedule of payments or payment on any specific date. Accordingly, you may not receive the return
on your investment that you expected.
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The Notes Are Not Suitable Investments For All Investors
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The class A-5 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 such an investment, as well as the interaction of these factors. You should not purchase the class A-5 notes unless
you understand the structural, prepayment, credit, liquidity and market risks associated with the class A-5 notes, the regulatory and enforcement risks relating to the trust student loans, the tax consequences of an investment in the
class A-5 notes and the interaction of the foregoing factors. The interaction of the factors described in this free-writing prospectus and other factors that may affect the class A-5 notes and their combined effects on the class A-5
notes are not possible to predict with meaningful certainty and are likely to change from time to time. As a result, an investment in the class A-5 notes involves substantial risks and uncertainties and should be considered only by
sophisticated institutional investors with substantial investment experience with similar types of securities and who have conducted an appropriate analysis of the class A-5 notes. Prospective investors must be able to bear the risk of
loss (including total loss) on their investment in the class A-5 notes.
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A Further 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 may potentially be downgraded by one or more nationally recognized statistical rating organizations (an
“NRSRO”) within the meaning of Section 3(a)(62) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The impact of any such potential downgrades is unknown, and depending on any lowered rating 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.
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Certain Actions Can Be Taken Without Noteholder Approval
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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.
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LIBOR Manipulation Claims And Recent Announcements By The United Kingdom Financial Conduct Authority Regarding Changes To, Or
Elimination Of, LIBOR May Affect the Interest Rate on Your Notes
|
The interest rate on the notes is based on a spread over three-month LIBOR, as set forth on the cover of this free-writing prospectus and the
special allowance payments on certain of the trust student loans are based on one-month LIBOR. The London Interbank Offered Rate, or LIBOR, serves as a global benchmark for home mortgages, student loans and what various issuers pay to
borrow money determining interest rates on commercial and consumer loans, bonds, derivatives and numerous other financial instruments.
|
On July 27, 2017, the Chief Executive Officer of the United Kingdom Financial Conduct Authority (the “FCA”) announced that by the end of 2021
(the “London Interbank Offered Rate Phase-Out Date”), LIBOR would no longer be sustained through the FCA’s efforts to compel banks’ participation in setting the benchmark. The FCA’s intention is that after 2021, it will no longer be
necessary for the FCA to ask, or to require, banks to submit contributions to LIBOR. The FCA does not intend to sustain LIBOR through using its influence or legal powers beyond that date. Further, on December 4, 2020, the ICE Benchmark
Administration Limited (the “IBA”), which took over administration of LIBOR on February 1, 2014, published its consultation on its intention to cease the publication of (i) one-week and two-month U.S. Dollar LIBOR immediately following
the publication of such rates on December 31, 2021, and (ii) the remaining U.S. Dollar LIBOR rates, including one-month LIBOR, immediately following the publication of such rates on June 30, 2023. The consultation provides that any
publication of the U.S. Dollar LIBOR rates referenced in clause (ii) above, including one-month LIBOR, based on panel bank submissions beyond December 31, 2021 will need to comply with applicable regulations, including as to
representativeness. The consultation is open for feedback until April 26, 2021, and is not intended to be an announcement that IBA will cease or continue the provision of any LIBOR settings after December 31, 2021, or June 30, 2023, as
applicable. It is possible that the IBA may be willing and able to produce one-week and two-month U.S. Dollar LIBOR after 2021 and the remaining U.S. Dollar LIBOR rates, including one-month LIBOR, after June 2023, but we cannot assure
you that LIBOR will survive in its current form, or at all. Following the London Interbank Offered Rate Phase-Out Date or in the event of any other disruption in the London interbank market, we refer you to “Description of the Notes—Determination of Indices—LIBOR” for the process for determining LIBOR under the indenture.
As a result of the foregoing, the rate at which your notes bear interest could be adversely affected by changes to the rate-setting process for
LIBOR, changes to such process or the phasing out of the rate entirely. There may be a negative effect to you if the LIBOR global benchmark is no longer available.
|
||
The Notes May Be Repaid Early Due To An Auction Sale Or
The Exercise Of The Optional Purchase Right. If This Happens, Your Yield May Be Affected And You Will Bear Reinvestment
Risk
|
The notes may be repaid before you expect them to be if:
● the servicer exercises its option to purchase all of the trust student loans; or
● the indenture trustee successfully conducts an auction sale.
Either event would result in the early retirement of the notes outstanding on that date. If this happens, your yield on the notes may be
affected. You will bear the risk that you cannot reinvest the money you receive in comparable notes at an equal yield.
|
|
Negative LIBOR Rates
Would Reduce The Rate
Of Interest On The Notes
|
The interest rate to be borne by each class of notes is based on a spread over LIBOR. The London Interbank Offered Rate, or LIBOR, serves as a
global benchmark for home mortgages, student loans and what various issuers pay to borrow money.
|
Changes in LIBOR will affect the rate at which the notes accrue interest and the amount of interest payments on the notes. To the extent that LIBOR decreases below 0.00% for any interest accrual period, LIBOR for such interest accrual period will be deemed to be 0.00% and the rate at which each class of notes accrue interest for such interest accrual period will be deemed to be 0.00% plus the applicable spread for each such class of notes for the related interest accrual period. | ||
Investments May Be Subject To An Array Of EU or United Kingdom Investment Laws, Regulations And Capital Requirements And The
Notes May Not Be A Suitable Investment For Certain Investors Accordingly
|
All prospective investors in the notes whose investment activities are subject to legal investment laws and regulations, regulatory capital
requirements, or review by regulatory authorities should consult with their own legal, accounting and other advisors in determining whether, and to what extent, the notes will constitute legal investments for them or are subject to
investment or other restrictions, unfavorable accounting treatment, capital charges, reserve requirements or other consequences.
Investors should be aware of the risk retention and due diligence requirements (the “EU Risk Retention and Due
Diligence Requirements”) which under Article 5 of Regulation (EU) 2017/2402 (the “EU Securitization Regulation”)) apply to certain types of
EU-regulated investors including credit institutions and investment firms (and in each case certain consolidated affiliates thereof), institutions for occupational retirement, alternative investment fund managers who manage or market
alternative investment funds in the EU, insurance and reinsurance undertakings and management companies of UCITS funds (or internally managed UCITS) (“EU Institutional Investors”). Amongst other
things, the EU Risk Retention and Due Diligence Requirements restrict an EU Institutional Investor from investing in a securitization unless the EU Institutional Investor has verified that:
(a) the
originator or original lender of the underlying exposures of the securitization (if established outside of the EU) grants all the credits giving rise to the underlying exposures on the basis of sound and well-defined criteria and
clearly established processes for approving, amending, renewing and financing those credits and has effective systems in place to apply those criteria and processes to ensure that credit-granting is based on a thorough assessment of
the obligor’s creditworthiness;
(b) the originator, sponsor or original lender of the securitization (if established outside of the EU) (i) retains on an ongoing basis a
material net economic interest which, in any event, shall not be less than 5%, determined in accordance with Article 6 of the EU Securitization Regulation, and (ii) discloses the risk retention to EU Institutional Investors (the “EU
Retention Requirement”); and
|
(c) (if established outside of the EU) the originator, sponsor or securitization special purpose entity (“SSPE”) has, where applicable,
made available the information required by Article 7 of the EU Securitization Regulation in accordance with the frequency and modalities provided for in Article 7 of the EU Securitization Regulation.
Pursuant to The European Union (Withdrawal) Act 2018, the EU Securitization Regulation as applicable on December 31, 2020 was retained as part of
the domestic law of the United Kingdom and amended by the Securitisation (Amendment) (EU Exit) Regulations 2019 (as amended, the “UK Securitization Regulation”).
Investors should also be aware of the risk retention and due diligence requirements (the UK Risk Retention and Due Diligence Requirements) which,
under Article 5 of the Securitisation (Amendment) (EU Exit) Regulations 2019/660 (the UK Securitization Regulation), apply to certain types of UK regulated investors, including credit institutions and investment firms (and in each case
certain affiliates thereof), institutions for occupational retirement, alternative investment fund managers who manage or market alternative investment funds in the UK, insurance and reinsurance undertakings and management companies of
UCITS funds (or internally managed UCITS) (UK Institutional Investors). Among other things, the UK Risk Retention and Due Diligence Requirements restrict a UK Institutional Investor from investing in a securitization unless the UK
Institutional Investor has verified that:
(a) the
originator or original lender of the securitization (if established outside of the UK) grants all the credits giving rise to the underlying exposures on the basis of sound and well-defined criteria and clearly established processes
for approving, amending, renewing and financing those credits and has effective systems in place to apply those criteria and processes to ensure that credit-granting is based on a thorough assessment of the obligor’s creditworthiness;
(b) the originator, sponsor or original lender of the securitization (if established outside of the UK) (i) retains on an ongoing basis a
material net economic interest which, in any event, shall not be less than 5%, determined in accordance with Article 6 of the UK Securitization Regulation, and (ii) discloses the risk retention to UK Institutional Investors (the “UK
Retention Requirement”); and
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(c) (if established outside of the UK) the originator, sponsor or securitization special purpose entity issuer has made available
information which is substantially the same as the information required by Article 7 of the UK Securitization Regulation substantially in accordance with the frequency and modalities provided for in Article 7 of the UK Securitization
Regulation.
Failure on the part of an EU Institutional Investor or UK Institutional Investor to comply with one or more of the EU Risk Retention and Due
Diligence Requirements or the UK Risk Retention and Due Diligence Requirements (as applicable) may result in various sanctions or penalties including, in the case of those investors subject to regulatory capital requirements, the
imposition of a punitive capital charge on the notes acquired by the relevant investor.
None of the sponsor, the sellers, the depositor and the initial purchasers or any other person intends to retain a material net economic interest in
the securitization constituted by the issuance of the notes in a manner that would satisfy the EU Retention Requirement or the UK Retention Requirement to take any other action which may be required by EU Institutional Investors or the
UK Risk Retention and Due Diligence Requirements respectively for the purposes of their compliance with the EU Risk Retention and Due Diligence Requirements, and no such person assumes (i) any obligation to so retain or take any such
other action or (ii) any liability whatsoever in connection with any Holder’s non-compliance with the EU Risk Retention and Due Diligence Requirements or the UK Risk Retention and Due Diligence Requirements. Consequently, the notes may
not be a suitable investment for EU Institutional Investors or UK Institutional Investors. As a result, the price and liquidity of the notes in the secondary market may be adversely affected.
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Your Notes Are Subject To A Call Option
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Navient Corporation, or one of its wholly-owned subsidiaries, has the option to call, in full, the class A-5 notes in respect of each reset date,
even if you have delivered a hold notice. If this option is exercised, you will receive a payment of principal equal to the outstanding principal balance of your class A-5 notes less all amounts distributed to you as a payment of
principal, plus all accrued and unpaid interest on such distribution date. However, you may not be able to reinvest the proceeds you receive in a comparable security with an equivalent yield. For additional information concerning the
call option and reset periods, see “Description of the Notes—The Reset Rate Notes” in this free-writing prospectus.
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You May Be Required To Continue To Hold Your Notes If A Failed Remarketing Occurs With Respect To A Reset Date
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In connection with any remarketing of the class A-5 notes (including on the current reset date), if a failed remarketing is declared, your class A‑5
notes will not be sold, even if you attempted to tender them for remarketing or if the notes were mandatorily tendered with respect to such reset date. In this event you will be required to rely on a sale through the secondary market,
which may not then exist for your class A-5 notes, independent of the remarketing process.
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If a failed remarketing is declared with respect to the April 26, 2021 reset date, the class A-5 notes will continue to bear interest until the next
reset date at the failed remarketing rate, which is currently equal to an annual rate of three-month LIBOR plus 0.75%. We cannot assure you that the failed remarketing rate will be as high as the prevailing market rate of interest for
similar securities and you may suffer a loss in yield. For additional information concerning a failed remarketing, see “Description of the Notes—The Reset Rate Notes” in this free-writing
prospectus.
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You May Experience Notification Delays In Connection With A Remarketing Of Your Notes
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Holders of beneficial interests in the class A-5 notes may not receive timely notifications of the reset terms for any reset date due to procedures
used by the clearing agencies and financial intermediaries. If you do not receive a copy of the notice delivered on the related remarketing terms determination date, you will nevertheless be deemed to have tendered your class A-5 notes
unless the remarketing agent has received a hold notice from you on or prior to the related notice date.
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You Will Bear Prepayment And Extension Risk Due To Actions Taken By Individual Borrowers And Other Variables Beyond Our Control
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A borrower may prepay a student loan in whole or in part at any time. The rate of prepayments on the trust student loans may be influenced by a
variety of economic, social, competitive and other factors, including changes in interest rates, the availability of alternative financings (including, without limitation, refinancings offered through the Department of Education’s
Direct Loan program), regulatory changes affecting the student loan market and the general economy. Various loan consolidation or refinance programs, including those offered by affiliates of the depositor, available to eligible
borrowers may increase the likelihood of prepayments. Further, future initiatives by Congress or future laws, executive orders or other policy statements to encourage or force consolidation, create debt forgiveness programs or
establish other policies and programs including but not limited to those proposed by several presidential campaigns could also affect prepayments on the trust student loans. In addition, the issuing entity may receive unscheduled
payments due to borrower defaults and purchases by the servicer or the depositor. Because a pool may include thousands of trust student loans, it is impossible to predict if or when or in what form any of these future actions may occur
or to predict the amount and timing of payments that will be received and paid to noteholders in any period. Consequently, the length of time that your notes are outstanding and accruing interest may be shorter than you expect.
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On the other hand, borrowers of trust student loans might not choose to prepay their trust student loans or the trust student loans may be extended
as a result of grace periods, deferment periods, forbearance periods, income-driven repayment plans or repayment term or monthly payment amount modifications agreed to by the servicer in compliance with laws and regulations. This may
slow the expected timing of principal payments or lengthen the remaining term of the trust student loans and delay principal payments to you. In addition, the amount available for distribution to you will be reduced if borrowers fail
to pay timely the principal and interest due on the trust student loans. Consequently, the length of time that your notes are outstanding and accruing interest may be longer than you expect.
The optional purchase right of the servicer and the provision for the auction of the trust student loans, create additional uncertainty regarding
the timing of payments to noteholders.
The effect of these factors is impossible to predict. To the extent they create reinvestment risk, you will bear that risk.
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A Failure To Comply With Student Loan Origination And Servicing Procedures Could Jeopardize Guarantor, Interest Subsidy And
Special Allowance Payments On The Trust Student Loans That Are FFELP Loans Or Otherwise Have An Adverse Impact On The Trust Student Loans, Which May Result In Delays In Payment Or Losses On Your Notes
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The rules under which the trust student loans were originated, including the Higher Education Act or the program rules require lenders making and
servicing student loans and the guarantors guaranteeing those loans to follow specified procedures, including due diligence procedures, to ensure that the student loans are properly made, disbursed and serviced.
Failure to follow these procedures may result in the Department of Education’s refusal to make reinsurance payments to the applicable guarantor or
to make interest subsidy payments and special allowance payments on the trust student loans that are FFELP Loans.
Loss of any loan program payments could adversely affect the amount of available funds and the issuing entity’s ability to pay principal and
interest on your notes.
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In addition, to the extent related to servicing practices of Navient Solutions, LLC with respect to FFELP loans or HEAL Program loans, an adverse
ruling in litigation against Navient Solutions, LLC may have a material adverse effect on the trust student loans, and the payments on your notes may be adversely affected. See “Navient Corporation”
in this free-writing prospectus.
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The Inability Of The Depositor Or The Servicer To Meet Its Repurchase Obligation May Result In Losses On Your Notes
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Under some circumstances, the issuing entity has the right to require the depositor (and the depositor has the right to require the sellers) or the
servicer to purchase a trust student loan or provide the issuing entity with a substitute student loan. This right arises generally if a breach of the representations, warranties or covenants of the depositor or the servicer, as
applicable, has a material adverse effect on the issuing entity, and is not cured within the applicable cure period. We cannot guarantee to you, however, that the depositor (and, in turn, the sellers) or the servicer will have the
financial resources to make a purchase or substitution.
For example, the depositor, the sellers, and the servicer are subsidiaries of Navient Corporation and, as a result, an adverse ruling in
litigation against Navient Corporation could also give rise to an obligation of the depositor, the servicer, or a seller to purchase, repurchase, or substitute trust student loans as set forth in the related transaction documents and
may have an adverse impact on the financial ability of the depositor, the servicer, or a seller to fulfill their respective obligations to purchase, repurchase or substitute trust student loans. See “Navient
Corporation” in this free-writing prospectus.
If the depositor, the sellers, or the servicer do not have the financial resources to make a required purchase or substitution, you will bear any
resulting loss.
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Incentive Programs May Affect Your Notes
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At the present time, the borrowers with respect to certain of the trust student loans may be eligible for various incentive programs. In addition,
under the terms of the servicing agreement, the servicer may make new incentive programs available to borrowers with trust student loans. See “The Companies’ Student Loan Financing
Business—Servicing—Incentive Programs” in this free-writing prospectus. These current or future incentive programs may affect payments on your notes.
For example, if one or more of the incentive programs which offer a principal balance reduction to borrowers are made available to borrowers with
trust student loans and a higher than anticipated number of borrowers qualify, the principal balance of the affected trust student loans may repay faster than anticipated.
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Accordingly, your notes may experience faster than anticipated principal payments.
Conversely, the existence of these incentive programs may discourage a borrower from prepaying an affected trust student loan. If this were to
occur, the principal balance of your notes may be reduced over a longer period than would be the case if there were no such incentive program.
Furthermore, incentive programs may reduce the amount of funds available to make payments on your notes by reducing the principal balances and yield
on the trust student loans. In that case, you will bear the risk of any loss not covered by available credit enhancement.
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A Servicer Default May Result In Additional Costs, Increased Servicing Fees By A Substitute Servicer Or A Diminution In Servicing Performance, Any Of Which May Have An Adverse Effect On
Your Notes
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If a servicer default occurs, the indenture trustee or the noteholders may remove the servicer without the consent of the eligible lender trustee,
as applicable. Only the indenture trustee or such noteholders, and not the eligible lender trustee, has the ability to remove the servicer if a servicer default occurs. In the event of the removal of the servicer and the appointment
of a successor servicer, we cannot predict:
• the
ability of the successor servicer to perform the obligations and duties of the servicer under the servicing agreement; or
• the
servicing fees charged by the successor servicer.
In addition, the noteholders have the ability, with some exceptions, to waive defaults by the servicer.
Furthermore, the indenture trustee or the noteholders may experience difficulties in appointing a successor servicer and during any transition phase
it is possible that normal servicing activities could be disrupted, resulting in increased delinquencies and/or defaults on the trust student loans.
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The Indenture Trustee May Have Difficulty Liquidating Trust Student Loans After An Event Of Default
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If an event of default occurs under the indenture, the indenture trustee may sell the trust student loans, without the consent of the noteholders
(but only in the event that there has been a payment default on the class A notes, and in all other cases, if the purchase price received from the sale of the trust student loans is sufficient to repay all noteholders in full).
However, the indenture trustee may not be able to find a purchaser for the trust student loans in a timely manner or the market value of those loans may not be high enough to make noteholders whole.
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You May Incur Losses Or Delays In Payments On Your Notes If Borrowers Default On The Trust Student Loans
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If a borrower defaults on a trust student loan that is only 98% or 97% guaranteed, the related issuing entity will experience a loss of
approximately 2% or 3%, as the case may be, of the outstanding principal and accrued interest on that student loan. If defaults occur on the trust student loans and the credit enhancement described in this free-writing prospectus is
insufficient, you may suffer a delay in payment or losses on your notes.
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If A Guarantor Of The Trust Student Loans Experiences Financial Deterioration Or Failure, You May Suffer Delays In Payment Or
Losses On Your Notes
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All of the trust student loans will be unsecured. As a result, the only security for payment of a FFELP guaranteed student loan is the guarantee
provided by the applicable guarantor. FFELP loans acquired by the issuing entity may be subject to guarantee agreements with a number of individual guarantors. A deterioration of a guarantor’s financial condition and ability to honor
guarantee claims could result in a failure of that guarantor to make guarantee payments to the eligible lender trustee in a timely manner, or at all. The financial condition of a guarantor could be adversely affected by a number of
factors, including the amount of claims made against that guarantor as a result of borrower defaults.
A guarantor’s financial condition and ability to honor guarantee claims with respect to FFELP loans could also be adversely affected by a number of
other factors including:
• the continued voluntary waiver by the guarantor of the guarantee fee payable by a borrower upon disbursement of a student loan;
• the amount of claims made against that guarantor as a result of borrower defaults;
• the amount of claims reimbursed to that guarantor from the Department of Education, which range from 75% to 100% of the guaranteed
portion of the loan, depending on the date the loan was made and the historical performance of the guarantor; and
• changes in legislation that may reduce expenditures from the Department of Education that support federal guarantors or that may
require guarantors to pay more of their reserves to the Department of Education.
If the financial condition of a guarantor deteriorates, it may fail to make guarantee payments in a timely manner, or at all. In that event, you
may suffer delays in payment or losses on your notes.
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The Department Of Education’s Failure To Make Reinsurance Payments May Negatively Affect The Timely Payment Of Principal And
Interest On Your Notes
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If a guarantor is unable to meet its guarantee obligations, the issuing entity may submit claims directly to the Department of Education for
payment. The Department of Education’s obligation to pay guarantee claims directly is dependent upon its determination that the guarantor is unable to meet its guarantee obligations. If the Department of Education delays in making this
determination, you may suffer a delay in the payment of principal and interest on your notes. In addition, if the Department of Education determines that the guarantor is able to meet its guarantee obligations, the Department of
Education will not make guarantee payments to the issuing entity. The Department of Education may or may not make the necessary determination that the guarantor is unable to meet its guarantee obligations. If the Department of
Education determines that the guarantor is unable to meet its guarantee obligations, it may or may not make this determination or the ultimate payment of the guarantee claims in a timely manner. This could result in delays or losses on
your investment.
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Payment Offsets By Guarantors Or The Department Of Education Could Prevent The Issuing Entity From Paying You The Full Amount Of
The Principal And Interest Due On Your Notes
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The eligible lender trustee may use the same Department of Education lender identification number for FFELP loans of the issuing entity as it uses
for other FFELP loans it holds on behalf of other issuing entities established by the sponsor. If it does, the billings submitted by the eligible lender trustee or the servicer to the Department of Education (for items such as special
allowance payments or interest subsidy payments) and the claims submitted to the guarantors will be consolidated with the billings and claims for payments for trust student loans under other issuing entities using the same lender
identification number. Payments on those billings by the Department of Education as well as claim payments by the applicable guarantors will be made to the eligible lender trustee, or to the servicer on behalf of the eligible lender
trustee, in a lump sum. Those payments must be allocated by the administrator among the various issuing entities that reference the same lender identification number.
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If the Department of Education or a guarantor determines that the eligible lender trustee owes it a liability on any trust student loan, including
loans it holds on behalf of the issuing entity for your notes or other issuing entities, the Department of Education or the applicable guarantor may seek to collect that liability by offsetting it against payments due to the eligible
lender trustee of the issuing entity. Any offsetting or shortfall of payments due to the eligible lender trustee could adversely affect the amount of available funds for any collection period and thus the issuing entity’s ability to
pay you principal and interest on your notes.
The servicing agreement for your notes contains provisions for cross-indemnification concerning those payments and offsets. Such provisions require
one entity to compensate the other or accept a lesser payment to the extent the latter has been assessed for the liability of the former. Even with cross-indemnification provisions, however, the amount of funds available to the issuing
entity from indemnification would not necessarily be adequate to compensate the issuing entity and investors in the notes for any previous reduction in the available funds.
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The Enactment Of The Health Care And Education Reconciliation Act Of 2010 And Any Other Future Changes In Law May Adversely
Affect Student Loans, The Guarantors, The Depositor or Navient CFC And, Accordingly, Adversely Affect Your Notes
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On March 30, 2010, the Health Care and Education Reconciliation Act of 2010 (the “Reconciliation Act”) was enacted into law. Effective July 1,
2010, the Reconciliation Act eliminated the FFELP. The terms of existing FFELP loans are not materially affected by the Reconciliation Act. The Higher Education Act or other relevant federal or state laws, rules and regulations may be
further amended or modified in the future in a manner, including as part of any reauthorization of the Higher Education Act, that could adversely affect the federal student loan programs as well as the student loans made under these
programs and the financial condition of the guarantors. Among other things, the level of guarantee payments may be adjusted from time to time. The elimination of FFELP and any other future changes could affect the ability of Navient
CFC, the depositor or the servicer to satisfy their obligations to purchase or substitute student loans. Future changes could also have a material adverse effect on the revenues received by the guarantors that are available to pay
claims on defaulted student loans in a timely manner. We cannot predict whether any changes will be adopted or, if adopted, what impact those changes would have on any issuing entity or the notes.
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The Use Of Master Promissory Notes May Compromise The Indenture Trustee’s Security Interest In The Student Loans
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For loans disbursed on or after July 1, 1999, a master promissory note evidences any student loan made to a borrower under the Federal Family
Education Loan Program. When a master promissory note is used, a borrower executes only one promissory note with each lender. Subsequent student loans from that lender are evidenced by a confirmation sent to the student. Therefore, if
a lender originates multiple student loans to the same student, all of the related student loans are evidenced by a single promissory note.
Under the Higher Education Act, each student loan made under a master promissory note may be sold independently of any other student loan made under
that same master promissory note. Each student loan is separately enforceable on the basis of an original or copy of the master promissory note.
It is possible that student loans transferred to the issuing entity may be originated under a master promissory note. If the servicer were to
deliver a copy of the master promissory note, in exchange for value, to a third-party that did not have knowledge of the indenture trustee’s lien, that third-party may also claim an interest in the student loan. It is possible that the
third-party’s interest could be prior to or on parity with the interest of the indenture trustee.
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The Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
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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. Military operations by the United States may increase 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.
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A Deterioration of General Economic Conditions May Reduce Payments on Your Notes
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A deterioration in economic conditions in the United States or globally, such as an increase in unemployment levels, contraction of the availability
of consumer credit or an increase in interest rates, may be caused by a variety of factors, including but not limited to, political gridlock on United States federal budget matters (including full or partial government shutdowns),
public health emergencies including the ongoing global outbreak of the 2019 novel coronavirus disease (also known as “COVID-19”), trade disputes, terrorist events, wars, and other military or civil conflicts, price volatility in
commodities, natural disasters and other disruptive political, social or economic events. Any such disruption in economic activities may be severe or unpredictable, and could adversely affect the ability and willingness of borrowers to
meet their payment obligations under the trust student loans and of the servicer to operate its business and manage and service the trust student loans, resulting in higher rates of delinquencies experienced by the trust with respect to
the trust student loans. A decrease in the amount of interest or principal received on the trust student loans could negatively affect the ability of the trust to generate sufficient cash flow to pay its obligations or the ability of
the servicer to service the interest and principal payments due on the notes, which, in turn, may cause losses on the notes. See also “Risk Factors— Forbearances Granted As a Result of the COVID-19 Pandemic May Delay Payments of
Interest and Principal” in this remarketing memorandum.
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The COVID-19 pandemic may adversely affect the ability of the servicer to operate its business and manage and service the trust student loans.
Restrictions on movement and business activities put in place by state and local governments may hinder the ability of the servicer and its employees to perform collection activities on the trust student loans. In addition, several
states have issued guidance regarding collection practices that could limit Navient’s collection activities for limited periods of time. As a result, the ability of the servicer to service the interest and principal payments due on the
notes may be diminished, which may lead to decreased collections on the trust student loans and may cause losses on the notes.
An improvement in economic conditions could result in prepayments by the borrowers of their payment obligations under the trust student loans. As
a result, you may receive principal payments of your notes earlier than anticipated.
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Forbearances Granted As a Result of the COVID-19 Pandemic May Delay Payments of Interest and Principal
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The Higher Education Act also permits, and in some cases requires, “forbearance” periods from loan collection in some circumstances. Interest
that accrues during a forbearance period is never subsidized. Forbearance is most often granted to borrowers for periods of economic hardship affecting the borrower, which may occur for a variety of reasons. During periods of
deteriorating economic conditions in the United States or globally, such as during disruptive political, social or economic events, forbearance requests typically increase. Forbearance is also often granted to borrowers when a federal
disaster or emergency has been declared such as in response to COVID-19.
For details of forbearance policies under the FFELP, see “Appendix A—Federal Family Education Loan Program—
Stafford Loans — Grace Periods, Deferral Periods and Forbearance Periods” in this remarketing memorandum. An increase in forbearances on the trust student loans may result in a delay in payments of interest or principal on the
trust student loans, which could negatively affect the ability of the trust to generate sufficient cash flow to pay its obligations and which, in turn, may cause losses on the notes.
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Forbearance requests have increased and are expected to continue increasing during the ongoing global COVID-19 pandemic. As a result of the
national emergency declaration made by then-President Trump on March 13, 2020 in response to the continuing outbreak of COVID-19, Navient has implemented the Coronavirus Disaster Forbearance Program for its FFELP Loans. Through June 30,
2020, Navient offered up to three months of disaster forbearance to qualified loan borrowers who request it (the “Coronavirus National Emergency Forbearance Program”). The Coronavirus National Emergency Forbearance Program brings a
borrower’s eligible loans current and postpones payments for up to three months. As of July 1, 2020, Navient began offering a short-term coronavirus forbearance to qualified loan borrowers who request it (the “Short-Term Coronavirus
Forbearance Program”). The Short-Term Coronavirus Forbearance Program brings a borrower’s eligible loans current and postpones payments for at least one full month. The Coronavirus National Emergency Forbearance Program and the
Short-Term Coronavirus Forbearance Program are collectively referred to as the “Coronavirus Disaster Forbearance Program.” During the forbearance period for the Coronavirus Disaster Forbearance Program, interest will accrue but will
not be capitalized. Pursuant to the Coronavirus Forbearance granted under the Coronavirus Disaster Forbearance Program will not count toward the total of 12 months of forbearance permitted over the life of the loan. Navient continues to
monitor the changing developments with the COVID-19 pandemic, and as such, will review and periodically revise the Coronavirus Disaster Forbearance Program to better respond to borrowers’ current needs, including without limitation to
modify the forbearance period granted to borrowers.
As a result of the COVID-19 pandemic, there has been a significant increase in forbearance requests among student loans serviced by Navient.
Unlike the relief options offered for natural disasters, the COVID-19 outbreak is affecting obligors nationwide and is expected to have a materially more significant impact on portfolio performance (including the performance of the
trust student loans) than even the most severe historic natural disasters. The increase in forbearances on the trust student loans as a result of the global COVID-19 pandemic may result in a delay in payments of interest or principal
received on the trust student loans, which could negatively affect the ability of the trust to generate sufficient cash flow to pay its obligations which, in turn, may cause losses on the notes. See “Risk
Factors—Current General Economic Conditions, or a Further Deterioration of Economic Conditions May Reduce Payments on Your Notes” in this remarketing memorandum.
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Certain Credit And Liquidity Enhancement Features Are Limited And If They Are Partially Or Fully Depleted, There May Be
Shortfalls In Distributions To Noteholders
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Certain credit and liquidity enhancement features, including the reserve account, are limited in amount. In certain circumstances, if there is a
shortfall in available funds, such amounts may be partially or fully depleted. This depletion could result in shortfalls and delays in distributions to noteholders.
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The Notes May Be Assigned Lower Ratings Than Those Described In This Free-Writing Prospectus By Different Rating Agencies
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The sponsor, or an affiliate, paid a fee to two or more NRSROs (the “Rating Agencies”) to assign the initial credit ratings to the notes on or
before the closing date. The SEC has said that being paid by the sponsor, issuer or remarketing agent to issue or maintain a credit rating on asset-backed securities creates a conflict of interest for NRSROs, and that this conflict is
particularly acute because arrangers of asset-backed securities transactions provide repeat business to such NRSROs.
The sponsor has not requested a rating of the notes by any NRSRO other than the Rating Agencies. However, in preparing for the offering, the
sponsor may have had discussions with, and received preliminary feedback from, NSROs other than the Rating Agencies. Other NRSROs may assign their own ratings to any class or classes of notes at any time, even prior to the closing
date. NRSROs have different methodologies, criteria, models and requirements, which may result in ratings that are lower than those assigned by the Rating Agencies. Depending upon the level of the ratings assigned, what NRSROs are
involved, what their stated reasons are for assigning a lower rating, and other factors, if a NRSRO issues a lower rating, the liquidity, market value and regulatory characteristics of the particular class or classes of notes could be
materially and adversely affected. In addition, the mere possibility that such a rating could be issued may affect price levels in any secondary market that may develop.
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The Replacement of LIBOR May Result in Adverse Tax Consequences to Noteholders
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If an alternative method or index is designated in place of LIBOR for notes that have an interest rate that currently adjusts based on LIBOR, the
U.S. federal income tax consequences of such a replacement are uncertain. If such a replacement constitutes a “significant modification” of the notes under Treasury Regulation section 1.1001-3, the replacement may result in a deemed
taxable exchange of the notes and the realization of gain or loss, as well as other corollary tax consequences. Whether a particular investor recognizes gain in respect of such deemed taxable exchange, and whether any floating rate note
deemed issued to such investor in such deemed taxable exchange is issued with original issue discount (“OID”), will depend upon the investor’s basis in the floating rate notes deemed exchanged, the relationship between LIBOR and the
other benchmark at the time of such deemed exchange, and other factors, such as whether pricing quotations on the floating rate notes are readily available.
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The Internal Revenue Service and the Treasury Department have proposed regulations, upon which taxpayers may rely until the promulgation of final
regulations, that, in certain circumstances, could reduce the likelihood that replacing a rate based on LIBOR with an alternative method or index would constitute a “significant modification” as described above. However, we can provide
no assurance that these regulations, in their current form, will provide any relief from the tax consequences described above if such a replacement is effected with respect to the notes. Moreover, the Internal Revenue Service recently
published Revenue Procedure 2020-44, which set forth certain safe harbors pursuant to which the adoption of an amendment related to replacing a rate based on LIBOR with an alternative benchmark would not constitute a “significant
modification.” It is unclear whether the substitution of an alternative method or index in place of LIBOR in respect of the floating rate notes would qualify for any of these safe harbors. Holders of the notes should consult their own
tax advisors with respect to the consequences of the designation of an alternative method or index in place of LIBOR.
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Current General Economic Conditions, Or A Further Deterioration of Economic Conditions May Reduce Payments on Your Notes
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Current general economic conditions, or a further deterioration in economic conditions in the United States or globally, such as a further
increase in unemployment levels, contraction of the availability of consumer credit or an increase in interest rates, may be caused by a variety of factors, including but not limited to, political gridlock on United States federal
budget matters (including full or partial government shutdowns), public health emergencies such as the ongoing global outbreak of the 2019 novel coronavirus disease (also known as “COVID-19”), trade disputes, terrorist events, wars, and
other military or civil conflicts, price volatility in commodities, natural disasters and other disruptive political, social or economic events. Any such disruption in economic activities may be severe or unpredictable, and could
adversely affect the ability and willingness of borrowers to meet their payment obligations under the trust student loans or of the servicer to operate its business and manage and service the trust student loans, possibly resulting in
higher rates of delinquencies and greater losses experienced by the trust with respect to the trust student loans. An increase in defaults on the trust student loans, or a decrease or delay in the amount of interest or principal
received on the trust student loans, either alone or in combination, could negatively affect the ability of the trust to generate sufficient cash flow to pay its obligations or the ability of the servicer to service the interest and
principal payments due on the notes, which, in turn, may cause losses on the notes.
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The ongoing global outbreak of COVID-19 has led to significant disruptions in economic activities and financial markets in the United States and
around the world. The COVID-19 outbreak has been declared to be a pandemic by the World Health Organization, and on March 13, 2020, President Trump declared a national emergency in the United States. In certain areas of the United
States, the COVID-19 pandemic has caused a near total cessation of all non-essential economic activities as state and local governments have issued shelter-in-place or stay-at-home orders, banned large gatherings, required all
non-essential business to close, and curtailed other business activities. Many businesses have temporarily suspended operations and laid-off employees. As a consequence, there has been a sudden and drastic increase in unemployment in
the United States and record numbers of Americans have filed for unemployment benefits. The COVID-19 outbreak has also caused substantial disruption and volatility in the credit markets which may continue for an extended period or
indefinitely and may lead to or exacerbate an economic recession in the United States or globally. There ultimately can be no assurance that any measures undertaken by the federal government, or by state or local governments, will be
effective to mitigate the impact of the COVID-19 pandemic. There is little certainty as to when the COVID-19 pandemic will abate, the frequency or severity of any subsequent waves of COVID-19, the effects and consequences of local and
regional surges in COVID-19, or the timing or extent to which the United States or global economy will recover from the disruption caused by the outbreak of COVID-19. Because a pandemic such as COVID-19 has not occurred in recent years,
historical loss experience is likely to not accurately predict the performance of the receivables. It is, therefore, not possible to predict the effect of the COVID-19 pandemic on the performance of the trust student loans or the notes.
Because a pandemic such as COVID-19 has not occurred in recent years, historical loss experience is likely to not accurately predict the performance of the trust student loans.
|
It is possible that the COVID-19 outbreak may worsen before it improves, and that the COVID-19 pandemic, the related remedial measures and/or a
resulting economic recession may result in higher levels of unemployment than those already reported, which could adversely affect the ability and willingness of borrowers to meet their payment obligations under the trust student loans
and possibly result in higher rates of delinquencies and greater losses. In addition, it is possible that a higher than anticipated percentage of borrowers may seek relief under bankruptcy or other debtor relief laws as a result of
financial and economic disruptions related to the outbreak of COVID-19. See “Appendix A—Federal Family Education Loan Program—Education Loan Discharges” in this remarketing memorandum. In an effort to assist borrowers impacted by the COVID-19 pandemic, the servicer continues to work with borrowers experiencing hardships on an individual basis, primarily using the Coronavirus
Disaster Forbearance Program, to provide forbearance when requested and other assistance programs. These programs may result in a delay in payments of interest or principal on the trust student loans and negatively impact cash flows to
the trust in the near term and, if not effective in mitigating the effect of COVID-19 on obligors, may adversely affect the notes. See “Risk Factors— Forbearances Granted As a Result of the COVID-19
Pandemic May Delay Payments of Interest and Principal” in this remarketing memorandum. During the continuation of the COVID-19 outbreak and for an indefinite period thereafter, investors in the notes should expect increases in
forbearances on the trust student loans, and such increase could be substantial. An increase in forbearances on the trust student loans or decrease or delay in the amount of interest or principal received on the trust student loans,
either alone or in combination, may lead to decreased collections on the trust student loans which, in turn, may cause losses on the notes.
The COVID-19 pandemic may adversely affect the ability of the servicer to operate its business and manage and service the trust student loans.
Restrictions on movement and business activities put in place by state and local governments may hinder the ability of the servicer and its employees to perform collection activities on the trust student loans. The servicer has enacted
necessary health safety measures which allow employees to work remotely if their function permits. An extended period of remote work arrangements could introduce operational risk, including cybersecurity risks. The servicer also
utilizes third party vendors for certain business activities. While the servicer closely monitors the business continuity activities of these third parties, successful implementation and execution of their business continuity strategies
are largely outside the servicer's control. If any transaction party is unable to adequately perform their obligations under the transaction documents due to a remote work environment, this may lead to decreased collections on the trust
student loans and, in turn, may cause losses on the notes. In addition, certain governmental authorities, including United States federal, state or local governments could enact laws, regulations, executive orders or other guidance that
allow borrowers to forego making scheduled payments for some period of time or require modification to the trust student loans, and some states have enacted executive orders that preclude creditors from exercising certain rights or
taking certain actions with respect to delinquent or defaulted loans. These programs, if enacted or expanded, could adversely affect the servicer’s ability to collect the interest and principal payments due on the notes, which may lead
to decreased collections on the trust student loans and, in turn, may cause losses on the notes.
|
A prolonged outbreak or new outbreaks of COVID-19, future outbreaks of coronavirus diseases or additional actions taken by governmental
authorities to limit any such outbreaks could lead to further disruptions in economic activities (including workforce reductions and reductions in borrower incomes) and in financial markets and may have a significant adverse impact on
the global economy in general. Any such disruption in economic activities could further adversely affect the ability and willingness of borrowers to meet their payment obligations under the trust student loans and of the servicer to
operate its business and manage and service the trust student loans, resulting in greater losses experienced by the trust. An increase in defaults on the trust student loans or decrease or delay in the amount of interest or principal
received on the trust student loans, or a change in the ability of the servicer to service the interest and principal payments due on the notes, either alone or in combination, may lead to decreased collections on the trust student
loans which, in turn, may cause losses on the notes.
|
||
Forbearances and other Modifications Occasioned by the COVID-19 Pandemic or Otherwise May Have Adverse United States Federal
Income Tax Consequences
|
The Internal Revenue Service has issued guidance providing that, in certain circumstances, forbearances and other modifications of debt
instruments occasioned by the global COVID-19 pandemic will not result in a deemed exchange thereof for United States federal income tax purposes. Such guidance does not by its terms apply to student loans.
Accordingly, it is possible that forbearances pursuant to the Coronavirus Disaster Forbearance Program or other modifications of trust student
loans that are directly or indirectly occasioned by the COVID-19 global pandemic may result in a deemed exchange of such trust student loans for U.S. federal income tax purposes, and, which could result in the realization of gain or
loss, as well as other corollary tax consequences, each as described more fully below under “Certain United States Federal Income Tax Consequences.”
|
• |
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;
|
• |
if applicable, entering into swap agreements from time to time with respect to the reset rate notes and making the required payments set forth therein;
|
• |
entering into any potential future interest rate cap agreements at the direction of the administrator from time to time and making the payments, including any upfront payments, required thereunder; and
|
• |
engaging in other activities that are necessary, suitable or convenient to accomplish, or are incidental to, the foregoing.
|
• |
the pool of trust student loans, legal title to which is held by the eligible lender trustee on behalf of the trust;
|
• |
all funds collected on trust student loans, including any special allowance payments and interest subsidy payments, on or after the applicable cutoff date;
|
• |
all moneys and investments from time to time on deposit in the Trust Accounts;
|
• |
if applicable, its rights under any and all swap agreements entered into from time to time with respect to the reset rate notes and the related documents;
|
• |
if applicable, its rights under any potential future interest rate cap agreement entered into from time to time and the related documents;
|
• |
its rights under the transfer and servicing agreements, including the right to require VG Funding (or Navient Solutions, LLC, as servicer, acting on its behalf), Navient CFC, the depositor or the servicer to repurchase trust student
loans from it or to substitute student loans under certain conditions; and
|
• |
its rights under the guarantee agreements with guarantors.
|
$
|
0.00
|
|||
Floating Rate Class A‑2 Student Loan‑Backed Notes
|
0.00
|
|||
Reset Rate Class A‑3 Student Loan‑Backed Notes
|
0.00
|
|||
Floating Rate Class A‑4 Student Loan‑Backed Notes
|
128,744,580.16
|
|||
Reset Rate Class A‑5 Student Loan‑Backed Notes
|
180,000,000.00
|
|||
Floating Rate Class B Student Loan‑Backed Notes
|
17,669,533.60
|
|||
Initial Equity
|
100.00
|
|||
Total
|
$
|
326,414,213.76
|
• |
was a consolidation loan guaranteed as to principal and interest by a guaranty agency under a guarantee agreement and the guaranty agency was, in turn, reinsured by the Department of Education in accordance with the FFELP;
|
• |
contained terms in accordance with those required by the FFELP, the guarantee agreements and other applicable requirements;
|
• |
was fully disbursed;
|
• |
was not more than 210 days past due;
|
• |
did not have a borrower who was noted in the related records of the servicer as being currently involved in a bankruptcy proceeding; and
|
• |
had special allowance payments, if any, based on the three-month commercial paper rate or the 91-day Treasury bill rate.
|
Disbursement Date
|
Percentage
Guaranteed
|
|||
Prior to October 1, 1993
|
100
|
%
|
||
On or after October 1, 1993 but before July 1, 2006
|
98
|
%
|
• |
the origination and servicing of the trust student loan being performed in accordance with the FFELP, the Higher Education Act, the guaranty agency’s rules and other applicable requirements;
|
• |
the timely payment to the guaranty agency of the guarantee fee payable on the trust student loan; and
|
• |
the timely submission to the guaranty agency of all required pre-claim delinquency status notifications and of the claim on the trust student loan.
|
● |
commercial banks, thrift institutions and credit unions;
|
● |
pension funds and insurance companies;
|
● |
educational institutions;
|
● |
various state and private nonprofit loan originating and secondary market agencies; and
|
● |
various other third parties.
|
● |
shortly after loan origination;
|
● |
while the borrowers are still in school;
|
● |
just before the loan’s conversion to repayment after borrowers graduate or otherwise leave school; or
|
● |
while the loans are in repayment.
|
● |
its automated loan administration system called PortSS® for the lender to use prior to loan sale; or
|
● |
its loan origination and interim servicing system called ExportSS®.
|
● |
Great Rewards(SM). Under the Great Rewards(SM) program, which is available for all student loans that were disbursed prior to June 30, 2002 and enter repayment after July 1993,
if a borrower makes 48 consecutive scheduled payments in a timely fashion, the effective interest rate is reduced permanently by 2% per annum.
|
● |
Great Returns(SM). Under the Great Returns(SM) program, borrowers whose loans were disbursed prior to June 30, 2002 and who make 24 consecutive scheduled payments in a timely
fashion get a reduction in principal equal to any amount over $250 that was paid as part of the borrower’s origination fee to the extent that the fee does not exceed 3% of the principal amount of the loan.
|
● |
Direct Repay/ ACH Benefit plan. Under the Direct Repay/ ACH Benefit plan, borrowers who make student loan payments electronically through automatic monthly deductions from a savings, checking or NOW account receive a
0.25% or 0.50% effective interest rate reduction as long as loan payments continue to be successfully deducted from the borrower’s bank account.
|
● |
Cash Back plan. Under the Cash Back plan, borrowers (i) whose loans are with a Company lender partner, (ii) who enroll in Manage Your Loans(SM), the servicer’s on-line account manager, (iii) who agree to receive
their account information by e-mail and (iv) who make their first 33 scheduled payments on time, receive a 3.3% check or credit based upon their original loan amount.
|
● |
Federal Student Loan Consolidation Incentive. Borrowers with an initial consolidation loan balance of at least $10,000 who make their first 36 payments on time receive a 1.0% interest rate reduction during
periods of active repayment.
|
● |
On-Time Payment Interest Rate Reduction plan. Under the On-Time Payment Interest Rate Reduction plan, borrowers who make their first 24 scheduled payments on time, sign-up for on-line loan management within 60
days from the first payment due date and continue to make payments on time, receive a 0.5% effective interest rate reduction.
|
• |
each student loan was free and clear of all security interests and other encumbrances and no offsets, defenses or counterclaims had been asserted or threatened;
|
• |
the information provided about the student loans was true and correct as of the original cutoff date;
|
• |
each student loan complied in all material respects with applicable federal and state laws and applicable restrictions imposed by the FFELP or under any guarantee agreement; and
|
• |
each student loan was guaranteed by the applicable guarantor.
|
• |
the shortfall, if any, between:
|
o |
the purchase amount of the qualified substitute student loans,
|
o |
the purchase amount of the trust student loans being replaced; plus
|
• |
any accrued interest amounts not guaranteed by, or that are required to be refunded to, a guarantor and any interest subsidy payments or special allowance payments lost as a result of the breach.
|
• |
the maturity or other liquidation of the last trust student loan and the disposition of any amount received upon liquidation of any remaining trust student loan, and
|
• |
the payment to the noteholders of all amounts required to be paid to them.
|
• |
collecting and depositing into the collection account all payments on the trust student loans, including claiming and obtaining any program payments;
|
• |
responding to inquiries from borrowers;
|
• |
attempting to collect delinquent payments; and
|
• |
sending out statements and payment coupons to borrowers.
|
• |
it will satisfy all of its obligations relating to the trust student loans, maintain in effect all qualifications required in order to service the loans and comply in all material respects with all requirements of law if a failure to
comply would have a materially adverse effect on the interests of the trust;
|
• |
it will not permit any rescission or cancellation of a trust student loan except as ordered by a court or other government authority or as consented to by the eligible lender trustee and the indenture trustee, except that it may
write off any delinquent loan if the remaining balance of the borrower’s account is less than $50;
|
• |
it will do nothing to impair the rights of the noteholders in the trust student loans; and
|
• |
it will not reschedule, revise, defer or otherwise compromise payments due on any trust student loan except during any applicable interest only, deferment or forbearance periods or otherwise in accordance with all applicable
standards and requirements for servicing of the loans.
|
• |
the shortfall, if any, between:
|
o |
the purchase amount of the qualified substitute trust student loans;
|
o |
the purchase amount of the trust student loans being replaced; and
|
• |
any accrued interest amounts not guaranteed by or that are required to be refunded to a guarantor and any interest subsidy payments or special allowance payments lost as a result of a breach.
|
• |
the successor to the servicer’s operations assumes in writing all of the obligations of the servicer;
|
• |
the sale or transfer and the assumption comply with the requirements of the servicing agreement; and
|
• |
the rating agencies confirm that this will not result in a downgrading or a withdrawal of the ratings then applicable to the notes.
|
• |
its obligation to purchase trust student loans from the trust as required by the servicing agreement or to pay to the trust the amount of any program payment which a guarantor or the Department of Education refuses to pay, or
requires the trust to refund, as a result of the servicer’s actions; or
|
• |
any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of the servicer’s duties or because of reckless disregard of its obligations and duties.
|
• |
any failure by the servicer to deposit in the Trust Accounts any required payment that continues for five Business Days after the servicer receives written notice of such failure from the indenture trustee or the eligible lender
trustee;
|
• |
any failure by the servicer to observe or perform in any material respect any other term, covenant or agreement in the servicing agreement that materially and adversely affects the rights of noteholders and continues for 60 days
after written notice of such failure is given (1) to the servicer by the indenture trustee, the eligible lender trustee or the administrator or (2) to the servicer, the indenture trustee and the eligible lender trustee by holders of 50%
or more of the notes;
|
• |
the occurrence of an insolvency event involving the servicer;
|
• |
any failure by the servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a FFELP loan servicer; or
|
• |
any failure by the servicer to deliver any particular information, report, certification or accountants’ letter when and as required by specified sections of the servicing agreement, which continues unremedied for fifteen (15)
calendar days after the date on which such information, report, certification or accountants’ letter was required to be delivered.
|
● |
directing the indenture trustee to make the required distributions from the Trust Accounts on each monthly servicing payment date and each distribution date;
|
● |
preparing, based on periodic data received from the servicer, and providing quarterly and annual distribution statements to the eligible lender trustee and the indenture trustee and any related U.S. federal income tax reporting
information; and
|
● |
providing the notices and performing other administrative obligations required by the indenture, the trust agreement and the sale agreement.
|
● |
any failure by the administrator to deliver to the indenture trustee for deposit any required payment by the Business Day preceding any monthly servicing payment date or distribution date, if the failure continues for five Business
Days after notice or discovery;
|
● |
any failure by the administrator to direct the indenture trustee to make any required distributions from any of the Trust Accounts on any monthly servicing payment date or any distribution date, if the failure continues for five
Business Days after notice or discovery;
|
● |
any failure by the administrator to observe or perform in any material respect any other term, covenant or agreement in the administration agreement or a related agreement that materially and adversely affects the rights of
noteholders and continues for 60 days after written notice of the failure is given:
|
o |
to the administrator by the indenture trustee or eligible lender trustee, or
|
o |
to the administrator, the indenture trustee or the eligible lender trustee by holders of 50% or more of the notes; or
|
● |
the occurrence of an insolvency event involving the administrator.
|
• |
the amount of principal distributions for each class of notes;
|
• |
the amount of interest distributions for each class of notes and the applicable interest rates;
|
• |
the Pool Balance at the beginning and at the end of the preceding collection period;
|
• |
the outstanding principal balance and the note pool factor for each class of notes for that distribution date;
|
• |
the servicing and the administration fees for that collection period;
|
• |
the interest rates, if available, for the next period for each class of notes;
|
• |
the amount of any aggregate Realized Losses on the trust student loans for that collection period;
|
• |
the amount of any note interest shortfall and note principal shortfall, if applicable, for each class of notes, and any changes in these amounts from the preceding statement;
|
• |
the amount of any carryover servicing fee for that collection period;
|
• |
the amount of any note interest carryover, if applicable, for each class of notes, and any changes in these amounts from the preceding statement;
|
• |
the aggregate purchase amounts for any trust student loans repurchased by the depositor, the servicer or the sellers from the trust in that collection period;
|
• |
the balance of trust student loans that are delinquent in each delinquency period as of the end of that collection period; and
|
• |
the balance of any reserve account after giving effect to changes in the balance on that distribution date.
|
●
|
borrower default, death, disability or bankruptcy;
|
●
|
the closing of the borrower’s school;
|
●
|
the school’s false certification of borrower eligibility;
|
●
|
liquidation of the student loan or collection of the related guarantee payments; and
|
●
|
purchase of a student loan by the depositor or the servicer.
|
●
|
the original denomination of your note; and
|
●
|
the applicable pool factor.
|
• |
the administrator advises the indenture trustee in writing that DTC is not willing or able to discharge its responsibilities as depository for the reset rate notes and the administrator is unable to locate a successor;
|
• |
the administrator, at its option, elects to terminate the book-entry system through DTC; or
|
• |
after the occurrence of an event of default, a servicer default or an administrator default, investors holding a majority of the outstanding principal balance of the reset rate notes, advise the trustee through DTC in writing that
the continuation of a book-entry system through DTC or a successor is no longer in the best interest of the holders of these reset rate notes.
|
• |
for reset rate securities denominated in U.S. Dollars, a global note certificate held through DTC (each, a ‘‘U.S. global note certificate’’); or
|
• |
for reset rate securities denominated in a non-U.S. Dollar currency, a global note certificate held through a European clearing system (each, a ‘‘non-U.S. global note certificate’’).
|
• |
a U.S. global note certificate for each class of reset rate securities with the applicable DTC custodian, registered in the name of Cede & Co., as nominee of DTC; and
|
• |
one or more corresponding non-U.S. global note certificates with respect to each class of reset rate securities with the applicable foreign custodian, as common depositary for Euroclear and Clearstream, Luxembourg, registered in the
name of a nominee selected by the common depositary for Euroclear and Clearstream, Luxembourg.
|
• |
the outstanding principal balance of the trust student loans plus
|
• |
any accrued but unpaid interest on the trust student loans as of the last day of the related collection period plus
|
• |
the balance of the reserve account on the distribution date following those distributions made under clauses (a) through (f) under “—Distributions—Distributions from the Collection Account”
below minus
|
• |
the Specified Reserve Account Balance and the Supplemental Interest Account Deposit Amount for that distribution date, or
|
• |
if the class A-5 notes are denominated in U.S. Dollars, a 360-day year consisting of twelve 30-day months; or
|
• |
if the class A-5 notes are denominated in a currency other than U.S. Dollars, generally, the Actual/Actual (ISMA) accrual method or another day-count convention as set forth on the related Remarketing
Terms Determination Date.
|
• |
the remarketing agent, in consultation with the administrator, with respect to the length of the reset period, the applicable currency (U.S. Dollars, Euros, Pounds Sterling or another currency), whether the interest rate is fixed or
floating and, if floating, the applicable interest rate index, the day-count convention, the applicable interest rate determination dates, the interval between interest rate change dates during each accrual period, whether the class A-5
notes will be structured to amortize periodically or to receive a payment of principal only at the end of the reset period, and the related All Hold Rate (if applicable); and
|
• |
the remarketing agent with respect to the determination of the applicable fixed rate of interest or Spread to the chosen interest rate index, as applicable.
|
• |
at a floating interest rate, in which case the class A-5 notes are said to be in floating rate mode, or
|
• |
at a fixed interest rate, in which case the class A-5 notes are said to be in fixed rate mode,
|
• |
the weighted average life of the class A-5 notes under several assumed prepayment scenarios;
|
• |
the name and contact information of the remarketing agent;
|
• |
the next reset date and reset period;
|
• |
the applicable minimum denomination and additional increments;
|
• |
the interest rate mode (i.e., fixed rate or floating rate);
|
• |
the applicable currency;
|
• |
if in foreign exchange mode, the identities of the Eligible Swap Counterparties from which bids will be solicited;
|
• |
if in foreign exchange mode, the applicable distribution dates on which interest and principal will be paid to the reset rate noteholders, if other than quarterly;
|
• |
whether the class A-5 notes will be structured to amortize periodically or to receive a payment of principal only at the end of the related reset period (as will be the case, generally, but not exclusively, whenever the class A-5 notes
bear a fixed rate of interest);
|
• |
if in floating rate mode, the applicable interest rate index;
|
• |
if in floating rate mode, the interval between interest rate change dates;
|
• |
if in floating rate mode, the applicable interest rate determination date;
|
• |
if in fixed rate mode, the applicable fixed rate pricing benchmark;
|
• |
if in fixed rate mode, the identities of the Eligible Swap Counterparties from which bids will be solicited;
|
• |
if in floating rate mode, whether there will be a swap agreement and if so the identities of the Eligible Swap Counterparties from which bids will be solicited;
|
• |
the applicable interest rate day-count basis; and
|
• |
the related All Hold Rate, if applicable.
|
• |
the remarketing agent cannot determine the applicable required reset terms on or before the remarketing terms determination date;
|
• |
the remarketing agent cannot establish the required spread on the spread determination date;
|
• |
the remarketing agent is unable to remarket some or all of the tendered reset rate notes at the spread set by the remarketing agent, or one or more committed purchasers default on their purchase obligations and the
remarketing agent chooses not to purchase such reset rate notes themself;
|
• |
any rating agency then rating the notes has not confirmed or upgraded its then-current rating of any class of notes, if such confirmation is required; or
|
• |
certain other conditions specified in the remarketing agreement are not satisfied.
|
• |
all holders of the class A-5 notes will retain their notes, including in all deemed mandatory tender situations;
|
• |
the related interest rate for the class A-5 notes will be reset to a failed remarketing rate of three-month LIBOR plus 0.75% per annum; and
|
• |
the related reset period will be set at three months.
|
• |
to hedge the currency exchange risk that results from the required payment of principal and interest by the trust in the applicable currency during the upcoming reset period;
|
• |
to pay additional interest at the applicable interest rate and in the applicable currency on the class A-5 notes from and including the related reset date to, but excluding the second business day following the
related reset date; and
|
• |
to facilitate the exchange of all secondary market trade proceeds from a successful remarketing (or proceeds from the exercise of the call option) on the applicable reset date to the applicable currency.
|
• |
on the effective date of such currency swap agreement for the related reset date, the U.S. Dollar equivalent of all secondary market trade proceeds received from purchasers of the class A-5 notes using the exchange
rate established on the effective date of such currency swap agreement;
|
• |
on or before each distribution date, (1) the rate of interest on the class A-5 notes multiplied by the outstanding principal balance of the class A-5 notes denominated in the applicable currency and (2) the
currency equivalent of the U.S. Dollars such swap counterparty concurrently receives from the trust as a payment of principal allocated to the class A-5 notes, including, on the maturity date for the class A-5 notes, if a currency swap
agreement is then in effect, the remaining outstanding principal balance of the class A-5 notes, but only to the extent that the required U.S. Dollar equivalent amount is received from the trust on such date, using the exchange rate
established on the applicable effective date of the currency swap agreement;
|
• |
with respect to a distribution date that is also a reset date, other than for distribution dates during a reset period following a reset date upon which a failed remarketing has occurred, up to and including the
reset date resulting in a successful remarketing or an exercise of the call option, additional interest at the applicable interest rate and in the applicable currency for the class A-5 notes from and including the related reset date to, but
excluding, the second business day following the related reset date; and
|
• |
on the reset date corresponding to a successful remarketing or an exercise of the call option of the class A-5 notes, the currency equivalent of all U.S. Dollar secondary market trade proceeds or proceeds from the
exercise of the call option received as of that reset date, as applicable, using the exchange rate established on the effective date of the applicable currency swap agreement for that reset date.
|
• |
on the effective date of such currency swap agreement for the related reset date, all secondary market trade proceeds received from purchasers of the class A-5 notes in the applicable currency;
|
• |
on or before each distribution date, (1) an interest rate of three-month LIBOR plus or minus a spread, as determined from the bidding process described below, multiplied by that swap counterpart’s pro rata share,
as applicable, of the U.S. Dollar equivalent of the outstanding principal balance of the class A-5 notes, and (2) that swap counterpart’s pro rata share of all payments of principal in U.S. Dollars that are allocated to the class A-5 notes;
provided that, all principal payments allocated to such notes on any distribution date will be deposited into the related accumulation account and paid to each related swap counterparty on or about the next reset date (including all amounts
required to be deposited in the related accumulation account on the related reset date), but excluding all investment earnings thereon; and
|
• |
on the reset date corresponding to a successful remarketing or an exercise of the call option of the class A-5 notes, all U.S. Dollar secondary market trade proceeds or proceeds from the exercise of the call
option, as applicable, received (1) from the remarketing agent that the remarketing agent either received directly from the purchasers of the class A-5 notes, if in U.S. Dollars; (2) from the new swap counterparty or counterparties pursuant
to the related currency swap agreements for the upcoming reset period, if in a currency other than U.S. Dollars; or (3) from the holder of the call option, as applicable.
|
• |
the next succeeding related reset date resulting in a successful remarketing;
|
• |
the purchase of all outstanding notes on a reset date, following the exercise of a call option;
|
• |
the distribution date on which the outstanding principal balance of the class A-5 notes is reduced to zero, excluding for such purpose all amounts on deposit in the related accumulation account; or
|
• |
the maturity date of the class A-5 notes.
|
• |
the applicable spread as determined by the remarketing agent on the Spread Determination Date; and
|
• |
the yield to maturity on the Spread Determination Date of the applicable fixed rate pricing benchmark, selected by the remarketing agent, as having an expected weighted average life based on a scheduled maturity at
the next reset date, which would be used in accordance with customary financial practice in pricing new issues of asset-backed securities of comparable average life, provided, that the remarketing agent shall establish that fixed rate equal
to the rate that, in the reasonable opinion of the remarketing agent, will enable all of the tendered reset rate notes to be remarketed by the remarketing agent at 100% of their outstanding principal balance. However, that fixed rate of
interest will in no event be lower than the related All Hold Rate, if applicable.
|
• |
the next succeeding reset date, if the class A-5 notes are then denominated in U.S. Dollars, or the next succeeding reset date resulting in a successful remarketing, if the class A-5 notes are then in foreign
exchange mode;
|
• |
the related reset date for which the call option is exercised;
|
• |
the distribution date on which the outstanding principal balance of the class A-5 notes is reduced to zero (including as the result of the optional purchase of the remaining trust student loans by the servicer or
an auction of the trust student loans by the indenture trustee); or
|
• |
the maturity date of the class A-5 notes.
|
• |
an event of default under the indenture relating to the payment of principal on any class at its maturity date or to the payment of interest on any class of notes which has resulted in an acceleration of the
maturity 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 maturity of the notes, or
|
• |
a liquidation of the trust assets following any event of default under the indenture,
|
A: |
to the noteholders of the reset rate notes then denominated in U.S. Dollars and then structured not to receive a payment of principal until the end of its related reset period, the amount, if any, on deposit in the
related accumulation account for the reset rate notes (exclusive of investment earnings) in reduction of the outstanding principal balance of such reset rate notes until they are paid in full; and/or
|
B: |
to the related currency Swap Counterparty if the reset rate notes are then in foreign exchange mode and are then structured not to receive a payment of principal until the end of their reset period, the amount, if
any, on deposit in the related accumulation account for the reset rate notes (exclusive of investment earnings) in reduction of the outstanding amount of the reset rate notes until they are paid in full;
|
A: |
to the class A noteholders (other than the noteholders of the reset rate notes if a swap agreement with respect to interest payments to be made to such noteholders is then in effect), the Class A Noteholders’
Interest Distribution Amount, ratably, without preference or priority of any kind, based on the amounts due and payable as the Class A Noteholders’ Interest Distribution Amount;
|
B: |
if a swap agreement is then in effect for the reset rate noteholders with respect to interest payments to be made to such noteholders, to each Swap Counterparty, the amount of any swap interest payments due and
payable by the trust (other than as paid to that Swap Counterparty under clause FIRST); and
|
C: |
if any swap agreement with respect to the reset rate notes has been terminated, to the related Swap Counterparty, the amount of any swap termination payments due to such Swap Counterparty under the related swap
agreement due to a swap termination event relating to a payment default by the trust, acceleration of the notes or the insolvency of the trust;
|
A: |
if the reset rate notes are in foreign exchange mode, pro rata (1) to the class A noteholders (other than the holders of any reset rate notes then in foreign exchange mode), ratably, an amount sufficient to reduce
the respective principal balances of those class A notes to zero, and (2) to the applicable currency Swap Counterparties an amount sufficient to reduce the U.S. Dollar equivalent principal balance of the reset rate notes then in foreign
exchange mode to zero; or
|
B: |
if the reset rate notes are then denominated in U.S. Dollars, pro rata to the class A noteholders, ratably, an amount sufficient to reduce the respective principal balances of those class A notes to zero;
|
• |
pay to noteholders the interest payable on the related distribution date; and
|
• |
reduce the outstanding principal amount of each class of notes then outstanding on the related distribution date to zero, taking into account all amounts then on deposit in any accumulation account.
|
• |
are then structured not to receive a payment of principal until the end of the related reset period, the outstanding principal balance of the reset rate notes will be deemed to have been reduced by any amounts on
deposit, exclusive of any investment earnings, in the related accumulation account; and/or
|
• |
are then denominated in a non-U.S. Dollar currency, the U.S. Dollar equivalent of the then-outstanding principal balance of the reset rate notes will be determined based upon the exchange rate provided for in the
related currency swap agreement or agreements.
|
• |
the minimum purchase amount described under “—Optional Purchase” above (plus any amounts owed to the servicer as carryover servicing fees); or
|
• |
the fair market value of the trust student loans as of the end of the related collection period.
|
• |
change the due date of any installment of principal of or interest on any note, or reduce its principal amount, the interest rate or redemption price;
|
• |
change the provisions of the indenture relating to the application of collections on, or the proceeds of the sale of, the trust student loans to payment of principal of or interest on the notes;
|
• |
change the place of payment or the payment currency for any note;
|
• |
impair the right to institute suit for the enforcement of provisions of the indenture regarding payment;
|
• |
reduce the percentage of outstanding notes whose holders must consent to any supplemental indenture;
|
• |
modify the provisions of the indenture regarding the voting of notes held by the trust, the depositor or an affiliate;
|
• |
reduce the percentage of outstanding notes whose holders must consent to a sale or liquidation of the trust student loans if the proceeds of the sale would be insufficient to pay the principal amount and accrued
interest on the notes;
|
• |
modify the provisions of the indenture which specify the applicable percentages of principal amount of notes necessary to take specified actions except to increase these percentages or to specify additional
provisions;
|
• |
modify any of the provisions of the indenture to affect the calculation of interest or principal due on any note on any distribution date or to affect the rights of the noteholders to the benefit of any provisions
for the mandatory redemption of the notes; or
|
• |
permit the creation of any lien ranking prior or equal to the lien of the indenture on any of the collateral for that series or, except as otherwise permitted or contemplated in that indenture, terminate the lien
of the indenture on any collateral or deprive the holder of any note of the security afforded by that lien.
|
• |
a default for five Business Days or more in the payment of any interest on any note after it is due and payable;
|
• |
a default in the payment of the principal of any note at maturity;
|
• |
a default in the performance of any covenant or agreement of the trust in the indenture, or a material breach of any representation or warranty made by the trust in the indenture or in any certificate, if the
default or breach has a material adverse effect on the holders of the notes and is not cured within 30 days after notice by the indenture trustee or by holders of at least 25% in principal amount of the outstanding notes; or
|
• |
the occurrence of an insolvency event involving the trust.
|
• |
exercise remedies as a secured party against the trust student loans and other assets of the trust that are subject to the lien of the indenture;
|
• |
sell those properties; or
|
• |
elect to have eligible lender trustee maintain ownership of the trust student loans and continue to apply collections on them as if there had been no declaration of acceleration.
|
• |
the holders of all the outstanding notes consent to the sale;
|
• |
the proceeds of the sale are sufficient to pay in full the principal and accrued interest on the outstanding notes, at the date of the sale; or
|
• |
the indenture trustee determines that the collections would not be sufficient on an ongoing basis to make all payments on the notes as the payments would have become due if the notes had not been declared due and
payable, and the indenture trustee obtains the consent of the holders of 66 2/3% of the outstanding notes.
|
• |
a citizen or individual resident of the United States;
|
• |
a corporation (including an entity treated as such) organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
• |
an estate the income of which is includible in gross income for U.S. federal income tax purposes, regardless of its source; or
|
• |
a trust whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust.
|
• |
is not actually or constructively a “10 percent shareholder” of Navient, Navient Credit Finance Corporation, the depositor or the trust, or a “controlled foreign corporation” with respect to which Navient, Navient
Credit Finance Corporation, the depositor or the trust is a “related person” within the meaning of the Code, and
|
• |
provides an appropriate statement, signed under penalties of perjury, certifying that the holder is a foreign person and providing that foreign person’s name and address. For beneficial owners that are individuals
or entities treated as corporations, this certification may be made on Form W-8BEN or Form W-8BEN-E. If the information provided in this statement changes, the foreign person must report that change within 30 days of such change. The
statement generally must be provided in the year a payment occurs or in any of the three preceding years.
|
• |
the gain is not effectively connected with the conduct of a trade or business in the United States by the foreign person, and
|
• |
in the case of an individual foreign person, the foreign person is not present in the United States for 183 days or more in the taxable year and certain other requirements are met.
|
• |
Reports on Form 8-K (Current Report), following the occurrence of events specified in Form 8-K requiring disclosure, which are required to be filed within the time-frame specified in Form 8-K related to the type of
event;
|
• |
Reports on Form 10-D (Asset-Backed Issuer Distribution Report), containing the distribution and pool performance information required on Form 10-D, which are required to be filed 15 days following the distribution
date; and
|
• |
Reports on Form 10-K (Annual Report), containing the items specified in Form 10-K with respect to a fiscal year and the items required pursuant to Items 1122 and 1123 of Regulation AB under the Securities Act.
|
(a) |
it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any class A-5 notes to any EU retail investor in the EEA. For the purposes of this provision:
|
(i) |
the expression “EU retail investor” means a person who is one (or more) of the following: (A) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or (B) a
customer within the meaning of Directive (EU) 2016/97 (as amended), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (C) not a qualified investor as defined in Regulation
(EU) 2017/1129 (as amended, the “Prospectus Regulation”); and
|
(ii) |
the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the class A-5 notes to be offered so as to enable an investor to decide to
purchase or subscribe the class A-5 notes;
|
(b) |
it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any notes to any UK retail investor in the United Kingdom. For the purposes of this provision:
|
(i) |
the expression UK retail investor means a person who is one (or more) of the following: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by
virtue of the European Union (Withdrawal) Act 2018 (the "EUWA"); or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000, as amended (the "FSMA" and any rules or regulations made under the FSMA
to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a
qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA (the "UK Prospectus Regulation"); and
|
(ii) |
the expression an “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or
subscribe for the Notes.
|
(c) |
it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the
Financial Services and Markets Act 2000 (“FSMA”)) received by it in connection with the issue or sale of the class A-5 notes in circumstances in which Section 21(1) of the FSMA does not apply to the trust; and
|
(d) |
it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the class A-5 notes in, from or otherwise involving the United Kingdom.
|
• |
if the Pool Balance as of the last day of the related collection period is greater than 40% of the Initial Pool Balance, then the Adjusted Pool Balance shall be the sum of that Pool Balance and the Specified
Reserve Account Balance for that distribution date, or
|
• |
if the Pool Balance as of the last day of the related collection period is less than or equal to 40% of the Initial Pool Balance, then the Adjusted Pool Balance shall be that Pool Balance.
|
• |
all collections on the trust student loans, including any guarantee payments received on the trust student loans, but net of:
|
(1) |
any collections in respect of principal on the trust student loans applied by the trust to repurchase guaranteed loans from the guarantors under the guarantee agreements, and
|
(2) |
amounts required by the Higher Education Act to be paid to the Department of Education or to be repaid to borrowers, whether or not in the form of a principal reduction of the applicable trust student loan, on the
trust student loans for that collection period, including consolidation loan rebate fees;
|
• |
any interest subsidy payments and special allowance payments received by the servicer or the eligible lender trustee with respect to the trust student loans during that collection period;
|
• |
all proceeds of the liquidation of defaulted trust student loans which were liquidated during that collection period in accordance with the servicer’s customary servicing procedures, net of expenses incurred by the
servicer related to their liquidation and any amounts required by law to be remitted to the borrower on the liquidated student loans, and all recoveries on liquidated student loans which were written off in prior collection periods or 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 to another eligible
lender pursuant to the servicing agreement;
|
• |
the aggregate purchase amounts received during that collection period for those trust student loans purchased by the sellers;
|
• |
the aggregate amounts, if any, received from the sellers, the depositor or the servicer, as the case may be, as reimbursement of non-guaranteed interest amounts, or lost interest subsidy payments and special
allowance payments, on the trust student loans pursuant to the sale agreement or the servicing agreement;
|
• |
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 (other than any accumulation account and any currency account);
|
• |
investment earnings actually received by the trust for that distribution date earned on amounts on deposit in any accumulation account;
|
• |
amounts transferred from the remarketing fee account in excess of the Reset Period Target Amount for that distribution date;
|
• |
amounts transferred from any investment premium purchase account in excess of the amount required to be on deposit therein pursuant to the formula set forth in the administration agreement;
|
• |
all amounts on deposit in any investment reserve account not transferred to the accumulation account to offset realized losses on eligible investments as of that distribution date;
|
• |
all amounts on deposit in any supplemental interest account;
|
• |
amounts transferred from the reserve account in excess of the Specified Reserve Account Balance as of that distribution date;
|
• |
all amounts received by the trust from any potential future cap counterparty, or otherwise under any potential future interest rate cap agreement, for deposit into the collection account for that distribution date;
and
|
• |
all amounts received by the trust from any Swap Counterparty for deposit into the collection account, but only to the extent paid in U.S. Dollars, for that distribution date;
|
• |
with respect to calculating LIBOR of a specified maturity, any day on which banks in New York, New York and London, England are open for the transaction of international business; and
|
• |
for all other purposes, any day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in Minneapolis, Minnesota, New York, New York or Wilmington, Delaware are authorized or
obligated by law, regulation or executive order to remain closed.
|
• |
if the reset rate notes did not have at least one related swap agreement in effect during the previous reset period, the floating rate applicable for the most recent reset period during which the Failed Remarketing
Rate was not in effect; or
|
• |
if the reset rate notes had one or more swap agreements in effect during the previous reset period, the weighted average of the floating rates of interest that were due to the related Swap Counterparties from the
trust during the previous reset period.
|
• |
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,
|
• |
the Class A Noteholders’ Principal Distribution Amount on that distribution date, over
|
• |
the amount of principal actually distributed or allocated to the class A noteholders or deposited into the accumulation account on that distribution date.
|
• |
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.
|
• |
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,
|
• |
the Class B Noteholders’ Principal Distribution Amount on that distribution date, over
|
• |
the amount of principal actually distributed to the class B noteholders on that distribution date.
|
• |
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.
|
• |
prior to the Stepdown Date or with respect to any distribution date on which a Trigger Event is in effect, zero; and
|
• |
on and after the Stepdown Date and provided that no Trigger Event is in effect, a fraction expressed as a percentage, the numerator of which is the aggregate principal balance of the class B notes immediately prior
to that distribution date and the denominator of which is the aggregate principal balance of all outstanding notes, less all amounts (other than investment earnings) on deposit in the accumulation account, immediately prior to that
distribution date.
|
• |
the remarketing agent, in consultation with the administrator, cannot establish one or more of the terms required to be set on the Remarketing Terms Determination Date,
|
• |
the remarketing agent is unable to establish the related Spread or fixed rate on the Spread Determination Date,
|
• |
the remarketing agent is unable to remarket some or all of the tendered reset rate notes at the Spread or fixed rate established on the Spread Determination Date, or committed purchasers default on their purchase
obligations, and the remarketing agent, in its sole discretion, elects not to purchase the reset rate notes themselves,
|
• |
the remarketing agent, in consultation with the administrator, are unable to obtain one or more swap agreements meeting the required criteria, if applicable,
|
• |
certain conditions specified in the remarketing agreement are not satisfied, or
|
• |
any applicable Rating Agency Condition has not been satisfied.
|
• |
all payments received by the trust through that date from borrowers, the guaranty agencies and the Department of Education;
|
• |
all amounts received by the trust through that date from repurchases of the trust student loans by any of the sellers, the depositor or the servicer;
|
• |
all liquidation proceeds and Realized Losses on the trust student loans liquidated through that date;
|
• |
the amount of any adjustments to balances of the trust student loans that the servicer makes under the servicing agreement through that date; and
|
• |
the amount by which guarantor reimbursements of principal on defaulted trust student loans through that date are reduced from 100% to 98%, or other applicable percentage, as required by the risk sharing provisions
of the Higher Education Act.
|
• |
as to the initial distribution date, the amount by which the aggregate outstanding principal amount of the notes exceeds the Adjusted Pool Balance for that distribution
date, and
|
• |
as to each subsequent distribution date, the amount by which the Adjusted Pool Balance for the preceding distribution date exceeds the Adjusted Pool Balance for that distribution date.
|
(a) |
0.25% of the Pool Balance as of the close of business on the last day of the related collection period; and
|
(b) |
$2,280,587.00;
|
• |
the product of:
|
(1) |
the difference between (a) the weighted average of the LIBOR-based rates (as determined on the LIBOR Determination Date immediately preceding that distribution date) that will be payable by the trust to any related
Swap Counterparties on the next distribution date, or the LIBOR-based rate (as determined on the LIBOR Determination Date immediately preceding that distribution date) that will be payable by the trust to the reset rate noteholders on the
next distribution date, as applicable, and (b) an assumed rate of investment earnings that satisfies the Rating Agency Condition,
|
(2) |
the amount on deposit in the accumulation account immediately after that distribution date, and
|
(3) |
the actual number of days from that distribution date to the next reset date, divided by 360; and
|
• |
an amount that satisfies the Rating Agency Condition.
|
• |
was a consolidation loan guaranteed as to principal and interest by a guaranty agency under a guarantee agreement and the guaranty agency was, in turn, reinsured by the Department of Education in accordance with
the FFELP;
|
• |
contained terms in accordance with those required by the FFELP, the guarantee agreements and other applicable requirements;
|
• |
was fully disbursed;
|
• |
was not more than 210 days past due;
|
• |
did not have a borrower who was noted in the related records of the servicer as being currently involved in a bankruptcy proceeding; and
|
• |
had special allowance payments, if any, based on the three-month commercial paper rate or the 91-day Treasury bill rate.
|
Aggregate Outstanding Principal Balance
|
$
|
321,198,463
|
||
Aggregate Outstanding Principal Balance – Treasury Bill
|
$
|
124,556
|
||
Percentage of Aggregate Outstanding Principal Balance – Treasury Bill
|
0.04
|
%
|
||
Aggregate Outstanding Principal Balance – One-Month LIBOR
|
$
|
321,073,907
|
||
Percentage of Aggregate Outstanding Principal Balance – One-Month LIBOR
|
99.96
|
%
|
||
Number of Borrowers
|
14,271
|
|||
Average Outstanding Principal Balance Per Borrower
|
$
|
22,507
|
||
Number of Loans
|
24,608
|
|||
Average Outstanding Principal Balance Per Loan – Treasury Bill
|
$
|
17,794
|
||
Average Outstanding Principal Balance Per Loan – One-Month LIBOR
|
$
|
13,051
|
||
Weighted Average Remaining Term to Scheduled Maturity
|
174 months
|
|||
Weighted Average Annual Interest Rate.
|
3.60
|
%
|
Interest Rates
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Less than or equal to 3.00%
|
9,901
|
$
|
122,332,214
|
38.1
|
%
|
|||||||
3.01% to 3.50%
|
7,515
|
74,531,717
|
23.2
|
|||||||||
3.51% to 4.00%
|
2,839
|
46,644,465
|
14.5
|
|||||||||
4.01% to 4.50%
|
3,385
|
49,579,232
|
15.4
|
|||||||||
4.51% to 5.00%
|
366
|
8,854,988
|
2.8
|
|||||||||
5.01% to 5.50%
|
168
|
4,190,279
|
1.3
|
|||||||||
5.51% to 6.00%
|
109
|
3,531,786
|
1.1
|
|||||||||
6.01% to 6.50%
|
116
|
3,573,254
|
1.1
|
|||||||||
6.51% to 7.00%
|
68
|
2,036,524
|
0.6
|
|||||||||
7.01% to 7.50%
|
54
|
2,633,557
|
0.8
|
|||||||||
7.51% to 8.00%
|
53
|
1,294,389
|
0.4
|
|||||||||
8.01% to 8.50%
|
32
|
1,954,988
|
0.6
|
|||||||||
Equal to or greater than 8.51%
|
2
|
41,071
|
*
|
|||||||||
Total
|
24,608
|
$
|
321,198,463
|
100.0
|
%
|
*
|
Represents a percentage greater than 0% but less than 0.05%.
|
Range of Outstanding
Principal Balance
|
Number of
Borrowers |
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||||
Less than $5,000.00
|
3,453
|
$
|
8,787,825
|
2.7
|
%
|
|||||||||
$
|
5,000.00-$ 9,999.99
|
3,177
|
23,347,247
|
7.3
|
||||||||||
$
|
10,000.00-$14,999.99
|
1,655
|
20,295,519
|
6.3
|
||||||||||
$
|
15,000.00-$19,999.99
|
1,326
|
23,054,474
|
7.2
|
||||||||||
$
|
20,000.00-$24,999.99
|
888
|
19,783,588
|
6.2
|
||||||||||
$
|
25,000.00-$29,999.99
|
670
|
18,353,467
|
5.7
|
||||||||||
$
|
30,000.00-$34,999.99
|
520
|
16,903,636
|
5.3
|
||||||||||
$
|
35,000.00-$39,999.99
|
379
|
14,187,495
|
4.4
|
||||||||||
$
|
40,000.00-$44,999.99
|
305
|
12,954,485
|
4.0
|
||||||||||
$
|
45,000.00-$49,999.99
|
246
|
11,682,834
|
3.6
|
||||||||||
$
|
50,000.00-$54,999.99
|
217
|
11,375,297
|
3.5
|
||||||||||
$
|
55,000.00-$59,999.99
|
190
|
10,890,067
|
3.4
|
||||||||||
$
|
60,000.00-$64,999.99
|
133
|
8,302,961
|
2.6
|
||||||||||
$
|
65,000.00-$69,999.99
|
136
|
9,168,530
|
2.9
|
||||||||||
$
|
70,000.00-$74,999.99
|
113
|
8,197,045
|
2.6
|
||||||||||
$
|
75,000.00-$79,999.99
|
86
|
6,670,999
|
2.1
|
||||||||||
$
|
80,000.00-$84,999.99
|
93
|
7,669,078
|
2.4
|
||||||||||
$
|
85,000.00-$89,999.99
|
90
|
7,872,857
|
2.5
|
||||||||||
$
|
90,000.00-$94,999.99
|
71
|
6,554,244
|
2.0
|
||||||||||
$
|
95,000.00-$99,999.99
|
48
|
4,674,417
|
1.5
|
||||||||||
$
|
100,000.00 and above |
475
|
70,472,398
|
21.9
|
||||||||||
Total
|
14,271
|
$
|
321,198,463
|
100.0
|
%
|
Number of Days Delinquent
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
0-30 days
|
23,803
|
$
|
307,098,705
|
95.6
|
%
|
|||||||
31-60 days
|
364
|
6,059,033
|
1.9
|
|||||||||
61-90 days
|
133
|
2,118,707
|
0.7
|
|||||||||
91-120 days
|
76
|
1,331,565
|
0.4
|
|||||||||
121-150 days
|
59
|
1,439,162
|
0.4
|
|||||||||
151-180 days
|
39
|
977,878
|
0.3
|
|||||||||
181-210 days
|
50
|
839,990
|
0.3
|
|||||||||
Greater than 210 days
|
84
|
1,333,423
|
0.4
|
|||||||||
Total
|
24,608
|
$
|
321,198,463
|
100.0
|
%
|
Number of Months
Remaining to
Scheduled Maturity
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
0 to 3
|
164
|
$
|
28,848
|
*
|
||||||||
4 to12
|
628
|
429,446
|
0.1
|
%
|
||||||||
13 to 24
|
1,093
|
1,310,955
|
0.4
|
|||||||||
25 to 36
|
951
|
2,051,908
|
0.6
|
|||||||||
37 to 48
|
678
|
2,096,636
|
0.7
|
|||||||||
49 to 60
|
3,891
|
14,420,267
|
4.5
|
|||||||||
61 to 72
|
1,676
|
7,958,660
|
2.5
|
|||||||||
73 to 84
|
1,306
|
7,658,150
|
2.4
|
|||||||||
85 to 96
|
960
|
6,847,327
|
2.1
|
|||||||||
97 to 108
|
787
|
6,793,852
|
2.1
|
|||||||||
109 to 120
|
2,043
|
20,504,718
|
6.4
|
|||||||||
121 to 132
|
1,914
|
27,631,223
|
8.6
|
|||||||||
133 to 144
|
1,486
|
24,763,979
|
7.7
|
|||||||||
145 to 156
|
985
|
17,320,509
|
5.4
|
|||||||||
157 to 168
|
645
|
12,253,686
|
3.8
|
|||||||||
169 to 180
|
1,459
|
31,058,025
|
9.7
|
|||||||||
181 to 192
|
855
|
21,152,639
|
6.6
|
|||||||||
193 to 204
|
607
|
16,164,621
|
5.0
|
|||||||||
205 to 216
|
497
|
15,394,836
|
4.8
|
|||||||||
217 to 228
|
405
|
14,341,821
|
4.5
|
|||||||||
229 to 240
|
447
|
16,254,611
|
5.1
|
|||||||||
241 to 252
|
279
|
11,162,821
|
3.5
|
|||||||||
253 to 264
|
182
|
6,961,004
|
2.2
|
|||||||||
265 to 276
|
199
|
8,487,545
|
2.6
|
|||||||||
277 to 288
|
109
|
4,546,485
|
1.4
|
|||||||||
289 to 300
|
112
|
4,848,306
|
1.5
|
|||||||||
301 to 312
|
59
|
3,436,255
|
1.1
|
|||||||||
313 to 324
|
35
|
2,759,944
|
0.9
|
|||||||||
325 to 336
|
29
|
1,902,016
|
0.6
|
|||||||||
337 to 348
|
27
|
2,253,518
|
0.7
|
|||||||||
349 to 360
|
77
|
6,137,823
|
1.9
|
|||||||||
361 and above
|
23
|
2,266,025
|
0.7
|
|||||||||
Total
|
24,608
|
$
|
321,198,463
|
100.0
|
%
|
•
|
Represents a percentage greater than 0% but less than 0.05%.
|
Current Borrower Payment Status
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Deferment
|
732
|
$
|
10,523,623
|
3.3
|
%
|
|||||||
Forbearance
|
1,519
|
29,059,965
|
9.0
|
|||||||||
Repayment
|
||||||||||||
First year in repayment
|
333
|
10,718,433
|
3.3
|
|||||||||
Second year in repayment
|
235
|
7,203,640
|
2.2
|
|||||||||
Third year in repayment
|
264
|
6,325,254
|
2.0
|
|||||||||
More than 3 years in repayment.
|
21,525
|
257,367,548
|
80.1
|
|||||||||
Total
|
24,608
|
$
|
321,198,463
|
100.0
|
%
|
• |
may have temporarily ceased repaying the loan through a deferment or a forbearance period (this category includes the Coronavirus
Disaster Forbearance Program); or
|
• |
may be currently required to repay the loan – repayment.
|
Scheduled Months in Status Remaining
|
|||
Current Borrower Payment Status
|
Deferment
|
Forbearance
|
Repayment
|
Deferment
|
18.2
|
-
|
203.7
|
Forbearance
|
-
|
8.3
|
191.3
|
Repayment
|
-
|
-
|
170.1
|
State
|
Number
of Loans
|
Aggregate Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Alabama
|
175
|
$
|
2,327,691
|
0.7
|
%
|
|||||||
Alaska
|
16
|
238,199
|
0.1
|
|||||||||
Arizona
|
477
|
6,971,936
|
2.2
|
|||||||||
Arkansas
|
108
|
1,042,792
|
0.3
|
|||||||||
California
|
2,655
|
37,681,319
|
11.7
|
|||||||||
Colorado
|
372
|
4,558,202
|
1.4
|
|||||||||
Connecticut
|
500
|
5,878,659
|
1.8
|
|||||||||
Delaware
|
88
|
1,204,020
|
0.4
|
|||||||||
District of Columbia
|
119
|
1,870,258
|
0.6
|
|||||||||
Florida
|
1,899
|
28,333,247
|
8.8
|
|||||||||
Georgia
|
636
|
9,270,429
|
2.9
|
|||||||||
Hawaii
|
140
|
1,800,347
|
0.6
|
|||||||||
Idaho
|
68
|
914,413
|
0.3
|
|||||||||
Illinois
|
975
|
11,491,183
|
3.6
|
|||||||||
Indiana
|
948
|
10,927,621
|
3.4
|
|||||||||
Iowa
|
71
|
1,088,821
|
0.3
|
|||||||||
Kansas
|
367
|
2,890,819
|
0.9
|
|||||||||
Kentucky
|
195
|
2,547,246
|
0.8
|
|||||||||
Louisiana
|
627
|
9,479,648
|
3.0
|
|||||||||
Maine
|
83
|
1,417,194
|
0.4
|
|||||||||
Maryland
|
707
|
10,210,953
|
3.2
|
|||||||||
Massachusetts
|
1,149
|
12,542,999
|
3.9
|
|||||||||
Michigan
|
532
|
8,872,315
|
2.8
|
|||||||||
Minnesota
|
198
|
2,071,889
|
0.6
|
|||||||||
Mississippi
|
146
|
2,422,547
|
0.8
|
|||||||||
Missouri
|
375
|
4,334,179
|
1.3
|
|||||||||
Montana
|
40
|
400,910
|
0.1
|
|||||||||
Nebraska
|
40
|
435,659
|
0.1
|
|||||||||
Nevada
|
125
|
1,742,374
|
0.5
|
|||||||||
New Hampshire
|
133
|
1,150,385
|
0.4
|
|||||||||
New Jersey
|
998
|
12,510,877
|
3.9
|
|||||||||
New Mexico
|
58
|
625,044
|
0.2
|
|||||||||
New York
|
2,159
|
25,891,693
|
8.1
|
|||||||||
North Carolina
|
625
|
9,293,628
|
2.9
|
|||||||||
North Dakota
|
11
|
176,491
|
0.1
|
|||||||||
Ohio
|
564
|
6,772,978
|
2.1
|
|||||||||
Oklahoma
|
407
|
4,847,006
|
1.5
|
|||||||||
Oregon
|
319
|
4,731,871
|
1.5
|
|||||||||
Pennsylvania
|
884
|
10,810,447
|
3.4
|
|||||||||
Rhode Island
|
66
|
912,863
|
0.3
|
|||||||||
South Carolina
|
284
|
3,754,325
|
1.2
|
|||||||||
South Dakota
|
10
|
102,634
|
*
|
|||||||||
Tennessee
|
392
|
5,320,551
|
1.7
|
|||||||||
Texas
|
1,886
|
24,863,195
|
7.7
|
|||||||||
Utah
|
78
|
1,685,040
|
0.5
|
|||||||||
Vermont
|
47
|
640,106
|
0.2
|
|||||||||
Virginia
|
813
|
9,188,247
|
2.9
|
|||||||||
Washington
|
569
|
6,605,446
|
2.1
|
|||||||||
West Virginia
|
101
|
1,341,037
|
0.4
|
|||||||||
Wisconsin
|
187
|
2,300,390
|
0.7
|
|||||||||
Wyoming
|
14
|
77,857
|
*
|
|||||||||
Other
|
172
|
2,628,481
|
0.8
|
|||||||||
Total
|
24,608
|
$
|
321,198,463
|
100.0
|
%
|
*
|
Represents a percentage greater than 0% but less than 0.05%.
|
Loan Repayment Terms
|
Number
of Loans
|
Aggregate Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Level Repayment
|
13,686
|
$
|
140,044,834
|
43.6
|
%
|
|||||||
Other Repayment Options(1)
|
8,909
|
136,632,527
|
42.5
|
|||||||||
Income-driven Repayment(2)
|
2,013
|
44,521,102
|
13.9
|
|||||||||
Total
|
24,608
|
$
|
321,198,463
|
100.0
|
%
|
Loan Type
|
Number
of Loans
|
Aggregate
Outstanding Principal
Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Subsidized.
|
12,057
|
$
|
128,527,889
|
40.0
|
%
|
|||||||
Unsubsidized
|
12,551
|
192,670,574
|
60.0
|
|||||||||
Total
|
24,608
|
$
|
321,198,463
|
100.0
|
%
|
Disbursement Date
|
Number
of Loans
|
Aggregate Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
September 30, 1993 and earlier
|
0
|
$
|
0
|
0.0
|
%
|
|||||||
October 1, 1993 through June 30, 2006
|
24,608
|
321,198,463
|
100.0
|
|||||||||
July 1, 2006 and later
|
0
|
0
|
0.0
|
|||||||||
Total
|
24,608
|
$
|
321,198,463
|
100.0
|
%
|
Name of Guaranty Agency
|
Number
of Loans
|
Aggregate Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
American Student Assistance
|
1,825
|
$
|
18,494,717
|
5.8
|
%
|
|||||||
Educational Credit Management Corporation
|
1,577
|
15,007,037
|
4.7
|
|||||||||
Florida Off Of Student Fin'l Assistance
|
881
|
9,454,525
|
2.9
|
|||||||||
Great Lakes Higher Education Corporation
|
12,051
|
186,899,433
|
58.2
|
|||||||||
Illinois Student Assistance Comm
|
1,113
|
11,410,113
|
3.6
|
|||||||||
Kentucky Higher Educ. Asst. Auth.
|
762
|
5,931,771
|
1.8
|
|||||||||
Louisiana Office Of Student Financial Asst
|
376
|
4,670,769
|
1.5
|
|||||||||
Michigan Guaranty Agency
|
325
|
3,786,510
|
1.2
|
|||||||||
New York State Higher Ed Services Corp
|
2,442
|
28,947,477
|
9.0
|
|||||||||
Oklahoma Guaranteed Stud Loan Prog
|
404
|
4,361,841
|
1.4
|
|||||||||
Pennsylvania Higher Education Assistance Agency
|
1,178
|
12,970,280
|
4.0
|
|||||||||
Texas Guaranteed Student Loan Corp
|
1,674
|
19,263,990
|
6.0
|
|||||||||
Total
|
24,608
|
$
|
321,198,463
|
100.0
|
%
|
Federal Fiscal Year
|
Federal Guaranty Reserve
Fund Level1
|
|||
2015
|
1.05
|
%
|
||
2016
|
1.37
|
%
|
||
2017
|
1.80
|
%
|
||
2018
|
2.21
|
%
|
||
2019
|
0.64
|
%
|
1
|
In accordance with Section 428(c)(9) of the Higher Education Act, does not include loans transferred from the former Higher Education Assistance Foundation, Northstar Guarantee Inc., Ohio
Student Aid Commission, Puerto Rico Higher Education Assistance Corporation, Student Loan Guarantee Foundation of Arkansas, Student Loans of North Dakota, Montana Guaranteed Student Loan Program, or designated states of Arizona, Hawaii,
Idaho, Indiana, Kansas, Maryland, Mississippi, Nevada, Washington, Wyoming, and certain Pacific Trust Territories . (The minimum reserve fund ratio under the Higher Education Act is 0.25 %.)
|
*
|
The percentages for 2015-2018 include only the Ascendium portfolio; the percentage for 2019 include the combined portfolios of Ascendium, USAF and NELA.
|
Federal Fiscal Year
|
Federal Guaranty Reserve
Fund Level1
|
|||
2014
|
0.277
|
%
|
||
2015
|
0.251
|
%
|
||
2016
|
0.308
|
%
|
||
2017
|
0.350
|
%
|
||
2018
|
0.363
|
%
|
Federal Fiscal Year
|
Federal Guaranty Reserve
Fund Level1
|
|||
2014
|
0.377
|
%
|
||
2015
|
0.295
|
%
|
||
2016
|
0.373
|
%
|
||
2017
|
0.430
|
%
|
||
2018
|
0.460
|
%
|
Federal Fiscal Year
|
Claims Rate
|
|||
2015
|
0.96
|
%
|
||
2016
|
1.00
|
%
|
||
2017
|
0.35
|
%
|
||
2018 |
0.35
|
%
|
||
2019
|
2.00
|
%
|
Federal Fiscal Year
|
Claims Rate
|
|||
2014
|
4.73
|
%
|
||
2015
|
4.71
|
%
|
||
2016
|
0.60
|
%
|
||
2017
|
0.67
|
%
|
||
2018
|
2.15
|
%
|
Federal Fiscal Year
|
Claims Rate
|
|||
2014
|
1.37
|
%
|
||
2015
|
0.60
|
%
|
||
2016
|
1.31
|
%
|
||
2017
|
0.63
|
%
|
||
2018
|
1.52
|
%
|
• |
default of the borrower;
|
• |
the death, bankruptcy or permanent, total disability of the borrower;
|
• |
closing of the borrower’s school prior to the end of the academic period;
|
• |
false certification of the borrower’s eligibility for the loan by the school; and
|
• |
an unpaid school refund.
|
• |
Subsidized Stafford Loans to students who demonstrated requisite financial need;
|
• |
Unsubsidized Stafford Loans to students who either did not demonstrate financial need or require additional loans to supplement their Subsidized Stafford Loans;
|
• |
Parent Loans for Undergraduate Students, known as “PLUS Loans,” to parents of dependent students whose estimated costs of attending school exceeded other available financial aid; and
|
• |
Consolidation Loans, which consolidated into a single loan a borrower’s obligations under various federally authorized education loan programs.
|
• |
is a United States citizen, national or permanent resident;
|
• |
has been accepted for enrollment or is enrolled and is maintaining satisfactory academic progress at a participating educational institution;
|
• |
is carrying at least one-half of the normal full-time academic workload for the course of study the student is pursuing; and
|
• |
meets the financial need requirements for the particular loan program.
|
Date of First Disbursement
|
Special Allowance Margin
|
|||
Before 10/17/86
|
3.50
|
%
|
||
From 10/17/86 through 09/30/92
|
3.25
|
%
|
||
From 10/01/92 through 06/30/95
|
3.10
|
%
|
||
From 07/01/95 through 06/30/98
|
2.50% for Stafford Loans that are in In-School, Grace or Deferment
|
|||
3.10% for Stafford Loans that are in Repayment and all other loans
|
||||
From 07/01/98 through 12/31/99
|
2.20% for Stafford Loans that are in In-School, Grace or Deferment
|
|||
2.80% for Stafford Loans that are in Repayment and Forbearance
|
||||
3.10% for PLUS, SLS and Consolidation Loans
|
Date of First Disbursement
|
Special Allowance Margin
|
|
From 01/01/00 through 09/30/07
|
1.74% for Stafford Loans that are in In-School, Grace or Deferment
|
|
2.34% for Stafford Loans that are in Repayment and Forbearance
|
||
2.64% for PLUS and Consolidation Loans
|
||
From 10/01/07 and after
|
1.19% for Stafford Loans that are In-School, Grace or Deferment
|
|
1.79% for Stafford Loans that are in Repayment and PLUS
|
||
2.09% for Consolidation Loans
|
Date of First Disbursement
|
Maximum Origination Fee
|
|||
Before 07/01/06
|
3.0
|
%
|
||
From 07/01/06 through 06/30/07
|
2.0
|
%
|
||
From 07/01/07 through 06/30/08
|
1.5
|
%
|
||
From 07/01/08 through 06/30/09
|
1.0
|
%
|
||
From 07/01/09 through 06/30/10
|
0.5
|
%
|
||
From 07/01/10 and after
|
0.0
|
%
|
• |
federal reimbursement of Stafford Loans made by eligible lenders to qualified students;
|
• |
federal interest subsidy payments on Subsidized Stafford Loans paid by the Department of Education to holders of the loans in lieu of the borrowers’ making interest payments during in-school, grace and deferment
periods or, in certain cases, during enrollment in an income-based repayment plan; and
|
• |
special allowance payments representing an additional subsidy paid by the Department of Education to the holders of eligible Stafford Loans.
|
Trigger Date
|
Borrower Rate
|
Maximum Borrower Rate
|
Interest Rate Margin
|
|||
Before 10/01/81
|
7%
|
N/A
|
N/A
|
|||
From 01/01/81 through 09/12/83
|
9%
|
N/A
|
N/A
|
|||
From 09/13/83 through 06/30/88
|
8%
|
N/A
|
N/A
|
|||
From 07/01/88 through 09/30/92
|
8% for 48 months; thereafter, 91-day Treasury + Interest Rate Margin
|
8% for 48 months,
then 10%
|
3.25% for loans made before 7/23/92 and for loans made on or before 10/1/92 to new student borrowers; 3.10% for loans made after 7/23/92
and before 7/1/94 to borrowers with outstanding FFELP loans
|
|||
From 10/01/92 through 06/30/94
|
91-day Treasury + Interest Rate Margin
|
9%
|
3.10%
|
|||
From 07/01/94 through 06/30/95
|
91-day Treasury + Interest Rate Margin
|
8.25%
|
3.10%
|
|||
From 07/01/95 through 06/30/98
|
91-day Treasury + Interest Rate Margin
|
8.25%
|
2.50% (In-School, Grace
or Deferment);
3.10% (Repayment)
|
|||
From 07/01/98 through 06/30/06
|
91-day Treasury + Interest Rate Margin
|
8.25%
|
1.70% (In-School, Grace or Deferment); 2.30% (Repayment)
|
|||
From 07/01/06 through 06/30/08
|
6.8%
|
N/A
|
N/A
|
|||
From 07/01/08 through 06/30/09
|
6.0% for undergraduate subsidized loans; and 6.8% for unsubsidized loans and graduate subsidized loans
|
6.0%, 6.8%
|
N/A
|
|||
From 07/01/09 through 06/30/10
|
5.6% for undergraduate subsidized loans;
and 6.8% for unsubsidized loans and graduate loans
|
5.6%, 6.8%
|
N/A
|
• |
the applicable maximum borrower rate
|
• |
the sum of
|
• |
the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held before that June 1,
|
• |
the applicable interest rate margin.
|
• |
while the borrower is a qualified student,
|
• |
during the grace period,
|
• |
during prescribed deferment periods, and
|
• |
in certain cases, during a borrower’s enrollment in an income-based repayment plan.
|
• |
satisfaction of need criteria, and
|
• |
continued eligibility of the loan for federal insurance or reinsurance.
|
Dependent Students
|
Independent Students
|
|||||||||||||||||||||||||||
Borrower’s Academic Level
|
Subsidized
and
Unsubsidized
on or after
10/1/93
|
Subsidized
and
Unsubsidized
on or after
7/1/07
|
Subsidized
and
Unsubsidized
on or after
7/1/08
|
Additional
Unsubsidized
only on
or after
7/1/94
|
Additional
Unsubsidized
only on
or after
7/1/07
|
Additional
Unsubsidized
only on
or after
7/1/08
|
Maximum
Annual
Total
Amount
|
|||||||||||||||||||||
Undergraduate (per year):
|
||||||||||||||||||||||||||||
1st year
|
$
|
2,625
|
$
|
3,500
|
$
|
5,500
|
$
|
4,000
|
$
|
4,000
|
$
|
4,000
|
$
|
9,500
|
||||||||||||||
2nd year
|
$
|
3,500
|
$
|
4,500
|
$
|
6,500
|
$
|
4,000
|
$
|
4,000
|
$
|
4,000
|
$
|
10,500
|
||||||||||||||
3rd year and above
|
$
|
5,500
|
$
|
5,500
|
$
|
7,500
|
$
|
5,000
|
$
|
5,000
|
$
|
5,000
|
$
|
12,500
|
||||||||||||||
Graduate (per year)
|
$
|
8,500
|
$
|
8,500
|
$
|
8,500
|
$
|
10,000
|
$
|
12,000
|
$
|
12,000
|
$
|
20,500
|
||||||||||||||
Aggregate Limit:
|
||||||||||||||||||||||||||||
Undergraduate
|
$
|
23,000
|
$
|
23,000
|
$
|
31,000
|
$
|
23,000
|
$
|
23,000
|
$
|
26,500
|
$
|
57,500
|
||||||||||||||
Graduate (including undergraduate)
|
$
|
65,500
|
$
|
65,500
|
$
|
65,500
|
$
|
73,000
|
$
|
73,000
|
$
|
73,000
|
$
|
138,500
|
• |
The loan limits include both FFELP and Federal Direct Lending Program (FDLP) loans.
|
• |
The amounts in the final column represent the combined maximum loan amount per year for Subsidized and Unsubsidized Stafford Loans. Accordingly, the maximum amount that a student may borrow under an Unsubsidized
Stafford Loan is the difference between the combined maximum loan amount and the amount the student received in the form of a Subsidized Stafford Loan.
|
• |
Independent undergraduate students, graduate students and professional students were permitted to borrow the additional amounts shown in the third and fourth columns. Dependent undergraduate students were also
permitted to receive these additional loan amounts if their parents were unable to provide the family contribution amount and could not qualify for a PLUS Loan.
|
• |
Students attending certain medical schools were eligible for $38,500 annually and $189,000 in the aggregate.
|
• |
The annual loan limits were sometimes reduced when the student was enrolled in a program of less than one academic year or has less than a full academic year remaining in his program.
|
Outstanding FFELP Indebtedness
|
Maximum Repayment Period
|
||
$
|
7,500-$9,999
|
12 Years
|
|
$
|
10,000-$19,999
|
15 Years
|
|
$
|
20,000-$30,000
|
20 Years
|
|
$
|
30,001-$59,999
|
25 Years
|
|
$
|
60,000 or more |
30 Years
|
Note: Maximum repayment period excludes authorized periods of deferment and forbearance.
|
• |
enrolled in an approved graduate fellowship program or rehabilitation program;
|
• |
seeking, but unable to find, full-time employment, subject to a maximum deferment of three years; or
|
• |
having an economic hardship, as defined in the Higher Education Act, subject to a maximum deferment of three years; or
|
• |
serving on active duty during a war or other military operation or national emergency, or performing qualifying National Guard duty during a war or other military operation or national emergency, subject to a
maximum deferment period of three years, and effective July 1, 2006 on loans made on or after July 1, 2001.
|
• |
the applicable maximum borrower rate
|
• |
the sum of:
|
• |
the applicable 1-year Index or the bond equivalent rate of 91-day Treasury bills, as applicable,
|
• |
the applicable interest rate margin.
|
Trigger Date
|
Borrower Rate
|
Maximum Borrower Rate
|
Interest Rate Margin
|
|||
Before 10/01/81
|
9%
|
N/A
|
N/A
|
|||
From 10/01/81 through 10/30/82
|
14%
|
N/A
|
N/A
|
|||
From 11/01/82 through 06/30/87
|
12%
|
N/A
|
N/A
|
|||
From 07/01/87 through 09/30/92
|
1-year Index + Interest Rate Margin
|
12%
|
3.25%
|
|||
From 10/01/92 through 06/30/94
|
1-year Index + Interest Rate Margin
|
PLUS 10%,
SLS 11%
|
3.10%
|
|||
From 07/01/94 through 06/30/98
|
1-year Index + Interest Rate Margin
|
9%
|
3.10%
|
|||
From 07/01/98 through 06/30/06
|
91-day Treasury + Interest Rate Margin
|
9%
|
3.10%
|
|||
From 07/01/06
|
8.5%
|
8.5%
|
N/A
|
• |
the borrower rate is set at the maximum borrower rate and
|
• |
the sum of the average of the bond equivalent rates of 91-day Treasury bills auctioned during that quarter and the applicable interest rate margin exceeds the maximum borrower rate.
|
Claims Paid Date
|
Maximum
|
5% Trigger
|
9% Trigger
|
|||||||||
Before October 1, 1993
|
100
|
%
|
90
|
%
|
80
|
%
|
||||||
October 1, 1993 — September 30, 1998
|
98
|
%
|
88
|
%
|
78
|
%
|
||||||
On or after October 1, 1998
|
95
|
%
|
85
|
%
|
75
|
%
|
Source
|
Basis
|
|
Insurance Premium
|
Up to 1% of the principal amount guaranteed, withheld from the proceeds of each loan disbursement
|
|
Loan Processing and Issuance Fee
|
0.40% of the principal amount guaranteed, paid by the Department of Education
|
|
Account Maintenance Fee
|
Originally 0.10%, which was reduced to 0.06% on October 1, 2007, of the original principal amount of loans outstanding, paid by the Department of Education
|
|
Default Aversion Fee
|
1% of the outstanding amount of loans submitted by a lender for default aversion assistance, minus 1% of the unpaid principal and interest paid on default claims, which is paid once per loan by transfers out of the
Student Loan Reserve Fund
|
|
Collection Retention Fee
|
16% of the amount collected on loans on which reinsurance has been paid (10% or 18.5% of the amount collected for a defaulted loan that is purchased by a lender for consolidation or rehabilitation, respectively),
withheld from gross receipts
|
• |
borrowing through Clearstream, Luxembourg or Euroclear for one day until the purchase side of the day trade is reflected in their Clearstream, Luxembourg or Euroclear accounts, in accordance with the clearing
system’s customary procedures;
|
• |
borrowing the Global Securities in the U.S. from a DTC participant no later than one day before settlement, which would give the Global Securities sufficient time to be reflected in their Clearstream, Luxembourg or
Euroclear account in order to settle the sale side of the trade; or
|
• |
staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC participant is at least one day before the value date for the sale to the Clearstream,
Luxembourg participant or Euroclear participant.
|
ELIGIBLE LENDER TRUSTEE
DEUTSCHE BANK TRUST
COMPANY AMERICAS
1761 East St. Andrew Place
Santa Ana, CA 92705
|
DELAWARE TRUSTEE
BNY MELLON TRUST OF
DELAWARE
301 Bellevue Parkway,
3rd Floor,
Wilmington, Delaware 19809
|
INDENTURE TRUSTEE AND
PAYING AGENT
DEUTSCHE BANK
NATIONAL TRUST
COMPANY
1761 E. Saint Andrew Place
Santa Ana, California 92705
|
MORGAN, LEWIS & BOCKIUS LLP
1111 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2541
|
RICHARDS, LAYTON & FINGER, P.A.
920 N. King Street
Wilmington, Delaware 19801
|
CHAPMAN AND CUTLER LLP 111 W. Monroe Street Chicago, IL 60603
|
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