Class
|
Outstanding
Principal Amount
|
Interest Rate
|
Price
|
Next Reset Date
|
Legal Maturity Date
|
||||||
Class A-5 Notes
|
$ | 180,000,000 |
3-month LIBOR
plus %
|
100.00% |
January 25, 2016
|
January 25, 2040
|
BofA Merrill Lynch
|
Deutsche Bank Securities
|
||
Original principal amount
|
$180,000,000
|
||
Current outstanding principal balance
|
$180,000,000
|
||
Principal amount being remarketed
|
$180,000,000 (1)
|
||
Remarketing Terms Determination Date
|
October 14, 2015
|
||
Notice Date(2)
|
October 16, 2015
|
||
Spread Determination Date(3)
|
On or before October 21, 2015
|
||
Current Reset Date
|
October 26, 2015
|
||
All Hold Rate
|
Three-Month LIBOR plus %
|
||
Next applicable reset date
|
January 25, 2016
|
||
Interest rate mode
|
Floating
|
||
Index
|
Three-Month LIBOR(4)
|
||
Spread(5)
|
Plus %
|
||
Day-count basis
|
Actual/360
|
||
Weighted average remaining life
|
(6)
|
REMARKETING TERMS SUMMARY
|
i
|
INTRODUCTION
|
iii
|
SUMMARY OF NOTE TERMS
|
S-1
|
RISK FACTORS
|
S-21
|
DEFINED TERMS
|
S-26
|
THE TRUST
|
S-26
|
USE OF PROCEEDS
|
S-31
|
THE TRUST STUDENT LOAN POOL
|
S-31
|
DESCRIPTION OF THE NOTES
|
S-39
|
STATIC POOLS
|
S-65
|
PREPAYMENTS, EXTENSIONS, WEIGHTED AVERAGE REMAINING LIFE AND EXPECTED MATURITY OF THE CLASS A-5 NOTES
|
S-65
|
U.S. FEDERAL INCOME TAX CONSEQUENCES
|
S-66
|
EUROPEAN UNION DIRECTIVE ON THE TAXATION OF SAVINGS INCOME
|
S-69
|
ERISA CONSIDERATIONS
|
S-70
|
ACCOUNTING CONSIDERATIONS
|
S-71
|
REPORTS TO NOTEHOLDERS
|
S-72
|
REMARKETING
|
S-72
|
NOTICES TO INVESTORS
|
S-72
|
LISTING INFORMATION
|
S-73
|
CERTAIN INVESTMENT COMPANY ACT CONSIDERATIONS
|
S-76
|
RATINGS
|
S-75
|
LEGAL PROCEEDINGS
|
S-75
|
LEGAL MATTERS
|
S-76
|
GLOSSARY
|
S-77
|
ANNEX A:
|
The Trust Student Loan Pool as of August 31, 2015
|
APPENDIX A:
|
Federal Family Education Loan Program
|
EXHIBIT I:
|
Prepayments, Extensions, Weighted Average Remaining Life and Expected Maturity of the Class A-5 Notes
|
APPENDIX I:
|
Base Prospectus, dated July 15, 2015
|
●
|
the remarketing agents cannot determine the applicable required reset terms on or before the remarketing terms determination date;
|
●
|
the remarketing agents cannot establish the required spread on the spread determination date;
|
●
|
either sufficient committed purchasers cannot be obtained for all of the class A-5 notes at the spread set by the remarketing agents, or committed purchasers default on their purchase obligations and the remarketing agents choose not to purchase the class A-5 notes themselves;
|
●
|
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.
|
●
|
Class A-1 Student Loan-Backed Notes in the original principal amount of $453,000,000, none of which remain outstanding;
|
●
|
Class A-2 Student Loan-Backed Notes in the original principal amount of $315,000,000, none of which remain outstanding; and
|
●
|
Class A-4 Student Loan-Backed Notes in the original principal amount of $307,339,000, and currently outstanding in the same amount.
|
●
|
Class A-3 Student Loan-Backed Notes in the original principal amount of $266,000,000.00, and currently outstanding in the amount of $97,530,574.70.
|
●
|
Class B Student Loan-Backed Notes in the original principal amount of $47,052,000.00, and currently outstanding in the amount of $32,489,200.45.
|
●
|
the floating rate class A notes and the reset rate class A notes collectively as the class A notes;
|
●
|
the floating rate class A notes and the class B notes as the floating rate notes; and
|
●
|
the floating rate notes and the reset rate notes as the notes.
|
Class
|
Spread
|
|||
Class A-4
|
plus 0.15%
|
|||
Class B
|
plus 0.31%
|
●
|
first, the class A noteholders' principal distribution amount, sequentially to the class A-3 notes, class A-4 notes and class A-5 notes, in that order, until their respective principal balances are reduced to zero; and
|
●
|
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.
|
Class
|
Maturity Date
|
|||
Class A-3
|
July 25, 2025
|
|||
Class A-4
|
October 25, 2029
|
|||
Class A-5
|
January 25, 2040
|
|||
Class B
|
January 25, 2040
|
●
|
the trust student loans;
|
●
|
collections and other payments on the trust student loans;
|
●
|
funds it currently holds or will hold from time to time in its trust accounts, including 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;
|
●
|
its rights under the transfer and servicing agreements, including the right to require VG Funding (or Navient Solutions, Inc., 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;
|
●
|
its rights under any swap agreement or potential future interest rate cap agreement, as applicable; and
|
●
|
its rights under the guarantee agreements with guarantors.
|
●
|
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
|
●
|
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.
|
●
|
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
|
●
|
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.
|
●
|
the amount of specified increases in the costs incurred by the servicer;
|
●
|
the amount of specified conversion, transfer and removal fees;
|
●
|
any amounts described in the first two bullets that remain unpaid from prior distribution dates; and
|
●
|
interest on any unpaid amounts.
|
●
|
the maturity or other liquidation of the last trust student loan and the disposition of any amount received upon its liquidation; and
|
●
|
the payment of all amounts required to be paid to the noteholders.
|
●
|
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 the 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 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
|
●
|
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.
|
●
|
Federal tax counsel for the trust is of the opinion that the class A-5 notes will be characterized as debt for federal income tax purposes.
|
●
|
Federal tax counsel for 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 federal income tax purposes.
|
●
|
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 that noteholders who were not otherwise subject to Delaware taxation on income would not become subject to Delaware taxation as a result of their ownership of notes.
|
●
|
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
|
●
|
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.
|
CUSIP Number
|
78442G QK 5
|
International Securities Identification Number (ISIN)
|
US78442GQK57
|
European Common Code
|
022702858
|
Federal Financial Regulatory Legislation Could Have An Adverse Effect On Navient Corporation, The Sponsor, The Servicer, The Depositor, Navient CFC or Any Other Seller And The Trust, Which Could Result In Losses Or Delays In Payments On Your Notes
|
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) to reform and strengthen supervision of the U.S. financial services industry. The Dodd-Frank Act represents a comprehensive change to existing laws, imposing significant new regulation on almost every aspect of the U.S. financial services industry.
The Dodd-Frank Act will result in significant new regulation in key areas of the business of Navient Corporation (formerly known as SLM Corporation), the indirect parent of Navient Solutions, Inc. and 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 will have substantial power to define the rights of consumers and the responsibilities of certain institutions, including Navient Corporation’s education loan servicing business. The CFPB began exercising its authority on July 21, 2011.
Most of the component parts of the Dodd-Frank Act continues to be subject to intensive rulemaking and public comment over the coming months and none of Navient Corporation, the sponsor or their affiliates can predict the ultimate effect the Dodd-Frank Act or required examinations of the private education loan market could have on their operations at this time. It is likely, however, that operational expenses will increase if new or additional compliance requirements are imposed on their operations and their competitiveness could be significantly affected if they are subjected to supervision and regulatory standards not otherwise applicable to their competitors.
The Dodd-Frank Act also creates a liquidation framework for the resolution of bank holding companies and other non-bank financial companies determined to be “covered financial companies.” If Navient Corporation or its affiliates were determined to be covered financial companies, it is possible that the Federal Deposit
|
Insurance Corporation (the “FDIC”) could be appointed receiver of Navient Corporation, the sponsor or any of their affiliates under the Orderly Liquidation Authority (“OLA”) provisions of the Dodd-Frank Act. If that occurred, the FDIC could repudiate contracts deemed burdensome to the estate, including secured debt. The sponsor has structured the transfers of the student loans to the depositor and the trust as a valid and perfected sale under applicable state law and under the United States Bankruptcy Code to mitigate the risk of the recharacterization of the sale as a security interest to secure debt of Navient Solutions, Inc. Any attempt by the FDIC to recharacterize the securitization transaction as a secured loan (which the FDIC could then repudiate) could cause delays in payments or losses on the notes. In addition, if the trust were to become subject to the OLA, the FDIC could repudiate the debt of the trust with the result that the noteholders would have a secured claim in the receivership of the trust. Also, if the trust were subject to OLA, noteholders would not be permitted to accelerate the debt, exercise remedies against the collateral or replace the servicer without the FDIC’s consent for 90 days after the receiver is appointed. As a result of any of these events, delays in payments on the notes and reductions in the amount of those payments could occur. See “The Trust Student Loan Pool—Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions—FDIC’s Repudiation Power Under the OLA” in this preliminary remarketing prospectus supplement.
|
||
Sequential Payment Of The Notes Results In A Greater Risk Of Loss
|
Holders of the class A-5 notes bear a greater risk of loss than do holders of the class A-3 and class A-4 notes because no principal will be paid to any class A-5 noteholders until the class A-3 and class A-4 notes have been paid in full. If a failed remarketing occurs, the reset rate notes would become subject to the failed remarketing rate, which may be higher than the interest rate that would otherwise be applicable to such class of notes. This would reduce the amount of available funds to pay interest on other classes of notes and principal on the reset rate notes. In that case, or if prepayments are much higher than anticipated, or if losses on the trust student loans are greater than expected, you may suffer a loss.
|
|
Your Notes Are Subject To A Call Option
|
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 preliminary remarketing prospectus supplement.
|
||
You May Be Required To Continue To Hold Your Notes If A Failed Remarketing Occurs With Respect To A Reset Date
|
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.
|
|
If a failed remarketing is declared with respect to the October 26, 2015 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 preliminary remarketing prospectus supplement.
|
||
You May Experience Notification Delays In Connection With A Remarketing Of Your Notes
|
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 agents have received a hold notice from you on or prior to the related notice date.
|
|
Certain Actions Can Be Taken Without Noteholder Approval
|
The transaction documents provide that certain actions may be taken based upon receipt by the indenture trustee of a confirmation from each of the rating agencies that the then-current ratings assigned by the rating agencies then rating the notes will not be downgraded or withdrawn by those actions. In this event, such actions may be taken without the consent of noteholders.
|
|
Your Notes May Have A Degree Of Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal And Interest On Your Notes
|
There is a degree of basis risk associated with the class A-5 notes. Basis risk is the risk that shortfalls might occur because, among other things, the interest rates of the trust student loans adjust on the basis of specified indices and those of the notes adjust on the basis of different indices. If a shortfall were to occur, the trust’s ability to pay principal and/or interest on your notes could be compromised. See “Annex A—The Trust Student Loan Pool—
|
Composition of the Trust Student Loans as of the Statistical Disclosure Date” in this preliminary remarketing prospectus supplement which specifies the percentages of trust student loans that adjust based on LIBOR or the 91-day Treasury bill rate, as applicable.
Consequently, you must rely on other forms of credit enhancement, to the extent available, to mitigate basis risk. There can be no assurance that the amount of credit enhancement will be sufficient to cover the basis risk associated with the notes.
|
||
Illiquid Market Conditions May Occur From Time To Time
|
Despite federal market interventions and programs, periods of general market illiquidity may occur from time to time and may adversely affect the secondary market for your class A-5 notes. Accordingly, you may not be able to sell your class A-5 notes when you want to do so or you may be unable to obtain the price that you wish to receive for your class A-5 notes and, as a result, you may suffer a loss on your investment.
|
|
The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
|
In the event of default by the servicer resulting solely from certain events of insolvency or the bankruptcy of the servicer, a court, conservator, receiver or liquidator may have the power to prevent any of the servicer, indenture trustee or the noteholders, as applicable, from appointing a successor and delays in the collection of payments on the related trust student loans may occur. Any delay in the collection of payments on the affected trust student loans may delay or reduce payments to noteholders. In addition, in the event of an insolvency or a bankruptcy of the servicer, a court, conservator, receiver or liquidator may permit the servicer to assign its rights and obligations as servicer to a third party without complying with the provisions of the transaction documents.
|
|
The Trust May Be Affected By Delayed Payments From
Borrowers Called To Active Military Service
|
The Higher Education Act, the Servicemembers Civil Relief Act and similar state and local laws provide payment relief to borrowers who enter active military service and to borrowers in reserve status who are called to active duty after the origination of their trust student loans. Recent and ongoing military operations by the United States have increased the number of citizens who are in active military service, including persons in reserve status who have been called or may be called to active duty.
The Servicemembers Civil Relief Act also limits the ability of a lender in the FFELP to take legal action against a borrower during the borrower’s period of active duty and, in some cases, during an additional three-month period thereafter.
We do not know how many trust student loans have been or may be affected by the application of these laws. As a result, there may
|
be affected by the application of these laws. As a result, there may be unanticipated delays in payment and losses on the trust student loans.
|
||
Rating Agencies May Have A Conflict Of Interest
|
The sponsor, or an affiliate, paid a fee to two or more rating agencies to assign the initial credit ratings to the notes on or before the closing date. The Securities and Exchange Commission has said that being paid by the sponsor, issuer or an underwriter to issue and/or maintain a credit rating on asset backed securities creates a conflict of interest for rating agencies, and that this conflict is particularly acute because arrangers of asset-backed securities transactions provide repeat business to such rating agencies.
|
|
A Lowering Of The Credit Rating of the United States Of America May Adversely Affect The Market Value Of Your Notes
|
The credit rating of the United States was downgraded by a NRSRO and may potentially be downgraded by other NRSROs in the future. The impact of any such downgrade is not yet clear, and depending on the ratings assigned, the stated reasons for a lower rating and other factors, the liquidity, market value and regulatory characteristics of your notes could be materially and adversely affected.
|
●
|
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, Inc., 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.
|
Floating Rate Class A-1 Student Loan-Backed Notes
|
$ | 0.00 | ||
Floating Rate Class A-2 Student Loan-Backed Notes
|
0.00 | |||
Reset Rate Class A-3 Student Loan-Backed Notes
|
97.53
|
|||
Floating Rate Class A-4 Student Loan-Backed Notes
|
307,339,000.00 | |||
Reset Rate Class A-5 Student Loan-Backed Notes
|
180,000,000.00 | |||
Floating Rate Class B Student Loan-Backed Notes
|
32,489,200.45
|
|||
Initial Equity
|
100.00 | |||
Total
|
$ |
617,358,875.15
|
●
|
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.
|
Class of Notes
|
Spread
|
|||
Class A-3
|
plus 1.35%
|
|||
Class A-4
|
plus 0.15%
|
●
|
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 as described in “Additional Information Regarding the Notes—Determination of Indices” in the base prospectus or another day-count convention as set forth on the related Remarketing Terms Determination Date.
|
●
|
the remarketing agents, 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 agents 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 agents;
|
●
|
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.
|
●
|
to facilitate the trust’s ability to pay principal and interest in the applicable currency;
|
●
|
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.
|
●
|
the applicable spread as determined by the remarketing agents 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 agents, 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 agents shall establish that fixed rate equal to the rate that, in the reasonable opinion of the remarketing agents, will enable all of the tendered reset rate notes to be remarketed by the remarketing agents 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.
|
●
|
a citizen or individual resident of the United States;
|
●
|
a corporation or partnership (including an entity treated as such) organized in or under the laws of the United States or 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 United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust.
|
●
|
the Plan’s purchase and holding of the notes will not constitute or otherwise result in a non-exempt prohibited transaction in violation of Section 406 of ERISA or Section 4975 of the Code which is not covered by a statutory exemption or a class or other applicable exemption from the prohibited transaction rules as described in the base prospectus; and
|
●
|
the purchase and holding of the notes by any employee benefit plan subject to a Similar Law will not cause a non-exempt violation of that Similar Law.
|
●
|
whether the fiduciary has the authority to make the investment;
|
●
|
the diversification by type of asset of the Plan’s portfolio;
|
●
|
the Plan’s funding objective; and
|
●
|
whether under the fiduciary standards of investment prudence and diversification an investment in the notes is appropriate for the Plan, also taking into account the overall investment policy of the Plan and the composition of the Plan’s investment portfolio.
|
●
|
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;
|
●
|
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 agents, 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 agents are unable to establish the related Spread or fixed rate on the Spread Determination Date,
|
●
|
the remarketing agents are 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 agents, in their sole discretion, elects not to purchase the reset rate notes themselves,
|
●
|
the remarketing agents, 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.
|
COMPOSITION OF THE TRUST STUDENT LOANS AS OF
THE STATISTICAL DISCLOSURE DATE
|
||||
Aggregate Outstanding Principal Balance
|
$
|
605,228,888
|
||
Aggregate Outstanding Principal Balance – Treasury Bill
|
$
|
601,252
|
||
Percentage of Aggregate Outstanding Principal Balance – Treasury Bill
|
0.10
|
%
|
||
Aggregate Outstanding Principal Balance – One-Month LIBOR
|
$
|
604,627,636
|
||
Percentage of Aggregate Outstanding Principal Balance – One-Month LIBOR
|
99.90
|
%
|
||
Number of Borrowers
|
30,358
|
|||
Average Outstanding Principal Balance Per Borrower
|
$
|
19,936
|
||
Number of Loans
|
49,859
|
|||
Average Outstanding Principal Balance Per Loan – Treasury Bill
|
$
|
33,403
|
||
Average Outstanding Principal Balance Per Loan – One-Month LIBOR
|
$
|
12,131
|
||
Weighted Average Remaining Term to Scheduled Maturity
|
201 months
|
|||
Weighted Average Annual Interest Rate
|
3.59
|
%
|
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY BORROWER INTEREST RATES AS OF THE STATISTICAL
DISCLOSURE DATE
|
||||||||||||
Interest Rates
|
Number
of Loans
|
Aggregate Outstanding Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Less than or equal to 3.00%
|
17,565
|
$
|
226,620,905
|
37.4
|
%
|
|||||||
3.01% to 3.50%
|
16,040
|
146,993,413
|
24.3
|
|||||||||
3.51% to 4.00%
|
5,704
|
77,260,799
|
12.8
|
|||||||||
4.01% to 4.50%
|
8,654
|
106,768,684
|
17.6
|
|||||||||
4.51% to 5.00%
|
674
|
14,367,336
|
2.4
|
|||||||||
5.01% to 5.50%
|
377
|
8,319,674
|
1.4
|
|||||||||
5.51% to 6.00%
|
196
|
5,597,994
|
0.9
|
|||||||||
6.01% to 6.50%
|
211
|
5,761,215
|
1.0
|
|||||||||
6.51% to 7.00%
|
134
|
4,597,254
|
0.8
|
|||||||||
7.01% to 7.50%
|
95
|
3,420,721
|
0.6
|
|||||||||
7.51% to 8.00%
|
135
|
3,208,830
|
0.5
|
|||||||||
8.01% to 8.50%
|
67
|
2,138,047
|
0.4
|
|||||||||
Equal to or greater than 8.51%
|
7
|
174,015
|
*
|
|||||||||
Total
|
49,859
|
$
|
605,228,888
|
100.0
|
%
|
|||||||
* Represents a percentage greater than 0% but less than 0.05%.
|
DISTRIBUTION OF THE TRUST STUDENT LOANS BY
OUTSTANDING PRINCIPAL BALANCE PER BORROWER
AS OF THE STATISTICAL DISCLOSURE DATE
|
||||||||||||
Range of Outstanding
Principal Balance
|
Number of Borrowers
|
Aggregate Outstanding Principal Balance
|
Percent of Pool
by Outstanding Principal Balance
|
|||||||||
Less than $5,000.00
|
6,949
|
$
|
21,025,947
|
3.5
|
%
|
|||||||
$ 5,000.00-$ 9,999.99
|
7,571
|
53,133,307
|
8.8
|
|||||||||
$10,000.00-$14,999.99
|
4,555
|
56,684,263
|
9.4
|
|||||||||
$15,000.00-$19,999.99
|
2,899
|
50,133,269
|
8.3
|
|||||||||
$20,000.00-$24,999.99
|
1,693
|
37,768,350
|
6.2
|
|||||||||
$25,000.00-$29,999.99
|
1,329
|
36,331,610
|
6.0
|
|||||||||
$30,000.00-$34,999.99
|
954
|
30,787,419
|
5.1
|
|||||||||
$35,000.00-$39,999.99
|
731
|
27,334,591
|
4.5
|
|||||||||
$40,000.00-$44,999.99
|
507
|
21,500,558
|
3.6
|
|||||||||
$45,000.00-$49,999.99
|
453
|
21,449,533
|
3.5
|
|||||||||
$50,000.00-$54,999.99
|
355
|
18,624,965
|
3.1
|
|||||||||
$55,000.00-$59,999.99
|
311
|
17,858,168
|
3.0
|
|||||||||
$60,000.00-$64,999.99
|
262
|
16,347,612
|
2.7
|
|||||||||
$65,000.00-$69,999.99
|
200
|
13,473,671
|
2.2
|
|||||||||
$70,000.00-$74,999.99
|
169
|
12,254,757
|
2.0
|
|||||||||
$75,000.00-$79,999.99
|
150
|
11,644,021
|
1.9
|
|||||||||
$80,000.00-$84,999.99
|
106
|
8,734,212
|
1.4
|
|||||||||
$85,000.00-$89,999.99
|
129
|
11,283,507
|
1.9
|
|||||||||
$90,000.00-$94,999.99
|
92
|
8,529,286
|
1.4
|
|||||||||
$95,000.00-$99,999.99
|
99
|
9,652,820
|
1.6
|
|||||||||
$100,000.00 and above
|
844
|
120,677,023
|
19.9
|
|||||||||
Total
|
30,358
|
$
|
605,228,888
|
100.0
|
%
|
|||||||
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY DELINQUENCY STATUS AS OF THE
STATISTICAL DISCLOSURE DATE
|
||||||||||||
Number of Days Delinquent
|
Number
of Loans
|
Aggregate Outstanding Principal Balance
|
Percent of Pool
by Outstanding Principal Balance
|
|||||||||
0-30 days
|
47,498
|
$
|
565,652,304
|
93.5
|
%
|
|||||||
31-60 days
|
817
|
12,719,112
|
2.1
|
|||||||||
61-90 days
|
462
|
7,921,385
|
1.3
|
|||||||||
91-120 days
|
274
|
4,764,046
|
0.8
|
|||||||||
121-150 days
|
200
|
3,410,874
|
0.6
|
|||||||||
151-180 days
|
139
|
2,377,133
|
0.4
|
|||||||||
181-210 days
|
96
|
1,573,025
|
0.3
|
|||||||||
Greater than 210 days
|
373
|
6,811,009
|
1.1
|
|||||||||
Total
|
49,859
|
$
|
605,228,888
|
100.0
|
%
|
|||||||
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY REMAINING TERM TO SCHEDULED MATURITY
AS OF THE STATISTICAL DISCLOSURE DATE
|
||||||||||||
Number of Months
Remaining to
Scheduled Maturity
|
Number
of Loans
|
Aggregate Outstanding
Principal Balance
|
Percent of Pool
by Outstanding Principal Balance
|
|||||||||
0 to 3
|
12
|
$
|
5,056
|
*
|
||||||||
4 to 12
|
66
|
88,948
|
*
|
|||||||||
13 to 24
|
1,676
|
1,836,001
|
0.3
|
%
|
||||||||
25 to 36
|
1,081
|
1,742,341
|
0.3
|
|||||||||
37 to 48
|
611
|
1,597,526
|
0.3
|
|||||||||
49 to 60
|
6,735
|
21,854,394
|
3.6
|
|||||||||
61 to 72
|
4,583
|
16,877,998
|
2.8
|
|||||||||
73 to 84
|
2,463
|
11,244,925
|
1.9
|
|||||||||
85 to 96
|
1,899
|
10,500,740
|
1.7
|
|||||||||
97 to 108
|
1,519
|
9,537,675
|
1.6
|
|||||||||
109 to 120
|
5,196
|
43,536,831
|
7.2
|
|||||||||
121 to 132
|
4,769
|
52,346,768
|
8.6
|
|||||||||
133 to 144
|
2,590
|
32,069,793
|
5.3
|
|||||||||
145 to 156
|
1,635
|
19,251,252
|
3.2
|
|||||||||
157 to 168
|
1,175
|
14,406,088
|
2.4
|
|||||||||
169 to 180
|
2,367
|
34,126,912
|
5.6
|
|||||||||
181 to 192
|
1,682
|
26,410,003
|
4.4
|
|||||||||
193 to 204
|
1,124
|
17,926,457
|
3.0
|
|||||||||
205 to 216
|
825
|
13,914,665
|
2.3
|
|||||||||
217 to 228
|
644
|
11,934,456
|
2.0
|
|||||||||
229 to 240
|
1,668
|
44,514,445
|
7.4
|
|||||||||
241 to 252
|
1,359
|
38,454,983
|
6.4
|
|||||||||
253 to 264
|
784
|
25,443,369
|
4.2
|
|||||||||
265 to 276
|
665
|
23,808,376
|
3.9
|
|||||||||
277 to 288
|
503
|
20,881,811
|
3.5
|
|||||||||
289 to 300
|
642
|
25,715,265
|
4.2
|
|||||||||
301 to 312
|
457
|
20,729,815
|
3.4
|
|||||||||
313 to 324
|
267
|
13,656,450
|
2.3
|
|||||||||
325 to 336
|
253
|
13,654,727
|
2.3
|
|||||||||
337 to 348
|
173
|
8,882,763
|
1.5
|
|||||||||
349 to 360
|
272
|
17,248,472
|
2.8
|
|||||||||
361 and above
|
164
|
11,029,585
|
1.8
|
|||||||||
Total
|
49,859
|
$
|
605,228,888
|
100.0
|
%
|
|||||||
* Represents a percentage greater than 0% but less than 0.05%.
|
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY CURRENT BORROWER PAYMENT STATUS
AS OF THE STATISTICAL DISCLOSURE DATE
|
||||||||||||
Current Borrower Payment Status
|
Number
of Loans
|
Aggregate Outstanding Principal Balance
|
Percent of Pool
by Outstanding Principal Balance
|
|||||||||
Deferment
|
2,474
|
$
|
37,143,969
|
6.1
|
%
|
|||||||
Forbearance
|
2,339
|
46,840,824
|
7.7
|
|||||||||
Repayment
|
||||||||||||
First year in repayment
|
1,388
|
34,938,900
|
5.8
|
|||||||||
Second year in repayment
|
961
|
22,979,216
|
3.8
|
|||||||||
Third year in repayment
|
1,306
|
30,065,785
|
5.0
|
|||||||||
More than 3 years in repayment
|
41,391
|
433,260,193
|
71.6
|
|||||||||
Total
|
49,859
|
$
|
605,228,888
|
100.0
|
%
|
|||||||
●
|
may have temporarily ceased repaying the loan through a deferment or a forbearance period; or
|
●
|
may be currently required to repay the loan – repayment.
|
SCHEDULED WEIGHTED AVERAGE REMAINING MONTHS IN
STATUS OF THE TRUST STUDENT LOANS BY
CURRENT BORROWER PAYMENT STATUS AS OF THE
STATISTICAL DISCLOSURE DATE
|
|||
Scheduled Months in Status Remaining
|
|||
Current Borrower Payment Status
|
Deferment
|
Forbearance
|
Repayment
|
Deferment
|
14.8
|
-
|
238.5
|
Forbearance
|
-
|
3.9
|
242.3
|
Repayment
|
-
|
-
|
194.1
|
GEOGRAPHIC DISTRIBUTION OF THE TRUST STUDENT LOANS
AS OF THE STATISTICAL DISCLOSURE DATE
|
||||||||||||
State
|
Number
of Loans
|
Aggregate Outstanding
Principal Balance
|
Percent of Pool
by Outstanding Principal Balance
|
|||||||||
Alabama
|
362
|
$
|
4,867,736
|
0.8
|
%
|
|||||||
Alaska
|
48
|
566,057
|
0.1
|
|||||||||
Arizona
|
848
|
11,418,334
|
1.9
|
|||||||||
Arkansas
|
189
|
2,025,694
|
0.3
|
|||||||||
California
|
5,134
|
67,936,153
|
11.2
|
|||||||||
Colorado
|
889
|
9,285,719
|
1.5
|
|||||||||
Connecticut
|
1,079
|
11,156,733
|
1.8
|
|||||||||
Delaware
|
160
|
2,060,775
|
0.3
|
|||||||||
District of Columbia
|
257
|
3,739,852
|
0.6
|
|||||||||
Florida
|
3,348
|
46,047,394
|
7.6
|
|||||||||
Georgia
|
1,198
|
17,686,977
|
2.9
|
|||||||||
Hawaii
|
294
|
3,547,025
|
0.6
|
|||||||||
Idaho
|
127
|
1,827,090
|
0.3
|
|||||||||
Illinois
|
2,303
|
24,780,502
|
4.1
|
|||||||||
Indiana
|
2,023
|
21,763,794
|
3.6
|
|||||||||
Iowa
|
144
|
2,094,308
|
0.3
|
|||||||||
Kansas
|
858
|
6,720,373
|
1.1
|
|||||||||
Kentucky
|
423
|
5,235,278
|
0.9
|
|||||||||
Louisiana
|
1,205
|
16,352,805
|
2.7
|
|||||||||
Maine
|
136
|
2,269,446
|
0.4
|
|||||||||
Maryland
|
1,517
|
20,443,173
|
3.4
|
|||||||||
Massachusetts
|
2,560
|
25,703,419
|
4.2
|
|||||||||
Michigan
|
947
|
13,513,191
|
2.2
|
|||||||||
Minnesota
|
442
|
4,721,708
|
0.8
|
|||||||||
Mississippi
|
302
|
4,038,692
|
0.7
|
|||||||||
Missouri
|
849
|
9,317,091
|
1.5
|
|||||||||
Montana
|
72
|
691,380
|
0.1
|
|||||||||
Nebraska
|
66
|
823,766
|
0.1
|
|||||||||
Nevada
|
254
|
3,175,884
|
0.5
|
|||||||||
New Hampshire
|
278
|
2,453,982
|
0.4
|
|||||||||
New Jersey
|
2,101
|
24,724,090
|
4.1
|
|||||||||
New Mexico
|
113
|
1,394,147
|
0.2
|
|||||||||
New York
|
4,558
|
52,904,451
|
8.7
|
|||||||||
North Carolina
|
1,106
|
14,942,602
|
2.5
|
|||||||||
North Dakota
|
28
|
208,793
|
*
|
|||||||||
Ohio
|
1,220
|
15,148,259
|
2.5
|
|||||||||
Oklahoma
|
744
|
9,250,276
|
1.5
|
|||||||||
Oregon
|
518
|
7,025,974
|
1.2
|
|||||||||
Pennsylvania
|
1,931
|
21,349,052
|
3.5
|
|||||||||
Rhode Island
|
144
|
1,681,718
|
0.3
|
|||||||||
South Carolina
|
471
|
5,951,064
|
1.0
|
|||||||||
South Dakota
|
24
|
317,215
|
0.1
|
|||||||||
Tennessee
|
753
|
9,703,774
|
1.6
|
|||||||||
Texas
|
3,691
|
45,644,976
|
7.5
|
|||||||||
Utah
|
124
|
2,370,224
|
0.4
|
|||||||||
Vermont
|
87
|
1,018,618
|
0.2
|
|||||||||
Virginia
|
1,763
|
19,524,593
|
3.2
|
|||||||||
Washington
|
1,229
|
13,427,458
|
2.2
|
|||||||||
West Virginia
|
203
|
2,354,835
|
0.4
|
|||||||||
Wisconsin
|
363
|
4,310,280
|
0.7
|
|||||||||
Wyoming
|
43
|
368,808
|
0.1
|
|||||||||
Other
|
333
|
5,343,350
|
0.9
|
|||||||||
Total
|
49,859
|
$
|
605,228,888
|
100.0
|
%
|
|||||||
* Represents a percentage greater than 0% but less than 0.05%.
|
DISTRIBUTION OF THE TRUST STUDENT LOANS BY REPAYMENT
TERMS AS OF THE STATISTICAL DISCLOSURE DATE
|
||||||||||||
Loan Repayment Terms
|
Number
of Loans
|
Aggregate Outstanding Principal Balance
|
Percent of Pool
by Outstanding Principal Balance
|
|||||||||
Level Repayment
|
32,419
|
$
|
311,156,254
|
51.4
|
%
|
|||||||
Other Repayment Options(1)
|
17,440
|
294,072,634
|
48.6
|
|||||||||
Total
|
49,859
|
$
|
605,228,888
|
100.0
|
%
|
(1) Includes, among others, graduated repayment and interest-only period loans.
|
DISTRIBUTION OF THE TRUST STUDENT LOANS BY LOAN
TYPE AS OF THE STATISTICAL DISCLOSURE DATE
|
||||||||||||
Loan Type
|
Number
of Loans
|
Aggregate Outstanding Principal Balance
|
Percent of Pool
by Outstanding Principal Balance
|
|||||||||
Subsidized
|
24,181
|
$
|
248,181,220
|
41.0
|
%
|
|||||||
Unsubsidized
|
25,678
|
357,047,668
|
59.0
|
|||||||||
Total
|
49,859
|
$
|
605,228,888
|
100.0
|
%
|
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY DATE OF DISBURSEMENT AS OF
THE STATISTICAL DISCLOSURE DATE
|
||||||||||||
Disbursement Date
|
Number
of Loans
|
Aggregate
Outstanding Principal Balance |
Percent of Pool
by Outstanding
Principal Balance |
|||||||||
September 30, 1993 and earlier
|
3 | $ | 101,732 | * | ||||||||
October 1, 1993 through June 30, 2006
|
49,856 | 605,127,156 | 100.0 | % | ||||||||
July 1, 2006 and later
|
0 | 0 | 0.0 | |||||||||
Total
|
49,859 | $ | 605,228,888 | 100.0 | % | |||||||
* Represents a percentage greater than 0% but less than 0.05%.
|
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY GUARANTY AGENCY AS OF
THE STATISTICAL DISCLOSURE DATE
|
||||||||||||
Name of Guaranty Agency
|
Number
of Loans
|
Aggregate Outstanding
Principal Balance
|
Percent of Pool
by Outstanding Principal Balance
|
|||||||||
American Student Assistance
|
3,879
|
$
|
36,879,670
|
6.1
|
%
|
|||||||
Educational Credit Management Corporation
|
3,470
|
30,789,036
|
5.1
|
|||||||||
Florida Office Of Student Financial Assistance
|
1,787
|
17,716,407
|
2.9
|
|||||||||
Great Lakes Higher Education Corporation
|
135
|
1,501,250
|
0.2
|
|||||||||
Illinois Student Assistance Commission
|
2,477
|
24,174,719
|
4.0
|
|||||||||
Kentucky Higher Education Assistance Authority
|
182
|
1,697,254
|
0.3
|
|||||||||
Louisiana Office Of Student Financial Assistance
|
747
|
8,533,149
|
1.4
|
|||||||||
Michigan Guaranty Agency
|
637
|
6,806,781
|
1.1
|
|||||||||
New Jersey Higher Education Student Assistance Authority
|
1,497
|
11,611,415
|
1.9
|
|||||||||
New York State Higher Education Services Corporation
|
4,990
|
54,447,547
|
9.0
|
|||||||||
Northwest Education Loan Association
|
17
|
388,943
|
0.1
|
|||||||||
Oklahoma Guaranteed Student Loan Program
|
750
|
8,268,212
|
1.4
|
|||||||||
Pennsylvania Higher Education Assistance Agency
|
2,477
|
24,794,853
|
4.1
|
|||||||||
Texas Guaranteed Student Loan Corporation
|
3,498
|
37,952,124
|
6.3
|
|||||||||
United Student Aid Funds, Inc.
|
23,316
|
339,667,530
|
56.1
|
|||||||||
Total
|
49,859
|
$
|
605,228,888
|
100.0
|
%
|
|||||||
Reserve Ratio
|
|||||
Federal Fiscal Year
|
|||||
Guarantor
|
2010
|
2011
|
2012
|
2013
|
2014
|
United Student Aid Funds, Inc.
|
0.400%
|
0.394%
|
0.354%
|
0.313%
|
0.277%
|
Recovery Rate
|
|||||
Federal Fiscal Year
|
|||||
Guarantor
|
2010
|
2011
|
2012
|
2013
|
2014
|
United Student Aid Funds, Inc.
|
32.90%
|
32.17%
|
31.82%
|
30.55%
|
32.01%
|
Loss Rate
|
|||||
Federal Fiscal Year
|
|||||
Guarantor
|
2010
|
2011
|
2012
|
2013
|
2014
|
United Student Aid Funds, Inc.
|
4.66%
|
4.71%
|
4.73%
|
4.74%
|
4.73%
|
Claims Rate
|
|||||
Federal Fiscal Year
|
|||||
Guarantor
|
2010
|
2011
|
2012
|
2013
|
2014
|
United Student Aid Funds, Inc.
|
1.69%
|
1.69%
|
1.58%
|
1.41%
|
1.48%
|
●
|
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 by the borrower’s school of his eligibility for the loan; and
|
●
|
an unpaid school refund.
|
●
|
Subsidized Stafford Loans to students who demonstrate requisite financial need;
|
●
|
Unsubsidized Stafford Loans to students who either do 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 exceed other available financial aid; and
|
●
|
Consolidation Loans, which consolidate into a single loan a borrower’s obligations under various federally authorized student 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; 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
|
8% for 48 months, then 10%
|
3.25% for loans made before 7/23/92 and for
|
|
Treasury + Interest Rate Margin
|
8% for 48 months, then 10%
|
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
|
Trigger Date
|
Borrower Rate
|
Maximum Borrower Rate
|
Interest Rate Margin
|
|||
From 07/01/10 through 06/30/11
|
4.5% for undergraduate subsidized loans; and 6.8% for unsubsidized loans and graduate loans
|
4.5%, 6.8%
|
N/A
|
|||
From 07/01/11 through 06/30/12
|
3.4% for undergraduate subsidized loans; and 6.8% for unsubsidized loans
and graduate loans
|
3.4%, 6.8%
|
N/A
|
|
||||||
From 07/01/12 and after
|
6.8%
|
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, and
|
●
|
during prescribed deferment periods.
|
●
|
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 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 may borrow the additional amounts shown in the third and fourth columns. Dependent undergraduate students may also receive these additional loan amounts
|
|
if their parents are unable to provide the family contribution amount and cannot qualify for a PLUS Loan.
|
●
|
Students attending certain medical schools are eligible for $38,500 annually and $189,000 in the aggregate.
|
●
|
The annual loan limits are sometimes reduced when the student is 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 deferral 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
|
Source
|
Basis
|
|
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
|
You should consider carefully the risk factors described in this prospectus beginning on page 15 and in the prospectus supplement that accompanies this prospectus.
The notes described herein represent obligations of the applicable issuing entity only. The notes are not obligations of or interests in the sponsor, administrator, servicer, depositor, any seller or any of their affiliates.
The notes are not guaranteed or insured by the United States of America or any U.S. governmental agency.
This prospectus may be used to offer and sell any series of notes only if it is accompanied by the prospectus supplement for that series.
|
The Depositors
Navient Funding, LLC (formerly known as SLM Funding LLC), a Delaware limited liability company, is the depositor. Navient Credit Finance Corporation is the sole member of Navient Funding, LLC. Navient Credit Funding, LLC (formerly known as SLM Education Credit Funding LLC), a Delaware limited liability company and an affiliate of Navient Funding, LLC, is also a depositor solely with respect to certain previously issued classes of auction rate notes for which either Navient Credit Funding, LLC or Navient Funding, LLC will be the selling securityholder. Navient Credit Finance Corporation is the sole member of Navient Credit Funding, LLC.
The Notes
The depositor intends to form trusts to issue student loan-backed notes. Each issue of notes will have its own designation. We intend to sell the notes from time to time in amounts, at prices and on terms determined at the time of the offering and sale of the related series of notes. Each series will include one or more classes of notes secured by the assets of the trust for that issue.
A class of notes may:
● be senior and/or subordinate to other classes in its series; and
● receive payments from one or more forms of credit or cash flow enhancements designed to reduce the risk to investors caused by shortfalls in payments on the related student loans.
Each holder of a class of notes will have the right to receive payments of principal and interest at the rates, on the dates and in the manner described in the applicable supplement to this prospectus.
Trust Assets
The assets of each trust will include:
● education loans to students or parents of students;
● specified types of credit enhancement; and
● moneys, investments and property, including derivative instruments as set forth herein and further described in the related prospectus supplement.
Each supplement to this prospectus will describe, among other things, the specific amounts, prices and terms of the notes of the related series. The supplements will also provide details of the specific student loans, credit enhancement, derivative instruments and other assets of the related trust as described herein.
|
●
|
this prospectus, including the Appendices hereto, which provides general information, some of which may not apply to your series of notes; and
|
●
|
the related prospectus supplement, including all Annexes and Exhibits thereto, which describes the specific terms of your series of notes, including:
|
●
|
the timing of interest and principal payments;
|
●
|
financial and other information about the student loans and the other assets owned by the trust;
|
●
|
information about credit enhancement; and
|
●
|
the method of selling the notes.
|
Prospectus Summary
|
1
|
Risk Factors
|
15
|
Risks Relating To The Notes Generally
|
15
|
Risks Relating To Student Loans Generally
|
19
|
Risks Relating To Private Education Loans
|
23
|
Risks Relating To Federally Guaranteed Student Loans
|
26
|
Risks Relating To Swap Agreements
|
31
|
Risks Related To Auction Rate Notes
|
33
|
Risks Related To Reset Rate Notes
|
34
|
Formation of the Issuing Entities
|
39
|
Use Of Proceeds
|
41
|
The Depositor
|
42
|
Navient Credit Funding, LLC
|
44
|
Navient Corporation
|
45
|
The Sponsor, Servicer and Administrator
|
45
|
The Sellers
|
47
|
The Student Loan Pools
|
48
|
The Companies’ Student Loan Financing Business
|
51
|
Transfer and Servicing Agreements
|
62
|
Servicing and Administration
|
65
|
Trading Information
|
79
|
Description of the Notes
|
80
|
Additional Information Regarding the Notes
|
87
|
Certain Legal Aspects of the Student Loans
|
132
|
U.S. Federal Income Tax Consequences
|
138
|
European Union Directive On The Taxation Of Savings Income
|
151
|
State Tax Consequences
|
152
|
ERISA Considerations
|
152
|
Available Information
|
155
|
Reports to Noteholders
|
155
|
Incorporation of Documents by Reference
|
156
|
The Plan of Distribution
|
156
|
Legal Matters
|
159
|
Appendix A: Federal Family Education Loan Program
|
A-1
|
Appendix B: Undergraduate and Graduate Loan Programs
|
B-1
|
Appendix C: Law Loan Programs
|
C-1
|
Appendix D: MBA Loan Programs
|
D-1
|
Appendix E: Medical Loan Programs
|
E-1
|
Appendix F: Dental Loan Programs
|
F-1
|
Appendix G: Direct-to-Consumer Loan Programs
|
G-1
|
Appendix H: Private Consolidation Loan Program
|
H-1
|
Appendix I: Career Training Loan Program
|
I-1
|
Appendix J: EFG Loan Programs
|
J-1
|
Appendix K: Smart Option Student Loan® Program
|
K-1
|
Appendix L: Global Clearance, Settlement and Tax Documentation Procedures
|
L-1
|
PROSPECTUS SUMMARY
|
||||
This summary highlights selected information concerning the notes. It does not contain all of the information that you might find important in making your investment decision. You should read the full description of this information which appears elsewhere in this document and in the prospectus supplement for your particular notes.
|
||||
Principal Parties | ||||
Issuing Entity
|
Each issuing entity will be a Delaware statutory trust to be formed for each series of notes under a trust agreement among the depositor, an owner trustee and an eligible lender trustee or trustee, as applicable. We sometimes refer to an issuing entity as a “trust” in this prospectus.
|
|||
Depositor
|
The depositor is Navient Funding, LLC (formerly known as SLM Funding LLC), sometimes referred to herein as Navient Funding, which is a Delaware limited liability company. Navient Credit Finance Corporation is the sole member of the depositor. An interim eligible lender trustee specified in the prospectus supplement for your notes will hold legal title to any FFELP loans on our behalf. Where the context involves the holding or transferring of legal title to FFELP loans, references herein to the depositor include the interim eligible lender trustee.
|
|||
Depositor for Certain Auction Rate Notes
|
Navient Credit Funding, LLC (formerly known as SLM Education Credit Funding LLC), sometimes referred to herein as Navient Credit Funding, which is a Delaware limited liability company, is also a depositor for certain classes of previously issued auction rate notes that were acquired by affiliates of Navient Credit Funding and will be reoffered from time to time. Navient Credit Finance Corporation is the sole member of Navient Credit Funding. Navient Credit Funding is an affiliate of Navient Funding. Navient Credit Funding will be the depositor solely with respect to certain reofferings of previously registered auction rate notes where Navient Credit Funding was originally the related issuing entity’s depositor for the applicable series of notes and either Navient Credit Funding or Navient Funding will be the selling securityholder of the class or classes of auction rate notes being reoffered.
|
|||
Trustee, Owner Trustee, Delaware Trustee and/or Eligible Lender Trustee
|
For each series of notes, the related prospectus supplement will specify the trustee, the owner trustee, the Delaware trustee and/or eligible lender trustee, as applicable, for the
|
related issuing entity. See “Formation of the Issuing Entities—Eligible Lender Trustee or Trustee”and “Formation of the Issuing Entities—Owner Trustee or Trustee” in this prospectus.
|
||||
Sponsor
|
The sponsor is Navient Solutions, Inc. We sometimes refer to Navient Solutions, Inc. and its successors in interest as Navient Solutions in this prospectus.
|
|||
Servicer
|
The servicer will be either Navient Solutions or another servicer specified in the prospectus supplement for your notes. Navient Solutions manages and operates the loan servicing functions for Navient Corporation and its affiliates and certain unrelated parties. We sometimes refer to Navient Corporation and its successors in interest as Navient in this prospectus.
Under the circumstances described in this prospectus, the servicer may transfer its servicing obligations to other entities. It may also contract with other servicers or sub-servicers. The related prospectus supplement will describe any sub-servicers with whom the servicer has contracted. See “Servicing and Administration—Matters Regarding the Servicer” in this prospectus.
|
|||
Sellers
|
The sellers are Navient Credit Finance Corporation and/or other affiliates of the depositor as identified in the related prospectus supplement. We sometimes refer to Navient Credit Finance Corporation and its successors in interest as Navient CFC in this prospectus.
|
|||
Originators
|
To the extent that non-FFELP loans have been originated by one or more originators not affiliated with Navient Solutions or the depositor and constitute a material portion of the related loan pool, the identity of such originators will be disclosed, to the extent known. The requisite information concerning those originators, to the extent available, will be provided in the related prospectus supplement.
|
|||
Indenture Trustee
|
For each series of notes, the related prospectus supplement will specify the indenture trustee for the notes. See “Description of the Notes—The Indenture—The Indenture Trustee” in this prospectus.
|
|||
Administrator
|
The administrator of the issuing entity will be either Navient Solutions or a sub-administrator specified in the prospectus supplement for your notes. Under the circumstances described in this prospectus, the administrator may transfer its obligations as administrator to an affiliate. The administrator may also contract with sub-administrators. If there is a sub-
|
administrator, the identity of the sub-administrator will be specified in the prospectus supplement for your notes. The related prospectus supplement will describe any sub-administrators with whom the administrator has contracted. See “Summary of Terms—Administrator” in the related prospectus supplement.
|
||||
The Notes
|
Each series of notes will include one or more classes of student loan-backed notes. The notes will be issued under an indenture between the issuing entity and the related indenture trustee. We may offer each class of notes publicly or privately, as specified in the related prospectus supplement.
The notes will be available for purchase in minimum denominations and additional amounts in excess thereof, as provided in the related prospectus supplement. The depositor may denominate the notes in U.S. Dollars or a non-U.S. Dollar currency as specified in the related prospectus supplement. The notes will be available initially in book-entry form only unless otherwise specified in the related prospectus supplement. Investors who hold the notes in book-entry form will be able to receive definitive notes only in the limited circumstances described in this prospectus or in the related prospectus supplement.
See “Additional Information Regarding the Notes—Book-Entry Registration” and “—Definitive Notes” in this prospectus.
Each class of notes will have a stated principal amount and will bear interest at the rate described in the related prospectus supplement. Interest rates may vary between the classes of notes in a particular series. The interest rate for a class of notes may be:
|
|||
● fixed;
|
||||
● variable;
|
||||
● adjustable;
|
||||
● auction-determined;
|
||||
● reset rate; or
|
||||
● any combination of these rates.
|
The related prospectus supplement will specify:
|
||||
● the stated principal amount of each class of notes; and
|
||||
● the interest rate for each class of notes or the method for determining the interest rate.
|
||||
See “Description of the Notes—Principal and Interest on the Notes” in this prospectus and “Summary of Terms—The Notes” and “—Information About the Notes” in the related prospectus supplement.
|
||||
If a series includes two or more classes of notes:
|
||||
● the timing and priority of payments, seniority, interest rates and/or the method of determining interest rates or amount of payments of principal or interest may differ for each class; or
|
||||
● payments of principal or interest on a class may or may not be made, depending on whether specified events occur.
|
||||
The related prospectus supplement will provide this information.
|
||||
Assets of the Issuing Entity
|
The assets of each issuing entity will include a pool of student loans. The loans, as specified in the related prospectus supplement, may be:
|
|||
● education loans to students or parents of students made under the Federal Family Education Loan Program, known as the FFELP; or
|
||||
● other education loans not made under the FFELP.
|
||||
Student loans owned by the issuing entity are called “trust student loans.”
|
||||
The assets of each issuing entity will include rights to receive payments made on these trust student loans and any proceeds related to them.
|
||||
We will purchase the student loans from Navient CFC or another affiliate of Navient under one or more purchase agreements. The prospectus supplement for your notes will describe the seller or sellers that sold the student loans to us. The student loans will be selected based on criteria listed in the related purchase agreement.
|
We will sell the student loans to the related issuing entity under a sale agreement. The related prospectus supplement will specify the aggregate principal balance of the loans sold to the issuing entity as of the cutoff date specified in that prospectus supplement. The property of each issuing entity will also include amounts on deposit in specific trust accounts. The accounts may include: a collection account, any reserve account, any pre-funding account, any capitalized interest account, any cash capitalization account and any other account identified in the related prospectus supplement. The property of each issuing entity may also include the right to receive payments under any swap agreements entered into by the issuing entity from time to time. See “Formation of the Issuing Entities” in this prospectus.
Each FFELP loan sold to an issuing entity will be guaranteed as to the payment of principal and interest by a state guaranty agency or a private non-profit guarantor. The percentage of the guarantee will be set forth in the prospectus supplement for your notes. These guarantees are contingent upon compliance with specific origination and servicing procedures, as prescribed by various U.S. federal and guarantor regulations. Each guarantor is reinsured by the U.S. Department of Education for a percentage of claims paid by that guarantor for a given federal fiscal year. The reinsured amount depends on a guarantor’s claims experience and the year in which the loans subject to the claims were disbursed. The percentage of the claims paid by a guarantor that are reinsured could change in the future by legislation. See “Appendix A—Federal Family Education Loan Program—Guaranty Agencies under the FFELP” in this prospectus.
|
||||
Non-FFELP loans or “private education loans” may or may not be insured by a private guarantor or surety. If insured private education loans are included in the assets sold to an issuing entity, the issuing entity and the holders of the publicly offered notes related to that issuing entity may or may not have the benefit of the guarantee. If your notes have the benefit of a private guarantee or surety, the related prospectus supplement will describe such private guarantee or surety.
|
||||
An issuing entity’s assets may include various agreements with counterparties providing for interest rate swaps, currency swaps, interest rate caps, floor agreements, collar agreements and liquidity agreements. As applicable, these agreements will be described in the related prospectus supplement.
|
Collection Account
|
For each issuing entity, the administrator will establish and maintain one or more accounts to hold all payments made with respect to the trust student loans. We refer to each of these accounts collectively as the “collection account” in this prospectus. The collection account will be in the name of the indenture trustee on behalf of the holders of the notes. The collection account will be an asset of the issuing entity. The related prospectus supplement will describe the permitted uses of funds in the collection account and the conditions for their application.
|
|||
Reserve Account
|
The administrator will establish a reserve account for each series. The reserve account will be established in the name of the indenture trustee and will be an asset of the issuing entity. On the relevant closing date, we will make a deposit into the reserve account, as specified in the related prospectus supplement. The initial deposit into the reserve account may be supplemented from time to time by additional deposits. The related prospectus supplement will describe the conditions and amounts of these additional deposits.
The related prospectus supplement for each issuing entity will describe when amounts in the reserve account will be available to cover shortfalls in payments due on the notes. It will also describe how amounts on deposit in the reserve account in excess of the required reserve account balance will be distributed.
|
|||
Pre-Funding Account
|
The related prospectus supplement for your notes will inform you if a portion of the net proceeds of the sale of the notes will be held in a pre-funding account and used to purchase additional student loans. If a pre-funding account is established, it will be in the name of the indenture trustee and will be an asset of the issuing entity. The related prospectus supplement will describe the permitted uses of any funds in the pre-funding account, the conditions for their application and the length of time during which additional student loans may be purchased with amounts on deposit in the pre-funding account.
|
|||
Capitalized Interest Account
|
The related prospectus supplement for your notes will inform you if the administrator will establish and maintain a capitalized interest account as an asset of the issuing entity. If a capitalized interest account is established, it will be in the name of the indenture trustee and the related issuing entity will make an initial deposit from the net proceeds of the sale of the notes into that account as specified in the related prospectus supplement. This initial deposit will be in the form of either cash or eligible investments.
|
Funds in the capitalized interest account will be available to cover shortfalls in payments of primary servicing fees, administration fees, if applicable, auction agent and broker-dealer fees, interest due to senior noteholders and payments due to each swap counterparty (other than any termination payments) pursuant to any swap agreement then in effect. Following such payments and after application of funds available in the collection account, but before application of funds in the reserve account, any funds remaining in the capitalized interest account will be applied toward shortfalls in payments of interest to subordinate noteholders.
|
||||
Other Accounts
|
The related prospectus supplement for your notes will also describe any other accounts established for the related issuing entity. These accounts may include cash collateralization accounts, supplemental interest accounts, investment reserve accounts, investment premium purchase accounts, currency accounts, and for any series that contains reset rate notes, one or more accumulation accounts.
|
|||
Pre-Funding Period
|
The related prospectus supplement for your notes will inform you if there is a pre-funding period (and the length of such pre-funding period) during which the trust may acquire additional student loans with amounts on deposit in the pre-funding account. The length of the pre-funding period will not extend for more than one year from the date of issuance of the related series of notes. The portion of the proceeds for the pre-funding account will not involve more than 50% of the proceeds of the offering of the related series of notes. The additional trust student loans acquired during the pre-funding period will have the same general characteristics as the original trust student loans in the related pool.
|
|||
Revolving Period
|
The related prospectus supplement for your notes will inform you if there is a revolving period (and the length of such revolving period) during which the trust may acquire additional student loans using the cash flows from the reated pool of trust student loans. The length of the revolving period will not extend for more than three years from the date of issuance of the related series of notes. The related prospectus supplement for your notes will describe the characteristics or selection criteria for the additional trust student loans.
|
|||
Credit and Cash Flow or other Enhancement or Derivative Arrangements
|
Credit or cash flow enhancement for any series of notes may include one or more of the items shown under “Additional Information Regarding the Notes—Credit Enhancement and Other Support—General” in this prospectus.
If any credit or cash flow enhancement applies to an issuing entity or any of the notes issued by that issuing entity, the related prospectus supplement will describe the specific enhancement and the conditions for their application as well as the related counterparty, if applicable. A credit or cash flow enhancement may have limitations and exclusions from coverage. The related prospectus supplement will describe any such limitations or exclusions. See “Additional Information Regarding the Notes—Credit Enhancement and Other Support” in this prospectus.
To the extent applicable, the related prospectus supplement will set forth information describing each form of credit enhancement or other permissible form of support, the extent of the enhancement or support being provided and the identity of each credit enhancement or support provider. The related prospectus supplement will also set forth how losses not covered by credit enhancement or support will be allocated to and among the applicable securities.
|
|||
Servicing Agreements
|
The servicer will enter into one or more servicing agreements covering the trust student loans held by each issuing entity. Under the servicing agreement, the servicer will be responsible for servicing, managing, maintaining custody of, and making collections on the trust student loans. In addition, it will file with any guarantor of the trust student loans and the U.S. Department of Education all appropriate claims to collect any guarantee payments or interest subsidy payments and special allowance payments owed on the trust student loans. See “Servicing and Administration” in this prospectus.
|
|
||
Servicing Fee
|
The servicer will receive a servicing fee as specified in the related prospectus supplement. It will also receive reimbursement for expenses and charges, as specified in such prospectus supplement. These amounts will be payable monthly.
The servicing fee and any portion of the servicing fee that remains unpaid from prior dates will be payable before any payments are made on the related notes unless any portion of the servicing fee is expressly subordinated to payments on the notes, as specified in the related prospectus supplement. See
|
“Servicing and Administration—Servicing Compensation” in this prospectus.
|
||||
Administration Agreement
|
Navient Solutions, in its capacity as administrator, will enter into an administration agreement with each issuing entity, the depositor, the eligible lender trustee, the owner trustee or trustee, as applicable, the servicer and the indenture trustee. Under this agreement, Navient Solutions will undertake specific administrative duties for each issuing entity. See “Servicing and Administration—Administration Agreement” in this prospectus.
|
|||
Administration Fee
|
The administrator will receive an administration fee as specified in the related prospectus supplement. It may also receive reimbursement for expenses and charges, as specified in the related prospectus supplement. These amounts will be payable before any payments are made on the related notes, as specified in the related prospectus supplement. See “Servicing and Administration—Administration Agreement” in this prospectus.
|
|||
Purchase Agreements
|
For each issuing entity, the depositor will acquire the related student loans under one or more purchase agreements. We will assign our rights under the purchase agreements to the trustee or eligible lender trustee, as applicable, on behalf of the issuing entity. The issuing entity will further assign these rights to the indenture trustee as collateral for the notes. See “Transfer and Servicing Agreements” in this prospectus.
|
|||
Sale Agreements
|
We will sell the trust student loans to the issuing entity under a sale agreement. The trustee or eligible lender trustee, as applicable, will hold legal title to the trust student loans. The issuing entity will assign its rights under the sale agreement to the indenture trustee as collateral for the notes. See “Transfer and Servicing Agreements” in this prospectus.
|
Representations and Warranties of the Depositor
|
Under the sale agreement for each issuing entity, the depositor, as the seller of the loans to the issuing entity, will make specific representations and warranties to the issuing entity concerning the trust student loans. We will have an obligation to repurchase any trust student loan if the issuing entity is materially and adversely affected by a breach of the depositor’s representations or warranties, unless we can cure the breach within the period specified in the related prospectus supplement. Alternatively, we may substitute qualified student loans rather than repurchasing the affected loans. Qualified substitute student loans are student loans that comply, on the date of substitution, with all of the representations and warranties made by us in the sale agreement. Qualified substitute student loans must also be substantially similar on an aggregate basis to the loans they are being substituted for with regard to the following characteristics:
|
|||
● principal balance;
|
||||
● status—in-school, grace, deferment, forbearance or repayment;
|
||||
● program type—Unsubsidized Stafford, Subsidized Stafford, PLUS, SLS, Consolidation or non-FFELP loans;
|
||||
● school type;
|
||||
● total return; and
|
||||
● remaining term to maturity.
|
||||
Any required repurchase or substitution will occur on the date the next collection period ends after the applicable cure period has expired.
In addition, the depositor will have an obligation to reimburse the issuing entity for:
|
||||
● any shortfall between the balance of the qualified substitute student loans and the balance of the loans being replaced; and
|
||||
● any accrued interest not guaranteed by, or that is required to be refunded to, a guarantor and any program payments lost as a result of a breach of our representations and warranties.
|
See “Transfer and Servicing Agreements—Sale of Student Loans to the Trust; Representations and Warranties of the Depositor” in this prospectus.
|
||||
Representations and
Warranties of Navient CFC and
the Other Sellers Under
the Purchase Agreements
|
In each purchase agreement, the related seller of the student loans will make representations and warranties to the depositor concerning the student loans sold through that purchase agreement. These representations and warranties will be similar to the representations and warranties we made under the related sale agreement. Under each purchase agreement, the related seller will have repurchase, substitution and reimbursement obligations that match our obligations under the sale agreement.
See “Transfer and Servicing Agreements—Purchase of Student Loans by the Depositor; Representations and Warranties of the Sellers” in this prospectus.
|
|||
Covenants of the Servicer
|
The servicer will agree to service the trust student loans in compliance with the servicing agreement and the Higher Education Act, as applicable. It will have an obligation to purchase from an issuing entity any trust student loan if the issuing entity is materially and adversely affected by a breach by the servicer of any of its covenants concerning that student loan. Alternatively, the servicer will have the right to substitute qualified student loans in those circumstances. Any breach that relates to compliance with the Higher Education Act or the relevant loan program rules, as in effect on such date of determination or the requirements of a guarantor, but that does not affect that guarantor’s obligation to guarantee payment of a trust student loan, will not be considered to have a material adverse effect (for example, any breach by the servicer that is cured within the applicable grace period will not be considered to have a material adverse effect).
If the servicer does not cure a breach within the grace period specified in the related servicing agreement, the purchase or substitution will be made on the collection period end date immediately following the expiration of the applicable cure period, or as otherwise described in the related servicing agreement.
In addition, the servicer will have an obligation to reimburse the issuing entity for:
|
|||
● any shortfall between the aggregate principal balance of the qualified substitute student loans and the aggregate principal balance of the loans being replaced; and
|
||||
● any accrued interest not guaranteed by, or that is required to be refunded to, a guarantor and any relevant loan program payments lost as a result of a breach of the servicer’s covenants.
|
||||
See “Servicing and Administration—Servicer Covenants” in this prospectus.
|
||||
Optional Purchases
|
Subject to any limitations described in the related prospectus supplement, the servicer or another entity specified in such prospectus supplement may, at its option, purchase, or arrange for the purchase of, all remaining trust student loans owned by an issuing entity on any distribution date when the pool balance of the remaining student loans is 10% or less of the initial pool balance, together with the aggregate initial principal balances of all trust student loans acquired during any applicable pre-funding period, plus accrued interest to be capitalized as of the applicable cutoff dates, or such lesser percentage as set forth in the related prospectus supplement. The exercise of this purchase option will result in the early retirement of the notes issued by that issuing entity. See “The Student Loan Pools—Termination” in this prospectus.
In addition, the servicer or another entity specified in the related prospectus supplement may have an option to purchase or arrange for the purchase of some of the trust student loans at any time. If the servicer or another entity has this option, the related prospectus supplement will specify the percentage limitation required for such purchase together with the other limitations thereon.
|
|||
Call Option and Collateral Call
|
If specified in the related prospectus supplement, the servicer or one of its affiliates specified in such prospectus supplement may exercise its option to call, in full, one or more classes of notes. If a class of notes has been called, it will either remain outstanding and be entitled to all interest and principal payments on such class of notes under the related indenture, or the servicer or its specified affiliate will deposit an amount into the collection account sufficient to redeem the specified class of notes, subject to satisfaction of the rating agency condition. See “Description of the Notes—Call Option on the Notes” in this prospectus. Each class of reset rate notes will be subject to a call option as described under “Additional
|
|||
Information Regarding the Notes—The Reset Rate Notes—Call Option” in this prospectus. In addition, if specified in the related prospectus supplement and provided that the rating agency condition is satisfied, the servicer or one or more of its affiliates will have the right to purchase certain of the trust student loans in an amount sufficient to redeem one or more classes of notes.
|
||||
See “Description of the Notes—Collateral Call” in this prospectus.
|
||||
Auction of Trust Assets
|
Subject to any limitations described in the related prospectus supplement, the indenture trustee may, or at the written direction of the administrator or the holders of a majority of the outstanding amount of the notes, shall, offer for sale by auction all remaining trust student loans at the end of the collection period in which their aggregate pool balance is 10% or less of the initial pool balance, together with the aggregate initial principal balances of all trust student loans acquired during any applicable pre-funding period, plus accrued interest to be capitalized as of the applicable cutoff dates, or such lesser percentage as set forth in the related prospectus supplement. An auction will occur only if the entity with the optional purchase right has first waived its optional purchase right. The auction of the remaining trust student loans will result in the early retirement of the notes issued by that issuing entity. See “The Student Loan Pools—Termination” in this prospectus and “Summary of Terms—Termination of the Trust—Auction of Trust Assets” in the related prospectus supplement.
|
|||
Tax Considerations
|
On the closing date for a series, Shearman & Sterling LLP or another law firm identified in the related prospectus supplement, as federal tax counsel to the applicable issuing entity, will deliver an opinion stating that, for U.S. federal income tax purposes:
|
|||
● the notes of that series will be characterized as debt; and
|
||||
● the issuing entity will not be characterized as an association or a publicly traded partnership taxable as a corporation.
|
||||
In addition, the law firm identified in the related prospectus supplement as Delaware tax counsel to the issuing entity will deliver an opinion stating that:
|
● the tax characterizations which apply for U.S. federal income tax purposes would apply for Delaware state income tax purposes; and
|
||||
● holders of the notes that are not otherwise subject to Delaware state income taxation will not become subject to Delaware state tax as a result of their ownership of the notes.
|
||||
By acquiring a note, you will agree to treat that note as indebtedness.
See “U.S. Federal Income Tax Consequences” and “State Tax Consequences” in this prospectus.
|
||||
ERISA Considerations
|
A fiduciary of any employee benefit plan or other retirement arrangement subject to Title I of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended, should carefully review with its legal advisors whether the plan’s purchase or holding of any class of notes could give rise to a transaction prohibited or otherwise impermissible under ERISA or the Internal Revenue Code. See “ERISA Considerations” in this prospectus and in the related prospectus supplement.
|
|||
Ratings
|
The sponsor expects that the notes will receive credit ratings from at least two rating agencies.
|
|||
RISKS RELATING TO THE NOTES GENERALLY
|
||
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.
|
|
The Notes Are Not Suitable Investments For All Investors
|
The 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.
|
|
If A Secondary Market For Your Notes Does Not Develop, The Value Of Your Notes May Diminish
|
The notes will be a new issue without an established trading market. The related prospectus supplement will specify whether we intend to list any or all of the related classes of notes on a European exchange; however, we do not intend to list the notes on any exchange in the United States. We cannot assure you that a listing on a European exchange will be accepted nor, in any event, that a secondary market for the notes will develop. If a secondary market does not develop, the spread between the bid price and the asked price for your notes may widen, thereby reducing the net proceeds to you from the sale of your notes.
|
|
The Issuing Entity Will Have Limited Assets From Which To Make Payments On The Notes, Which May Result In Losses
|
An issuing entity will not have, nor will it be permitted to have, significant assets or sources of funds other than the related pool of trust student loans and, with respect to FFELP loans, the related guarantee agreements. If so provided in the related prospectus supplement, the issuing entity may have a reserve account and any other accounts established in the issuing entity’s name, and may enter into interest rate and/or currency swap agreements, interest rate cap agreements, floor agreements, collar agreements or liquidity agreements as described under “Additional Information Regarding the Notes—Credit Enhancement and Other Support.”
|
Consequently, you must rely upon payments on the trust student loans from the borrowers and guarantors, as applicable, and, if available, amounts on deposit in the trust accounts, amounts received from derivative counterparties and the other specified credit or cash flow enhancements to repay your notes. If these sources of funds are unavailable or insufficient to make payments on your notes, you may experience a loss on your investment.
|
||
Your Notes May Have A Degree Of Basis Risk, Which Could Compromise The Issuing Entity’s Ability To Pay Principal And Interest On Your Notes
|
There may be a degree of basis risk associated with an issuing entity’s notes. There is a risk that shortfalls might occur because, among other things, while the effective interest rates of the related trust student loans adjust on the basis of specified indices, the interest rates of an issuing entity’s notes may adjust on the basis of a different index. If a shortfall were to occur, the issuing entity’s ability to pay principal and/or interest on its notes could be compromised. See the prospectus supplement related to your notes for a description of the related issuing entity’s initial trust student loans.
|
|
Consequently, you must rely on other forms of credit enhancement, to the extent available, to mitigate basis risk. There can be no assurance that the amount of credit enhancement will be sufficient to cover any basis risk associated with an issuing entity’s notes.
|
||
You May Be Unable To Reinvest Principal Payments At The Yield You Earn On The Notes
|
Asset-backed notes usually produce increased principal payments to investors when market interest rates fall below the interest rates on the collateral—student loans in this case—and decreased principal payments when market interest rates rise above the interest rates on the collateral. As a result, you are likely to receive more money to reinvest at a time when other investments generally are producing lower yields than the yield on the notes. Similarly, you are likely to receive less money to reinvest when other investments generally are producing higher yields than the yield on the notes.
|
|
Subordination Of Some Classes Of Notes Results In A Greater Risk Of Losses Or Delays In Payment On Those Notes
|
Some classes of notes may be subordinate to other classes of that series. Consequently, holders of some classes of notes may bear a greater risk of losses or delays in payment. The related prospectus supplement will describe the nature and extent of any subordination.
|
The Notes May Be Repaid Early Due To An Auction Sale Or The Exercise Of The Purchase Option. 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 or other applicable entity 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.
|
||
If The Holder Of The Call Option Or Collateral Call Exercises Its Right, You May Not Be Able To Reinvest In A Comparable Note
|
If specified in the prospectus supplement for your notes, the servicer will have, or may transfer to certain of its affiliates, the option to call, in full, one or more classes of notes. If this option is exercised, the affected class of notes will either remain outstanding and be entitled to all of the benefits of the related indenture, or the servicer or its specified affiliate will deposit an amount into the collection account sufficient to redeem the affected class of notes, subject to satisfaction of the rating agency condition set forth in the related prospectus supplement for your notes. In addition, if specified in the related prospectus supplement and subject to satisfaction of the rating agency condition, the servicer or one or more of its affiliates will have the right to purchase certain of the trust student loans in an amount sufficient to redeem one or more classes of notes. If the note call option or collateral call option is exercised with respect to your class of notes, you will receive a payment of principal equal to the outstanding principal balance of your notes, less any amounts distributed to you by the issuing entity as a payment of principal on the related distribution date, plus all accrued and unpaid interest on such distribution date, but you may not be able to reinvest the proceeds you receive in a comparable security with an equivalent yield.
|
|
The Bankruptcy Of The Depositor, Navient CFC Or Any Other Seller Could Delay Or Reduce Payments On Your Notes
|
We have taken steps to assure that the voluntary or involuntary application for relief by 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 depositor with those of Navient CFC and the other sellers. However, we cannot guarantee that our activities will not result in a court concluding that our assets and liabilities should be consolidated with those of
|
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 depositor 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 Navient CFC or the other sellers should any such seller become subject to an insolvency law.
|
||
If 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.
|
||
In addition, if the court ruled in favor of this position, reductions in the amount of payments on the notes could result.
|
||
Withdrawal Or Downgrade Of Initial Ratings May Decrease The Prices Of Your Notes
|
A security rating is not a recommendation to buy, sell or hold securities. Similar ratings on different types of securities do not necessarily mean the same thing. A rating agency may revise or withdraw its rating at any time if it believes circumstances have changed. A subsequent downgrade in the rating on your notes is likely to decrease the price a subsequent purchaser will be willing to pay for your notes.
|
|
Subordinated Noteholders May Not Be Able To Direct The Indenture Trustee Upon An Event Of Default Under The Indenture
|
If specified in the related prospectus supplement, and an event of default occurs under the indenture, only the holders of the controlling class of notes, which is defined as the holders of the then outstanding class or classes of the most senior notes, will be able to waive that event of default, accelerate the maturity dates of the notes or direct any remedial action under the related indenture. In this event, the holders of any outstanding subordinated class or classes of notes will not have any rights to direct any remedial action until each more senior class of notes has been paid in full.
|
The Dodd-Frank Act And Future Legislation and Regulatory Reforms Could Have An Adverse Effect On Navient’s And Navient Solutions’ Business And Operating Results
|
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) to reform and strengthen supervision of the U.S. financial services industry. The Dodd-Frank Act represents a comprehensive change to existing laws, imposing significant new regulation on almost every aspect of the U.S. financial services industry.
|
|
The Dodd-Frank Act will result in significant new regulation in key areas of the business of Navient (the parent of the sponsor), the sponsor and their affiliates and the markets in which Navient, the sponsor and their affiliates operate. Most of the component parts of the Dodd-Frank Act are still subject to intensive rulemaking and public comment over the coming months and none of Navient, the sponsor or their affiliates can predict the ultimate effect the Dodd-Frank Act or required examinations of the private education loan market could have on their operations at this time. It is likely, however, that operational expenses will increase if new or additional compliance requirements are imposed on their operations and their competitiveness could be significantly affected if they are subjected to supervision and regulatory standards not otherwise applicable to their competitors.
|
||
See “Certain Legal Aspects of the Student Loans—Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions” below for more information.
|
||
RISKS RELATING TO STUDENT LOANS GENERALLY
|
||
You Will Bear Prepayment And Extension Risk Due To Actions Taken By Individual Borrowers And Other Variables Beyond Our Control
|
A borrower may prepay a student loan in whole or in part, at any time. The rate of prepayments on the 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 and the general economy. Various loan consolidation programs, including those offered by affiliates of the depositor, available to eligible borrowers may increase the likelihood of prepayments. In addition, an issuing entity may receive unscheduled payments due to defaults and purchases by the servicer or the depositor. Because a pool may include thousands of student loans, it is impossible 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.
|
||
On the other hand, the trust student loans may be extended as a result of grace periods, deferment periods and, under some circumstances, forbearance periods. This may lengthen the remaining term of the 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.
|
||
Any optional purchase right, any provision for the auction of the student loans, and, if applicable, the possibility that any pre-funded amount may not be fully used to purchase additional 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.
|
||
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, Which May Result In Delays In Payment Or Losses On Your Notes
|
The rules under which the trust student loans were originated, including the Higher Education Act or the program rules and surety agreements for private education loans, require lenders making and servicing student loans and the guarantors, if any, 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 U.S. 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; or
● the guarantors’ or sureties’ inability or refusal to make guarantee or insurance payments on the trust student loans that are private education 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.
|
The Inability Of The Depositor Or The Servicer To Meet Its Repurchase Obligation May Result In Losses On Your Notes
|
Under some circumstances, the issuing entity has the right to require the depositor (and the depositor has the right to require the applicable seller) 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 you, however, that the depositor (and, in turn, the applicable seller) or the servicer will have the financial resources to make a purchase or substitution. In this case, you will bear any resulting loss.
|
|
Incentive Programs May Affect Your Notes
|
At the present time, the sellers of the trust student loans make available to borrowers various incentive programs. In addition, under the terms of the servicing agreement for your notes, 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 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.
|
||
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.
|
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
|
If a servicer default occurs, the indenture trustee or the noteholders of a given series of notes may remove the servicer without the consent of the trustee, eligible lender trustee or owner trustee, as applicable. Only the indenture trustee or the noteholders, and not the trustee, eligible lender trustee or owner trustee, as applicable, have 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 cost of the transfer of servicing to the successor servicer;
● 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.
|
||
The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
|
In the event of default by the servicer resulting solely from certain events of insolvency or the bankruptcy of the servicer, a court, conservator, receiver or liquidator may have the power to prevent either the indenture trustee or the noteholders from appointing a successor servicer or prevent the servicer from appointing a sub-servicer, as the case may be, and delays in the collection of payments on the trust student loans may occur. Any delay in the collection of payments on the trust student loans may delay or reduce payments to noteholders.
|
|
The Indenture Trustee May Have Difficulty Liquidating Trust Student Loans After An Event Of Default
|
If an event of default occurs under an 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 a class of senior notes, and in all other cases, if the purchase price received from the sale of the trust student loans is sufficient to repay all related 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.
|
||
An Issuing Entity May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
|
The Higher Education Act, the Servicemembers Civil Relief Act and similar state and local laws provide payment relief to borrowers who enter active military service and to borrowers in reserve status who are called to active duty after the origination of their trust student loans. Recent and ongoing military operations by the United States have increased the number of citizens who are in active military service, including persons in reserve status who have been called or may be called to active duty.
|
|
The Servicemembers Civil Relief Act also limits the ability of a lender in the FFELP to take legal action against a borrower during the borrower’s period of active duty and, in some cases, during an additional period thereafter.
|
||
We do not know how many trust student loans have been or may be affected by the application of these laws. As a result, there may be unanticipated delays in payment and losses on the trust student loans.
|
||
RISKS RELATING TO PRIVATE EDUCATION LOANS
|
(The following risk factors apply to issuing entities whose assets include private education loans.)
|
|
Private Education Loans May Have Greater Risk Of Default
|
Private education loans are made to students who may have higher debt burdens than student loan borrowers as a whole. Borrowers of private education loans typically have already borrowed up to the maximum annual or aggregate limits permitted under federally guaranteed student lending programs. As a result, borrowers of private education loans may be more likely than other student loan borrowers as a whole to default on their payments or have a higher rate of forbearances. Failures by borrowers to pay timely the principal and interest on their private education loans or an increase in deferments or forbearances could affect the timing and amount of available funds for any collection period and adversely affect an issuing entity’s ability to pay principal and interest on your notes. In addition, the private education loans are not secured by any collateral of the borrowers and are not insured by any FFELP guaranty agency, the federal government or by any other governmental agency. Consequently, if a borrower defaults on a private education loan, you will bear the risk of loss to the extent that the reserve account or other specified credit
|
enhancement for your notes is insufficient or unavailable to cover such default.
|
||
Past Charge-Off Rates On Navient’s Private Education Loans May Not Be Indicative Of Future Charge-Off Rates
|
Navient Solutions as the servicer, has agreed to service the trust student loans on the same terms as they service substantially similar loans owned by Navient and its affiliates. Navient and its subsidiaries have established forbearance policies for their private education loans under which they provide the borrower with temporary relief from payment of principal or interest in exchange for a processing fee paid by the borrower, which is waived under certain circumstances. During the forbearance period, generally granted in three-month increments, interest that the borrower otherwise would have paid is typically capitalized at the end of the forbearance term. At December 31, 2014, approximately 3.8% of Navient’s private education loans in repayment were in forbearance. Forbearance is used most heavily when the borrower’s loan enters repayment; however, borrowers may apply for forbearance multiple times and a significant number of private education loan borrowers have taken advantage of this option. When a borrower ends forbearance and enters repayment, the account is considered current. Accordingly, a borrower who may have been delinquent in his payments or may not have made any recent payments on his account will be accounted for as a borrower in current repayment status when the borrower exits the forbearance period. In addition, past charge-off rates on Navient’s private education loans may not be indicative of future charge-off rates because of, among other things, the use of forbearance and the effect of future changes to the forbearance policies. If the servicer’s applicable forbearance policies prove over time to be less effective on cash collections than expected or if the servicer limits the circumstances under which forbearance may be granted under their forbearance policies, these changes could have a material adverse effect on the amount of future charge-offs and the ultimate default rate changes.
|
|
In addition, future charge-off rates can be higher than anticipated due to a variety of factors such as downturns in the economy, regulatory or operational changes in debt management operations’ effectiveness, and other unforeseeable future trends. You will bear the risk of loss if actual future performance in charge-offs and delinquency is worse than estimated.
|
Interests Of Other Persons In Private Education Loans Could Be Superior To An Issuing Entity’s Interest, Which May Result In Reduced Payments On Your Notes
|
Another person could acquire an interest in a private education loan that is evidenced by a physical “promissory note” within the meaning of the Uniform Commercial Code superior to an issuing entity’s interest in that student loan because the promissory notes evidencing private education loans will not be segregated or marked as belonging to an issuing entity and will not be held by a third-party custodian on behalf of the indenture trustee. The seller will cause financing statements to be filed with the appropriate governmental authorities to perfect an issuing entity’s interest in the related private education loans. The servicer will also mark its books and records accordingly. However, the servicer will continue to hold the promissory notes evidencing private education loans. If another party purchases (or takes a security interest in) one or more private education loans for new value in the ordinary course of business and obtains possession of those promissory notes evidencing private education loans without actual knowledge of the issuing entity’s interests, the new purchaser (or secured party) might acquire an interest in those private education loans superior to the interest of the applicable issuing entity.
|
|
Risk Of Default By Private Guarantors
|
Some of the trust student loans may include a guarantee by a private guarantor. If applicable to the trust student loans backing your notes, if such a private guarantor defaults on its guarantee obligations, you will rely solely on payments from the related borrower for payments on the related private guaranteed trust student loan. In these circumstances, you will bear the risk of loss resulting from the failure of any borrower of a private guaranteed student loan to the extent this loss is not covered by the limited credit enhancement provided in the financing structure for your notes.
|
Consumer Protection Laws May Affect Enforceability Of Student Loans
|
Numerous federal and state consumer protection laws, including various state usury laws and related regulations, impose substantial requirements upon lenders and servicers involved in consumer finance. Some states impose finance charge ceilings and other restrictions on certain consumer transactions and require contract disclosures in addition to those required under federal law. These requirements impose specific statutory liability that could affect an assignee’s ability to enforce consumer finance contracts such as the student loans. In addition, the remedies available to the indenture trustee or the noteholders upon an event of default under the indenture may not be readily available or may be limited by applicable state and federal laws.
|
|
Risk Of Bankruptcy Discharge Of Private Education Loans
|
Currently, private education loans made for qualified education expenses are generally not dischargeable by a borrower in bankruptcy. Private education loans can become dischargeable if the borrower proves that keeping the loans non-dischargeable would impose an undue hardship on the debtor and the debtor’s dependents. In addition, direct-to-consumer loans are disbursed directly to borrowers based upon certifications and warranties contained in their promissory notes, including certification of the borrower’s cost of attendance. This process does not involve school enrollment verification as an additional criteria and, therefore, may be subject to some additional risk that the loans were not used for qualified education expenses and thus could become dischargeable in a bankruptcy proceeding. If you own any notes in a related issuing entity, you will bear any risk of loss resulting from the discharge of any borrower of a private education loan to the extent the amount of the default is not covered by the issuing entity’s credit enhancement.
|
|
RISKS RELATING TO FEDERALLY GUARANTEED STUDENT LOANS
|
(The following risk factors apply to issuing entities whose assets include FFELP loans.)
|
|
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 the related prospectus supplement is insufficient, you may suffer a delay in payment or losses on your notes.
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If A Guarantor Or Surety 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 guaranteed student loan is the guarantee provided by the applicable guarantor or surety. Student loans acquired by each issuing entity may be subject to guarantee or surety agreements with a number of individual guarantors or insurance companies. A deterioration of a guarantor’s or surety’s financial condition and ability to honor guarantee claims could result in a failure of that guarantor or surety to make guarantee or surety payments to the eligible lender trustee in a timely manner, or at all. The financial condition of a guarantor or surety could be adversely affected by a number of factors, including the amount of claims made against that guarantor or surety as a result of borrower defaults.
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A FFELP guarantor’s financial condition and ability to honor guarantee claims could be adversely affected by a number of other factors including:
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● the continued voluntary waiver by the guarantor of the guarantee fee payable by a borrower upon disbursement of a student loan;
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● the amount of claims made against that guarantor as a result of borrower defaults;
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● the amount of claims reimbursed to that guarantor from the U.S. 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
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● changes in legislation that may reduce expenditures from the U.S. Department of Education that support federal guarantors or that may require guarantors to pay more of their reserves to the U.S. Department of Education.
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If the financial condition of a guarantor or surety deteriorates, they 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 U.S. 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 FFELP guarantor is unable to meet its guarantee obligations, the issuing entity may submit claims directly to the U.S. Department of Education for payment. The U.S. 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 U.S. 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 U.S. Department of Education determines that the FFELP guarantor is able to meet its guarantee obligations, the U.S. Department of Education will not make guarantee payments to the issuing entity. The U.S. Department of Education may or may not make the necessary determination that the guarantor is unable to meet its guarantee obligations. If the U.S. 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 FFELP Loan Guarantors Or The U.S. 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 U.S. Department of Education lender identification number for FFELP loans in an issuing entity as it uses for other FFELP loans it holds on behalf of other issuing entities established by us. If it does, the billings submitted by the eligible lender trustee or the servicer to the U.S. 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 U.S. 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 U.S. 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 U.S. Department of Education or the applicable guarantor may seek to collect that liability by offsetting it
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against payments due to the eligible lender trustee under the terms 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 the notes.
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The servicing agreement for your notes and other servicing agreements of the depositor will contain 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, Navient CFC Or The Other Sellers 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 eliminates 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 other sellers, 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 that it issues.
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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.
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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. Also, a security interest in these student loans may be perfected either through the secured party taking possession of the original or a copy of the master promissory note, or the filing of a financing statement. Prior to the master promissory note, each student loan made under the Federal Family Education Loan Program was evidenced by a separate note. Assignment of the original note was required to effect a transfer and possession of a copy did not perfect a security interest in the loan.
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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 a parity with the interest of the indenture trustee.
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RISKS RELATING TO SWAP AGREEMENTS
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(If an issuing entity is a party to one or more interest rate or currency, as applicable, swap agreements, as will be specified in the related prospectus supplement, the following risk factors will apply.)
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In The Event Of An Early Termination Of A Swap Agreement Due To Certain Swap Termination Events, An Issuing Entity May Be Required To Make A Large Termination Payment To Any Related Swap Counterparty
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To the extent described in the related prospectus supplement, when a class of notes bears interest at a fixed rate, an issuing entity may enter into one or more interest rate swap agreements to hedge basis risk. If at any time a class of notes is denominated in a currency other than U.S. Dollars, the issuing entity will be required to enter into one or more currency swap agreements with eligible swap counterparties to hedge against currency risk.
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A swap agreement generally may not be terminated except upon the occurrence of enumerated termination events set forth in the applicable swap agreement which will be described in the related prospectus supplement. Depending on the reason for the termination, however, a swap termination payment may be due from either the issuing entity or the related swap counterparty.
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If a termination event under any of these swap agreements occurs and the issuing entity owes the related swap counterparty a large termination payment that is required to be paid pro rata with interest due to the related notes, the issuing entity may not have sufficient available funds on that or future distribution dates to make required payments of interest or principal, and the holders of all classes of notes may suffer a loss.
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Your Notes Will Have Greater Risk If An Interest Rate Swap Agreement Terminates
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If on any distribution date a payment is due to the issuing entity under an interest rate swap agreement, but the related swap counterparty defaults and the administrator is unable to arrange for a replacement swap agreement, holders of such notes will remain entitled to the established rate of interest and principal, even though the related swap agreement has terminated. If this occurs, amounts available to make payments on the related notes will be reduced to the extent the interest rates on those notes exceed the rates which the issuing entity would have been required to pay to the swap counterparty under the terminated interest rate swap agreement. In this event, the issuing entity may not have sufficient available funds on that or future distribution dates to make required payments of interest or principal to all classes of notes and you may suffer a loss.
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Your Notes Will Have Greater Risk If A Currency Swap Agreement Terminates
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To the extent described in the related prospectus supplement, when a class of notes is to be denominated in a currency other than U.S. Dollars, the issuing entity will enter into one or more currency swap agreements with eligible swap counterparties to hedge against currency exchange and basis risks. The currency swap agreements will be intended to convert:
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● principal and interest payments on the related class of notes from U.S. Dollars to the applicable currency; and
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● the interest rate on the related class of notes from a LIBOR-based rate to a fixed or floating rate payable in the applicable currency.
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Upon an early termination of any currency swap agreement, you cannot be certain that the issuing entity will be able to enter into a substitute currency swap agreement with similar currency exchange terms. If the issuing entity is not able to enter into a substitute currency swap agreement, there can be no assurance that the amount of credit enhancement will be sufficient to cover the currency risk and the basis risk associated with a class of notes denominated in a currency other than U.S. Dollars.
In addition, the issuing entity may owe the related swap counterparty swap termination payments that are required to be paid pro rata with the related classes of notes. In this event, there can be no assurance that the amount of credit enhancement will be sufficient to cover the swap termination payments and payments due on your notes and you may suffer loss.
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If any currency swap counterparty fails to perform its obligations or if the related currency swap agreement is terminated, the issuing entity will have to exchange U.S. Dollars for the applicable currency during the applicable reset period at an exchange rate that may not provide sufficient amounts to make payments of principal and interest to all of the notes in full, including as a result of the inability to exchange U.S. Dollar amounts then on deposit in any related accumulation account for the applicable currency.
Moreover, there can be no assurance that the spread between LIBOR and any applicable non-U.S. Dollar currency index will not widen. As a result, if a currency swap agreement is terminated and the issuing entity is not
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able to enter into a substitute currency swap agreement, all of the notes bear the resulting currency risk and spread risk.
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In addition, if a payment is due to the issuing entity under a currency swap agreement, a default by the related swap counterparty may reduce the amount of available funds for any collection period and thus impede the issuing entity’s ability to pay principal and interest on your class of notes.
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RISKS RELATED TO AUCTION RATE NOTES
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(If auction rate notes are offered or reoffered in the related prospectus supplement, the following risk factors will apply.)
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The Interest Rates On Any Auction Rate Notes Are Subject To Limitations, Which Could Reduce Your Yield
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The interest rates on the auction rate notes may be limited by the maximum rate, which will be based on the least of the maximum auction rate, the maximum interest rate, generally 18% per annum, or, in certain circumstances, the auction student loan rate, which is based on the rates of return on the trust student loans, less specified administrative costs. If, for any accrual period, the maximum rate is less than the auction rate determined in accordance with the auction procedures, interest will be paid on the auction rate notes at the maximum rate even though there may be sufficient available funds to pay interest at the auction rate.
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For a distribution date on which the interest rate for a class of auction rate notes is equal to the auction student loan rate, the carryover amount will be the excess of (a) the lower of (1) the amount of interest at the auction rate determined pursuant to the auction procedures for the auction rate notes and (2) the amount of interest at the maximum auction rate which would have been applied if the auction student loan rate were not a component of the maximum auction rate over (b) the auction student loan rate. This carryover amount will be allocated to the applicable notes on succeeding quarterly distribution dates, and paid on the succeeding distribution date, to the holders of such class or classes of notes on the related record date, only to the extent that there are funds available for that purpose and other conditions are met. It is possible that such carryover amount may never be paid. Any carryover amount not paid at the time of redemption of an auction rate note will be extinguished.
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The Lack Of A Market for Auction Rate Securities Could Again In The Future Result In Prolonged Periods Of Failed Auctions And A Loss Of Liquidity
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An economic downturn may cause the market for auction rate notes to cease to exist which may result in outstanding classes of auction rate notes experiencing a prolonged period of ongoing failed auctions. In such event, holders of auction rate securities may be unable to sell their securities and may experience a potentially significant loss of market value. Investors in auction rate notes need to be aware that they may be required to hold their notes without an ability to liquidate their investments unless they are willing to sell such auction rate notes at a loss and possibly a significant loss.
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RISKS RELATED TO RESET RATE NOTES
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(If reset rate notes are offered in the related prospectus supplement, the following risk factors will apply.)
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If A Currency Swap Agreement Terminates, Additional Interest Will Not Be Paid
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To the extent described in the prospectus supplement for your notes, a currency swap agreement supporting payment of reset rate notes denominated in a currency other than U.S. Dollars may provide for the payment to all reset rate noteholders of approximately two business days of interest at the applicable rate resulting from a required delay in the payment of reset date remarketing proceeds through Euroclear and Clearstream, Luxembourg. If a currency swap agreement is terminated, however, the issuing entity, in turn, will make payments in respect of those reset rate notes, but will not make payments for those additional days of interest resulting from the required delay in the payment of reset date remarketing proceeds through Euroclear and Clearstream, Luxembourg.
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Even If You Do Not Receive Timely Notices, You Will Be Deemed To Have Tendered Your Reset Rate Notes
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Unless notice of the exercise of the call option described below has already been given, the administrator, not less than fifteen nor more than thirty calendar days prior to each remarketing terms determination date, will inform DTC, Euroclear and Clearstream, Luxembourg, as applicable, of the identity of the remarketing agents, whether (1) such class of notes will be subject to an automatic tender on the upcoming reset date unless a holder elects not to tender its reset rate notes by timely delivery of a hold notice, or (2) whether such class of notes is subject to mandatory tender by all of the holders regardless of a desire by any noteholders to retain their notes. The administrator also will request that DTC, Euroclear and Clearstream, Luxembourg, as applicable, notify its participants of the contents of such notice given to DTC, Euroclear and Clearstream, Luxembourg, as applicable, inform them of the notices to be given on the remarketing terms determination date and the spread determination date and the procedures that must be followed if any beneficial owner of reset rate notes wishes to retain its notes or inform them of any procedures to be followed in connection with a mandatory tender of such notes.
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Due to the procedures used by the clearing agencies and the financial intermediaries, however, holders of beneficial interests in any class of reset rate notes may not receive timely notifications of the reset terms for any reset date. Despite this potential delay in the distribution of such notices by the related clearing agencies, even though you may not receive a copy of the notice to be delivered on the related remarketing terms determination date, you will be deemed to have tendered your class unless the remarketing agents have received a hold notice, if applicable, from you on or prior to the related notice date. See “Additional Information Regarding the Notes—The Reset Rate Notes—Timeline” in this prospectus for a chart describing the dates related to the entire remarketing process.
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If Investments In An Accumulation Account Do Not Perform As Anticipated, Your Notes May Be Downgraded Or You May Suffer A Loss
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During any reset period when an accumulation account is being maintained for a class of reset rate notes, the administrator, on behalf of the issuing entity, will invest any funds on deposit in that accumulation account in eligible investments, as defined in the administration agreement. Eligible investments include among other things asset-backed notes and repurchase obligations under repurchase agreements entered into with respect to federally guaranteed student loans that are serviced by the servicer or an affiliate thereof, that satisfy the applicable minimum rating requirements set by the applicable rating agencies and that have an expected maturity date at least one business day before the next reset date for the related class of reset rate notes.
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There can be no assurance that these investments will not default or that they will always retain their initial ratings. Any downgrade in these investments would also likely reduce the market value of such investments. In this event, if the administrator were to have the issuing entity sell such investments prior to their maturity, whether to minimize potential future losses or for any other reason, or if the indenture trustee were to liquidate such investments following an event of default and an acceleration of your notes, you may suffer a loss. Furthermore, there is no certainty that these investments will pay interest and principal at the rates, at the times or in the full amounts owed. As a result, it is possible that, absent sufficient cash flow from the assets of the issuing entity, other than the accumulation account, to offset these losses, you could suffer a loss on your notes.
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In The Event That Sums Are Deposited Into A Supplemental Interest Account Or An Investment Reserve Account, Principal Payments To Subordinated Noteholders May Be Delayed, Or Subordinated Noteholders May Suffer A Loss
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On and after the date on which the senior notes have been paid in full, or on and after any earlier date described in the related prospectus supplement, your subordinated notes will be entitled to principal distributions. However, if amounts on deposit in an accumulation account for a class of reset rate notes bearing interest at a fixed rate become sufficiently large, it is possible that required deposits into the related supplemental interest account may result in a shortage of available funds, and principal would not be paid to you on that or succeeding distribution dates until there are sufficient available funds.
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In addition, amounts required to be deposited into a related investment reserve account will be funded on each applicable distribution date, to the level necessary to satisfy
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the rating agency condition, subject to a maximum amount, prior to any distributions of principal to the subordinated notes. If there are insufficient available funds following any such deposit, principal payments to your subordinated notes may be delayed. In addition, if amounts withdrawn from the investment reserve account are insufficient to offset losses on eligible investments, and there are insufficient available funds to both replenish the related accumulation account and make payments of principal to the subordinated noteholders, you may suffer a loss.
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If The Holder Of The Call Option On The Reset Rate Notes Exercises The Call Option, You May Not Be Able To Reinvest In A Comparable Note
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Navient will have, or may transfer to certain of its subsidiaries, the option to call, in full, any class of reset rate notes on each related 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 reset rate notes, less any amounts distributed to you by the issuing entity as a payment of principal on the related distribution date, plus all accrued and unpaid interest on such distribution date, but you may not be able to reinvest the proceeds you receive in a comparable security with an equivalent yield.
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If A Failed Remarketing Is Declared, You Will Be Required To Rely On A Sale Through The Secondary Market If You Wish To Sell Your Reset Rate Notes
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In connection with the remarketing of your class of reset rate notes, if a failed remarketing is declared, your reset rate notes will not be sold even if you attempted or were required to tender them for remarketing. In this event you will be required to rely on a sale through the secondary market, which may not then exist for your class of reset rate notes, independent of the remarketing process.
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If A Failed Remarketing Is Declared, The Failed Remarketing Rate You Will Receive May Be Less Than The Then-Prevailing Market Rate Of Interest
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If a failed remarketing is declared, your class of reset rate notes will become subject to the applicable failed remarketing rate. If your class is then denominated in U.S. Dollars, you will receive interest until the next reset date at the related failed remarketing rate of three-month LIBOR plus a related spread. If your class is then denominated in a non-U.S. Dollar currency, you will receive interest until the next reset date at the failed remarketing rate established on the related spread determination date, which will always be a floating rate of interest, or at the related initial failed remarketing rate established for your class of reset rate notes on the closing date, as described in the related prospectus supplement. The failed remarketing rate may differ significantly from the rate of interest you received during any previous reset period, which may have been at a fixed rate or based on an index different than three-month LIBOR or the applicable index established on the spread
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determination date, or on the related closing date, as applicable, with respect a class of reset rate notes. We cannot assure you that the failed remarketing rate will always be at least as high as the prevailing market rate of interest for similar notes and you may suffer a loss in yield.
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acquire, hold, sell and manage trust student loans, the other trust assets and related proceeds;
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enter into one or more swap agreements and/or interest rate cap agreements, from time to time;
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issue the notes;
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make payments on the notes; and
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engage in other incidental or related activities.
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the trust student loans themselves, legal title to which will be held by either the trustee or the eligible lender trustee, as applicable, will hold;
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all funds collected on the trust student loans on or after the date specified in the related prospectus supplement, including any guarantor, surety or U.S. Department of Education payments;
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all moneys and investments on deposit in the collection account, any reserve account, any pre-funding account and any other trust account or any other form of credit enhancement (amounts on deposit in any account may be invested in eligible investments as permitted by the related indenture);
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all applicable rights under each applicable swap agreement and/or interest rate cap agreement then in effect;
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rights under the related transfer and servicing agreements, including the right to require the sellers, the depositor or the servicer to repurchase trust student loans from it or to substitute student loans under some conditions;
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rights under the guarantee or surety agreements with guarantors or insurers; and
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if applicable, rights under any policy with an insurer.
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restrictions on the nature of its business; and
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a restriction on its ability to commence a voluntary case or proceeding under any insolvency law without the unanimous affirmative vote of all of its directors.
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maintaining records and books of accounts separate from those of its sole member;
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refraining from commingling its assets with the assets of its sole member; and
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refraining from holding itself out as having agreed to pay, or being liable for, the debts of its sole member.
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restrictions on the nature of its business; and
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a restriction on its ability to commence a voluntary case or proceeding under any insolvency law without the unanimous affirmative vote of all of its directors.
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maintaining records and books of accounts separate from those of its sole member;
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refraining from commingling its assets with the assets of its sole member; and
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refraining from holding itself out as having agreed to pay, or being liable for, the debts of its sole member.
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The principal and interest of each loan is guaranteed by a guarantor and is reinsured by the U.S. Department of Education under the FFELP.
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Each loan was originated in the United States, its territories or its possessions in accordance with the FFELP.
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Each loan contains terms required by the FFELP and the applicable guarantee agreements.
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Each loan provides for periodic payments that will fully amortize the amount financed over its term to maturity, exclusive of any deferment or forbearance periods.
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Each loan satisfies any other criteria described in the related prospectus supplement.
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The principal and interest of the loan may be guaranteed or insured by a guarantor or insurer identified in the related prospectus supplement.
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Each loan was originated in the United States, its territories or its possessions in accordance with the rules of the specific loan program.
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Each loan contains terms required by the program and the applicable guarantee agreements.
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Each loan provides for periodic payments that will fully amortize the amount financed over its term to maturity, exclusive of any deferment or forbearance periods.
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Each loan satisfies any other criteria described in the related prospectus supplement.
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the composition of the pool;
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the distribution of the pool by loan type, payment status, interest rate basis and remaining term to maturity;
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the borrowers’ states of residence; and
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the percentages of the student loans guaranteed by the applicable guarantors.
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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
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the payment to the noteholders of all amounts required to be paid to them.
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commercial banks, thrift institutions and credit unions;
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pension funds and insurance companies;
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educational institutions; and
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various state and private nonprofit loan originating and secondary market agencies.
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shortly after loan origination;
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while the borrowers are still in school;
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just before the loan’s conversion to repayment after borrowers graduate or otherwise leave school; or
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while the loans are in repayment.
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its automated loan administration system called PortSS® for the lender to use prior to loan sale; or
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its loan origination and interim servicing system called ExportSS®.
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Undergraduate and Graduate Loans. The Companies acquired Signature Student Loans and EXCEL Loans funded by several commercial banks in the United States. Signature Student Loans and EXCEL Loans provide undergraduate and graduate students (other than law, medical, dental or business school students) supplemental financing to help fund the cost of attending an undergraduate or graduate institution. Signature Student Loans and EXCEL Loans are serviced on behalf of the seller by the servicer or a subservicer identified in the prospectus supplement for your notes. They are not guaranteed by any federal guarantor, or by any governmental agency or by any private guarantor. Signature Student Loans and EXCEL Loans were not made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and were only made to eligible students who qualified pursuant to credit underwriting standards established by the program and related lender.
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Law Loans. The Companies acquired LAWLOANS and LawEXCEL Loans funded by several commercial banks in the United States. LAWLOANS and LawEXCEL Loans provided law students additional educational financing to help pay for the costs of attending law school and to finance the costs of taking one or more state bar examinations upon graduation from law school. LAWLOANS and LawEXCEL Loans are serviced on behalf of the seller by the servicer. They are not guaranteed by any federal guarantor, or by any other governmental agency or by any private guarantor. LAWLOANS and LawEXCEL Loans not made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and only made to eligible students who qualified pursuant to credit underwriting standards established by the program and related lender.
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Medical Loans. The Companies acquired MEDLOANS and MD EXCEL Loans funded by several commercial banks in the United States. MEDLOANS and MD
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EXCEL Loans provided medical students additional educational financing to help pay for the costs of attending medical school. None received a residency loan to finance the cost of participating in one or more medical residency programs if such student had applied for the loan within a limited period or after graduation. MEDLOANS and MD EXCEL Loans are serviced on behalf of the seller by the servicer. They are not guaranteed by any federal guarantor, or by any governmental agency or by any private guarantor. MEDLOANS and MD EXCEL Loans were not made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and were only made to eligible students who qualified pursuant to credit underwriting standards established by the program and related lender.
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Dental Loans. The Companies acquired DENTALoans and Dental EXCEL Loans funded by several commercial banks in the United States. DENTALoans and Dental EXCEL Loans provide dental students additional educational financing to help pay for the costs of attending dental school. A dental student may also receive a residency, relocation and licensure exam loan to finance the cost of participating in one or more dental residency programs if such student has applied for the loan within a limited period or after graduation. DENTALoans and Dental EXCEL Loans are serviced on behalf of the seller by the servicer. They are not guaranteed by any federal guarantor, or by any governmental agency or by any private guarantor. DENTALoans and Dental EXCEL Loans were not made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and were only made to eligible students who qualified pursuant to credit underwriting standards established by the program and related lender.
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MBA Loans. The Companies acquired MBA Loans and MBA EXCEL Loans funded by several commercial banks in the United States. MBA Loans and MBA EXCEL Loans provide business school students additional educational financing to help pay for the costs of attending graduate school. MBA Loans and MBA EXCEL Loans are serviced on behalf of the seller by the servicer. They are not guaranteed by any federal guarantor, or by any other governmental agency or by any private guarantor. MBA Loans and MBA EXCEL Loans were not made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and were only made to eligible students who qualified pursuant to credit underwriting standards established by the program and related lender.
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Direct-to-Consumer Loans. The Companies acquired Direct-to-Consumer Loans. Direct-to-Consumer Loans provide undergraduate and graduate students or other creditworthy individuals borrowing on behalf of students (other than law, medical, dental or business school students) supplemental financing to help fund the cost of attending an undergraduate or graduate institution. Direct-to-Consumer Loans are serviced on behalf of the seller by the servicer or a subservicer identified in the prospectus supplement for your notes. They are not guaranteed by any federal guarantor, or by any governmental agency or by any private guarantor. Direct-to-Consumer Loans were not made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and were only made to
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eligible students or other creditworthy individuals borrowing on behalf of students who qualified pursuant to credit underwriting standards established by the related lender.
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Private Consolidation Loans. The Companies acquired Private Consolidation Loans. Private Consolidation Loans allow eligible borrowers to combine several existing private education loans into one new loan. Private Consolidation Loans are serviced on behalf of the seller by the servicer or a subservicer identified in the prospectus supplement for your notes. They are not guaranteed by any federal guarantor, or by any governmental agency or by any private guarantor. Private Consolidation Loans may not be made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and may only be made to eligible borrowers who qualify pursuant to credit underwriting standards established by the related lender.
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Career Training Loans. The Companies acquire Career Training Loans funded by several commercial banks in the United States. Career Training Loans provide eligible borrowers financing at technical and trade schools, tutorial and learning centers, and private kindergarten through secondary education schools. Career Training Loans are serviced on behalf of the seller by the servicer or a subservicer identified in the prospectus supplement for your notes. They are not guaranteed by any federal guarantor, or by any governmental agency or by any private guarantor. Career Training Loans may not be made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and may only be made to eligible students or other creditworthy individuals borrowing on behalf of students who qualify pursuant to credit underwriting standards of the related lender.
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EFG Loans. The Companies’ entities acquired the EFG Loans, which were funded by commercial banks in the United States. EFG Loans provide private supplemental funding for undergraduate, graduate and health professional students. EFG Loans are serviced on behalf of the seller by the servicer or a subservicer identified in the prospectus supplement for your notes. They are not guaranteed by any federal guarantor, or by any governmental agency, but they may be guaranteed by a private insurer. However, no issuing entity or noteholder will have any benefit of any such insurance party. EFG Loans were not made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and were only made to eligible students or other creditworthy individuals borrowing on behalf of students who qualified pursuant to credit underwriting standards of the program and related lender.
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Smart Option Student Loans. The Companies acquire Smart Option Student Loans. Smart Option Student Loans provide private supplemental funding for certificate-seeking, continuing education, undergraduate and graduate students at eligible degree-granting institutions and for students enrolled in non-degree granting institutions, such as technical training, trade and vocational schools and on-line courses. Smart Option Student Loans are serviced on behalf of the seller by the
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servicer or a subservicer identified in the prospectus supplement for your notes. They are not guaranteed by any federal guarantor, or by any governmental agency or by any private guarantor. Smart Option Student Loans may not be made to a single borrower in excess of the annual and aggregate limits imposed by the applicable loan program and may only be made to eligible students who qualify pursuant to credit underwriting standards established by Sallie Mae Bank.
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Other Private Education Loan Programs. From time to time, the Companies may acquire private education loans originated under other loan programs. If the trust for your notes were to purchase any of those loans, the prospectus supplement for your notes would describe the loans and the loan program.
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Signature Student Loans, LAWLOANS, MEDLOANS, DENTALoans and MBA Loans. Prior to 1998, judgmental criteria were applied and considered elements of a borrower’s credit history such as: number of late payments, record of bankruptcies, foreclosures, garnishments, judgments, unpaid liens, educational loan defaults, etc. Beginning in May 1998, FICO scoring was employed. Freshmen borrowers have additional requirements to qualify on their own for one of these loans. They must have forty-eight (48) months of credit history and two active trade lines in the previous two months. Any applicant who does not meet underwriting or eligibility requirements must obtain a creditworthy cosigner to obtain a loan. However, there are certain denial reasons for a borrower that will not allow that borrower to obtain a loan even with a creditworthy cosigner and the MEDLOANS program does not allow cosigners.
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EXCEL Loans, LawEXCEL Loans, MBA EXCEL Loans, MD EXCEL Loans, Dental EXCEL Loans, MEDLOANS, Private Consolidation Loans and Direct-to-Consumer Loans. Since inception, judgmental criteria have been applied and considered
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elements of a borrower’s and cosigner’s credit history such as: number of late payments, record of bankruptcies, foreclosures, garnishments, judgments, unpaid liens, educational loan defaults, etc. Student EXCEL® and the EXCEL Graduate loans (consisting of the LawEXCEL, MBA EXCEL, Dental EXCEL and MD EXCEL loans) allow for multiple cosigners. In addition, the EXCEL Loan and the Private Consolidation Loan underwriting involve a debt-to-income test.
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Career Training Loans. Since inception, judgmental criteria have been applied and considered elements of a borrower’s and cosigner’s credit history such as: record of bankruptcies, foreclosures, educational loan defaults, unpaid tax liens or charge-offs. Currently, FICO scoring and, in certain circumstances, income verification are employed. In addition, underwriting for Career Training Loans involves a debt-to-income test.
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EFG Loans. Since inception, judgmental criteria were applied and considered elements of a borrower’s and cosigner’s credit history such as: record of bankruptcies, foreclosures, educational loan defaults, unpaid tax liens or charge-offs.
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Smart Option Student Loans. Since inception, judgmental criteria were applied and considered elements of a borrower’s and cosigner’s credit history such as: record of bankruptcies, foreclosures, educational loan defaults, unpaid tax liens or charge-offs. In addition, the Companies use automated underwriting/approval strategies which include, but are not limited to, FICO scoring and internally developed and validated scorecards based on analysis of the Companies’ historical account performance, application and credit bureau data.
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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.
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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.
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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
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0.50% effective interest rate reduction as long as loan payments continue to be successfully deducted from the borrower’s bank account.
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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.
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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.
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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.
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Cosigner Release Option. Under the Cosigner Release Option, the borrower may apply to have the cosigner released from the private loan obligation if the borrower meets the following conditions:
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Education Funding Pledge and Price Advantage. Borrowers at not-for-profit institutions with Signature Student Loans approved under the Signature Student
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Loan program’s standard underwriting criteria and first disbursed between June 1, 2007 and May 31, 2008 received an Education Funding Pledge and, if the borrower applied with a creditworthy cosigner, also received a Price Advantage. The Education Funding Pledge relaxed underwriting criteria on subsequent loans to permit approval of the subsequent loans unless new negative derogatory information appeared on the borrower’s credit file. Under Price Advantage, if the borrower applied with the same cosigner on the subsequent loan, s/he received the better of the pricing from the prior loan or what the borrower and cosigner qualify for on the new loan. Price Advantage only remains on subsequent loans if the same borrower and cosigner apply for each subsequent loan. Both the Education Funding Pledge and Price Advantage were available for up to six subsequent academic years.
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each student loan is free and clear of all security interests and other encumbrances and no offsets, defenses or counterclaims have been asserted or threatened;
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the information provided about the student loans is true and correct as of the cutoff date;
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each student loan complies in all material respects with applicable federal and state laws and applicable restrictions imposed by the FFELP or under any guarantee or insurance agreement; and
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with respect to FFELP loans, each student loan is guaranteed by the applicable guarantor.
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the shortfall, if any, between:
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the purchase amount of the qualified substitute student loans,
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the purchase amount of the trust student loans being replaced; plus
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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.
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the amount in the pre-funding account on the closing date;
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the length of the funding period; and
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the uses to which the funds in the pre-funding account can be applied and the conditions to the application of those funds.
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the amount in the supplemental purchase account on the closing date;
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the length of the funding period; and
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the uses to which the funds in the supplemental purchase account can be applied and the conditions to the application of those funds.
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the amount in the add-on consolidation loan account on the closing date;
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the length of the consolidation loan add-on period (not to exceed the maximum permitted pre-funding period); and
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the uses to which the funds in the add-on consolidation loan account can be applied and the conditions to the application of those funds.
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a segregated account with a Federal Deposit Insurance Company (the “FDIC”)-insured depository institution which has either (A) a long-term unsecured debt rating acceptable to the applicable rating agencies or (B) a short-term unsecured debt rating or certificate of deposit rating acceptable to the applicable rating agencies; or
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a segregated trust account with the corporate trust department of a depository institution having corporate trust powers, so long as any of the securities of that depository institution have an investment grade credit rating from each applicable rating agency.
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direct obligations of, and obligations fully guaranteed as to timely payment by, the United States of America, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America; provided that obligations of, or guaranteed by, the Government National Mortgage Association (GNMA), the Federal Home Loan Mortgage Corporation (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae) shall be eligible investments only if, at the time of investment, they meet the criteria of each of the rating agencies for collateral for securities having ratings equivalent to the respective ratings of the related series of notes in effect at the related closing date;
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demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any State (or any domestic branch of a foreign bank) and subject to supervision and examination by federal or state banking or depository institution authorities (including depository receipts issued by any such institution or trust company as custodian with respect to any obligation referred to in the first bullet point above or portion of such obligation for the benefit of the holders of such depository receipts); provided that at the time of the investment or contractual commitment to invest therein (which shall be deemed to be made again each time funds are reinvested following each distribution date), the commercial paper or other short-term senior unsecured debt obligations (other than such obligations the rating of which is based on the credit of a person other than such depository institution or trust company) thereof shall have a credit rating specified by each of the rating agencies rating the notes issued by that trust;
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commercial paper having, at the time of the investment, a rating to be specified by each of the rating agencies rating the notes issued by that trust;
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investments in money market funds having a rating to be specified by each of the rating agencies rating the notes issued by that trust (including funds for which the indenture trustee, the administrator or the trustee or eligible lender trustee, as applicable, or any of their respective affiliates is investment manager or advisor);
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bankers’ acceptances issued by any depository institution or trust company referred to in the second bullet point above;
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repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in the second bullet point above; provided, however, that if such depository institution or trust company’s rating from Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business (“S&P”) (if S&P is then rating the notes issued by that trust) falls below “A”, within 60 days such repurchase obligations will be replaced with repurchase obligations entered into with a depository institution or trust company with at least an “A” rating from S&P;
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repurchase obligations with respect to student loans serviced by the servicer or an affiliate thereof, entered into with an institution that is an eligible lender (under the FFELP) or that holds student loans through an eligible lender trustee and whose short-term debt ratings are not less than a rating to be set by the rating agencies rating the notes issued by that trust, provided that the applicable repurchase date shall occur no later than the business day prior to the next distribution date; and
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any other investment which would not result in the downgrading or withdrawal of any rating of the related series of notes by any of the rating agencies as affirmed in writing to the indenture trustee.
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collecting and depositing into the collection account all payments on the trust student loans, including claiming and obtaining any program payments;
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responding to inquiries from borrowers;
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attempting to collect delinquent payments; and
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sending out statements and payment coupons to borrowers.
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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 related trust;
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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, the owner trustee or the trustee, as applicable, 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;
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it will do nothing to impair the rights of the noteholders in the trust student loans; and
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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 the same standards it uses for similar student loans owned by Navient and its affiliates.
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the shortfall, if any, between
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the purchase amount of the qualified substitute trust student loans;
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the purchase amount of the trust student loans being replaced; and
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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.
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a specified annual percentage of the pool balance;
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a unit amount based on the number of accounts and other activity or event related fees;
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any combination of these; or
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any other formulation described in the related prospectus supplement.
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collecting and posting all payments;
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responding to inquiries of borrowers on the trust student loans;
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investigating delinquencies;
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pursuing, filing and collecting any program payments;
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accounting for collections;
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furnishing monthly and annual statements to the trustees; and
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paying taxes, accounting fees, outside auditor fees, data processing costs and other costs incurred in administering the student loans.
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the successor to the servicer’s operations assumes in writing all of the obligations of the servicer;
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the sale or transfer and the assumption comply with the requirements of the servicing agreement; and
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the rating agencies confirm that this will not result in a downgrading or a withdrawal of the ratings then applicable to the notes.
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its obligation to purchase trust student loans from a trust as required in the related servicing agreement or to pay to the trust the amount of any program payment which a guarantor or the U.S. Department of Education refuses to pay, or requires the trust to refund, as a result of the servicer’s actions; or
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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.
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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 trustee, eligible lender trustee or owner trustee, as applicable;
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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 trustee, eligible lender trustee or owner trustee, as applicable, or the administrator or (2) to the servicer, the indenture trustee and the trustee, eligible lender trustee or owner trustee, as applicable, by holders of 50% or more of the notes (or the most senior notes then outstanding, if applicable);
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the occurrence of an insolvency event involving the servicer;
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any failure by the servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a third-party servicer, if applicable; or
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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.
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directing the indenture trustee to make the required distributions from the trust accounts on each monthly servicing payment date and each distribution date;
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preparing, based on periodic data received from the servicer, and providing quarterly and annual distribution statements to the trustee, eligible lender trustee or owner trustee, as applicable, and the indenture trustee and any related U.S. federal income tax reporting information; and
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providing the notices and performing other administrative obligations required by the indenture, the trust agreement and the sale agreement.
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the sub-administrator assumes in writing all of the obligations of the administrator that are sub-contracted;
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the sub-administrator covenants to comply with the requirements of the administration agreement; and
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the rating agencies confirm that this will not result in a downgrading or a withdrawal of the ratings then applicable to the notes.
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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;
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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;
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any failure by the administrator to observe or perform in any material respect any other term, covenant or agreement in an 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:
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(1)
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to the administrator by the indenture trustee or the trustee, eligible lender trustee or owner trustee, as applicable,
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(2)
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to the administrator, the indenture trustee, the trustee, eligible lender trustee or owner trustee, as applicable, by holders of 50% or more of the notes (or senior notes, if applicable);
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the occurrence of an insolvency event involving the administrator; or
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any failure by the administrator 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.
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the amount of principal distributions for each class of notes;
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the amount of interest distributions for each class of notes and the applicable interest rates;
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the pool balance at the beginning and at the end of the preceding collection period;
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the outstanding principal amount and the note pool factor for each class of notes for that distribution date;
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the servicing fees, the administration fees and the amount of any carryover servicing fees for that collection period;
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the interest rates, if available, for the next period for each class of notes or the website where those rates may be found;
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the amount of any aggregate realized losses for that collection period;
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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;
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the amount of any note interest carryover, if applicable, for each class of notes, and any changes in these amounts from the preceding statement;
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the aggregate purchase amounts for any trust student loans repurchased by the depositor, the servicer or any seller from the trust in that collection period;
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the balance of trust student loans that are delinquent in each delinquency period as of the end of that collection period;
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any amounts paid to any credit enhancement provider or swap counterparty;
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the balance of any reserve account, capitalized interest account, or cash capitalization or cash collateral account, after giving effect to changes in the balance on that distribution date;
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to the extent applicable, any amount of available credit enhancement drawn upon with respect to such distribution date;
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any applicable triggers or asset tests are then in effect;
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if applicable, the amount of trust student loans added during a pre-funding period (including any add-on consolidation loans) or a revolving period and the amount of any required repurchases or substitutions of trust student loans, to the extent material, and the balance of any related trust accounts as of both the prior and current distribution dates; and
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amounts distributed to the holders of the excess distribution certificates and the uses of available funds to the extent not otherwise set forth above.
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borrower default, death, disability or bankruptcy;
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the closing of the borrower’s school;
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the school’s false certification of borrower eligibility;
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liquidation of the student loan or collection of the related guarantee payments; and
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purchase of a student loan by the depositor or the servicer.
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the original denomination of your note; and
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the applicable pool factor.
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change the due date of any installment of principal of or interest on any note or reduce any note’s principal amount, interest rate or redemption price;
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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 or interest on the notes;
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change the place of payment or the payment currency for any note;
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impair the right to institute suit for the enforcement of provisions of the indenture regarding payment;
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reduce the percentage of outstanding notes whose holders must consent to any supplemental indenture;
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modify the provisions of the indenture regarding the voting of notes held by the trust, the depositor or an affiliate;
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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;
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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;
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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
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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.
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a default for five business days or more in the payment of any interest on any note after it is due (or senior notes only if so provided in the related prospectus supplement);
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a default in the payment of the principal of any note at maturity;
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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 related 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 senior notes, if applicable; or
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the occurrence of an insolvency event involving the trust.
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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;
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sell the trust student loans and other assets of the trust; or
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elect to have the trustee or eligible lender trustee, as applicable, maintain ownership of the trust student loans and continue to apply collections on them as if there had been no declaration of acceleration.
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the holders of all the outstanding notes (or senior notes, if applicable) consent to the sale;
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the proceeds of the sale are sufficient to pay in full the principal and accrued interest on the outstanding notes, or senior notes, if applicable, at the date of the sale; or
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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 (or senior notes, if applicable) 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 (or senior notes, if applicable).
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the holder previously has given to the indenture trustee written notice of a continuing event of default;
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the holders of not less than 25% of the outstanding notes (or senior notes, if applicable), have requested in writing that the indenture trustee institute a proceeding in its own name as indenture trustee;
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the holder or holders have offered the indenture trustee reasonable indemnity;
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the indenture trustee has for 60 days after receipt of notice failed to institute the proceeding; and
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no direction inconsistent with the written request has been given to the indenture trustee during the 60-day period by the holders of a majority of the outstanding notes, or senior notes, if applicable.
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the entity formed by or surviving the consolidation or merger is organized under the laws of the United States, any state or the District of Columbia;
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the surviving entity expressly assumes the trust’s obligation to make due and punctual payments on the notes and the performance or observance of every agreement and covenant of the trust under the indenture;
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no default will occur and be continuing immediately after the merger or consolidation;
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the trust has been advised that the ratings then applicable to the notes would not be reduced or withdrawn as a result of the merger or consolidation;
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any action that is necessary to maintain the lien and security interest created by the related indenture shall have been taken; and
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the trust has received opinions of federal and Delaware tax counsel that the consolidation or merger would have no material adverse U.S. federal or Delaware state tax consequences to the trust or to any holder of the notes.
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except as expressly permitted by the indenture, the transfer and servicing agreements or other related documents, sell, transfer, exchange or otherwise dispose of any of the assets of that trust;
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claim any credit on or make any deduction from the principal and interest payable on notes of the series, other than amounts withheld under the Internal Revenue Code or applicable state law, or assert any claim against any present or former holder of notes because of the payment of taxes levied or assessed upon the trust;
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except as contemplated by the indenture and the related documents, dissolve or liquidate in whole or in part;
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permit the validity or effectiveness of the indenture to be impaired or permit any person to be released from any covenants or obligations under the indenture, except as expressly permitted by the indenture; or
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permit any lien, charge or other encumbrance to be created on the assets of the trust, except as expressly permitted by the indenture and the related documents.
|
•
|
a maximum limitation, or ceiling, on its interest rate, and
|
•
|
a minimum limitation, or floor, on its interest rate.
|
•
|
“bid/hold orders”—specify the minimum interest rate that a current investor is willing to accept in order to continue to hold auction rate notes for the upcoming accrual period;
|
•
|
“sell orders”—an order by a current investor to sell a specified principal amount of auction rate notes, regardless of the upcoming interest rate; and
|
•
|
“potential bid orders”—specify the minimum interest rate that a potential investor, or a current investor wishing to purchase additional auction rate notes, is willing to accept in order to buy a specified principal amount of auction rate notes.
|
1. Denominations (Units)
|
= $50,000
|
|
2. Interest period
|
= 28 days
|
|
3. Principal amount outstanding
|
= $50 Million (1000 Units)
|
Bid/Hold Orders
|
Sell Orders
|
Potential Bid Orders
|
|
20 Units at 2.90%
|
100 Units Sell
|
40 Units at 2.95%
|
|
100 Units Sell
|
60 Units at 3.00%
|
||
60 Units at 3.02%
|
200 Units Sell
|
100 Units at 3.05%
100 Units at 3.10%
|
|
120 Units at 3.05%
|
400 Units
|
100 Units at 3.11%
|
|
100 Units at 3.14%
|
|||
200 Units at 3.10%
|
200 Units at 3.15%
|
||
200 Units at 3.12%
|
700 Units
|
||
600 Units
|
Order
Number
|
Number
of Units
|
Cumulative
Total
(Units)
|
Percent
|
Order
Number
|
Number
of Units
|
Cumulative
Total
(Units)
|
Percent
|
1.
|
20(W)
|
20
|
2.90%
|
7.
|
200(W)
|
600
|
3.10%
|
2.
|
40(W)
|
60
|
2.95%
|
8.
|
100(W)
|
700
|
3.10%
|
3.
|
60(W)
|
120
|
3.00%
|
9.
|
100(W)
|
800
|
3.11%
|
4.
|
60(W)
|
180
|
3.02%
|
10.
|
200(W)
|
1000
|
3.12%
|
5.
|
100(W)
|
280
|
3.05%
|
11.
|
100(L)
|
3.14%
|
|
6.
|
120(W)
|
400
|
3.05%
|
12.
|
200(L)
|
3.15%
|
•
|
if a class of reset rate notes is denominated in U.S. Dollars, a 360-day year consisting of twelve 30-day months; or
|
•
|
if a class of reset rate notes is denominated in a currency other than U.S. Dollars, generally, the Actual/Actual (ISMA) accrual method or such other day-count convention as will be set forth in the related remarketing terms determination date notice and in the related prospectus supplement. See “—Determination of Indices—Day-Count Basis; Interest Rate Change Dates; Interest Rate Determination Dates” below for a description of potential day-count conventions including Actual/Actual (ISMA).
|
•
|
the remarketing agents, in consultation with the administrator, with respect to the length of the reset period, the currency, i.e. U.S. Dollars, Pounds Sterling, Euros or another currency, whether the interest rate is fixed or floating and, if floating, the applicable interest rate index, the day-count convention, the interest rate determination dates, the interval between interest rate change dates during each accrual period, and the related all-hold rate, if applicable; and
|
•
|
the remarketing agents with respect to the determination of the fixed rate of interest or spread to the chosen interest rate index, as applicable.
|
•
|
at a floating interest rate, in which case such reset rate notes are said to be in floating rate mode, or
|
•
|
at a fixed interest rate, in which case such reset rate notes are said to be in fixed rate mode,
|
|
•
|
the weighted average life of that class of reset rate notes under several assumed prepayment scenarios;
|
•
|
the name and contact information of the remarketing agents;
|
•
|
the next reset date and reset period;
|
•
|
the applicable minimum denomination and additional increments;
|
•
|
if two or more classes of reset rate notes are successfully remarketed on the same reset date, whether there will be any change in their relative priorities with respect to the right to receive payments of principal;
|
•
|
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, if other than quarterly;
|
•
|
whether the applicable class 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, wherever such class bears a fixed rate of interest);
|
•
|
if in floating rate mode described under “Additional Information Regarding the Notes—Floating Rate Notes,” 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 related 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;
|
•
|
the related all-hold rate, if applicable; and
|
•
|
the principal payment priority of the applicable class, if it will differ from that previously in effect.
|
•
|
if no swap agreement was in effect for that class 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 one or more swap agreements were in effect for that class during the previous reset period, a three-month LIBOR-based rate equal to the weighted average of the floating rates of interest that the trust paid to the related swap counterparties hedging currency and/or basis risk for that class during the preceding reset period; and
|
•
|
a reset period of three months will be established, at the end of which the purchaser under the call option may either remarket that class pursuant to the remarketing procedures set forth below or retain that class for one or more successive three-month reset periods at the existing call rate.
|
•
|
the remarketing agents cannot determine the applicable required reset terms (other than the related spread or fixed rate) on the related remarketing terms determination date;
|
•
|
the remarketing agents cannot establish the required spread or fixed rate on the related spread determination date;
|
•
|
either sufficient committed purchasers cannot be obtained for all tendered reset rate notes at the spread or fixed rate set by the remarketing agents, or any committed purchasers default on their purchase obligations (and the remarketing agents choose not to purchase those reset rate notes themselves);
|
•
|
one or more interest rate and/or currency swap agreements satisfying all required criteria cannot be obtained, if applicable as described under “—Foreign Exchange Mode” “—Floating Rate Mode” and “—Fixed Rate Mode” below;
|
•
|
the trust is unable to obtain a favorable tax opinion with respect to certain tax related matters;
|
•
|
certain conditions specified in the related remarketing agreement are not satisfied; or
|
•
|
any rating agency then rating the notes has not confirmed or upgraded its then-current ratings of any class of notes, if such confirmation is required.
|
•
|
all holders of that class will retain their reset rate notes (including in all deemed mandatory tender situations);
|
•
|
the related interest rate will be reset to a failed remarketing rate of three-month LIBOR plus the related spread;
|
•
|
the related reset period will be three months; and
|
•
|
any existing interest rate swap agreement will be terminated in accordance with its terms.
|
•
|
all holders of that class will retain their reset rate notes;
|
•
|
that class will remain denominated in the then-current non-U.S. Dollar currency;
|
•
|
each existing currency swap agreement will remain in effect and each currency swap counterparty will be entitled to receive quarterly interest payments from the trust at an increased LIBOR-based rate, which we refer to in this prospectus as the “extension rate”;
|
•
|
the trust will be entitled to receive from each currency swap counterparty, for payment to the applicable reset rate noteholders, quarterly floating rate interest payments at the specified failed remarketing rate; and
|
•
|
the related reset period will be 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 accrued between the reset date and the special reset payment date as described below, at the applicable interest rate and in the applicable currency for a class of reset rate 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 to the applicable currency of all secondary market trade proceeds from a successful remarketing, or proceeds from the exercise of the call option, on the applicable reset date.
|
•
|
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 related class of reset rate notes using the exchange rate
|
|
established on the effective date of such currency swap agreement or, with respect to the initial currency swap agreement, the U.S. Dollar equivalent of all proceeds received on the closing date from the sale of the related class using the exchange rate set forth in the initial currency swap agreement, as described in the related prospectus supplement;
|
•
|
on or before each distribution date, (1) the rate of interest on the related class of reset rate notes multiplied by the outstanding principal balance of the related class of reset rate 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 related class of reset rate notes, including, on the maturity date for the related class of reset rate notes, if a currency swap agreement is then in effect, the remaining outstanding principal balance of the related class of reset rate 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 related class of reset rate 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 related class of reset rate 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 related class of reset rate 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 related class of reset rate notes, and (2) that swap counterpart’s pro rata share of all payments of principal in U.S. Dollars that are allocated to the related class of reset rate notes; provided that if so provided in the related prospectus supplement, 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 related class of reset rate 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 agents that the remarketing agents either received directly from the purchasers of the related class of reset rate notes being remarketed, 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 related class of reset rate notes is reduced to zero, excluding for such purpose all amounts on deposit in the related accumulation account; or
|
•
|
the maturity date of the related class of reset rate notes.
|
•
|
the applicable spread as determined by the remarketing agents 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 agents, 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 notes of comparable average life, provided, that the remarketing agents shall establish such fixed rate equal to the rate that, in the reasonable opinion of the remarketing agents, will enable all of the tendered reset rate notes to be remarketed by the remarketing agents at 100% of their
|
outstanding principal balance. However, such 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 related class of reset rate notes is then denominated in U.S. Dollars, or the next succeeding reset date resulting in a successful remarketing, if that class is then in foreign exchange mode;
|
•
|
the related reset date of an exercise of the call option;
|
•
|
the distribution date on which the outstanding principal balance of the related class of reset rate notes is reduced to zero, including as the result of the optional purchase of the remaining trust student loans by the related servicer or an auction of the trust student loans by the related indenture trustee; or
|
•
|
the maturity date of the related class of reset rate notes.
|
•
|
inform DTC, Euroclear and Clearstream, Luxembourg, as applicable, of the identities of the applicable remarketing agents and (1) if the applicable class of reset rate notes is denominated in U.S. Dollars in both the then-current and immediately following reset period, that such class of notes is subject to automatic tender on the reset date unless a holder elects not to tender its particular reset rate notes, or (2) if the applicable class of reset rate notes is then in, or to be reset in, foreign exchange mode, that such class of notes is subject to mandatory tender by all of the holders thereof, and
|
•
|
request that DTC, Euroclear and Clearstream, Luxembourg, as applicable, notify its participants of the contents of the notice given to DTC, Euroclear and Clearstream, Luxembourg, as applicable, the notices to be given on the remarketing terms determination date and the spread determination date, and the procedures that must be followed if any beneficial owner of a reset rate note wishes to retain its notes or any procedures to be followed in connection with a mandatory tender of such note, each as described below.
|
•
|
“30/360” which means that interest is calculated on the basis of a 360-day year consisting of twelve 30-day months;
|
•
|
“Actual/360” which means that interest or any other relevant factor is calculated on the basis of the actual number of days elapsed in a year of 360 days;
|
•
|
“Actual/365 (fixed)” which means that interest is calculated on the basis of the actual number of days elapsed in a year of 365 days, regardless of whether accrual or payment occurs in a leap year;
|
•
|
“Actual/Actual (accrual basis)” which means that interest is calculated on the basis of the actual number of days elapsed in a year of 365 days, or 366 days for every day in a leap year;
|
•
|
“Actual/Actual (payment basis)” which means that interest is calculated on the basis of the actual number of days elapsed in a year of 365 days if the interest period ends in a non-leap year, or 366 days if the interest period ends in a leap year, as the case may be; and
|
•
|
“Actual/Actual (ISMA)” is a calculation in accordance with the definition of “Actual/Actual” adopted by the International Securities Market Association (“ISMA”), which means that interest is calculated on the following basis:
|
•
|
where the number of days in the relevant accrual period is equal to or shorter than the determination period during which such accrual period ends, the number of days in such accrual period divided by the product of (A) the number of days in such determination period and (B) the number of distribution dates that would occur in one calendar year; or
|
•
|
where the accrual period is longer than the determination period during which the accrual period ends, the sum of:
|
(1)
|
the number of days in such accrual period falling in the determination period in which the accrual period begins divided by the product of (x) the number of days in such determination period and (y) the number of distribution dates that would occur in one calendar year; and
|
(2)
|
the number of days in such accrual period falling in the next determination period divided by the product of (x) the number of days in such determination period and (y) the number of distribution dates that would occur in one calendar year;
|
•
|
“LIBOR Determination Date” means, for each accrual period, the second business day before the beginning of that accrual period.
|
•
|
“Reference Banks” means four major banks in the London interbank market selected by the administrator.
|
•
|
“Reuters Screen LIBOR01 Page” means the display page so designated on the Reuters Monitor Money Rates Service, or such other page that may replace that page on that service, or such other service as may be nominated as the information vendor for the purposes of displaying comparable rates or prices.
|
•
|
“GBP-LIBOR Determination Date” means, for each accrual period, the day that is two Settlement Days before the beginning of that accrual period.
|
•
|
“Reference Banks” means four major banks in the London interbank market selected by the administrator.
|
•
|
“Reuters Screen 3750 Page” means the display page so designated on the Reuters Monitor Money Rates Service, or such other page that may replace that page on that service, or such other service as may be nominated as the information vendor for the purposes of displaying comparable rates or prices.
|
•
|
“Settlement Day” means any day on which TARGET2 (the Trans-European Automated Real-time Gross Settlement Express Transfer System) is open which is also a day on which banks in New York City are open for business.
|
•
|
“EURIBOR Determination Date” means, for each accrual period, the day that is two Settlement Days before the beginning of that accrual period.
|
•
|
“Reference Banks” means four major banks in the Euro-zone interbank market selected by the administrator.
|
•
|
“Reuters Screen 248 Page” means the display page so designated on the Reuters Monitor Money Rates Service, or such other page that may replace that page on that service, or such other service as may be nominated as the information vendor for the purposes of displaying comparable rates or prices.
|
•
|
“Settlement Day” means any day on which TARGET (the Trans-European Automated Real-time Gross Settlement Express Transfer System) is open which is also a day on which banks in New York City are open for business.
|
•
|
If the rate described above is not published in H.15(519) by 3:00 p.m., New York City time, on that interest determination date, unless the calculation is made earlier and the rate was available from that source at that time, then the Commercial Paper Rate will be the Bond Equivalent Yield of the rate on the relevant interest determination date, for commercial paper having the index maturity specified on
|
the Remarketing Terms Determination Date, as published in H.15 Daily Update or any other recognized electronic source used for displaying that rate under the heading “Commercial Paper— Financial.” The “Bond Equivalent Yield” will be calculated as follows:
|
Bond Equivalent Yield =
|
N × D
|
x 100
|
360 (D × 90)
|
•
|
If the rate described in the prior paragraph cannot be determined, the Commercial Paper Rate will remain the commercial paper rate then in effect on that interest determination date.
|
•
|
The Commercial Paper Rate will be subject to a lock-in period of six New York City business days.
|
•
|
If the Designated CMT Page is Reuters Screen FRBCMT Page, the rate on that interest determination date; or
|
•
|
If the Designated CMT Page is Reuters Screen 7052 Page, the average for the week, or the month, as specified on the related remarketing terms determination date, ended immediately before the week in which the related interest determination date occurs.
|
•
|
If the rate described above is not displayed on the relevant page by 3:00 p.m., New York City time, on that interest determination date, unless the calculation is made earlier and the rate is available from that source at that time on that interest determination date, then the CMT Rate will be the Treasury constant maturity rate having the designated index maturity, as published in H.15(519) or another recognized electronic source for displaying the rate.
|
•
|
If the applicable rate described above is not published in H.15(519) or another recognized electronic source for displaying such rate by 3:00 p.m., New York City time, on that interest determination date, unless the calculation is made earlier and the rate is available from one of those sources at that time, then the CMT Rate will
|
|
be the Treasury constant maturity rate, or other Treasury rate, for the index maturity and with reference to the relevant interest determination date, that is published by either the Board of Governors of the Federal Reserve System or the Treasury and that the administrator determines to be comparable to the rate formerly displayed on the Designated CMT Page shown above and published in H.15(519).
|
•
|
If the rate described in the prior paragraph cannot be determined, then the administrator will determine the CMT Rate to be a yield to maturity based on the average of the secondary market closing offered rates as of approximately 3:30 p.m., New York City time, on the relevant interest determination date reported, according to their written records, by leading primary United States government securities dealers in New York City. The administrator will select five such securities dealers and will eliminate the highest and lowest quotations or, in the event of equality, one of the highest and lowest quotations, for the most recently issued direct nonmalleable fixed rate obligations of the Treasury (“Treasury Notes”) with an original maturity of approximately the designated index maturity and a remaining term to maturity of not less than the designated index maturity minus one year in a representative amount.
|
•
|
If the administrator cannot obtain three Treasury Note quotations of the kind described in the prior paragraph, the administrator will determine the CMT Rate to be the yield to maturity based on the average of the secondary market bid rates for Treasury Notes with an original maturity longer than the designated CMT index maturity which have a remaining term to maturity closest to the designated CMT index maturity and in a representative amount, as of approximately 3:30 p.m., New York City time, on the relevant interest determination date of leading primary United States government securities dealers in New York City. In selecting these offered rates, the administrator will request quotations from at least five such securities dealers and will disregard the highest quotation (or if there is equality, one of the highest) and the lowest quotation (or if there is equality, one of the lowest). If two Treasury Notes with an original maturity longer than the designated CMT index maturity have remaining terms to maturity that are equally close to the designated CMT index maturity, the administrator will obtain quotations for the Treasury Note with the shorter remaining term to maturity.
|
•
|
If three or four but not five leading primary United States government securities dealers are quoting as described in the prior paragraph, then the CMT Rate for the relevant interest determination date will be based on the average of the bid rates obtained and neither the highest nor the lowest of those quotations will be eliminated.
|
•
|
If fewer than three leading primary United States government securities dealers selected by the administrator are quoting as described above, the CMT Rate will remain the CMT Rate then in effect on that interest determination date.
|
•
|
If the rate described above does not appear on FedFunds1 or is not yet published in H.15(519) by 3:00 p.m., New York City time, on that interest determination date, unless the calculation is made earlier and the rate was available from that source at that time, then the Federal Funds Rate for the relevant interest determination date will be the rate described above in H.15 Daily Update, or any other recognized electronic source used for the purpose of displaying such rate, opposite the heading “Federal Funds (Effective).”
|
•
|
If the rate described above does not appear on FedFunds1 or is not yet published in H.15(519), H.15 Daily Update or another recognized electronic source for displaying such rate by 3:00 p.m., New York City time, on that interest determination date, the Federal Funds Rate for that interest determination date will be the arithmetic mean of the rates for the last transaction in overnight U.S. Dollar federal funds arranged by three leading brokers of federal funds transactions in New York City, selected by the administrator, on that interest determination date.
|
•
|
If fewer than three brokers selected by the administrator are quoting as described above, the Federal Funds Rate will remain the Federal Funds Rate then in effect on the relevant interest determination date.
|
•
|
If the rate described above is not published in H.15(519) prior to 3:00 p.m., New York City time, on the relevant interest determination date, unless the calculation is made earlier and the rate was available from that source at that time, then the Prime Rate will be the rate for that interest determination date, as published in H.15 Daily Update or another recognized electronic source for displaying such rate opposite the caption “Bank Prime Loan.”
|
•
|
If the above rate is not published in either H.15(519), H.15 Daily Update or another recognized electronic source for displaying such rate by 3:00 p.m., New York City time, on the relevant interest determination date, then the administrator will determine the Prime Rate to be the average of the rates of interest publicly announced by each bank that appears on the Reuters Screen designated as “USPRIME1” as that bank’s prime rate or base lending rate as in effect on that interest determination date.
|
•
|
If fewer than four rates appear on the Reuters Screen USPRIME1 Page on the relevant interest determination date, then the Prime Rate will be the average of the prime rates or base lending rates quoted, on the basis of the actual number of days in the year divided by a 360-day year, as of the close of business on that interest determination date by three major banks in New York City selected by the administrator.
|
•
|
If the banks selected by the administrator are not quoting as mentioned above, the Prime Rate will remain the prime rate then in effect on that interest determination date.
|
•
|
subordination of one or more classes of notes,
|
•
|
reserve accounts,
|
•
|
capitalized interest accounts,
|
•
|
cash capitalization or cash collateral accounts,
|
•
|
supplemental interest accounts,
|
•
|
investment premium purchase accounts,
|
•
|
investment reserve accounts,
|
•
|
overcollateralization,
|
•
|
letters of credit,
|
•
|
liquidity agreements,
|
•
|
pool insurance policies,
|
•
|
financial guaranty insurance policies or surety bonds,
|
•
|
repurchase bonds, or
|
•
|
any combination of the foregoing.
|
•
|
for reset rate notes denominated in U.S. Dollars, a global note certificate held through DTC (each, a “U.S. global note certificate”); or
|
•
|
for reset rate notes 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 notes 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 notes 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 administrator advises the applicable trustee in writing that DTC is not willing or able to discharge its responsibilities as depository for the 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 amount of the 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 notes.
|
•
|
A financing statement or statements covering the student loans naming each seller, as debtor, will be filed under the UCC to protect the interest of the depositor in the event that the transfer by that seller is deemed to be an assignment of collateral as security; and
|
•
|
A financing statement or statements covering the trust student loans naming the depositor, as debtor, will also be filed under the UCC to protect the interest of the trustee or eligible lender trustee, as applicable, in the event that the transfer by the depositor is deemed to be an assignment of collateral as security.
|
•
|
purchased the student loans in the ordinary course of its business;
|
•
|
took possession of the student loans; and
|
•
|
acquired the student loans for new value and without actual knowledge of the related trustee’s or eligible lender trustee’s interest; as the case may be,
|
•
|
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.
|
•
|
the U.S. dollar value of the applicable currency denominated principal balance determined on the date such payment is received or the foreign exchange note is disposed of by using the spot rate for the date of receipt or disposition, and
|
•
|
the U.S. dollar value of such currency denominated principal balance determined on the date the holder acquired the foreign exchange note by using the spot rate for the date of acquisition.
|
•
|
the difference between: (1) the U.S. dollar value of the applicable currency denominated principal balance of the foreign exchange note, determined on the date such payment is received or the note is disposed of, by using the spot rate for the rate for the date of receipt or disposition, and (2) the U.S. dollar value of such currency denominated principal balance of the foreign exchange note, determined on the date the holder acquired such note, by using the spot rate for the date of acquisition, and
|
•
|
the difference between: (1) the U.S. dollar value of the payment of any accrued interest on the foreign exchange note, determined on the date such payment is received or the note is disposed of, by using the spot rate for the date of receipt or disposition, and (2) the translated amount.
|
•
|
employee benefit plans as defined in Section 3(3) of ERISA;
|
•
|
certain other retirement plans and arrangements described in Section 4975 of the Code, including:
|
1.
|
individual retirement accounts and annuities, and
|
2.
|
Keogh plans;
|
•
|
collective investment funds and separate accounts and, as applicable, insurance company general accounts in which those plans, accounts or arrangements are invested that are subject to the fiduciary responsibility provisions of ERISA and Section 4975 of the Code;
|
•
|
any other entity whose assets are deemed to be “plan assets” as a result of any of the above plans, arrangements, funds or accounts investing in such entity; and
|
•
|
persons who are fiduciaries with respect to plans in connection with the investment of plan assets.
|
•
|
Prohibited Transaction Class Exemption (“PTCE”) 96-23, which exempts certain transactions effected on behalf of a Plan by an “in-house asset manager”;
|
•
|
PTCE 90-1, which exempts certain transactions between insurance company separate accounts and Parties in Interest;
|
•
|
PTCE 91-38, which exempts certain transactions between bank collective investment funds and Parties in Interest;
|
•
|
PTCE 95-60, which exempts certain transactions between insurance company general accounts and Parties in Interest; or
|
•
|
PTCE 84-14, which exempts certain transactions effected on behalf of a Plan by a “qualified professional asset manager.”
|
•
|
Reports on Form 8-K (Current Report), following the issuance of the series of notes of the related trust, including as Exhibits to the Form 8-K the transaction agreements or other documents specified in the related prospectus supplement;
|
•
|
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 specified in the related prospectus supplement; and
|
•
|
Report 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.
|
•
|
show the price at which each class of notes is being offered for sale to the public and any concessions that may be offered to dealers participating in the offering; or
|
•
|
specify that the notes will be sold by the depositor or an affiliate or will be sold or resold by the underwriters in negotiated transactions at varying prices to be determined at the time of such sale.
|
•
|
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 by the borrower’s school of his eligibility for the loan; and
|
•
|
an unpaid school refund.
|
•
|
Subsidized Stafford Loans to students who demonstrate requisite financial need;
|
•
|
Unsubsidized Stafford Loans to students who either do 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 exceed other available financial aid; and
|
•
|
Consolidation Loans, which consolidate into a single loan a borrower’s obligations under various federally authorized student 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; 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, and
|
•
|
during prescribed deferment periods.
|
•
|
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 may borrow the additional amounts shown in the third and fourth columns. Dependent undergraduate students may also receive these additional loan amounts if their parents are unable to provide the family contribution amount and cannot qualify for a PLUS Loan.
|
•
|
Students attending certain medical schools are eligible for $38,500 annually and $189,000 in the aggregate.
|
•
|
The annual loan limits are sometimes reduced when the student is 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 deferral 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
|
•
|
Be enrolled or admitted at an eligible institution.
|
•
|
Be a U.S. citizen, national or Permanent Resident (foreign students may apply with a creditworthy U.S. citizen or Permanent Resident as cosigner).
|
•
|
Have all outstanding student loans in good standing (i.e., not in default).
|
•
|
Meet established credit requirements.
|
•
|
Be the age of majority in his/her state of residence. A borrower who does not meet the age requirements may be eligible with a creditworthy cosigner.
|
•
|
The maximum interest rate allowed by law,
|
•
|
The sum of
|
•
|
either the previous calendar quarter’s average of the 13-week U.S. Treasury Bills rounded to the nearest one-hundredth (0.01) of one percent, as published weekly in The Wall Street Journal, “Credit Markets” section, in the table that quotes the result as the “bond equivalent” rate of the most recent auction,
|
•
|
or the Prime Rate, as published in The Wall Street Journal, “Credit Markets” section, “Money Rates” table on the fifteenth day of the last month of the quarter prior to the reset date, and
|
•
|
the applicable interest rate margin,
|
•
|
Rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
The maximum interest rate allowed by law,
|
•
|
The sum of
|
•
|
the Prime Rate, as published in The Wall Street Journal, “Credit Markets” section, “Money Rates” table on the next to last business day of the month prior to the reset date, and
|
•
|
the applicable interest rate margin,
|
•
|
Rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
The maximum interest rate allowed by law,
|
•
|
The sum of
|
•
|
either the previous calendar quarter’s average of the 13-week U.S. Treasury Bills rounded to the nearest one-hundredth (0.01) of one percent, as published weekly in The Wall Street Journal, “Credit Markets” section, in the table that quotes the result as the “bond equivalent” rate of the most recent auction,
|
•
|
or one-month LIBOR, as published by Reuters on its Reuters Screen LIBOR01 Page on the most recent business day that is at least two New York and two London business days prior to the twenty-fifth day of the month, and
|
•
|
the applicable interest rate margin,
|
•
|
Rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
The monthly variable interest rate for any month resets monthly on or about the next to last New York business day of the prior month. Any change to the interest rate becomes effective on the first day of the month.
|
•
|
The annual variable interest rate for any year resets annually on or about the next to last New York business day of July. Any change to the interest rate becomes effective on August 1.
|
•
|
at the beginning of the repayment period;
|
•
|
every twelve (12) months during periods of internship/residency deferment or at the end of the deferment period if it is less than twelve (12) months;
|
•
|
every six (6) months during periods of in-school deferment and at the end of each in-school deferment period; and
|
•
|
at the end of each hardship forbearance period.
|
•
|
pay principal and interest while in school;
|
•
|
pay only interest while in school; or
|
•
|
defer principal and interest while in school.
|
Total Outstanding EXCEL Loan Program Indebtedness
|
Maximum Repayment
Terms
|
|
$500-$2,999
|
Up to 4 years (48 months)
|
|
$3,000-$3,999
|
6 years (72 months)
|
|
$4,000-$7,499
|
10 years (120 months)
|
|
$7,500-$9,999
|
15 years (180 months)
|
|
$10,000 -$39,999
|
20 years (240 months)
|
|
$40,000 -$59,999
|
25 years (300 months)
|
|
$60,000 and greater
|
30 years (360 months)
|
•
|
Be currently enrolled or admitted at least half-time in a degree-granting program at an American Bar Association accredited law school program, and for an EXCEL Grad Extension Loan, must be in the final year of a law program.
|
•
|
Be a U.S. citizen, national or permanent resident, or other eligible alien (foreign students may apply with a creditworthy U.S. citizen or permanent resident as cosigner).
|
•
|
Have all outstanding student loans in good standing (i.e., not in default).
|
•
|
Meet established credit requirements.
|
•
|
For a LAWLOANs Bar Study Loan, the borrower also must be sitting for the bar exam no later than twelve (12) months after graduation.
|
•
|
Be the age of majority in his/her state of residence. A borrower who does not meet the age requirements may be eligible with a creditworthy cosigner.
|
•
|
The maximum interest rate allowed by law,
|
•
|
The sum of
|
•
|
either the previous calendar quarter’s average of the 13-week U.S. Treasury Bills rounded to the nearest one-hundredth (0.01) of one percent, as published weekly in The Wall Street Journal, “Credit Markets” section, in the table that quotes the result, as the “bond equivalent” rate of the most recent auction,
|
•
|
or the Prime Rate, as published in The Wall Street Journal, “Credit Markets” section, “Money Rates” table on the fifteenth day of the last month of the quarter prior to the change date, and
|
•
|
the applicable interest rate margin,
|
•
|
Rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
The maximum interest rate allowed by law,
|
•
|
The sum of
|
•
|
the Prime Rate, as published in The Wall Street Journal, “Credit Markets” section, “Money Rates” table on the next to last business day of the month prior to the reset date, and
|
•
|
the applicable interest rate margin,
|
•
|
Rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
The maximum interest rate allowed by law,
|
•
|
The sum of
|
•
|
either the previous calendar quarter’s average of the 13-week U.S. Treasury Bills rounded to the nearest one-hundredth (0.01) of one percent, as published weekly in The Wall Street Journal, “Credit Markets” section, in the table that quotes the result as the “bond equivalent” rate of the most recent auction,
|
•
|
or one-month LIBOR, as published by Reuters on its Reuters Screen LIBOR01 Page on the most recent business day that is at least two New York and two London business days prior to the twenty-fifth day of the month, and
|
•
|
the applicable interest rate margin,
|
•
|
Rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
The monthly variable interest rate for any month resets monthly on or about the next to last New York business day of the prior month. Any change to the interest rate becomes effective on the first day of the month.
|
•
|
The annual variable interest rate for any year resets annually on or about the next to last New York business day of July. Any change to the interest rate becomes effective on August 1.
|
•
|
At the beginning of the repayment period.
|
•
|
Every twelve (12) months during periods of internship/residency deferment or at the end of the deferment period if it is less than twelve (12) months.
|
•
|
Every six (6) months during periods of in-school deferment and at the end of each in-school deferment period.
|
•
|
At the end of each hardship forbearance period.
|
•
|
pay principal and interest while in school;
|
•
|
pay only interest while in school; or
|
•
|
defer principal and interest while in school.
|
Total LawEXCEL Loan Indebtedness
|
Maximum Repayment Terms
|
|
$500-$2,999
|
Up to 4 years (48 months)
|
|
$3,000-$3,999
|
6 years (72 months)
|
|
$4,000-$7,499
|
10 years (120 months)
|
|
$7,500-$9,999
|
15 years (180 months)
|
|
$10,000 -$39,999
|
20 years (240 months)
|
|
$40,000 -$59,999
|
25 years (300 months)
|
|
$60,000 and greater
|
30 years (360 months)
|
•
|
Be currently enrolled or admitted (including less than half-time students) in an approved graduate business program.
|
•
|
Be a U.S. citizen, national, or Permanent Resident (foreign students may apply with a creditworthy U.S. citizen or Permanent Resident as cosigner).
|
•
|
Have all outstanding student loans in good standing (i.e., not in default).
|
•
|
Meet established credit requirements.
|
•
|
Be the age of majority in his/her state of residence. A borrower who does not meet the age requirements may be eligible with a creditworthy cosigner.
|
•
|
the maximum interest rate allowed by law, and
|
•
|
the sum of the applicable index and the applicable interest rate margin,
|
•
|
rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
The monthly variable interest rate for any month resets monthly on or about the next to last New York business day of the prior month. Any change to the interest rate becomes effective on the first day of the month.
|
•
|
The annual variable interest rate for any year resets annually on the next to last New York business day of July. Any change to the interest rate becomes effective on August 1.
|
•
|
At the beginning of the repayment period.
|
•
|
Every twelve (12) months during periods of internship/residency deferment or at the end of the deferment period if it is less than twelve (12) months.
|
•
|
Every six (6) months during periods of in-school deferment and at the end of each in-school deferment period.
|
•
|
At the end of each hardship forbearance period.
|
•
|
Prior to the 1996/1997 Academic Year, repayment terms were as follows:
|
•
|
Twelve (12) years (144 months).
|
•
|
Minimum monthly payment was $50.00 per loan program.
|
•
|
The maximum repayment excludes periods of in-school, grace, deferment and forbearance.
|
•
|
For the 1996/1997 Academic Year, repayment terms were as follows:
|
•
|
If the outstanding MBA Loan debt was $15,000 or less, the maximum repayment term was twelve (12) years (144 months).
|
•
|
If the total indebtedness exceeded $15,000, the maximum repayment term was fifteen (15) years (180 months).
|
•
|
Minimum monthly payment is $50.00 per loan program.
|
•
|
The maximum repayment excludes periods of in-school, grace, internship/residency, and forbearance.
|
•
|
For the 1997/1998 Academic Year to the present:
|
•
|
The standard repayment terms for MBA Loans is 15 years, but can be less based upon the loan balance. In addition, the borrower can request an extended repayment term of up to 30 years. The MBA Loans program currently requires a minimum $50.00 monthly payment for all combined MBA Loans.
|
•
|
Repayment terms exclude periods of in-school, grace, deferment and forbearance.
|
•
|
If the borrower chooses an alternative graduated repayment schedule and the maximum repayment period allowed is twelve (12) years, the first year (12 months) will be interest-only payments followed by eleven (11) years (132 months) of principal and interest payments.
|
•
|
If the borrower chooses an alternative graduated repayment schedule and the maximum repayment period is fifteen (15) years, the first year (12 months) will be interest-only payments followed by fourteen (14) years (168 months) of principal and interest payments.
|
•
|
pay principal and interest while in school;
|
•
|
pay only interest while in school; or
|
•
|
defer principal and interest while in school.
|
Total Outstanding MBA EXCEL Loan Indebtedness
|
Maximum Repayment Terms
|
|
$500-$2,999
|
Up to 4 years (48 months)
|
|
$3,000-$3,999
|
6 years (72 months)
|
|
$4,000-$7,499
|
10 years (120 months)
|
|
$7,500-$9,999
|
15 years (180 months)
|
|
$10,000 -$39,999
|
20 years (240 months)
|
|
$40,000 - $59,999
|
25 years (300 months)
|
|
$60,000 and greater
|
30 years (360 months)
|
•
|
Graduate student enrolled or admitted at least half-time at a medical school approved by the Association of American Medical Colleges (AAMC) (for allopathic medical students only).
|
•
|
Be a U.S. citizen, national or Permanent Resident.
|
•
|
Have all outstanding student loans in good standing (i.e., not in default).
|
•
|
Meet established credit requirements.
|
•
|
Be the age of majority in his/her state of residence.
|
•
|
Graduate student enrolled at least half time in a graduate level degree granting program at an approved institution, and must be in the final year of a medical program for the EXCEL Grad Extension Loan R&R program.
|
•
|
Be a U.S. citizen or eligible permanent resident (foreign students may apply with a creditworthy U.S. citizen or eligible permanent resident as cosigner).
|
•
|
Have all outstanding student loans in good standing (i.e., not in default).
|
•
|
Meet established credit requirements.
|
•
|
Be the age of majority in his/her state of residence.
|
•
|
The interest rate cap as presented in the following chart
|
Interest Rate Cap
|
Limitations on Changes in Interest Rates
|
|||||
App Year
|
Minimum
|
Maximum
|
||||
1986/1987 through 1988/1989
|
6.00%
|
20.00%
|
Rate will not change more than 10% during each year
|
|||
1989/1990 through 1990/1991
|
6.00%
|
20.00%
|
Rate will not change more than 10% during each year
|
|||
1991/1992 to present
|
N/A
|
N/A
|
The rate will not exceed the maximum allowed by law
|
•
|
The sum of
|
Prior to
1992/1993
|
Variable (In-School and Grace)
|
Fixed (Repayment)
|
||
● Weekly variable.
● Changes each Wednesday.
● The index is the weekly auction of the 91-day T-Bill that occurs each Tuesday.
|
● The most recent weekly average yield on United States Treasury securities adjusted to a constant maturity of 30 years published prior to the beginning of the repayment period.
|
As of 1992/1993
|
Variable (In-School and Grace)
|
|
● Quarterly variable.
● Changes January 1, April 1, July 1 and October 1.
● The index is the average of the weekly auctions of the 91-day T-Bill for the quarter preceding the change date.
|
||
As of 1999/2000
|
Variable (In-School, Grace, and Repayment)
|
|
● Quarterly variable.
● Changes January 1, April 1, July 1 and October 1.
● The index is the Prime Rate published in The Wall Street Journal on the first day of the month preceding the change date.
|
||
Disbursed on or after June 1, 2004 and before March 2008, for MEDLOANS ALP Loans, and disbursed on or after August 1,
2004 and before March 2008 for MEDEX Loans (and for such loans applied for prior to March 2008 but disbursed on or after that date) |
Variable (In-School, Grace, and Repayment)
● Monthly variable.
● Changes on the first business day of each month.
● The index is the Prime Rate published in The Wall Street Journal on the next to last business day of the month preceding the change date.
|
|
Applied for and disbursed on or after March 2008 for MEDLOANS
|
● Monthly variable
● Changes on the twenty-fifth (25th) day of each month.
● The index is one-month LIBOR published by Reuters on its Reuters Screen LIBOR01 Page on the most recent business day that is at least two business days prior to the twenty-fifth (25th) day of the month.
|
•
|
The applicable interest rate margin.
|
•
|
Rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
The monthly variable interest rate for any month resets monthly on or about the next to last New York business day of the prior month. Any change to the interest rate becomes effective on the first day of the month.
|
•
|
The annual variable interest rate for any year resets annually on the next to last New York business day of July. Any change to the interest rate becomes effective on August 1.
|
Prior to 1992/1993
|
Interest will capitalize at the beginning of repayment and at the end of any forbearance.
|
1993/1994 through 1997/1998
|
Interest will capitalize at graduation, annually until repayment begins, and at the end of any deferment or forbearance.
|
1998/1999 to Present
|
Interest will capitalize:
● At the beginning of the repayment period.
● Every six (6) months during periods of in-school deferment and at the end of each in-school deferment period.
|
● Every twelve (12) months during periods of internship/residency deferment or at the end of the deferment period if it is less than twelve (12) months.
● At the end of each hardship forbearance period.
|
•
|
For loans disbursed prior to the 1993/1994 Academic Year, the borrower may choose an alternative graduated schedule where the first year (12 months) will be interest-only payments, followed by 19 years (228 months) of principal and interest payments.
|
•
|
For loans disbursed as of the 1993/1994 Academic Year through the 2002/2003 Academic Year, the borrower may choose an alternative graduated schedule where the first three years (36 months) will be interest-only payments, followed by 17 years (204 months) of principal and interest payments.
|
•
|
For all loans, the borrower can request twenty-four (24) months of interest-only payments followed by level payments for the remaining term of the loan, or up to forty-eight (48) months of interest-only payments followed by level payments for the remaining term of the loan.
|
•
|
In addition, certain MEDLOANS Program Loans have unique repayment incentives:
|
•
|
We cannot predict how many borrowers will participate in these programs.
|
•
|
pay principal and interest while in school;
|
•
|
pay only interest while in school; or
|
•
|
defer principal and interest while in school.
|
Total MD EXCEL Loan Indebtedness
|
Maximum Repayment Terms
|
|
$500-$2,999
|
Up to 4 years (48 months)
|
|
$3,000-$3,999
|
6 years (72 months)
|
|
$4,000-$7,499
|
10 years (120 months)
|
|
$7,500-$9,999
|
15 years (180 months)
|
|
$10,000 and greater
|
20 years (240 months)
|
•
|
Graduate student enrolled or admitted at least half-time at a dental school approved by the Association of American Dental Association (ADA).
|
•
|
Be a U.S. citizen, national or Permanent Resident (foreign students may apply with a creditworthy U.S. citizen or permanent resident as cosigner)
|
•
|
Have all outstanding student loans in good standing (i.e., not in default).
|
•
|
Meet established credit requirements.
|
•
|
Be the age of majority in his/her state of residence.
|
•
|
the maximum interest rate allowed by law, and
|
•
|
the sum of the applicable index and the applicable interest rate margin,
|
•
|
rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
The monthly variable interest rate for any month resets monthly on or about the next to last New York business day of the prior month. Any change to the interest rate becomes effective on the first day of the month.
|
•
|
The annual variable interest rate for any year resets annually on the next to last New York business day of July. Any change to the interest rate becomes effective on August 1.
|
Prior to 1992/1993
|
Interest will capitalize at the beginning of repayment and at the end of any forbearance.
|
1993/1994 through 1997/1998
|
Interest will capitalize at graduation, annually until repayment begins, and at the end of any deferment or forbearance.
|
1998/1999 to Present
|
Interest will capitalize:
● At the beginning of the repayment period.
● Every six (6) months during periods of in-school deferment and at the end of each in-school for deferment period
● Every twelve (12) months during periods of internship/residency deferment or at the end of the deferment period if it is less than twelve (12) months.
● At the end of each hardship forbearance period.
|
•
|
For loans disbursed prior to the 1993/1994 Academic Year, the borrower may choose an alternative graduated schedule where the first year (12 months) will be interest-only payments, followed by 19 years (228 months) of principal and interest payments.
|
•
|
For loans disbursed as of the 1993/1994 Academic Year through the 2002/2003 Academic Year, the borrower may choose an alternative graduated schedule where the first three years (36 months) will be interest-only payments, followed by 17 years (204 months) of principal and interest payments.
|
•
|
For all loans, the borrower can request twenty-four (24) months of interest-only payments followed by level payments for the remaining term of the loan, or up to forty-eight (48) months of interest-only payments followed by level payments for the remaining term of the loan.
|
•
|
pay principal and interest while in school;
|
•
|
pay only interest while in school; or
|
•
|
defer principal and interest while in school.
|
Total Dental EXCEL Loan Indebtedness
|
Maximum Repayment Terms
|
|
$500-$2,999
|
Up to 4 years (48 months)
|
|
$3,000-$3,999
|
6 years (72 months)
|
|
$4,000-$7,499
|
10 years (120 months)
|
|
$7,500-$9,999
|
15 years (180 months)
|
|
$10,000 and greater
|
20 years (240 months)
|
•
|
Be currently enrolled at least half-time in a degree or certificate granting program at an eligible degree-granting institution.
|
•
|
Be a U.S. citizen or eligible Permanent Resident.
|
•
|
Have all outstanding student loans in good standing (i.e., not in default).
|
•
|
Meet established credit requirements.
|
•
|
Be the age of majority in his/her state of residence. A borrower who does not meet the age requirements may be eligible with a creditworthy cosigner.
|
•
|
The maximum interest rate allowed by law,
|
•
|
The sum of
|
•
|
the highest U.S. Prime Rate, as published in The Wall Street Journal under the “Money Rates” section on the next to last New York business day of the month prior to the reset date, and
|
•
|
the applicable interest rate margin,
|
•
|
Rounded to the nearest one-fourth (0.25) of one percent.
|
•
|
At the beginning of the repayment period.
|
•
|
At the end of any in-school deferment.
|
•
|
At the end of each hardship forbearance period.
|
•
|
When the interest rate changes.
|
•
|
Quarterly during the in-school and grace periods.
|
•
|
At the beginning of the repayment period.
|
•
|
At the end of any in-school deferment.
|
•
|
At the end of each hardship forbearance period.
|
•
|
At the end of any in-school deferment.
|
•
|
At the end of each hardship forbearance period.
|
Total Outstanding Tuition Answer Loan Indebtedness
|
Maximum Repayment
Terms
|
$2,999 and under
|
4 years (48 months)
|
$3,000 to $3,999
|
6 years (72 months)
|
$4,000 to $7,499
|
10 years (120 months)
|
$7,500 to $9,999
|
15 years (180 months)
|
$10,000 to $39,999
|
20 years (240 months)
|
$40,000 to $59,999
|
25 years (300 months)
|
$60,000 and greater
|
30 years (360 months)
|
•
|
Be a U.S. citizen or eligible Permanent Resident.
|
•
|
Have good credit or apply with a creditworthy cosigner and have a minimum three-year credit history.
|
•
|
Have all outstanding student loans in good standing (i.e., not in default).
|
•
|
Meet minimum income requirements.
|
•
|
Be the age of majority in his/her state of residence. A borrower who does not meet the age requirements may be eligible with a creditworthy cosigner.
|
•
|
Be consolidating private education loans on which he/she is the primary borrower.
|
•
|
Students must have successfully completed his/her post-secondary course of study (or will do so within the next 30 days).
|
•
|
The maximum interest rate allowed by law,
|
•
|
The sum of
|
•
|
the highest U.S. Prime Rate, as published in The Wall Street Journal under the “Money Rates” table on the next to last New York business day of the month prior to the reset date, and
|
•
|
the applicable interest rate margin,
|
•
|
Rounded to the nearest one-fourth (0.25) of one percent.
|
•
|
At the end of any in-school deferment.
|
•
|
At the end of each hardship forbearance period.
|
Total Outstanding Private Consolidation Loan Indebtedness
|
Maximum Repayment
Terms
|
$5,000 to $19,999
|
15 years (180 months)
|
$20,000 to $39,999
|
20 years (240 months)
|
$40,000 to $59,999
|
25 years (300 months)
|
$60,000 and above
|
30 years (360 months)
|
•
|
Be currently enrolled at a primary or secondary tutoring center or primary or secondary school or be enrolled in an eligible 2 or-4 year college/university or trade school that has met Navient Solutions’ established underwriting criteria.
Navient Solutions will not disburse loans to a school unless the school has met Navient Solutions’ underwriting criteria, which consists of evidence that the school (i) has all licenses and approvals it needs to operate as an educational institution, (ii) meets various financial tests, including minimum net worth and revenue, (iii) has a refund policy that complies with applicable law, and (iv) does not offer any type of unconditional guarantees.
|
•
|
Be the age of majority in his/her state of residence. A borrower who does not meet the age requirement may be eligible with a creditworthy cosigner.
|
•
|
Meet established credit requirements, including the required minimum FICO score.
|
Range of Dates
|
Minimum FICO Score
|
|
July 31, 1999 – April 29, 2000
|
700
|
|
April 30, 2000 – September 4, 2002
|
550
|
|
September 5, 2002 – March 11, 2003
|
575
|
|
March 12, 2003 – June 1, 2004
|
600
|
|
June 1, 2004 – October 16, 2008
|
630
|
|
October 16, 2008 – Present
|
700 for strategic partner schools and 760 for non-strategic partner schools
|
•
|
Demonstrate credit experience.
|
•
|
Through August 19, 2008, provide income verification if the applicant’s FICO score was lower than 700 or the loan amount was $20,000 or greater. Following August 19, 2008, provide income verification when requested by Navient Solutions. Such request for income verification will be based upon the amount to be financed, an overall review of the credit file and information provided on the loan application.
|
•
|
Meet established debt-to-income ratio requirements. Typically the required debt-to-income ratio is 45% or less, subject to limited exceptions based on the amount to be financed or the presence of additional residual income.
|
•
|
Generally, the loan amount must be a minimum of $1,000 (subject to an exception for Sylvan Learning Centers where the minimum loan amount is $500) up to the lower of the total cost of education or a certain maximum loan amount, less other aid received. The total cost of education includes tuition, as certified by the student’s school, and can also include other allowable expenses. These other allowable expenses are typically books, fees, computer purchases and living expenses. The loan amount to be applied to these allowable expenses can be up to 60% of the tuition amount, not to exceed $6,000. A portion of tuition must be financed to enable financing of other education-related expenses.
|
•
|
Be a U.S. citizen, permanent resident, or alien resident (foreign students must obtain a creditworthy U.S. citizen or permanent resident as cosigner).
|
•
|
the maximum borrower interest rate allowed by law;
|
•
|
the sum of one-month LIBOR and the applicable interest rate margin;
|
•
|
rounded to the nearest one-eighth (0.125) of one percent.
|
•
|
the maximum borrower interest rate allowed by law;
|
•
|
the sum of the Prime Rate and the applicable interest rate margin;
|
•
|
rounded to the nearest one-eighth (0.125) of one percent (prior to February 2007 it was rounded to the nearest one-quarter (0.25) of one percent).
|
•
|
provide a reason that demonstrates financial difficulty;
|
•
|
make at least two consecutive monthly scheduled payments (one payment in the month prior to the processing of the forbearance and one in the current month) OR one payment in the current month equal to at least two full monthly scheduled payments;
|
•
|
request a forbearance grant that does not exceed maximum hardship forbearance months allowed (24 months over the life of the loan);
|
•
|
request a forbearance grant that does not exceed 7 months; and
|
•
|
pay a forbearance fee (if the loan was disbursed prior to October 22, 2005 and the borrower requests a one to two-month forbearance, the fee will be $20 per loan; however, if the borrower requests more than a three month forbearance, or the loan was disbursed after October 22, 2005, the fee will be $50 per loan).
|
•
|
Be enrolled or admitted at an eligible institution.
|
•
|
Be a U.S. citizen, national or Permanent Resident (foreign students may apply with a creditworthy U.S. citizen or Permanent Resident as cosigner).
|
•
|
Have all outstanding student loans in good standing (i.e., not in default).
|
•
|
Meet established credit requirements.
|
•
|
Be the age of majority in his/her state of residence. A borrower who does not meet the age requirements may be eligible with a creditworthy cosigner.
|
•
|
The maximum interest rate allowed by law,
|
•
|
The sum of
|
•
|
either the previous calendar quarter’s average of the 13-week U.S. Treasury Bills rounded to the nearest one-hundredth (0.01) of one percent, as published weekly in The Wall Street Journal, “Credit Markets” section, in the table that quotes the result as the “bond equivalent” rate of the most recent auction,
|
•
|
or the Prime Rate, as published in The Wall Street Journal, “Credit Markets” section, “Money Rates” table on the forty-fifth day prior to the related reset date, and
|
•
|
the applicable interest rate margin.
|
•
|
be currently enrolled or accepted for enrollment or, with respect to SOSL only, enrolled sometime in the 365 days prior to disbursement, at an eligible institution;
|
•
|
be a U.S. citizen, national or Permanent Resident (foreign students may apply with a creditworthy U.S. citizen or Permanent Resident as cosigner);
|
•
|
meet established credit requirements; and
|
•
|
be the age of majority in his/her state of residence (a borrower who does not meet the age of majority requirements may be eligible with an eligible creditworthy cosigner).
|
1.
|
Interest Repayment Option: Borrowers who select the Interest Repayment Option make interest payments while in school and during the separation period.
|
2.
|
Fixed Repayment Option: Borrowers who select the Fixed Repayment Option make fixed payments of $25 each month while in school and during the separation period. Unpaid interest capitalizes after the six month separation period.
|
3.
|
Deferred Repayment Option: Borrowers who select the Deferred Repayment Option make no payments while in school or during the separation period. Unpaid interest capitalizes after the six month separation period.
|
•
|
at the beginning of the repayment period (unless the borrower selected the Interest Repayment Option);
|
•
|
every twelve (12) months during periods of internship/residency deferment or at the end of the deferment period if it is less than twelve (12) months;
|
•
|
every six (6) months during periods of in-school deferment and at the end of each in school deferment period; and
|
•
|
at the end of each hardship forbearance period.
|
•
|
at the beginning of the repayment period (unless the borrower selected the Interest Repayment Option);
|
•
|
every twelve (12) months during periods of internship/residency deferment or at the end of the deferment period if it is less than twelve (12) months;
|
•
|
every six (6) months during periods of in-school deferment and at the end of each in school deferment period; and
|
•
|
at the end of each hardship forbearance period.
|
•
|
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.
|
•
|
each clearing system, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business in the chain of intermediaries between the beneficial owner and the U.S. entity required to withhold tax complies with applicable certification requirements, and
|
•
|
that holder takes one of the following steps to obtain an exemption or reduced tax rate:
|
•
|
a citizen or individual resident of the United States,
|
•
|
a corporation or partnership, including an entity treated as such for U.S. federal income tax purposes, organized in or under the laws of the United States or 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.
|
ELIGIBLE LENDER TRUSTEE
DEUTSCHE BANK TRUST COMPANY AMERICAS
60 Wall Street, 16th Floor
Mailstop NYC60-1625
New York, New York 10005
|
DELAWARE TRUSTEE
BNY MELLON TRUST OF DELAWARE
100 White Clay Center
Suite 102
Newark, Delaware 19711
|
INDENTURE TRUSTEE AND PAYING AGENT
DEUTSCHE BANK NATIONAL TRUST COMPANY
100 Plaza One
Jersey City, New Jersey 07311
|
CADWALADER, WICKERSHAM & TAFT LLP
700 Sixth Street, N.W.
Washington, D.C. 20001
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RICHARDS, LAYTON & FINGER, P.A.
920 King Street
Wilmington, Delaware 19801
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SHEARMAN & STERLING LLP
801 Pennsylvania Avenue, N.W.
Washington, D.C. 20004 2604
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CADWALADER, WICKERSHAM & TAFT LLP
700 Sixth Street, N.W.
Washington, D.C. 20001
|
SHEARMAN & STERLING LLP
801 Pennsylvania Avenue, N.W.
Washington, D.C. 20004 2604
|
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