Delaware
(State or other jurisdiction of
incorporation or organization)
|
6189
(Primary Standard Industrial
Classification Code Number)
|
04-3480392
(I.R.S. employer
identification no.)
|
Reed D. Auerbach, Esquire
Bingham McCutchen LLP
399 Park Avenue
New York, NY 10022
(212) 705-7000
|
Cheryl Barnes, Esquire
Cadwalader, Wickersham & Taft LLP
1201 F Street, N.W., Suite 1100
Washington, D.C. 20004
(202) 862-2200
|
CALCULATION OF REGISTRATION FEE
|
||||||||
Title of Each Class of Securities to be Registered
|
Amount to be Registered
|
Proposed Maximum Per Unit Offering Price
|
Proposed Maximum Aggregate Offering Price(1)
|
Amount of Registration Fee (2)
|
||||
Student Loan-Backed Securities
|
$2,000,000(3)(4)(5)
|
100%
|
$2,000,000
|
$272.80(6)
|
(1)
|
Estimated solely for the purposes of calculating the registration fee.
|
(2)
|
Calculated pursuant to Rule 457 of the Securities Act of 1933.
|
(3)
|
Includes an indeterminate amount of securities offered or sold in a remarketing transaction in connection with a reset date.
|
(4)
|
This registration statement also includes securities offered or sold by SLM Corporation (or one of its subsidiaries) following any exercise of a related call option, which offers or sales will be treated as an original issuance for purposes of payment of registration fees.
|
(5)
|
This registration statement also includes securities offered or sold by SLM Funding LLC relating to certain classes of previously registered auction rate notes that have been acquired by one or more affiliates of the registrants in open market transactions and were originally issued by securitization trusts sponsored by either of the registrants, which offers or sales will be treated as an original issuance for purposes of payment of registration fees.
|
(6) | SLM Funding LLC is paying $136.40 of the registration fee and SLM Education Credit Funding LLC is paying $136.40 of the registration fee. |
Class
|
Principal
|
Interest Rate
|
Maturity
|
|||
Floating Rate Class A-1 Notes
|
$
|
Prime Rate plus %
|
||||
Floating Rate Class A-2 Notes
|
$
|
[One]-Month LIBOR plus %
|
||||
Floating Rate Class B Notes
|
$
|
[One]-Month LIBOR plus %
|
You should consider carefully the risk factors on page S-[__] of this prospectus supplement and on page [__] of the base prospectus.
The notes are asset-backed securities issued by and are obligations of the issuing entity, which is a trust. They are not obligations of or interests in the sponsor, administrator, servicer, depositor, any seller or any of their affiliates.
The notes are not guaranteed or insured by the United States or any governmental agency.
|
Underwriting Proceeds to
Price to Public Discount the Depositor
Per Floating Rate Class A-1 Note % % %
Per Floating Rate Class A-2 Note % % %
Per Floating Rate Class B Note[*] % % %
[*For the amount of class B notes retained by the depositor or an affiliate, the underwriting discount will be % and proceeds to the depositor will be % with no selling concession or reallowance.] [INCLUDED ONLY IF TRANCHE IS RETAINED BY DEPOSITOR]
We expect the proceeds to the depositor in respect of the notes to be $ before deducting expenses payable by the depositor estimated to be $ and certain deposits to be made by the trust.
Neither the SEC nor any state securities commission has approved or disapproved the securities or determined whether this supplement or the base prospectus is accurate or complete. Any contrary representation is a criminal offense.
|
|||||
_______________
[Joint Book-Runners]
|
||||||
[_______]
|
[_______]
|
[_______]
|
||||
_______________
[Co-Managers]
|
||||||
[_______]
|
[_______]
|
[_______]
|
[_______]
|
|||
_______________
_______ __, 20___
|
Page
|
|
Summary of Terms
|
S-1
|
· Issuing Entity
|
S-1
|
· Depositor
|
S-1
|
· Sponsor, Servicer and Administrator
|
S-1
|
· Indenture Trustee and Paying Agent
|
S-1
|
· Trustee
|
S-1
|
· Delaware Trustee
|
S-1
|
· The Notes
|
S-1
|
Class A Notes:
|
S-1
|
Class B Notes:
|
S-1
|
· Dates
|
S-2
|
· Information About the Notes
|
S-2
|
· Administrator
|
S-5
|
· Luxembourg Paying Agent
|
S-5
|
· Information About the Trust
|
S-5
|
Formation of the Trust
|
S-5
|
Its Assets
|
S-6
|
· Administration of the Trust
|
S-9
|
Distributions
|
S-9
|
S-10
|
|
Transfer of the Assets to the Trust
|
S-11
|
Servicing of the Assets
|
S-11
|
Compensation of the Servicer
|
S-11
|
· Termination of the Trust
|
S-12
|
Optional Redemption of the Notes
|
S-12
|
Optional Purchase of the Trust Student Loans
|
S-13
|
Auction of Trust Assets
|
S-13
|
· [Swap Agreement]
|
S-14
|
· [Revolving Period]
|
S-15
|
· [Prefunding Period]
|
S-15
|
· Excess Distribution Certificateholder
|
S-15
|
· Capital Requirements Directive Article 122a and RC Certificateholder
|
S-15
|
· Tax Considerations
|
S-16
|
· ERISA Considerations
|
S-16
|
· [Ratings of the Notes]
|
S-17
|
· Listing Information
|
S-17
|
· Risk Factors
|
S-17
|
· Identification Numbers
|
S-17
|
Risk Factors
|
S-18
|
· Federal Financial Regulatory Legislation Could Have An Adverse Effect On SLM Corporation, The Sponsor, The Servicer, The Depositor, The Sellers And The Trust, Which Could Result In Losses Or Delays In Payments On Your Notes
|
S-18
|
· The Notes Are Subject To Optional Redemption By The Trust
|
S-19
|
· The Notes Are Not Suitable Investments For All Investors
|
S-21
|
· Regulatory Initiatives May Result In Increased Regulatory Capital Requirements And/Or Decreased Liquidity In Respect Of The Notes
|
S-21
|
· Sequential Payment Of The Class A Notes Results In A Greater Risk Of Loss For Some Holders
|
S-23
|
· Subordination Of The Class B Notes And Sequential Payment Of The Notes Result In A Greater Risk Of Loss For Class B Noteholders
|
S-23
|
· Investors In The Class B Notes Bear Greater Risk Of Loss Because The Priority Of Payment Of Interest And The Timing Of Principal Payments On The Class B Notes May Change Due To The Variability Of Cashflows
|
S-24
|
· Certain Credit And Liquidity Enhancement Features Are Limited And If They Are Depleted, There May Be Shortfalls In Distributions To Noteholders
|
S-25
|
· The Characteristics Of The Trust Student Loans May Change
|
S-25
|
· The Trust Will Not Have The Benefit Of Any Guarantees Or Insurance On The Trust Student Loans
|
S-25
|
· Failure To Pay Interest On The Class B Notes Is Not An Event Of Default For So Long As Any Class A Notes Are Outstanding
|
S-26
|
· The Occurrence Of An Event Of Default Under The Indenture May Delay Payments On The Class B Notes
|
S-26
|
· Class B Noteholders May Not Be Able To Direct The Indenture Trustee Upon An Event Of Default Under The Indenture
|
S-26
|
· [Your Notes Will Have A Degree Of Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal And Interest On Your Notes, And The Swap Agreement Does Not Eliminate All Of This Basis Risk]
|
S-27
|
· Risk Of Bankruptcy Discharge Of Private Education Loans
|
S-28
|
· School Closures And Unlicensed Schools May Result In Losses On Your Notes
|
S-28
|
· Certain Actions Can Be Taken Without Noteholder Approval
|
S-29
|
· The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
|
S-30
|
· The Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
|
S-30
|
· [Retention Of The Class B Notes By The Depositor Or An Affiliate May Reduce The Liquidity Of The Class B Notes]
|
S-30
|
· The Notes May Be Assigned Lower Ratings Than Those Described In This Prospectus Supplement By Different Rating Agencies
|
S-30
|
· Illiquid Market Conditions May Occur from Time to Time
|
S-31
|
· [The Interests Of The Swap Counterparty May Differ From Those Of The Noteholders]
|
S-32
|
Defined Terms
|
S-33
|
Formation of the Trust
|
S-33
|
· The Trust
|
S-33
|
· Capitalization of the Trust
|
S-34
|
· Depositor
|
S-35
|
· Trustee
|
S-35
|
· Indenture Trustee and Paying Agent
|
S-36
|
· Delaware Trustee
|
S-37
|
Appendix A Tables
|
S-37
|
Use of Proceeds
|
S-38
|
The Trust Student Loan Pool
|
S-39
|
· General
|
S-39
|
· Eligible Trust Student Loans
|
S-39
|
· Additional Seller
|
S-39
|
· Certain Expenses
|
S-40
|
· Characteristics of the Trust Student Loans
|
S-40
|
· Insurance of Student Loans
|
S-40
|
· Cure Period for Trust Student Loans
|
S-40
|
[Recent Developments]
|
S-40
|
Description of the Notes
|
S-40
|
· General
|
S-40
|
· Interest
|
S-41
|
· Notice of Interest Rates
|
S-42
|
· Trust Accounts and Eligible Investments
|
S-42
|
· Principal
|
S-44
|
Optional Interest Rate Reduction
|
S-46
|
· Class RC Certificate
|
S-46
|
· Distributions
|
S-46
|
· Priority of Payments Following Certain Events of Default Under the Indenture
|
S-49
|
· Voting Rights and Remedies
|
S-50
|
· Cash Capitalization Account
|
S-51
|
· Credit Enhancement
|
S-51
|
· Potential Future Interest Rate Cap Agreement
|
S-52
|
· Administration Fee
|
S-53
|
· Servicing Compensation
|
S-53
|
· Trust Fees
|
S-54
|
· Optional Redemption of the Notes
|
S-54
|
· Optional Purchase
|
S-55
|
· Auction of Trust Assets
|
S-55
|
Static Pools
|
S-56
|
Prepayments, Extensions, Weighted Average Lives and Expected Maturities of the Notes
|
S-57
|
[Swap Agreement]
|
S-58
|
[Revolving Period]
|
S-61
|
[Prefunding Period]
|
S-61
|
Pool Asset Review
|
S-61
|
U.S. Federal Income Tax Consequences
|
S-64
|
European Union Directive on the Taxation of Savings Income
|
S-65
|
ERISA Considerations
|
S-65
|
Accounting Considerations
|
S-67
|
Reports To Noteholders
|
S-67
|
Notice to Investors
|
S-67
|
Listing Information
|
S-69
|
Underwriting
|
S-70
|
[Ratings of the Notes]
|
S-72
|
Compliance With Article 122a of the Capital Requirements Directive
|
S-72
|
Legal Matters
|
S-73
|
Glossary For Prospectus Supplement
|
S-74
|
Annex A: Characteristics of the Trust Student Loan Pool
|
A-1
|
Exhibit I: Prepayments, Extensions, Weighted Average Lives and Expected Maturities of the Notes
|
I-1 |
Appendix I: Periodic Default Percentages for Career Training Loans
|
Ap A-1
|
|
|
|
|
Page
|
|
Prospectus Summary
|
8
|
Risk Factors
|
21
|
Formation of the Issuing Entities
|
45
|
Use of Proceeds
|
47
|
The Depositor
|
48
|
The Auction Rate Notes Depositor
|
50
|
The Sponsor, Servicer and Administrator
|
50
|
The Sellers
|
52
|
The Student Loan Pools
|
53
|
The Companies’ Student Loan Financing Business
|
56
|
Transfer and Servicing Agreements
|
67
|
Servicing and Administration
|
71
|
Trading Information
|
84
|
Description of the Notes
|
86
|
Additional Information Regarding the Notes
|
93
|
Certain Legal Aspects of the Student Loans
|
137
|
U.S. Federal Income Tax Consequences
|
143
|
European Union Directive on the Taxation of Savings Income
|
156
|
State Tax Consequences
|
157
|
ERISA Considerations
|
157
|
Available Information
|
160
|
Reports to Noteholders
|
160
|
Incorporation of Documents by Reference
|
161
|
The Plan of Distribution
|
161
|
Legal Matters
|
164
|
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
|
|
·
|
the accompanying base prospectus, which begins after this prospectus supplement and provides general information, some of which may not apply to your particular class of notes; and
|
|
·
|
this prospectus supplement, which describes the specific terms of the notes being offered.
|
·
|
Floating Rate Class A-1 Student Loan-Backed Notes in the amount of $[_________].
|
·
|
Floating Rate Class A-2 Student Loan-Backed Notes in the amount of $[_________].
|
·
|
Floating Rate Class B Student Loan-Backed Notes in the amount of $[_________].
|
·
|
to the class A-1 notes and class A-2 notes as the class A notes; and
|
·
|
to the class A notes and class B notes as the notes.
|
Class
|
Spread
|
|
Class A-1
|
plus [ ]
|
|
Class A-2
|
plus [ ]
|
|
Class B
|
plus [ ]
|
Class
|
Maturity Date
|
|
Class A-1
|
[____]
|
|
Class A-2
|
[____]
|
|
Class B
|
[____]
|
·
|
there are higher than anticipated prepayment rates on the trust student loans;
|
·
|
the trust exercises its option to purchase all outstanding notes, which will not occur until the first distribution date on which the aggregate outstanding principal balance of the notes is equal to 10% or less of the initial aggregate principal balance of the notes prior to taking into account any distributions to be made on such distribution date; or
|
·
|
the indenture trustee auctions all remaining trust student loans, which, absent an event of default under the indenture, will not occur until the first distribution date on which the pool balance is less than 10% of the initial pool balance.
|
|
·
|
the trust student loans;
|
·
|
collections and other payments on the trust student loans;
|
·
|
funds it will hold from time to time in its trust accounts, including a collection account, a cash capitalization account and a reserve account;
|
·
|
[its rights under the swap agreement described under “—Swap Agreement” below;] and
|
·
|
its rights under any potential future interest rate cap agreement.
|
·
|
Trust Student Loans. The trust student loans are private education loans, which are education loans generally made to students or parents of students that are not guaranteed or reinsured under the Federal Family Education Loan Program, also known as “FFELP,” or under any other federal student loan program, or otherwise insured by any private third-party insurance provider. The private education loans were made and underwritten under various loan programs administered or sponsored by Sallie Mae, Inc., including its Undergraduate and Graduate Loan Programs, Law Loan Programs, MBA Loan Programs, Medical Loan Programs, Dental Loan Programs, Direct-to-Consumer Loan Programs, Private Consolidation Loan Program, Career Training Loan Program, EFG Loan Programs and Smart Option Student Loan® Program. The trust student loans also include career training loans which include loans to help finance trade school education, private kindergarten through secondary school education, pre-college tutorial programs, part-time community college and continuing education programs as well as internet-based education programs. These programs are summarized in Appendices B through K, as applicable, to the base prospectus.
|
·
|
Trust Accounts. The administrator will establish and maintain in the name of the indenture trustee the collection account and the reserve account for the benefit of the noteholders. Funds in the trust accounts will be invested in eligible investments as provided in the indenture. See “Servicing and Administration—Accounts—Eligible Investments” in the base prospectus for a more detailed description of eligible investments.
|
·
|
Collection Account. The administrator will establish and maintain the collection account as an asset of the trust in the name of the indenture trustee. The trust will make an initial deposit from the net proceeds of the sale of the notes into the collection account on the closing date. The deposit will be in cash or eligible investments equal to approximately $[_________] plus the excess, if any, of the pool balance as of the statistical cutoff date over the pool balance as of the closing date.
|
·
|
Cash Capitalization Account. The administrator will establish and maintain the cash capitalization account as an asset of the trust in the name of the indenture trustee. On the closing date, the trust will make an initial deposit from the net proceeds of the sale of the notes into the cash capitalization account. The deposit will be in cash or eligible investments equal to $[_________]. Amounts on deposit in the cash capitalization account will not be replenished.
|
·
|
Reserve Account. The administrator will establish and maintain the reserve account as an asset of the trust in the name of the indenture trustee. The trust will make an initial deposit from the net proceeds of the sale of the notes into the reserve account on the closing date. The initial deposit will be in cash or eligible investments equal to $[_________]. Funds in the reserve account may be replenished on each distribution date to the extent additional funds are available after all prior required distributions have been made. The amount required to be on deposit in the reserve account at any time, which we refer to as the specified reserve account balance, is the lesser of $[_________] and the outstanding principal balance of the notes. See “Description of the Notes—Distributions” in this prospectus supplement.
|
·
|
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 noteholders 100% of the aggregate outstanding principal balance of the notes plus accrued interest, after taking into account all distributions of interest and principal made by the trust to all noteholders from available funds on such distribution date; and
|
·
|
pay all other amounts, if any, then due and owed by the trust, to the extent not paid from available funds on such distribution date.
|
·
|
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.
|
·
|
reduce the outstanding principal balance of each class of notes then outstanding on the related distribution date to zero; and
|
·
|
pay to noteholders the interest payable on the related distribution date.
|
·
|
In the opinion of federal tax counsel for the trust, the notes will be characterized as debt for federal income tax purposes.
|
·
|
In the opinion of federal tax counsel for the trust, the trust will not be characterized as an association or a publicly traded partnership taxable as a corporation for federal income tax purposes.
|
·
|
In the opinion of federal tax counsel for the trust, if the trust is deemed to be converted into a partnership for federal income tax purposes upon the transfer or sale of the excess distribution certificate to a holder that does not also hold the RC certificate, such deemed conversion will not constitute a taxable event to the noteholders.
|
·
|
In the opinion of Delaware tax counsel for the trust, the same characterizations would apply for Delaware state income tax purposes as for federal income tax purposes and noteholders who are not otherwise subject to Delaware taxation on income will not become subject to Delaware tax 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 notes [and the trust’s entering into the interest rate swap agreement] will not result in a non-exempt prohibited transaction; and
|
·
|
the purchase or holding of the notes [and the trust’s entering into the interest rate swap agreement] will not cause a non-exempt violation of any substantially similar federal, state, local or foreign laws.
|
|
·
|
Class A-1 Notes:
|
|
·
|
Class A-2 Notes:
|
|
·
|
Class B Notes:
|
|
·
|
Class A-1 Notes:
|
|
·
|
Class A-2 Notes:
|
|
·
|
Class B Notes:
|
|
·
|
Class A-1 Notes:
|
|
·
|
Class A-2 Notes:
|
|
·
|
Class B Notes:
|
Federal Financial Regulatory Legislation Could Have An Adverse Effect On SLM Corporation, The Sponsor, The Servicer, The Depositor, The Sellers 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 SLM Corporation, the parent of the sponsor, the sponsor and their affiliates and the markets in which SLM Corporation, the sponsor and their affiliates operate. Pursuant to the Dodd-Frank Act, SLM Corporation and many of its subsidiaries will be subject to regulations promulgated by the Consumer Financial Protection Bureau (the “CFPB”). The CFPB will have substantial power to define the rights of consumers and the responsibilities of lending institutions, including SLM Corporation’s private education lending and retail banking businesses. The CFPB began exercising its authority on July 21, 2011.
|
|
Most of the component parts of the Dodd-Frank Act will be subject to intensive rulemaking and public comment over the coming months and none of SLM 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.” Under that liquidation framework, it is possible that the Federal Deposit Insurance Corporation (the “FDIC”) could be appointed receiver of SLM 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 the sponsor. Any attempt by the FDIC to repudiate the transfer of student loans or 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 “Certain Legal Aspects of the Student Loans—Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions—FDIC’s Repudiation Power Under the OLA” in the accompanying base prospectus. See “Certain Legal Aspects of the Student Loans—Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions—FDIC’s Avoidance Power Under the OLA” in the accompanying base prospectus.
|
|
The Notes Are Subject To Optional Redemption By The Trust
|
The trust, at the written direction of the administrator, without prior notice to noteholders, will have the option, but not the obligation, to redeem the outstanding notes in whole (and not in part) at a price
|
equal to par plus accrued interest beginning on the first distribution date on which the aggregate outstanding principal balance of the notes, prior to taking into account any distributions to be made on such distribution date, is equal to 10% or less of the initial aggregate principal balance of the notes, and continuing on each distribution date thereafter until the aggregate outstanding principal balance of the notes has been reduced to zero.
|
|
If the optional redemption is exercised, you may not be able to reinvest the proceeds you receive in a comparable security with an equivalent yield. In addition, because the optional redemption will continue to be exercisable until the aggregate outstanding principal balance of the notes is paid in full, the timing of any price paid to you upon any exercise of the optional redemption will affect the weighted average life and yield on your investment in the notes and, if you purchased your notes at a premium to par, you may suffer a loss on your investment in the notes.
|
|
If the optional redemption is not exercised, the weighted average life on your investment in the notes may be longer (and its yield may be lower) than you expected at the time of your investment in the notes. Further, if the optional redemption is not exercised, you may not be able to sell your notes when you want to do so or you may be unable to obtain the price that you wish to receive for your notes and, as a result, you may suffer a loss on your investment in the notes.
|
|
Based on current market conditions and the current market value of the trust student loans, there may be significant economic incentives for the optional redemption to be exercised; however, there is no assurance that then prevailing market conditions, future fair market value of the remaining trust student loans, or other economic factors will provide sufficient incentive for the trust to exercise the optional redemption at any point in the future.
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There can be no assurance that the trust will exercise the optional redemption or that, even if the exercise of such optional redemption is deemed to be advisable, it will be able to raise sufficient funds (either through permitted borrowings or asset sales) to exercise the
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optional redemption on any applicable distribution date. Similarly, even if funds are available, there can be no assurance that the trust will be able to satisfy any conditions precedent to entering into a permitted credit agreement for the purpose of exercising the optional redemption.
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See “Description of the Notes—Optional Redemption of the Notes” in this prospectus supplement for a more detailed description of the optional redemption.
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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 an investment, as well as the interaction of these factors.
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Regulatory Initiatives May Result In Increased Regulatory Capital Requirements And/Or Decreased Liquidity In Respect Of The Notes
|
Article 122a under the Capital Requirements Directive restricts a credit institution incorporated in an European Economic Area member state (an “EEA credit institution”), and its consolidated group affiliates, irrespective of their jurisdiction of incorporation, from investing in asset-backed securities unless the originator, sponsor or original lender in respect of the relevant securitization has explicitly disclosed to the EEA credit institution or its consolidated group affiliate, as applicable, that it will retain, on an on-going basis, a net economic interest of not less than 5% in respect of certain specified credit risk tranches or asset exposures as contemplated by Article 122a. The Capital Requirements Directive is a European Union Directive that has been adopted by the European Economic Area member states that are not European Union member states pursuant to the applicable provisions of the Agreement on the European Economic Area, dated January 1, 1994 (as amended).
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Article 122a also requires an EEA credit institution and its consolidated group affiliates to be able to demonstrate that it has undertaken certain due diligence in respect of, amongst other things, the securitization exposures it has acquired and the underlying exposures, and that procedures are established for such due diligence activities to be conducted on an on-going basis. Failure by an EEA credit institution or one of its consolidated group
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affiliates which invests in the notes described in this prospectus supplement to comply with one or more of the requirements set out in Article 122a in the manner required by its national regulator will result in the imposition of significant additional capital charges with respect to that investment. Investors should make themselves aware of the requirements of Article 122a (and any corresponding implementing rules of their regulator), where applicable to them, in addition to any other regulatory requirements applicable to them with respect to their investment in the notes.
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The depositor has committed to retain (or it will act to ensure that an affiliate of the depositor which is consolidated with it for accounting purposes retains) a material net economic interest in the securitization transaction as contemplated by Article 122a. On the closing date, such material net economic interest will equal 5% of the initial pool balance and will be held in the form of the RC certificate. Relevant investors are required independently to assess and determine the sufficiency of the depositor’s commitment described above, in any investor report and otherwise, and none of SLM Corporation, the sponsor, the administrator, the servicer, the depositor, any seller, the initial purchasers or any of their affiliates makes any representation that the information described above is sufficient in all circumstances for such purposes or that Article 122a will not be amended, supplemented, or interpreted in the future in such a way as to make an investment in the notes by an EEA credit institution (or a consolidated subsidiary of an EEA credit institution) non-compliant with Article 122a. Considerable uncertainty remains with respect to the interpretation of Article 122a, particularly by the national regulatory authorities in each of the European Union and the European Economic Area member states, and it is not clear what will be required to demonstrate compliance to national regulators. Investors in the notes are responsible for analyzing their own regulatory position and for making themselves aware of the requirements of Article 122a, where applicable to them, in addition to any other regulatory requirements applicable to them with respect to their investment in the notes. Investors who are uncertain as to the requirements that will need to be complied with in order to avoid the
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additional regulatory capital charges for noncompliance with Article 122a should seek guidance from their regulator. None of SLM Corporation, the sponsor, the administrator, the servicer, the depositor, any seller, the initial purchasers or any of their affiliates makes any representation to any prospective investor or purchaser of the notes regarding the regulatory capital treatment of their investment on the closing date or at any time in the future.
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Similar requirements to those set out in Article 122a are expected to be implemented for other European Union regulated investors (such as investment firms, insurance and reinsurance undertakings, UCITS funds and certain hedge fund managers) in the future. None of SLM Corporation, the sponsor, the administrator, the servicer, the depositor, any seller, the initial purchasers or any of their affiliates makes any representation regarding such additional changes.
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|
Article 122a and any other changes to the regulation or regulatory treatment of the notes for some or all investors may negatively impact the regulatory position of individual investors and, in addition, have a negative impact on the price and liquidity of the notes in the secondary market.
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Sequential Payment Of The Class A Notes Results In A Greater Risk Of Loss For Some Holders
|
Holders of the class A notes with higher numerical designations bear a greater risk of loss than do holders of the class A notes with lower numerical designations because, in general, distributions of principal of any class of the class A notes will be made only after the class A notes having a lower numerical designation have been paid.
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The yields to maturity on the class A-2 notes may be more sensitive than the yield to maturity on the class A-1 notes because of losses due to defaults on the trust student loans and the timing of those losses, to the extent such losses are not covered by any applicable credit enhancement. The timing of receipt of principal and interest on the class A-2 notes may be adversely affected by those losses even if such notes do not ultimately bear such losses.
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Subordination Of The Class B Notes And Sequential
Payment Of The Notes Result In A Greater Risk Of Loss For Class B Noteholders |
Holders of class B notes bear a greater risk of loss than do holders of class A notes because distributions of interest on the class B notes will be subordinate to the payments of interest on and principal distributions to the class A notes, and distributions of principal of the class B notes will be subordinate to the payment of both interest on and all principal of the class A notes. As a result of the longer weighted average life of the class B notes, holders of those notes have a greater risk of suffering a loss on their investments.
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Investors In The Class B Notes Bear Greater Risk Of Loss Because The Priority Of Payment Of Interest And The Timing Of Principal Payments On The Class B Notes May Change Due To The Variability Of Cashflows
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Interest on the class B notes generally will be paid prior to principal of the class A notes. However, if after giving effect to all required distributions of principal of and interest on the notes on any distribution date, the aggregate outstanding principal balance of the trust student loans, including any accrued interest thereon that is expected to be capitalized, and amounts then on deposit in the capitalized interest account (after any distributions of interest from that account) and in the reserve account in excess of the specified reserve account balance, would be less than the outstanding principal balance of the class A notes, interest on the class B notes will be subordinated to the payment of principal of the class A notes on that distribution date.
Principal of the class B notes will not begin to be paid until the principal of the class A notes is paid in full. Thus, investors in the class B notes will bear a greater risk of loss than the holders of class A notes. Investors in the class B notes will also bear the risk of any adverse changes in the anticipated yield and weighted average life of their notes resulting from any variability in payments of principal of and/or interest on the class B notes.
The yield to maturity on the class B notes may be more sensitive than the yields to maturity on the class A notes because of losses due to defaults on the trust student loans and the timing of those losses, to the extent such losses are not covered by any applicable credit enhancement. The timing of receipt of principal of and interest on the class B notes may be adversely affected by those losses even if the class B notes do not ultimately bear such losses.
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Certain Credit And Liquidity Enhancement Features Are Limited And If They Are Depleted, There May Be Shortfalls In Distributions To Noteholders
|
Certain credit and liquidity enhancement features, including the reserve account and the cash capitalization account, are limited in amount. In addition, the cash capitalization account will not be replenished, is available for a limited duration and will not be extended. In certain circumstances, if there is a shortfall in available funds, such amounts may be depleted. This depletion could result in shortfalls and delays in distributions to noteholders.
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The Characteristics Of The Trust Student Loans May Change
|
The statistical information in this prospectus supplement reflects only the characteristics of the trust student loans as of the statistical cutoff date. The trust student loans actually sold to the trust on the closing date will have characteristics that differ somewhat from the characteristics of the trust student loans as of the statistical cutoff date, due to payments received on and other changes in these loans that occur during the period from the statistical cutoff date to the closing date. We do not expect the characteristics of the trust student loans actually sold to the trust on the closing date to differ materially from the characteristics of the trust student loans as of the statistical cutoff date.
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However, in making your investment decision, you should assume that the actual characteristics of the trust student loans will vary somewhat from the characteristics of the trust student loans presented in this prospectus supplement as of the statistical cutoff date.
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The Trust Will Not Have The Benefit Of Any Guarantees Or Insurance On The Trust Student Loans
|
The trust student loans are not guaranteed, insured or reinsured by the United States or any state-sponsored guarantee agency or private insurer or by any other insurance or external credit enhancement. The primary credit enhancement for the notes is overcollateralization and amounts on deposit in the reserve account and, in the case of the class A notes, the subordination of the class B notes. The amount of credit enhancement is limited and can be depleted over time. In this event, you may suffer a loss on your investment.
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Failure To Pay Interest On The Class B Notes Is Not An Event Of Default For So Long As Any Class A Notes Are Outstanding
|
The indenture provides that failure to pay interest when due on any outstanding class B notes will not be an event of default under the indenture for so long as any of the class A notes are outstanding. Under these circumstances, the holders of the class B notes will not have any right to declare an event of default, to cause the maturity of the notes to be accelerated or to direct any remedial action under the indenture.
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The Occurrence Of An Event Of Default Under The Indenture May Delay Payments On The Class B Notes
|
The trust will not make any distributions of principal or interest on the class B notes until payment in full of principal and interest is received on the class A notes outstanding, following:
This may result in a delay or default in making payments on the class B notes.
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Class B Noteholders May Not Be Able To Direct The Indenture Trustee Upon An Event Of Default Under The Indenture
|
If an event of default occurs under the indenture, only the holders of the class A notes, for as long as such class A notes are outstanding, may waive that event of default, accelerate the maturity dates of the notes or direct any remedial action under the indenture. The holders of any outstanding class B notes will not have any rights to direct any remedial action until all of the class A notes have been paid in full and are no longer outstanding.
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[Your Notes Will Have A Degree Of Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal And Interest On Your Notes, And The Swap Agreement Does Not Eliminate All Of This Basis Risk]
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[The trust will enter into an interest rate swap agreement with [_______].
The swap agreement is intended primarily to mitigate the basis risk associated with a decrease in the prime rate payable on certain of the trust student loans with no decrease in the rate of one-month LIBOR payable on the floating rate notes. If this occurs, shortfalls might result in available funds to make payments due to the notes because the interest rates of certain of the trust student loans adjust monthly on the basis of the prime rate and the interest rate payable on the floating rate notes adjusts on the basis of one-month LIBOR. See “Annex A—Characteristics of the Trust Student Loan Pool—Composition of the Trust Student Loans as of the Statistical Cutoff Date” which specifies the percentages of trust student loans that adjust based on the prime rate, one-month LIBOR or the 91-day Treasury bill rate, or that bear a fixed rate, as applicable.
The notional amount of the swap agreement will equal the aggregate principal balance of the prime rate-based trust student loans that are reset monthly, as determined periodically. The notional amount of the swap agreement does not include the principal balances of the fixed rate-based, the T-bill rate-based or the other types of prime rate-based trust student loans. Consequently you must rely on other forms of credit enhancement, to the extent available, to mitigate that portion of the basis risk not covered by the swap agreement.
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The swap agreement is scheduled to terminate, by its terms, on the ______ 20__ distribution date. In addition, an early termination of a swap agreement may occur upon the occurrence of certain events. See “Swap Agreement—Default Under the Swap Agreement” and “—Termination Events.”
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Upon the early termination of the swap agreement, you cannot be certain that the trust will be able to enter into a substitute swap agreement. In addition, the trust will not enter into any substitute swap agreement after the swap agreement terminates on the ______ 20__distribution date. In this event, there can be no assurance that the amount of credit enhancement will be sufficient to cover the basis risk associated with the notes.]
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Risk Of Bankruptcy Discharge Of Private Education Loans
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Career training loans made for qualified education expenses are generally dischargeable by a borrower in bankruptcy. Private education loans, other than career training loans, made for qualified education expenses, are generally not dischargeable by a borrower in bankruptcy. However, such 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. As of the statistical cutoff date, approximately 7.9% of the trust student loans are direct-to-consumer loans. For a more complete description of direct-to-consumer loans see “Sallie Mae’s Student Loan Financing Business” and “Appendix G: Direct-to-Consumer Loan Programs” in the base prospectus attached hereto.
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If you own any notes, you will bear any risk of loss resulting from the discharge by any borrower of a private education loan to the extent the amount of the default is not covered by the trust’s credit enhancement.
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School Closures And Unlicensed Schools May Result In Losses On Your Notes
|
Most of the trust student loans are subject to the so-called “Holder-in-Due-Course” rule of the Federal Trade Commission, the provisions of which are similar to those contained in the Uniform Consumer Credit
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Code and in state statutes and common law of many states. The effect of these laws is to subject a seller (and certain lenders and their assignees, such as the trust) in a consumer credit transaction to all claims and defenses which the obligor in the transaction can assert against the sellers of the goods or services. Under these laws, the trust as holder of the trust student loans will be subject to any claims or defenses that the student borrower may assert against its school for failure of the school to satisfy its obligations under the enrollment agreement with the student as a result of a school closure or otherwise. If a student is successful in making such a claim against the school, the student may have the right to recover from the trust payments previously made on the related trust student loan and have a defense against making further payments. In this event, to the extent available funds and credit enhancement is insufficient to cover such amounts, you may suffer a loss on your investment.
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In addition, generally state law requires schools engaged in providing educational services in that state to be licensed by a state regulatory authority in that state. In most states, if a school is not licensed at the time the student signs the enrollment agreement, the enrollment agreement may be void and, as a result, the student will have a defense against repayment of the loan. Although the sellers will represent as a condition to the sale of the trust student loans that, as of the statistical cutoff date, all of the related schools are licensed under applicable law, to the extent that a related school became unlicensed prior to the student signing the enrollment agreement, the related borrower will have the right to recover payments previously made on the related trust student loan and will have a defense against further payment. In this event, to the extent available funds and credit enhancement are insufficient to cover such amounts, you may suffer a loss on your investment.
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Certain Actions Can Be Taken Without Noteholder Approval
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The transaction documents provide that certain actions may be taken based upon receipt by the indenture trustee of a confirmation from each of the rating agencies that the then-current ratings assigned by the rating agencies then rating the notes will not be downgraded or withdrawn by those actions. In this event, such actions may be taken without the consent of noteholders.
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The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
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In the event of a default by the servicer resulting solely from certain events of insolvency or the bankruptcy of the servicer, a court, conservator, receiver or liquidator 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 subservicer, 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. In addition, in the event of an insolvency or bankruptcy of the servicer, a court, conservator, receiver or liquidator may permit the servicer to assign its rights and obligations as servicer to a third party without complying with the provisions of the transaction documents.
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The Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
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The Servicemembers Civil Relief Act and similar state and local laws provide payment relief to borrowers who enter active military service and to borrowers in reserve status who are called to active duty after the origination of their trust student loans. 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.
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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.
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[Retention Of The Class B Notes By The Depositor Or An Affiliate May Reduce The Liquidity Of The Class B Notes]
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[Although [all] [a portion] of the class B notes will initially be retained by the depositor or an affiliate, all or a portion of the class B notes could be subsequently sold in the secondary market at varying prices from time to time. Accordingly, if a portion of the retained class B notes is sold, the market for the class B notes may be less liquid than would otherwise be the case. Furthermore, if additional portions of the retained class B notes are sold in the secondary market, demand and market price for the class B notes already in the market could be adversely affected.]
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The Notes May Be Assigned Lower Ratings Than Those
Described In This Prospectus Supplement By Different Rating Agencies |
The sponsor, or an affiliate, will pay a fee to each of [__________] and [__________] (collectively, the “Rating Agencies”) to assign the initial credit ratings to the notes. The SEC has said that being paid by the sponsor, issuer or an initial purchaser to issue or maintain a credit rating on asset-backed securities creates a conflict of interest for nationally recognized statistical rating organizations (“NRSROs”), and that this conflict is particularly acute because arrangers of asset-backed securities transactions provide repeat business to such NRSROs.
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The sponsor has not requested a rating of the notes by any NRSRO other than the Rating Agencies. However, other NRSROs may assign their own ratings to any class or classes of notes at any time, even prior to the closing date. NRSROs have different methodologies, criteria, models and requirements, which may result in ratings that are lower than those assigned by the Rating Agencies. Depending upon the level of the ratings assigned, what NRSROs are involved, what their stated reasons are for assigning a lower rating, and other factors, if a NRSRO issues a lower rating, the liquidity, market value and regulatory characteristics of the particular class or classes of notes could be materially and adversely affected. In addition, the mere possibility that such a rating could be issued may affect price levels in any secondary market that may develop.
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Illiquid Market Conditions May Occur from Time to Time
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Despite recent 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 notes. Accordingly, you may not be able to sell your notes when you want to do so or you may be unable to obtain the price that you wish to receive for your notes and, as a result, you may suffer a loss on your investment.
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[The Interests Of The Swap Counterparty May Differ From Those Of The Noteholders]
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[[_______] will serve as swap counterparty and may also serve as valuation agent pursuant to the terms of the swap agreement. In that capacity, the swap counterparty will calculate collateral values and the mid-market value of the swap agreement and make other determinations that may be material to investors in the notes. The manner in which [_______] makes such determinations or otherwise exercises its discretion may adversely affect investors in the notes. In addition, [_______] may have the right to cease serving in this capacity or to delegate certain responsibilities to third parties, who may have interests and incentives that differ from those of investors in the notes. In their capacity as swap counterparty, [_______] owes no fiduciary duty to the noteholders.]
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·
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acquiring, holding and managing the trust student loans and holding the other assets of the trust and related proceeds;
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·
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issuing the notes;
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·
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making payments on the notes;
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·
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[entering into the swap agreement and making the payments required thereunder;]
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·
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entering into any potential future interest rate cap agreement at the direction of the administrator from time to time and making payments, including any upfront payments, required thereunder; and
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·
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engaging in other activities that are necessary, suitable or convenient to accomplish, or are incidental to, the foregoing.
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Floating Rate Class A-1 Student Loan-Backed Notes
|
$ | ||||
Floating Rate Class A-2 Student Loan-Backed Notes
|
$ | ||||
Floating Rate Class B Student Loan-Backed Notes
|
$ | ||||
Equity
|
100 | ||||
Total
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$ |
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·
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contains terms in accordance with those required by the loan program under which it was originated (the Undergraduate and Graduate Student Loan Programs, the Law Loan Programs, the MBA Loan Programs, the Medical Loan Programs, the Direct-to-Consumer Loan Programs, the EFG Loan Programs, the Smart Option Student Loan® Program, the Career Training Loan Program and the Private Consolidation Loan Program, as applicable), the purchase agreements, and other applicable requirements;
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·
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is not more than [___] days past due;
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·
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is fully disbursed; and
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·
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does not have a borrower who is noted in the related records of the servicer as being currently involved in a bankruptcy proceeding.
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·
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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 (“GNMA”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal National Mortgage Association (“Fannie Mae”), 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, GNMA, Freddie Mac or Fannie Mae shall be eligible investments only if, at the time of investment, they meet the criteria of each of the rating agencies rating the notes for collateral for securities having ratings equivalent to the ratings of the notes in effect at the closing date;
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·
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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 from each of the rating agencies rating the notes in the highest investment category granted thereby;
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·
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commercial paper having, at the time of the investment, a rating from each of the rating agencies rating the notes in the highest investment category granted thereby;
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·
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investments in money market funds having a rating from each of the rating agencies rating the notes in the highest investment category granted thereby (including funds for which the indenture trustee, the administrator or the trustee, or any of their respective affiliates is investment manager or advisor);
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·
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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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·
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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; and
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·
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any other investment which would not result in the downgrading or withdrawal of any rating of the notes by any of the rating agencies rating the notes as affirmed in writing by such rating agencies to the indenture trustee.
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·
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the outstanding principal balance of the trust student loans, plus
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·
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any accrued interest on the trust student loans as of the last day of the related collection period that is expected to be capitalized, plus
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·
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the balance of the cash capitalization account on the distribution date following those distributions made with respect to clauses (1) through (5) under “—Distributions—Distributions from the Collection Account” below, plus
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·
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the balance of the reserve account on the distribution date following those distributions made under clauses (1) through (6) under
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“—Distributions—Distributions from the Collection Account” below, minus
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|
·
|
the Specified Reserve Account Balance for that distribution date, or
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(1)
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to the servicer, the primary servicing fee due on that distribution date;
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(2)
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to the administrator, the administration fee due on that distribution date and all prior unpaid administration fees;
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(3)
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[to the swap counterparty, any swap payments payable to the swap counterparty by the trust under the swap agreement;]
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(4)
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[pro rata, based on the aggregate principal balance of the class A notes and the amount of any swap termination payment due and payable by the trust to the swap counterparty under this item (4):]
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|
(a)
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to the class A noteholders, the Class A Noteholders’ Interest Distribution Amount; and
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(b)
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[to the swap counterparty, the amount of any swap termination payments due to the swap counterparty under the swap agreement resulting from (i) a termination event or event of default where the trust is the sole affected party or defaulting party, respectively, or (ii) a “Tax Event” or “Illegality” (each as defined in the swap agreement), irrespective of which party is the affected party; provided, that if any amounts allocable to the notes are not needed to pay the Class A Noteholders' Interest Distribution Amount as of such distribution date, such amounts will be applied to pay the portion, if any, of any swap termination payment referred to above remaining unpaid;]
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(5)
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to the class B noteholders, the Class B Noteholders’ Interest Distribution Amount;
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(6)
|
sequentially, first, to the class A-1 noteholders, and second, to the class A-2 noteholders, in that order, until the principal balance of each such class has been reduced to zero, the Class A Noteholders’ Principal Distribution Amount;
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(7)
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to the class B noteholders, until the principal balance of the notes has been reduced to zero, the Class B Noteholders’ Principal Distribution Amount;
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(8)
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to the reserve account, the amount required to reinstate the amount in the reserve account up to the Specified Reserve Account Balance;
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(9)
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to the indenture trustee, the trustee and the Delaware trustee, any unpaid fees and expenses, including without limitation any indemnity amounts, to the extent such amounts have not been paid by the administrator;
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(10)
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to the servicer, the aggregate unpaid amount of the carryover servicing fee, if any;
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(11)
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[to the swap counterparty, the amount of any swap termination payments owed by the trust to the swap counterparty under the swap agreement and not payable in clause (4) above;]
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(12)
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to the related potential future cap counterparty under any potential future interest rate cap agreement, the amount of any payment due under such potential future interest rate cap agreement;
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(13)
|
sequentially, first, to the class A-1 noteholders, second, to the class A-2 noteholders, and third, to the class B noteholders, in that order, until the principal balances thereof have been reduced to zero, the Additional Principal Distribution Amount, if any; and
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(14)
|
first, to the class RC certificates, to reduce their remaining outstanding principal balance, if any, to zero, then to the excess distribution certificateholder, any remaining amounts after application of the preceding clauses.
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·
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an event of default under the indenture relating to the payment of principal of any class of notes at its maturity date or to the payment of interest on the controlling class of notes which in either case has resulted in an acceleration of the maturity of the notes;
|
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·
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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
|
|
·
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a liquidation of the trust assets following any event of default under the indenture;
|
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(1)
|
pro rata, to the indenture trustee, for annual fees and any other amounts due and owing to it under the indenture, and to the trustee and Delaware trustee, if applicable, for annual fees and any other amounts due and owing to them under the trust agreement (but, in each case, only to the extent not paid by the administrator or the depositor);
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(2)
|
to the servicer, the primary servicing fee due on that distribution date;
|
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(3)
|
to the administrator, the administration fee due on that distribution date and all prior unpaid administration fees;
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(4)
|
[to the swap counterparty, any swap payments payable to the swap counterparty by the trust under the swap agreement;]
|
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(5)
|
[pro rata, based on the aggregate principal balance of the notes and the amount of any swap termination payment due and payable by the trust to a swap counterparty under this item (5):]
|
|
(a)
|
to the class A noteholders, pro rata, the Class A Noteholders’ Interest Distribution Amount; and; and
|
|
(b)
|
[to the swap counterparty, the amount of any swap termination payments due to the swap counterparty under the swap agreement resulting from (i) a termination event or event of default where the trust is the sole affected party or defaulting party, respectively, or (ii) a “Tax Event” or “Illegality” (each as defined in the swap agreement), irrespective of which party is the affected party; provided, that if any amounts allocable to the notes are not needed to pay the Interest Distribution Amount as of such distribution date, such amounts will be applied to pay the portion, if any, of any swap termination payment referred to above remaining unpaid;]
|
|
(6)
|
pro rata, based on the aggregate principal balance of the class A notes, to the class A noteholders, an amount sufficient to reduce the respective principal balances of the class A notes to zero;
|
|
(7)
|
to the class B noteholders, the Class B Noteholders’ Interest Distribution Amount;
|
|
(8)
|
to the class B noteholders, an amount sufficient to reduce the principal balance of the class B notes to zero;
|
|
(9)
|
to the servicer, all carryover servicing fees, if any;
|
|
(10)
|
[to the swap counterparty, the amount of any swap termination payments owed by the trust to the swap counterparty under the swap agreement and not payable in item (5) above;]
|
|
(11)
|
to the related potential future cap counterparty under any potential future interest rate cap agreement, the amount of any payment due under such potential future interest rate cap agreement; and
|
|
(12)
|
first, to the class RC certificates, to reduce their remaining outstanding principal balance, if any, to zero, then to the excess distribution certificateholder, any remaining funds.
|
|
·
|
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.
|
Party
|
Amount
|
|
Servicer
|
The primary servicing fee(1) for any month is equal to 1/12 of an amount not to exceed [___]% of the outstanding principal balance of the trust student loans, plus the amount of any carryover servicing fee.
|
|
Indenture Trustee and Trustee(2)
|
$[_____] per annum, payable in advance.
|
|
Delaware Trustee(3)
|
$[_____] per annum, payable in advance.
|
|
Administrator(1)
|
$[_____] per month, payable in arrears.
|
(1)
|
To be paid from Available Funds before any amounts are distributed to the noteholders.
|
(2)
|
To be paid by the administrator pursuant to a separate agreement with the indenture trustee and trustee, and may be paid by the trust if there is an event of default under the indenture, and such amount has not previously been paid.
|
(3)
|
To be paid by the administrator pursuant to a separate agreement with the Delaware trustee, and may be paid by the trust if there is an event of default under the indenture, and such amount has not previously been paid.
|
·
|
pay noteholders 100% of the aggregate outstanding principal balance of the notes plus accrued interest, after taking into account all distributions of interest and principal made by the trust to all noteholders from Available Funds on such distribution date; and
|
·
|
pay all other amounts, if any, then due and owed by the trust, to the extent not paid from Available Funds on such distribution date.
|
|
·
|
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.
|
|
·
|
reduce the outstanding principal balance of each class of notes then outstanding on the related distribution date to zero; and
|
|
·
|
pay to noteholders the interest payable on the related distribution date.
|
|
·
|
one-month LIBOR, except for the first accrual period, as determined for the accrual period related to the applicable distribution date,
|
|
·
|
a notional amount equal to the aggregate principal balance, as of the last day of the collection period preceding the beginning of the related accrual period (or, for the initial distribution date, the statistical cutoff date), of the trust student loans bearing interest based upon the prime rate, reset monthly; and
|
|
·
|
a fraction, the numerator of which is the actual number of days elapsed in the related accrual period and the denominator of which is 360.
|
|
·
|
the weighted average of the prime rates published in The Wall Street Journal in the “Interest Rates & Bonds” section, “Consumer Rates” table as of the second business day before the first calendar day of each of the immediately preceding three months (or if The Wall Street Journal is not published on any such date the first preceding day for which that rate is published in The Wall Street Journal) minus [___]%;
|
|
·
|
a notional amount equal to the aggregate principal balance, as of the last day of the collection period preceding the beginning of the related accrual period (or, for the initial distribution date, the statistical cutoff date), of the trust student loans bearing interest based upon the prime rate, reset monthly; and
|
|
·
|
a fraction, the numerator of which is the actual number of days elapsed in the related accrual period and the denominator of which is 365 or 366, as the case may be.
|
|
·
|
the failure of the trust or the swap counterparty to pay or deliver any amount when due under the swap agreement after giving effect to the applicable grace period;
|
|
·
|
the occurrence of certain events of bankruptcy and insolvency;
|
|
·
|
an acceleration of the principal of the notes following an event of default under the indenture (other than an event of default relating to a breach of any covenant or a violation of any representation or warranty) which acceleration has become non-rescindable and non-waivable;
|
|
·
|
an acceleration of the principal of the notes following an event of default under the indenture for a breach of any covenant or a violation of any representation or warranty which acceleration has become non-rescindable and non-waivable, and pursuant to which the indenture trustee has liquidated the trust student loans; and
|
|
·
|
the following other standard events of default under the 1992 ISDA Master Agreement, as modified by the terms of the swap agreement: “Breach of Agreement” (not applicable to the trust), “Credit Support Default”, “Misrepresentation” (not applicable to the trust), “Default Under Specified Transaction” (not applicable to the trust), “Cross-Default” (not applicable to the trust) and “Merger Without Assumption” (not applicable to the trust), as described in Sections 5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vi) and 5(a)(viii), respectively, of the 1992 ISDA Master Agreement.
|
|
·
|
the Plan’s purchase or holding of the notes [and the trust’s entering into the swap agreement] will not constitute or otherwise result in a non-exempt prohibited transaction in violation of Section 406 of ERISA or Section 4975 of the Code which is not covered by a statutory exemption or a class or other applicable exemption from the prohibited transaction rules as described in the base prospectus; and
|
|
·
|
the purchase or holding of the notes [and the trust’s entering into the swap agreement] 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.
|
|
·
|
it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity, within the meaning of section 21 of the FSMA, received by it in connection with the issue or sale of any notes in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (the “FSMA”) does not apply to the trust;
|
|
·
|
it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom; and
|
|
·
|
in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of notes which are the subject of the offering contemplated by this prospectus supplement to the public in that Relevant Member State other than:
|
Underwriter
|
Class A-1
Notes
|
Class A-2
Notes
|
Class B
Notes
|
|||
$
|
$
|
$
|
||||
Total
|
$
|
$
|
$
|
Initial Public Offering Price
|
Underwriting Discount
|
Proceeds to The Depositor
|
Concession
|
Reallowance
|
|||||
Per Class A-1 Note
|
%
|
%
|
%
|
%
|
%
|
||||
Per Class A-2 Note
|
%
|
%
|
%
|
%
|
%
|
||||
Per Class B Note*
|
%
|
%
|
%
|
%
|
%
|
||||
Total
|
$
|
$
|
$
|
|
·
|
if the form of risk retention is changed from the type specified in paragraph (1) sub-paragraph (d) of Article 122a to any other type specified in paragraph (1) of Article 122a, it will act to cause the trust, or the administrator on behalf of the trust, to publish a notice of such change in a leading newspaper having general circulation in Luxembourg (which is expected to be Luxemburger Wort) and/or on the Luxembourg Stock Exchange’s website at http://www.bourse.lu;
|
|
·
|
it will, or will cause the trust, or the administrator on behalf of the trust, to provide the indenture trustee on a monthly basis confirmation of its compliance with its undertaking in respect of the retention of the material net economic interest; and
|
|
·
|
it will notify the trust and the administrator promptly of: (1) any change in the identity of the entity holding the retained net economic interest or in the form in which such interest is held; and (2) any breach of its undertaking in respect of the retention of the material net economic interest.
|
|
·
|
with respect to the initial distribution date, all amounts deposited into the collection account on the closing date;
|
|
·
|
all collections received by the servicer from borrowers on the trust student loans;
|
|
·
|
all Recoveries received during that collection period;
|
|
·
|
the aggregate purchase amounts received during that collection period for those trust student loans repurchased by the depositor or purchased by the servicer or any seller;
|
|
·
|
amounts received by the trust pursuant to the servicing agreement during that collection period related to yield or principal adjustments;
|
|
·
|
investment earnings for that distribution date earned on amounts on deposit in the Trust Accounts and any interest remitted by the administrator to the collection account prior to such distribution date;
|
|
·
|
amounts transferred from the reserve account in excess of the applicable Specified Reserve Account Balance;
|
|
·
|
[amounts received from the swap counterparty for that distribution date; provided, that, in the event of a termination of the swap agreement, any swap termination payments received will be used, to the extent required therefor, to enter into a replacement swap agreement and will not constitute Available Funds until such time as the inclusion of such amounts as a part of Available Funds satisfies the Rating Agency Condition; and]
|
|
·
|
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;
|
|
·
|
the amount of interest that was payable on the preceding distribution date to each class of class A notes, over
|
|
·
|
the amount of interest actually distributed with respect to each such class A note on that preceding distribution date,
|
|
·
|
the amount of interest accrued at the respective class A note interest rates for the related accrual period on the aggregate outstanding principal balances of these classes of class A notes on the applicable immediately preceding distribution date (or in the case of the initial distribution date, the closing date) after giving effect to all principal distributions to class A noteholders on preceding distribution dates; 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 with respect to the class B notes on that preceding distribution date,
|
|
·
|
the amount of interest accrued at the class B note interest rate for the related accrual period on the outstanding balance of the class B notes on the applicable immediately preceding distribution date (or in the case of the initial distribution date, the closing date) after giving effect to all principal distributions to class B noteholders on preceding distribution dates, and
|
|
·
|
the Class B Note Interest Shortfall for that distribution date.
|
|
·
|
all payments received by the trust through the last day of such collection period from borrowers (other than Recoveries);
|
|
·
|
all amounts received by the trust through that date for trust student loans repurchased by the depositor or purchased by any of the sellers or the servicer;
|
|
·
|
the aggregate principal balance of all trust student loans that became Charged-Off Loans during such collection period; and
|
|
·
|
the amount of any adjustments to balances of the trust student loans that the servicer makes under the servicing agreement through the last day of such collection period.
|
Aggregate Outstanding Principal Balance
|
|
Aggregate Outstanding Principal Balance - Treasury Bill
|
|
Percentage of Aggregate Outstanding Principal Balance - Treasury Bill
|
|
Aggregate Outstanding Principal Balance - Prime
|
|
Percentage of Aggregate Outstanding Principal Balance - Prime
|
|
Aggregate Outstanding Principal Balance - Prime Monthly Reset
|
|
Percentage of Aggregate Outstanding Principal Balance - Prime Monthly Reset
|
|
Aggregate Outstanding Principal Balance - Prime Quarterly Reset
|
|
Percentage of Aggregate Outstanding Principal Balance - Prime Quarterly Reset
|
|
Aggregate Outstanding Principal Balance - Prime Annual Reset
|
|
Percentage of Aggregate Outstanding Principal Balance - Prime Annual Reset
|
|
Aggregate Outstanding Principal Balance - Fixed
|
|
Percentage of Aggregate Outstanding Principal Balance - Fixed
|
|
Aggregate Outstanding Principal Balance - One-Month LIBOR
|
|
Percentage of Aggregate Outstanding Principal Balance - One-Month LIBOR
|
|
Number of Borrowers
|
|
Average Outstanding Principal Balance Per Borrower
|
|
Number of Loans
|
|
Weighted Average Remaining Term to Scheduled Maturity
|
|
Weighted Average Annual Interest Rate
|
|
Weighted Average Margin - Treasury Bill
|
|
Weighted Average Margin - Prime
|
|
Weighted Average Annual Interest Rate - Fixed
|
|
Weighted Average Margin - One-Month LIBOR
|
|
____________________
|
*
|
Trust student loans of borrowers who are in-school have an assumed term to maturity depending on the particular loan type.
|
Loan Program
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|
Undergraduate & Graduate Loan Programs(1)
|
||||
Law Loan Programs
|
||||
MBA Loan Programs
|
||||
Medical Loan Programs
|
||||
Consolidation Loan Programs
|
||||
Direct to Consumer Loan Programs
|
||||
Total
|
||||
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY SCHOOL TYPE AS OF THE STATISTICAL CUTOFF DATE
|
||||
School Type
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|
4-year Institution
|
|
|||
2-year Institution
|
|
|||
Proprietary/Vocational
|
|
|||
Unidentified
|
|
|||
Total
|
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY TITLE IV STATUS AS OF THE STATISTICAL CUTOFF DATE
|
|||
Title IV Status
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
For-Profit
|
|||
Non-Profit
|
|||
Total
|
Interest Rates
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
Less than or equal to 3.00%
|
|||
3.01% to 3.50%
|
|||
3.51% to 4.00%
|
|||
4.01% to 4.50%
|
|||
4.51% to 5.00%
|
|||
5.01% to 5.50%
|
|||
5.51% to 6.00%
|
|||
6.01% to 6.50%
|
|||
6.51% to 7.00%
|
|||
7.01% to 7.50%
|
|||
7.51% to 8.00%
|
|||
8.01% to 8.50%
|
|||
Equal to or greater than 8.51%
|
|||
Total
|
Range of Outstanding
Principal Balance
|
Number of
Borrowers
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|
Less than $5,000.00
|
||||
$ | 5,000.00 — $9,999.99 | |||
$ | 10,000.00 — $14,999.99 | |||
$ | 15,000.00 — $19,999.99 | |||
$ | 20,000.00 — $24,999.99 | |||
$ | 25,000.00 — $29,999.99 | |||
$ | 30,000.00 — $34,999.99 | |||
$ | 35,000.00 — $39,999.99 | |||
$ | 40,000.00 — $44,999.99 | |||
$ | 45,000.00 — $49,999.99 | |||
$ | 50,000.00 — $54,999.99 | |||
$ | 55,000.00 — $59,999.99 | |||
$ | 60,000.00 — $64,999.99 | |||
$ | 65,000.00 — $69,999.99 | |||
$ | 70,000.00 — $74,999.99 | |||
$ | 75,000.00 — $79,999.99 | |||
$ | 80,000.00 — $84,999.99 | |||
$ | 85,000.00 — $89,999.99 | |||
$ | 90,000.00 — $94,999.99 | |||
$ | 95,000.00 — $99,999.99 | |||
$100,000.00 and above
|
||||
Total
|
Number of Months Remaining to Scheduled Maturity*
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|
1-60 | ||||
121-180 | ||||
181-240 | ||||
241-300 | ||||
301-360 | ||||
361 and greater
|
||||
Total
|
||||
________________
*Trust student loans of borrowers who are in-school have an assumed term to maturity depending on the particular loan type. The stated term is the expected number of principal and interest payments remaining on the loan without regard to in-school payments of less than the full of amount of principal and interest due or to periods spent in deferment or forbearance status.
** Represents a percentage greater than 0% but less than 0.05%.
|
Current Loan Status
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of
Pool by
Outstanding
Principal Balance
|
In-School
|
|||
Grace
|
|||
Deferment
|
|||
Forbearance
|
|||
Repayment
|
|||
First year in repayment
|
|||
Second year in repayment
|
|||
Third year in repayment
|
|||
More than 3 years in repayment
|
|||
Total
|
|
·
|
In-School – the borrower is attending school and may or may not have a repayment obligation;
|
|
·
|
Grace – the borrower is in a grace period after completing school and may or may not have a repayment obligation;
|
|
·
|
Deferment – the borrower is temporarily not required to make payments, but may still be making interim interest or fixed payments, typically, but not always, due to a return to school;
|
|
·
|
Forbearance – the borrower is temporarily not required to make payments, typically, but not always, due to economic hardship; or
|
|
·
|
Repayment – the borrower is currently required to repay the loan.
|
Scheduled Remaining Months in Status
|
|||||
Current Borrower Payment Status
|
In-School
|
Grace
|
Deferment
|
Forbearance
|
Repayment
|
In-School
|
|||||
Grace
|
|||||
Deferment
|
|||||
Forbearance
|
|||||
Repayment
|
DISTRIBUTION OF THE TRUST STUDENT LOANS
BY CURRENT PAYMENT STATUS
AS OF THE STATISTICAL CUTOFF DATE
|
|||
Current Payment Status
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
In-School
|
|||
Grace
|
|||
Deferment
|
|||
Forbearance
|
|||
Repayment
|
|||
First year in repayment
|
|||
Second year in repayment
|
|||
Third year in repayment
|
|||
More than 3 years in repayment
|
|||
Total
|
|
·
|
In-School – the borrower is attending school without any repayment obligation;
|
|
·
|
Grace – the borrower is in a grace period after completing school without any repayment obligation;
|
|
·
|
Deferment – the borrower is temporarily not required to make payments, typically, but not always, due to a return to school;
|
|
·
|
Forbearance – the borrower is temporarily not required to make payments, typically, but not always, due to economic hardship; or
|
|
·
|
Repayment – the borrower is currently required to repay the loan.
|
SCHEDULED WEIGHTED AVERAGE REMAINING MONTHS IN
STATUS OF THE TRUST STUDENT LOANS BY
CURRENT PAYMENT STATUS AS OF THE
STATISTICAL CUTOFF DATE
|
|||||
Scheduled Remaining Months in Status
|
|||||
Current Payment Status
|
In-School
|
Grace
|
Deferment
|
Forbearance
|
Repayment
|
In-School
|
|||||
Grace
|
|||||
Deferment
|
|||||
Forbearance
|
|||||
Repayment
|
DISTRIBUTION OF THE TRUST STUDENT LOANS BY
REPAYMENT TERMS AS OF
THE STATISTICAL CUTOFF DATE
|
|||
Loan Repayment Terms
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
Level Principal & Interest Repayment(1)
|
|||
Interim Interest Repayment(2)
|
|||
Interim Fixed Repayment(2),(3)
|
|||
Other Repayment Options(4)
|
|||
Total
|
|||
___________
(1) Includes loans currently in-school and grace, if any.
|
|||
(2) Interim includes periods of in-school, grace and school deferment.
(3) Interim Fixed Repayment requires payments of $25 for the Smart Option Student Loan Program.
(4) May include, among others, graduated repayment and interest-only period loans.
|
State
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
Alabama
|
|||
Alaska
|
|||
Arizona
|
|||
Arkansas
|
|||
California
|
|||
Colorado
|
|||
Connecticut
|
|||
Delaware
|
|||
District of Columbia
|
|||
Florida
|
|||
Georgia
|
|||
Hawaii
|
|||
Idaho
|
|||
Illinois
|
|||
Indiana
|
|||
Iowa
|
|||
Kansas
|
|||
Kentucky
|
|||
Louisiana
|
|||
Maine
|
|||
Maryland
|
|||
Massachusetts
|
|||
Michigan
|
|||
Minnesota
|
|||
Mississippi
|
|||
Missouri
|
|||
Montana
|
|||
Nebraska
|
|||
Nevada
|
|||
New Hampshire
|
|||
New Jersey
|
|||
New Mexico
|
|||
New York
|
|||
North Carolina
|
|||
North Dakota
|
|||
Ohio
|
|||
Oklahoma
|
|||
Oregon
|
|||
Pennsylvania
|
|||
Rhode Island
|
|||
South Carolina
|
|||
South Dakota
|
|||
Tennessee
|
|||
Texas
|
|||
Utah
|
|||
Vermont
|
|||
Virginia
|
|||
Washington
|
|||
West Virginia
|
|||
Wisconsin
|
|||
Wyoming
|
|||
Other
|
|||
Total
|
Disbursement Date
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|
1997
|
||||
1998
|
||||
1999
|
||||
2000
|
||||
2001
|
||||
2002
|
||||
2003
|
||||
2004
|
||||
2005
|
||||
2006
|
||||
2007
|
||||
2008
|
||||
2009
|
||||
2010
|
||||
2011
|
||||
2012
|
||||
2013
|
||||
Total
|
||||
___________
*Represents a percentage greater than 0% but less than 0.05%.
|
DISTRIBUTION OF FICO CREDIT SCORES
AS OF A DATE NEAR THE LOAN APPLICATION FOR
ALL BORROWERS AND CO-BORROWERS(1)
|
|||
FICO Score
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|
[ - ]
|
|||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
|
|
[ - ]
|
|
|
|
[ - ]
|
|
|
|
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
[ - ]
|
|
||
Total
|
|
||
___________
(1) Co-borrowers include joint and several obligors.
|
DISTRIBUTION OF FICO CREDIT SCORES AS OF
A DATE NEAR THE LOAN APPLICATION FOR
LOANS WITH CO-BORROWERS(1)
|
|||
FICO Score
|
Aggregate
Outstanding
Principal Balance
|
Percent by
Outstanding
Principal Balance
|
|
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
Total
|
|||
___________
(1)The FICO scores shown are for the co-borrower on the trust student loan.
|
DISTRIBUTION OF FICO CREDIT SCORES AS OF
A DATE NEAR THE LOAN APPLICATION FOR
LOANS WITHOUT CO-BORROWERS
|
|||
FICO Score
|
Aggregate
Outstanding
Principal Balance
|
Percent by
Outstanding
Principal Balance
|
|
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
[ - ]
|
|||
Total
|
|||
___________
|
|||
* Represents a percentage greater than 0% but less than 0.05%.
|
Monthly Prepayments
|
=
|
Balance after scheduled payments
|
x
|
(1-(1-CPR)1/12)
|
CPR
|
0%
|
2%
|
4%
|
6%
|
8%
|
|||||
Monthly Prepayment
|
$[___]
|
$[___]
|
$[___]
|
$[___]
|
$[___]
|
|
·
|
the statistical cutoff date for the trust student loans is ________ __, 20__;
|
|
·
|
the closing date will be ________ __, 20__;
|
|
·
|
all trust student loans (as grouped within the “rep lines” described below) are in repayment status (with accrued interest having been capitalized upon entering repayment), with the exception of grace status loans which remain in their current status until their status end date and then move to repayment and in-school status loans which are assumed to have up to either a 36-month grace period (with respect to trust student loans under the Medical Loan Programs and the Dental Loan Programs), a 9-month grace period (with respect to LAWLOANS) or a 6-month grace period (with respect to all other trust student loans) before moving to repayment, and no trust student loan moves from repayment to any other status;
|
|
·
|
the trust student loans that are not in repayment status have interest accrued and capitalized upon entering repayment;
|
|
·
|
no delinquencies or defaults occur on any of the trust student loans, no repurchases for breaches of representations, warranties or covenants occur, and all borrower payments are collected in full;
|
|
·
|
index levels for calculation of payments is:
|
|
·
|
Prime Rate of [___]%;
|
|
·
|
91-day Treasury bill rate of [___]%; and
|
|
·
|
one-month LIBOR rate of [___]%;
|
|
·
|
distributions begin on ________ __, 20__, and payments are made on the 15th day of every month thereafter, whether or not the 15th is a business day;
|
|
·
|
the interest rate for the notes at all times will be equal to:
|
|
·
|
an administration fee equal to $[_________] is paid monthly by the trust to the administrator, beginning in ______ 20__;
|
|
·
|
a servicing fee equal to 1/12th of the then outstanding principal balance of the trust student loans times [___]% is paid monthly by the trust to the servicer, beginning in ______ 20__;
|
|
·
|
the collection account has an initial balance equal to $0;
|
|
·
|
the reserve account has an initial balance equal to $[_________] and at all times a balance equal to the lesser of (1) $[_________], and (2) the outstanding balance of the notes;
|
|
·
|
the cash capitalization account has an initial balance equal to $[_________], and on the ______ 20__ distribution date, any amounts on deposit in the cash capitalization account that have not previously been released will be included in Available Funds;
|
|
·
|
under the interest rate swap, the trust will pay the assumed prime rate minus [___]% in exchange for three-month LIBOR;
|
|
·
|
the trust will enter into no other swap or other interest rate hedging agreements;
|
|
·
|
all payments are assumed to be made at the end of the month and amounts on deposit in the collection account, reserve account and cash capitalization account, including reinvestment income earned in the previous month, net of servicing fees, are reinvested in eligible investments at the assumed reinvestment rate of [___]% per annum through the end of the collection period, and reinvestment earnings are available for distribution from the prior collection period;
|
|
·
|
prepayments on the trust student loans are applied monthly in accordance with CPR, as described above;
|
|
·
|
there are no fees or expenses payable to the indenture trustee, the trustee and the Delaware trustee, including without limitation any indemnity amounts, that have not been paid by the administrator, at the time the Principal Distribution Amount is distributed to the related noteholders on each distribution date;
|
|
·
|
no amounts are payable to the servicer as carryover servicing fees on any distribution date;
|
|
·
|
an optional redemption by the trust occurs on the first distribution date on which the aggregate outstanding principal balance of the notes, prior to taking into account any distributions to be made on such distribution date, is equal to 10% or less of the initial aggregate principal balance of the notes; and
|
|
·
|
the pool of trust student loans consists of [___] representative loans (“rep lines”), which have been created for modeling purposes from individual trust student loans based on combinations of similar individual student loan characteristics, which include, but are not limited to, loan status, interest rate, loan type and index.
|
Weighted Average Life to Optional Redemption(1) (years)(2)
|
|||||||||
0%
|
2%
|
4%
|
6%
|
8%
|
Class A-1 Notes
|
|||||||||
Class A-2 Notes
|
|||||||||
Class B Notes
|
|||||||||
Expected Maturity Date to Optional Redemption(1)
|
|||||||||
Class A-1 Notes
|
|||||||||
Class A-2 Notes
|
|||||||||
Class B Notes
|
(1)
|
Weighted average lives and expected maturities of the notes shown assume that the trust exercises the optional redemption upon the first distribution date such optional redemption is available.
|
(2)
|
The weighted average life of each class of notes (assuming a 360-day year consisting of twelve 30-day months) is determined by: (1) multiplying the amount of each principal payment on the related class of notes by the number of years from the closing date to the related distribution date, (2) adding the results, and (3) dividing that sum by the principal amount of the related class of notes as of the closing date.
|
Weighted Average Life to Maturity(1) (years)(2)
|
|||||||||
0%
|
2%
|
4%
|
6%
|
8%
|
Class A-1 Notes
|
|||||||
Class A-2 Notes
|
|||||||
Class B Notes
|
|||||||
Expected Maturity Date to Maturity(1)
|
|||||||
Class A-1 Notes
|
|||||||
Class A-2 Notes
|
|||||||
Class B Notes
|
(1)
|
Weighted average lives and expected maturities of the notes shown assume that the trust does not exercise the optional redemption.
|
(2)
|
The weighted average life of each class of notes (assuming a 360-day year consisting of twelve 30-day months) is determined by: (1) multiplying the amount of each principal payment on the related class of notes by the number of years from the closing date to the related distribution date, (2) adding the results, and (3) dividing that sum by the principal amount of the related class of notes as of the closing date.
|
Distribution Date
|
[0]%
|
[2]%
|
[4]%
|
[6]%
|
[8]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
Distribution Date
|
[0]%
|
[2]%
|
[4]%
|
[6]%
|
[8]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
Distribution Date
|
[0]%
|
[2]%
|
[4]%
|
[6]%
|
[8]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
Distribution Date
|
[0]%
|
[2]%
|
[4]%
|
[6]%
|
[8]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
Distribution Date
|
[0]%
|
[2]%
|
[4]%
|
[6]%
|
[8]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
Distribution Date
|
[0]%
|
[2]%
|
[4]%
|
[6]%
|
[8]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
|
·
|
|
·
|
FICO scores are based on the greater of the borrower and co-borrower scores as of a date near the loan application and must be at least:
|
|
§
|
Undergraduate/Graduate at not-for-profit schools: greater than or equal to 640;
|
|
§
|
Undergraduate/Graduate at for-profit schools: greater than or equal to 670;
|
|
§
|
DTC loans: greater than or equal to 670; and
|
|
§
|
Private Consolidation loans: greater than or equal to 640; and
|
|
·
|
Excludes loans made at selected schools that have historically experienced higher rates of default.
|
|
·
|
The following cohort default triangles are segmented by loan program type, FICO score, co-borrower status and school type.
|
|
·
|
Terms and calculations used in the cohort default triangles are defined below:
|
|
·
|
Repayment Year – The calendar year loans entered repayment.
|
|
·
|
Disbursed Principal Entering Repayment – The amount of principal entering repayment in a given year, based on disbursed principal prior to any interest capitalization.
|
|
·
|
Years in Repayment – Measured in years between repayment start date and default date. Zero represents defaults that occurred prior to the start of repayment.
|
|
·
|
Periodic Defaults – Defaulted principal in each Year in Repayment as a percentage of the disbursed principal entering repayment in each Repayment Year.
|
|
§
|
Defaulted principal includes any interest capitalization that occurred prior to default.
|
|
§
|
Defaulted principal is not reduced by any amounts recovered after the loan defaulted.
|
|
§
|
Because the numerator includes capitalized interest while the denominator does not, default rates are higher than if the numerator and denominator both included capitalized interest.
|
|
·
|
Total – The sum of Periodic Defaults across Years in Repayment for each Repayment Year.
|
|
(1)
|
Undergraduate/Graduate loans marketed under the Signature Student Loan brand.
|
|
(2)
|
Periodic Defaults for the most recent calendar Year in Repayment are for a partial year.
|
|
(3)
|
Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.
|
|
(1)
|
Undergraduate/Graduate loans marketed under the Signature Student Loan brand.
|
|
(2)
|
Periodic Defaults for the most recent calendar Year in Repayment are for a partial year.
|
|
(3)
|
Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.
|
|
(1)
|
Undergraduate/Graduate loans marketed under the Signature Student Loan brand.
|
|
(2)
|
FICO scores are based on the greater of the borrower and co-borrower scores as of a date near the loan application.
|
|
(3)
|
Periodic Defaults for the most recent calendar Year in Repayment are for a partial year.
|
|
(4)
|
Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.
|
|
(1)
|
Undergraduate/Graduate loans marketed under the Signature Student Loan brand.
|
|
(2)
|
FICO scores are based on the greater of the borrower and co-borrower scores as of a date near the loan application.
|
|
(3)
|
Periodic Defaults for the most recent calendar Year in Repayment are for a partial year.
|
|
(4)
|
Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.
|
|
(1)
|
FICO scores are based on the greater of the borrower and co-borrower scores as of a date near the loan application.
|
|
(2)
|
Periodic Defaults for the most recent calendar Year in Repayment are for a partial year.
|
|
(3)
|
Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.
|
|
(1)
|
Private education loans marketed under the Smart Option Student Loan® brand.
|
|
(2)
|
Periodic Defaults for the most recent calendar Year in Repayment are for a partial year.
|
|
(3)
|
Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.
|
|
(1)
|
Periodic Defaults for the most recent calendar Year in Repayment are for a partial year.
|
|
(2)
|
Numerator is the amount of principal in each cohort that defaulted in each Year in Repayment. Denominator is the amount of disbursed principal for that Repayment Year.
|
TRUSTEE
[__________________]
|
INDENTURE TRUSTEE
AND PAYING AGENT
[__________________]
|
BINGHAM McCUTCHEN LLP
399 Park Avenue
New York, New York 10022
|
RICHARDS, LAYTON & FINGER, P.A.
920 King Street
Wilmington, Delaware 19801
|
SHEARMAN & STERLING LLP
801 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2604
|
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
|
Class
|
Principal
|
Interest Rate
|
Maturity
|
||||
Class A-1 Notes
|
$
|
[____]-month LIBOR plus
|
%
|
|
|||
Class A-2 Notes
|
$
|
%
|
|
||||
Class B Notes
|
$
|
[____]-month LIBOR plus
|
%
|
|
You should consider carefully the risk factors on page S-[__] of this prospectus supplement and on page [__] of the base prospectus.
The notes are asset-backed securities issued by and are obligations of the issuing entity, which is a trust. They are not obligations of or interests in the sponsor, administrator, servicer, depositor, any seller or any of their affiliates.
The notes are not guaranteed or insured by the United States or any governmental agency.
|
Underwriting Proceeds to
Price to Public Discount the Depositor
Per Class A-1 Note % % %
Per Class A-2 Note % % %
Per Class B Note[*] % % %
[*For the amount of class B notes retained by the depositor or an affiliate, the underwriting discount will be % and proceeds to the depositor will be % with no selling concession or reallowance.] [INCLUDED ONLY IF TRANCHE IS RETAINED BY DEPOSITOR]
We expect the proceeds to the depositor in respect of the notes to be $ before deducting expenses payable by the depositor estimated to be $ and certain deposits to be made by the trust.
Neither the SEC nor any state securities commission has approved or disapproved the securities or determined whether this supplement or the base prospectus is accurate or complete. Any contrary representation is a criminal offense.
|
|||||
_______________
[Joint Book-Runners]
|
||||||
[_______]
|
[_______]
|
[_______]
|
||||
_______________
[Co-Managers]
|
||||||
[_______]
|
[_______]
|
[_______]
|
[_______]
|
|||
_______________
_______ __, 20___
|
Page
|
|||
Summary of Terms
|
S-1
|
||
·
|
Issuing Entity
|
S-1
|
|
·
|
Depositor
|
S-1
|
|
·
|
Sponsor, Servicer and Administrator
|
S-1
|
|
·
|
[Subservicer]
|
S-1
|
|
·
|
Indenture Trustee
|
S-1
|
|
·
|
Eligible Lender Trustee
|
S-1
|
|
·
|
Delaware Trustee
|
S-1
|
|
·
|
The Notes
|
S-1
|
|
·
|
Dates
|
S-2
|
|
·
|
Information About the Trust Student Loans
|
S-2
|
|
·
|
Information About the Notes
|
S-3
|
|
·
|
Indenture Trustee and Paying Agent
|
S-6
|
|
·
|
[Luxembourg Paying Agent
|
S-6
|
|
·
|
Administrator
|
S-6
|
|
·
|
Information About the Trust
|
S-6
|
|
·
|
Administration of the Trust
|
S-12
|
|
·
|
Termination of the Trust
|
S-15
|
|
·
|
[Swap Agreement[s]]
|
S-17
|
|
·
|
[Revolving Period]
|
S-18
|
|
·
|
[Prefunding Period]
|
S-18
|
|
·
|
Excess Distribution Certificateholder
|
S-18
|
|
·
|
Pool Asset Review
|
S-18
|
|
·
|
Tax Considerations
|
S-19
|
|
·
|
ERISA Considerations
|
S-20
|
|
·
|
[Ratings of the Notes]
|
S-20
|
|
·
|
Listing Information
|
S-21
|
|
·
|
Risk Factors
|
S-21
|
|
·
|
Identification Numbers
|
S-21
|
|
Risk Factors
|
S-22
|
||
·
|
Federal Financial Regulatory Legislation Could Have An Adverse Effect On SLM Corporation, The Sponsor, The Servicer, The Depositor, The Sellers And The Trust, Which Could Result In Losses Or Delays In Payments On Your Notes
|
S-22
|
|
·
|
The Notes Are Not Suitable Investments For All Investors
|
S-24
|
|
·
|
Subordination Of The Class B Notes And Sequential Payment Of The Notes Result In A Greater Risk Of Loss
|
S-24 | |
·
|
Investors In The Class B Notes Bear Greater Risk Of Loss Because The Priority Of Payment Of Interest And The Timing Of Principal Payments On The Class B Notes May Change Due To The Variability Of Cashflows
|
S-25
|
|
·
|
Certain Credit And Liquidity Enhancement Features Are Limited And If They Are Partially or Fully Depleted, There May Be Shortfalls In Distributions To Noteholders
|
S-26
|
|
·
|
The Notes May Be Assigned Lower Ratings From Other NRSROs Than Those Assigned By The Rating Agencies
|
S-27
|
|
·
|
A Lowering Of The Credit Rating Of The United States Of America May Adversely Affect The Market Value Of Your Notes
|
S-28
|
|
·
|
The Characteristics Of The Trust Student Loans May Change
|
S-28
|
|
·
|
[Your Notes Will Have Basis Risk And The Swap Agreement[s] Do Not Eliminate All Of This Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal And Interest On Your Notes
|
S-29
|
|
·
|
Any Inability Of The Trust To Acquire Additional Trust Student Loans Would Likely Cause You To Receive An Accelerated Principal Distribution
|
S-30
|
·
|
Certain Actions Can Be Taken Without Noteholder Approval
|
S-30
|
|
·
|
The Bankruptcy Of The Servicer [Or Subservicer] Could Delay The Appointment Of A Successor Servicer [Or Subservicer] Or Reduce Payments On Your Notes
|
S-31
|
|
·
|
The Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
|
S-31
|
|
·
|
[Timely Payments On Your Notes Relies In Part On The Servicing Ability Of The Subservicer]
|
S-32
|
|
·
|
[The Use of a Subservicer May Make It More Difficult To Find A Successor Servicer]
|
S-32
|
|
·
|
[Retention Of Some Or All Of The Class B Notes By The Depositor Or Its Affiliate May Reduce The Liquidity Of The Class B Notes]
|
S-32
|
|
·
|
Current Illiquid Market Conditions May Continue In The Future
|
S-33
|
|
Defined Terms
|
S-34
|
||
Formation of the Trust
|
S-34
|
||
·
The Trust
|
S-34
|
||
·
|
Capitalization of the Trust
|
S-36
|
|
·
|
Repurchase Requests
|
S-36
|
|
·
|
Depositor
|
S-36
|
|
·
|
Eligible Lender Trustee
|
S-36
|
|
·
|
Delaware Trustee
|
S-37
|
|
·
|
Indenture Trustee
|
S-38
|
|
·
|
[The Subservicer]
|
S-39
|
|
Use of Proceeds
|
S-39
|
||
The Trust Student Loan Pool
|
S-40
|
||
·
|
General
|
S-40
|
|
·
|
Eligible Trust Student Loans
|
S-40
|
|
·
|
Additional Sellers
|
S-41
|
|
·
|
Certain Expenses
|
S-42
|
|
·
|
Characteristics of the Initial Trust Student Loans
|
S-42
|
|
·
|
Insurance of Trust Student Loans; Guarantors of Trust Student Loans
|
S-42
|
|
·
|
Cure Period for Trust Student Loans
|
S-44
|
|
·
|
Consolidation of Federal Benefit Billings and Receipts and Guarantor Claims with Other Trusts
|
S-45
|
|
·
|
Third-Party Originators of FFELP Loans
|
S-46
|
|
[Recent Developments]
|
S-46
|
||
Description of the Notes
|
S-46
|
||
·
|
General
|
S-46
|
|
·
|
The Notes
|
S-46
|
|
·
|
Supplemental Purchase Period
|
S-50
|
|
·
|
Servicing Compensation
|
S-51
|
|
·
|
Distributions
|
S-52
|
|
·
|
Distributions Following an Event of Default and Acceleration of the Maturity of the Notes
|
S-55
|
|
·
|
Voting Rights and Remedies
|
S-57
|
|
·
|
Credit Enhancement
|
S-57
|
|
·
|
Potential Future Interest Rate Cap Agreement
|
S-59
|
|
·
|
Administration Fee
|
S-59
|
|
·
|
[Swap Agreement[s]
|
S-59
|
|
·
|
[Revolving Period]
|
S-63
|
|
·
|
[Prefunding Period]
|
S-63
|
|
·
|
Determination of Indices
|
S-63
|
|
·
|
Notice of Interest Rates
|
S-63
|
|
·
|
Accounts
|
S-63
|
|
·
|
Trust Fees
|
S-64
|
|
·
|
Optional Purchase
|
S-64
|
|
·
|
Auction of Trust Assets
|
S-65
|
|
Static Pools
|
S-66
|
||
Prepayments, Extensions, Weighted Average Lives and Expected Maturities of the Notes
|
S-67
|
||
Pool Asset Review
|
S-68
|
U.S. Federal Income Tax Consequences
|
S-71
|
||
European Union Directive on the Taxation of Savings Income
|
S-71
|
||
ERISA Considerations
|
S-72
|
||
Accounting Considerations
|
S-73
|
||
Reports to Noteholders
|
S-74
|
||
Notice to Investors
|
S-75
|
||
Underwriting
|
S-76
|
||
Listing Information
|
S-78
|
||
[Ratings of the Notes]
|
S-80
|
||
Compliance with Article 122a of the Capital Requirements Directive
|
S-80
|
||
Legal Matters
|
S-80
|
||
Glossary for Prospectus Supplement
|
S-81
|
||
Annex A: Characteristics of the Initial Trust Student Loan Pool
|
A-1
|
||
Exhibit I: Prepayments, Extensions, Weighted Average Lives and Expected Maturities of the Notes
|
I-1
|
|
Page
|
|
Prospectus Summary
|
8
|
Risk Factors
|
21
|
Formation of the Issuing Entities
|
45
|
Use of Proceeds
|
47
|
The Depositor
|
48
|
The Auction Rate Notes Depositor
|
50
|
The Sponsor, Servicer and Administrator
|
50
|
The Sellers
|
52
|
The Student Loan Pools
|
53
|
The Companies’ Student Loan Financing Business
|
56
|
Transfer and Servicing Agreements
|
67
|
Servicing and Administration
|
71
|
Trading Information
|
84
|
Description of the Notes
|
86
|
Additional Information Regarding the Notes
|
93
|
Certain Legal Aspects of the Student Loans
|
137
|
U.S. Federal Income Tax Consequences
|
143
|
European Union Directive on the Taxation of Savings Income
|
156
|
State Tax Consequences
|
157
|
ERISA Considerations
|
157
|
Available Information
|
160
|
Reports to Noteholders
|
160
|
Incorporation of Documents by Reference
|
161
|
The Plan of Distribution
|
161
|
Legal Matters
|
164
|
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
|
|
·
|
the accompanying base prospectus, which begins after this prospectus supplement and provides general information, some of which may not apply to your particular class of notes; and
|
|
·
|
this prospectus supplement, which describes the specific terms of the notes being offered.
|
·
|
Floating Rate Class A-1 Student Loan-Backed Notes in the amount of $[_________].
|
·
|
Fixed Rate Class A-2 Student Loan-Backed Notes in the amount of $ [_________].
|
·
|
Floating Rate Class B Student Loan-Backed Notes in the amount of $[_________].
|
·
|
the class A-1 notes and class A-2 notes as the class A notes;
|
·
|
the class A-1 and class B notes as the LIBOR-based notes; and
|
·
|
the class A notes and class B notes as the notes.
|
Class
|
Spread
|
|
Class A-1
|
plus %
|
|
Class B
|
plus %
|
|
x + [ / * (y-x)]
|
|
x = -month LIBOR, and
|
|
y = -month LIBOR.
|
·
|
first, to the class A noteholders, the class A noteholders’ principal distribution amount, sequentially, to the class A-1 and class A-2 notes, in that order, until their respective principal balances are reduced to zero; and then
|
·
|
second, to the class B noteholders, the class B noteholders’ principal distribution amount , until the principal balance of the class B notes is reduced to zero.
|
Class
|
Maturity Date
|
|
Class A-1
|
||
Class A-2
|
||
Class B
|
·
|
there are higher than anticipated prepayment rates on the trust student loans;
|
·
|
the servicer exercises its option to purchase all remaining trust student loans, which will not occur until the first distribution date on which the pool balance is 10% or less of the initial pool balance; or
|
·
|
the indenture trustee auctions all remaining trust student loans, which absent an event of default under the indenture, will not occur until the first distribution date on which the pool balance is 10% or less of the initial pool balance.
|
·
|
the trust student loans;
|
·
|
collections and other payments on the trust student loans;
|
·
|
funds it will hold from time to time in its trust accounts, including a collection account, a reserve account, a supplemental purchase account, a capitalized interest account and a floor income rebate account;
|
·
|
[its rights under each swap agreement described under “—Swap Agreement[s]” below;] and
|
·
|
its rights under any potential future interest rate cap agreement.
|
·
|
Trust Student Loans. The trust student loans (including the initial trust student loans and any additional trust student loans) are education loans to students and parents of students made under the Federal Family Education Loan Program, known as the FFELP. [Approximately [____]% of the trust student loans by principal balance are Stafford loans, [____]% are PLUS loans and [____]% are consolidation loans.] [All of the trust student loans are consolidation loans.] Consolidation loans are used to combine a borrower’s obligations under various federally authorized student loan programs into a single loan. See “Appendix A—Federal Family Education Loan Program” in the base prospectus for a description of each type of FFELP loan.
|
·
|
Initial Trust Student Loans. The initial trust student loans have been selected from the student loans owned by the sellers, or have been acquired by the related seller from one or more of its affiliates, based on the criteria established by the depositor, as described in this prospectus supplement and the base prospectus.
|
·
|
Significant Guarantors. The guaranty agencies described in Annex A to this prospectus supplement guarantee all of the initial trust student loans. [______________] guarantees approximately [____]% of the initial trust student loans by principal balance and [______________] guarantees approximately [____]% of the initial trust student loans by principal balance, are the only guarantors that guarantee more than 10% of the initial trust student loans by principal balance. See “The Trust Student Loan Pool—Insurance of Trust Student Loans; Guarantors of Trust Student Loans” in this prospectus supplement. The initial trust student loans are also reinsured by the United States Department of Education.
|
·
|
Additional Trust Student Loans. From time to time during the supplemental purchase period, the depositor may acquire additional trust student loans from the sellers to the extent that the trust has sufficient funds on deposit in the supplemental purchase account for the purchase of such additional trust student loans.
|
·
|
Collection Account. The administrator will establish and maintain the collection account as an asset of the trust in the name of the indenture trustee. The trust will make an initial deposit from the net proceeds of the sale of the notes into the collection account on the closing date. The deposit will be in cash or eligible investments equal to $[_________] plus the excess, if any, of the pool balance as of the statistical cutoff date over the pool balance as of the closing date to the extent such excess amount is not deposited into the supplemental purchase account. See “Servicing and Administration—Accounts” in the base prospectus for a more complete description of eligible investments.
|
·
|
Supplemental Purchase Account. On the closing date, the administrator will establish and maintain the supplemental purchase account as an asset of the trust in the name of the indenture trustee. The trust will make a deposit from the net proceeds of the sale of the notes into the supplemental purchase account on the closing date. The deposit will be in cash or eligible investments equal to the excess, if any, of the pool balance as of the statistical cutoff date over the pool balance as of the closing date, but not to exceed [__]% of the pool balance as of the statistical cutoff date. Funds on deposit in the supplemental purchase account will be used to purchase additional trust student loans from time to time during the supplemental purchase period.
|
·
|
Reserve Account. The administrator will establish and maintain a reserve account as an asset of the trust in the name of the indenture trustee. The trust will make an initial deposit from the net proceeds of the sale of the notes into the reserve account on the closing date. The deposit will be in cash or eligible investments equal to $[_________].
|
|
·
|
[____]% of the pool balance as of the end of the related collection period; and
|
|
·
|
$[_________].
|
|
·
|
on the maturity date for the class A notes and upon termination of the trust, to cover shortfalls in payments of the class A noteholders’ principal and accrued interest; and
|
|
·
|
on the maturity date for the class B notes and upon termination of the trust, to cover shortfalls in payments of the class B noteholders’ principal and accrued interest and any carryover servicing fees.
|
·
|
Capitalized Interest Account. The administrator will establish and maintain a capitalized interest account as an asset of the trust in the name of the indenture trustee. The trust will make an initial deposit from the net proceeds of the sale of the notes into the capitalized interest account on the closing date. The deposit will be in cash or eligible investments equal to $[_________].
|
·
|
Floor Income Rebate Account. The administrator will establish and maintain a floor income rebate account as an asset of the trust in the name of the indenture trustee. On or before each [monthly allocation] [distribution] date, the administrator will instruct the indenture trustee to transfer from the collection account to the floor income rebate account the monthly accrual of interest paid by borrowers on trust student loans originated on or after April 1, 2006 that exceeds the special allowance support levels applicable to such trust student loans, which we refer to in this prospectus supplement as “floor income.” These deposited amounts will be used to offset the amount of floor income, if any, that is expected to be netted by the Department of Education against the interest subsidy payments and/or special allowance payments otherwise due to the trust for that collection period. Once the Department of Education has netted all payments which currently occurs on a quarterly basis, on the next succeeding distribution date all sums on deposit in the floor income rebate account during the previous collection period will be withdrawn and included in available funds on such 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 [monthly allocation dates or] distribution dates[, as applicable]; 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;
|
·
|
[pay any amounts that would be due and owing to a swap counterparty if the related swap agreement were terminated at such time;] and
|
·
|
reduce the outstanding principal balance of each class of notes then outstanding on the related distribution date to zero.
|
·
|
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.
|
·
|
In the opinion of federal tax counsel for the trust, the notes will be characterized as debt for federal income tax purposes.
|
·
|
In the opinion of federal tax counsel for the trust, the trust will not be characterized as an association or a publicly traded partnership taxable as a corporation for federal income tax purposes.
|
·
|
In the opinion of Delaware tax counsel for the trust, the same characterizations would apply for Delaware state income tax purposes as for federal income tax purposes and noteholders who are not otherwise subject to Delaware taxation on income will not become subject to Delaware tax 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 notes [and the trust’s entering into each interest rate swap agreement will not result in a non-exempt prohibited transaction;] and
|
·
|
the purchase or holding of the notes [and the trust’s entering into each interest rate swap agreement] will not cause a non-exempt violation of any substantially similar federal, state, local or foreign laws.
|
|
·
|
Class A-1 Notes:
|
|
·
|
Class A-2 Notes:
|
|
·
|
Class B Notes:
|
|
·
|
Class A-1 Notes:
|
|
·
|
Class A-2 Notes:
|
|
·
|
Class B Notes:
|
|
·
|
Class A-1 Notes:
|
|
·
|
Class A-2 Notes:
|
|
·
|
Class B Notes:
|
Federal Financial Regulatory Legislation Could Have An Adverse Effect On SLM Corporation, The Sponsor, The Servicer, The Depositor, The Sellers 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 SLM Corporation, the parent of the sponsor, the sponsor and their affiliates and the markets in which SLM Corporation, the sponsor and their affiliates operate. Pursuant to the Dodd-Frank Act, SLM Corporation and many of its subsidiaries will be subject to regulations promulgated by the Consumer Financial Protection Bureau (the “CFPB”). The CFPB will have substantial power to define the rights of consumers and the responsibilities of lending institutions, including SLM Corporation’s private education lending and retail banking businesses. The CFPB began exercising its authority on July 21, 2011.
|
|
Most of the component parts of the Dodd-Frank Act will be subject to intensive rulemaking and public comment over the coming months and none of SLM 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.” Under that liquidation framework, it is possible that the Federal Deposit Insurance Corporation (the “FDIC”) could be appointed receiver of SLM 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 the sponsor. Any attempt by the FDIC to repudiate the transfer of student loans or 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 “Certain Legal Aspects of the Student Loans—Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions—FDIC’s Repudiation Power Under the OLA” in the accompanying base prospectus.
|
In addition, and also assuming that the FDIC were appointed receiver of SLM Corporation, the sponsor or any of their affiliates under the OLA, the FDIC could avoid transfers of receivables that are deemed “preferential.” Under one potential interpretation of the OLA, the FDIC could avoid a seller’s or issuing entity’s transfer of certain receivables to the depositor perfected merely upon their transfer (in the case of a sale) or by the filing of a Uniform Commercial Code (“UCC”) financing statement (in the case of a pledge by the issuing entity). If the transfer were avoided as a preference under the OLA, noteholders would have only an unsecured claim in the receivership for the purchase price of the receivables. On July 15, 2011, the FDIC Board of Directors published a final rule which, among other things, states that the FDIC is interpreting the OLA’s provisions regarding the treatment of preferential transfers in a manner comparable to the relevant provisions of the United States Bankruptcy Code so that transferees will have the same treatment under the OLA as they would have in a bankruptcy proceeding. If a court were to conclude, however, that this FDIC rule is not consistent with the statute, then if a transfer were avoided as a preference under the OLA, noteholders would have only an unsecured claim in the receivership for the purchase price of the receivables. See “Certain Legal Aspects of the Student Loans—Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions—FDIC’s Avoidance Power Under the OLA” in the accompanying base prospectus.
|
|
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 an investment, as well as the interaction of these factors.
|
Subordination Of The Class B Notes And Sequential Payment Of The Notes Result In A Greater Risk Of Loss
|
Holders of class B notes and, to a lesser extent, holders of class A-2 notes, bear a greater risk of loss than do holders of class A-1 notes because:
|
|
|
|
|
|
|
Investors In The Class B Notes Bear Greater Risk Of Loss Because The Priority Of Payment Of Interest And The Timing Of Principal Payments On The Class B Notes May Change Due To The Variability Of Cashflows
|
Interest on the class B notes generally will be paid prior to principal of the class A notes. However, if after giving effect to all required distributions of principal of and interest on the notes on any distribution date, the aggregate outstanding principal balance of the trust student loans, including accrued interest thereon that is expected to be capitalized, and amounts then on deposit in the capitalized interest account (after any distributions of interest from that account) and in the reserve account in excess of the specified reserve account balance, would be less than the outstanding principal balance of the class A notes, interest on the class B notes will be subordinated to the payment of principal of the class A notes on that distribution date.
|
Principal of the class B notes will not begin to be paid until the principal of the class A notes is paid in full. Thus, investors in the class B notes will bear a greater risk of loss than the holders of class A notes. Investors in the class B notes will also bear the risk of any adverse changes in the anticipated yield and weighted average life of their notes resulting from any variability in payments of principal of and/or interest on the class B notes.
|
The yield to maturity on the class B notes may be more sensitive than the yields to maturity on the class A notes because of losses due to defaults on the trust student loans and the timing of those losses, to the extent the losses are not covered by any applicable credit enhancement. The timing of receipt of principal of and interest on the class B notes may be adversely affected by the losses even if those notes do not ultimately bear such losses.
|
|
Certain Credit And Liquidity Enhancement Features Are Limited And If They Are Partially or Fully Depleted, There May Be Shortfalls In Distributions To Noteholders
|
Certain credit and liquidity enhancement features, including the reserve account and the capitalized interest account, are limited in amount. In addition, the capitalized interest account will not be replenished, is available for a limited duration and will not be extended. In certain circumstances, if there is a shortfall in available funds, such amounts may be partially or fully depleted. This depletion could result in shortfalls and delays in distributions to noteholders.
|
The Notes May Be Assigned Lower Ratings From Other NRSROs Than Those Assigned By The Rating Agencies
|
The sponsor, or an affiliate, will pay a fee to each of [__________] and [__________] (collectively, the “Rating Agencies”) to assign the initial credit ratings to the notes on or before the closing date. The Securities and Exchange Commission (the “SEC”) 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.
Under recently effective rules of the SEC, information conveyed to the Rating Agencies in connection with this transaction is required to be made available to other nationally recognized statistical rating organizations (“NRSROs”) within the meaning of Section 3(a)(62) of the Securities Exchange Act of 1934, as amended. Any such NRSRO may use this information to issue whatever rating is, in its opinion, warranted. NRSROs may have different methodologies, criteria, models and requirements, which may result in ratings that are lower than those assigned by the Rating Agencies. Depending upon the level of the ratings assigned by one or more NRSROs, what NRSROs are involved, what their stated reasons are for assigning a lower rating, and other factors, if an NRSRO issues a lower rating, the liquidity, market value and regulatory characteristics of the particular class or classes of notes could be materially and adversely affected. In addition, the mere possibility that such a rating could be issued may affect price levels in any secondary market that may develop.
|
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 has been downgraded by a NRSRO and may potentially be downgraded by other NRSRO’s in the future. The impact of any such downgrade is not yet clear, and depending on the ratings assigned, the stated reasons for a lower rating and other factors, the liquidity, market value and regulatory characteristics of your notes could be materially and adversely affected.
|
The Characteristics Of The Trust Student Loans May Change
|
The statistical information in this prospectus supplement reflects only the characteristics of the initial trust student loans as of the statistical cutoff date. The initial trust student loans actually sold to the trust on the closing date will have characteristics that differ somewhat from the characteristics of the initial trust student loans, as of the statistical cutoff date, due to payments received on and other changes in these loans that occur during the period from the statistical cutoff date to the closing date. We do not expect the characteristics of the initial trust student loans actually sold to the trust on the closing date to differ materially from the characteristics of the initial trust student loans as of the statistical cutoff date.
|
However, in making your investment decision, you should assume that the actual characteristics of the trust student loans will vary somewhat from the characteristics of the initial trust student loans presented in this prospectus supplement as of the statistical cutoff date.
|
|
Further, certain characteristics of the final pool of trust student loans may vary from the characteristics of the initial pool of trust student loans described in this prospectus supplement due to the acquisition of additional trust student loans during the supplemental purchase period. The only requirement limiting the purchase of additional trust student loans by the trust is that each such trust student loan must satisfy the eligibility criteria described under “The Trust Student Loan Pool” in this prospectus supplement at the time of its sale to the trust.
|
[Your Notes Will Have Basis Risk And The Swap Agreement[s] Do Not Eliminate All Of This Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal And Interest On Your Notes
|
The trust will enter into [an] [one or more] interest rate swap agreement[s] with [______] and [______]. Each swap agreement is intended to mitigate the basis risk associated with the notes. Basis risk is the risk that shortfalls might occur because, among other things, the interest rates of the trust student loans either adjust on the basis of certain indices or are fixed and the interest rates of the notes adjust on the basis of a different index or adjust on different dates than the trust student loans. 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—Characteristics of the Trust Student Loan Pool—Composition of the Trust Student Loans as of the Statistical Cutoff Date” which specifies the percentages of trust student loans that adjust based on the prime rate, the 91-day Treasury bill rate or LIBOR, or that bear a fixed rate, as applicable.
The notional amount of each swap agreement will equal the aggregate principal balance of the prime rate-based trust student loans that are reset monthly, as determined periodically. The notional amount of each swap agreement does not include the principal balances of the fixed rate-based, the T-bill rate-based or the other types of prime rate-based trust student loans. Consequently you must rely on other forms of credit enhancement, to the extent available, to mitigate that portion of the basis risk not covered by each swap agreement.
|
Each swap agreement is scheduled to terminate, by its terms, on the earliest to occur of: (i) the distribution date on which the outstanding principal balance of class A-2 notes is reduced to zero; or (ii) the maturity date of the class A-2 notes. In addition, an early termination of a swap agreement may occur upon the occurrence of certain events. See “Swap Agreement—Default Under the Swap Agreement” and “—Termination Events.”
|
Upon the early termination of a swap agreement, you cannot be certain that the trust will be able to enter into a substitute swap agreement. In addition, the trust will not enter into any substitute swap agreement after the related swap agreement terminates on the earliest to occur of: (i) the distribution date on which the outstanding principal balance of class A-2 notes is reduced to zero; or (ii) the maturity date of the class A-2 notes. In this event, there can be no assurance that the amount of credit enhancement will be sufficient to cover the basis risk associated with the notes.]
|
|
Any Inability Of The Trust To Acquire Additional Trust Student Loans Would Likely Cause You To Receive An Accelerated Principal Distribution
|
The trust intends to purchase additional trust student loans from the depositor during the supplemental purchase period. The depositor will acquire these additional trust student loans from one or more of the sellers.
|
While the sellers intend to use their best efforts to sell additional trust student loans to the depositor, no seller is required to sell additional trust student loans to the depositor and no assurance can be given that the sellers will have sufficient eligible student loans available to enable the trust to use all amounts on deposit in the supplemental purchase account. If any such funds are not used by the trust to purchase additional trust student loans by the required time, such remaining amounts will become part of available funds on the next distribution date and may result in a full or partial principal payment to the notes. This could shorten the weighted average life of your notes. If your notes are prepaid, you will bear the risk that you may be unable to reinvest any principal prepayment at yields at least equal to the yield on your notes.
|
|
Certain Actions Can Be Taken Without Noteholder Approval
|
The transaction documents provide that certain actions may be taken based upon receipt by the indenture trustee of a confirmation from each of the rating agencies that the then-current ratings assigned by the rating agencies then rating the notes will not be downgraded or withdrawn by those actions. In this event, such actions may be taken without the consent of noteholders.
|
The Bankruptcy Of The Servicer [Or Subservicer] Could Delay The Appointment Of A Successor Servicer [Or Subservicer] Or Reduce Payments On Your Notes
|
In the event of default by the servicer [or subservicer] resulting solely from certain events of insolvency or the bankruptcy of the servicer [or subservicer], a court, conservator, receiver or liquidator may have the power to prevent either the servicer, indenture trustee or the noteholders, as applicable, from appointing a successor servicer [or prevent the servicer from appointing a successor subservicer or from servicing the trust student loans itself, as the case may be,] 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 unanticipated delays in payment and losses on the trust student loans.
|
[Timely Payments On Your Notes Relies In Part On The Servicing Ability Of The Subservicer]
|
[Although the servicer is obligated to cause the trust student loans to be serviced in accordance with the terms of the transaction documents, the timing of payments on the trust student loans will be directly affected by the ability of the subservicer to adequately service the trust student loans. Maintenance of the guarantor’s guarantee obligations and the Department of Education’s reinsurance obligations with respect to the trust student loans is dependent on the subservicer’s compliance with federal regulations. If the subservicer defaults on its obligations and is terminated, the timing of payments on the trust student loans will depend on the ability of the servicer to service the trust student loans or to find an alternative subservicer to service the trust student loans and you may suffer a delay in the timing of payments on your notes until any transfer of servicing is completed or effective.]
|
[The Use of a Subservicer May Make It More Difficult To Find A Successor Servicer]
|
[The servicer or any successor servicer may only terminate a subservicer for cause or by paying a deconversion fee. Moreover, the successor servicer will be responsible for any breaches by the subservicer under the subservicing agreement. As a result, if necessary, it may be more difficult to find a successor servicer due to the use of a subservicer. Any delay in finding a successor servicer may cause the market value and liquidity of your notes to decline and cause you to suffer a loss on your investment.]
|
[Retention Of Some Or All Of The Class B Notes By The Depositor Or Its Affiliate May Reduce The Liquidity Of The Class B Notes]
|
[Some or all of the class B notes may be retained by the depositor or an affiliate of the depositor and, consequently, the market for the class B notes may be less liquid than would otherwise be the case. In addition, if any of the retained class B notes are subsequently sold in the secondary market, demand and market price for any class B notes already in the market could be adversely affected.]
|
Current Illiquid Market Conditions May Continue In The Future
|
Despite recent federal market interventions and programs, the current period of general market illiquidity may continue or even worsen and may adversely affect the secondary market for your notes. Accordingly, you may not be able to sell your notes when you want to do so or you may be unable to obtain the price that you wish to receive for your notes and, as a result, you may suffer a loss on your investment.
|
|
·
|
acquiring, holding and managing the trust student loans and holding the other assets of the trust and related proceeds;
|
|
·
|
issuing the notes;
|
|
·
|
making payments on the notes;
|
|
·
|
[entering into each swap agreement and making the required payments set forth therein;]
|
|
·
|
entering into any potential future interest rate cap agreement 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 the 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;
|
|
·
|
[its rights under each swap agreement and the related documents;]
|
|
·
|
its rights under any 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 the applicable seller, the depositor or the servicer to repurchase or purchase, as applicable, 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
|
$ | ||||
Fixed Rate Class A-2 Student Loan-Backed Notes
|
$ | ||||
Floating Rate Class B Student Loan-Backed Notes
|
|||||
Equity
|
100 | ||||
Total
|
$ |
|
·
|
is a [consolidation loan made under the FFELP] [FFELP loan] that is guaranteed as to at least (1) 100% with respect to trust student loans with an initial date of disbursement prior to October 1, 1993, (2) 98% with respect to trust student loans with an initial date of disbursement prior to July 1, 2006 and on or after October 1, 1993 or (3) 97% with respect to trust student loans with an initial date of disbursement on or after July 1, 2006, of its principal and interest by a guaranty agency under a guarantee agreement and the guaranty agency is, in turn, reinsured by the Department of Education in accordance with the FFELP under a guarantee agreement;
|
|
·
|
contains terms in accordance with those required by the FFELP, the guarantee agreements and other applicable requirements;
|
|
·
|
is fully disbursed;
|
|
·
|
is not more than [___] days past due;
|
|
·
|
[is serviced by [subservicer]];
|
|
·
|
does not have a borrower who is noted in the related records of the servicer [subservicer] as being currently involved in a bankruptcy proceeding; and
|
|
·
|
has special allowance payments, if any, based on the three-month commercial paper rate, the 91-day Treasury bill rate or [___]-month LIBOR.
|
Disbursement Date
|
Percentage Guaranteed
|
||
Prior to October 1, 1993
|
100%
|
||
On or after October 1, 1993 but before July 1, 2006
|
98%
|
||
On or after July 1, 2006
|
97%
|
|
·
|
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.
|
|
·
|
the outstanding principal balance of the trust student loans, plus
|
|
·
|
any accrued interest on the trust student loans as of the last day of the related collection period that is expected to be capitalized, plus
|
|
·
|
the balance of the capitalized interest account on the distribution date following those distributions made with respect to clauses (a) through (e) under “—Distributions—Distributions from the Collection Account” below, plus
|
|
·
|
the balance of the reserve account on the distribution date following those distributions made under clauses (a) through (g) under
|
|
“—Distributions—Distributions from the Collection Account” below, minus
|
|
·
|
the Specified Reserve Account Balance for that distribution date, or
|
|
·
|
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 [monthly allocation dates or] distribution dates[, as applicable]; and
|
|
·
|
interest on any unpaid amounts.
|
|
(1)
|
to the class A noteholders (other than the class A-2 noteholders), the Class A Noteholders’ Interest Distribution Amount, pro rata, based on the amounts payable as Class A Noteholders' Interest Distribution Amount; and
|
|
(2)
|
[to each swap counterparty, the amount of any swap termination payments due to such swap counterparty under the related swap agreement resulting from (i) a termination event or event of default where the trust is the sole affected party or defaulting party, respectively, or (ii) a “Tax Event” or “Illegality” (each as defined in the related swap agreement), irrespective of which party is the affected party; provided, that if any amounts allocable to the notes are not needed to pay the Class A Noteholders' Interest Distribution Amount as of such distribution date, such amounts will be applied to pay the portion, if any, of any swap termination payment referred to above remaining unpaid;]
|
|
·
|
an event of default under the indenture relating to the payment of principal of any class of notes at their 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; provided that, failure to pay interest on the class B notes due to insufficient Available Funds shall not be an event of default so long as the class A notes are then outstanding,
|
|
·
|
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 class A noteholders[ (other than the class A-2 noteholders)], the Class A Noteholders’ Interest Distribution Amount; and
|
|
(b)
|
[to each swap counterparty, the amount of any swap termination payments due to such swap counterparty under the swap agreement resulting from (i) a termination event or event of default where the trust is the sole affected party or defaulting party, respectively, or (ii) a “Tax Event” or “Illegality” (each as defined in the swap agreement), irrespective of which party is the affected party; provided, that if any amounts allocable to the notes are not needed to pay the Interest Distribution Amount as of such distribution date, such amounts will be applied to pay the portion, if any, of any swap termination payment referred to above remaining unpaid;]
|
|
·
|
a fixed rate of interest with respect to the class A-2 notes,
|
|
·
|
the outstanding principal balance of the class A-2 notes immediately following the preceding distribution date (or with respect to the first distribution date, the closing date); and
|
|
·
|
a fraction, the numerator of which is 90 (or, with respect to the first distribution date, ) and the denominator of which is 360.
|
|
·
|
a LIBOR-based floating rate of interest (provided that LIBOR for the first accrual period will be determined using the same formula that applies to the LIBOR-based notes);
|
|
·
|
the outstanding principal balance of the related class of notes immediately following the preceding distribution date (or with respect to the first distribution date, the closing date); and
|
|
·
|
a fraction, the numerator of which is the actual number of days elapsed in the related accrual period and the denominator of which is 360.
|
|
·
|
the failure of the trust or any swap counterparty to pay or deliver any amount when due under the related swap agreement after giving effect to the applicable grace period;
|
|
·
|
the occurrence of certain events of bankruptcy and insolvency;
|
|
·
|
an acceleration of the principal of the notes following an event of default under the indenture (other than an event of default relating to a breach of any covenant or a violation of any representation or warranty) which acceleration has become non-rescindable and non-waivable;
|
|
·
|
an acceleration of the principal of the notes following an event of default under the indenture for a breach of any covenant or a violation of any representation or warranty which acceleration has become non-rescindable and non-waivable, and pursuant to which the indenture trustee has liquidated the trust student loans; and
|
|
·
|
the following other standard events of default under the 1992 ISDA Master Agreement, as modified by the terms of each swap agreement: “Breach of Agreement” (not applicable to the trust), “Credit Support Default”, “Misrepresentation” (not applicable to the trust), “Default Under Specified Transaction” (not applicable to the trust), “Cross-Default” (not applicable to the trust) and “Merger Without Assumption” (not applicable to the trust), as described in Sections 5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vi) and 5(a)(viii), respectively, of the 1992 ISDA Master Agreement.
|
Party
|
Amount
|
|
Servicer(1)
|
The primary servicing fee(2) for any month (equal to 1/12 of an amount not to exceed [___]% of the outstanding principal amount of the trust student loans), plus the amount of any carryover servicing fee.
|
|
Indenture Trustee(3)
|
$[____] per annum, payable in advance.
|
|
Eligible Lender Trustee(4)
|
$[____] per annum, payable in advance.
|
|
Administrator(2)
|
$[____] per quarter, payable in arrears.
|
(1)
|
To be paid as described in “—Servicing Compensation” above. [The servicer will pay the subservicer’s fees pursuant to the subservicing agreement. The subservicer’s fees will not be obligations of the trust.]
|
(2)
|
To be paid before any amounts are distributed to the noteholders.
|
(3)
|
To be paid by the administrator pursuant to a separate agreement with the indenture trustee, and may be paid by the trust if there is an event of default on the notes, and such amount has not previously been paid.
|
(4)
|
To be paid by the administrator pursuant to a separate agreement with the eligible lender trustee, and may be paid by the trust if there is an event of default on the notes, and such amount has not previously been paid.
|
|
·
|
[pay any amounts that would be due and owing to a swap counterparty if the related swap agreement were terminated at such time;]
|
|
·
|
pay to noteholders the interest payable on the related distribution date; and
|
|
·
|
reduce the outstanding principal balance of each class of notes then outstanding on the related distribution date to zero.
|
|
·
|
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.
|
|
·
|
the Plan’s purchase or holding of the notes [and the trust’s entering into each swap agreement] will not constitute or otherwise result in a non-exempt prohibited transaction in violation of Section 406 of ERISA or Section 4975 of the Code which is not covered by a statutory exemption or a class or other applicable exemption from the prohibited transaction rules as described in the base prospectus; and
|
|
·
|
the purchase or holding of the notes [and the trust’s entering into each swap agreement] 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.
|
|
·
|
Reports on Form 8-K (Current Report), following the issuance of the series of notes of the trust, including as Exhibits to the Form 8-K the transaction documents;
|
|
·
|
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 each distribution date; 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 Exchange Act.
|
|
·
|
it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity, within the meaning of section 21 of the FSMA, received by it in connection with the issue or sale of any notes in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (the “FSMA”) does not apply to the trust; and
|
|
·
|
it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom; and
|
|
·
|
in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of notes which are the subject of the offering contemplated by this prospectus supplement to the public in that Relevant Member State other than:
|
|
·
|
provided that no such offer of notes shall require the trust or the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of the foregoing, the expression “an offer of notes to the public” in relation to any notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the notes to be offered so as to enable an investor to decide to purchase or subscribe the notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
|
Underwriter
|
Class A-1
Notes
|
Class A-2
Notes
|
Class B
Notes
|
|||||||||
$ | $ | $ | ||||||||||
Total
|
$ | $ | $ |
Initial Public Offering Price
|
Underwriting Discount
|
Proceeds to The Depositor
|
Concession
|
Reallowance
|
|||||||||||
Per Class A-1 Note
|
%
|
%
|
%
|
%
|
%
|
||||||||||
Per Class A-2 Note
|
%
|
%
|
%
|
%
|
%
|
||||||||||
Per Class B Note*
|
%
|
%
|
%
|
%
|
%
|
||||||||||
Total
|
$ | $ | $ |
|
·
|
if the Pool Balance as of the last day of the related collection period is greater than [__]% of the Initial Pool Balance, then the Adjusted Pool Balance shall be the sum of the Pool Balance, Capitalized Interest 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 [__]% of the Initial Pool Balance, then the Adjusted Pool Balance shall be the sum of the Pool Balance and Capitalized Interest.
|
|
·
|
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 of the trust student loans applied by the trust to repurchase guaranteed loans from the guarantors under the guarantee agreements,
|
|
(2)
|
all 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 floor income rebate fees and consolidation loan rebate fees, and
|
|
(3)
|
amounts deposited into the floor income rebate account during the related collection period;
|
|
·
|
any interest subsidy payments and special allowance payments 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 [subservicer’s] customary servicing procedures, net of expenses incurred by the servicer [subservicer] 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 the subservicer, as the case may be], 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 repurchased by the sellers;
|
|
·
|
the aggregate amounts, if any, received from the sellers, the depositor or the servicer [or the subservicer, 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 allocation date];
|
|
·
|
investment earnings for that distribution date earned on amounts on deposit in each Trust Account;
|
|
·
|
amounts transferred from the reserve account in excess of the Specified Reserve Account Balance as of that distribution date;
|
|
·
|
amounts on deposit in the floor income rebate account that were deposited into such account during the collection period preceding that collection period;
|
|
·
|
[amounts received from any swap counterparty for that distribution date; provided, that, in the event of a termination of a swap agreement, any related swap termination payments received will be used, to the extent required therefor, to enter into a replacement swap agreement and will not constitute Available Funds until such time as the inclusion of such amounts as a part of Available Funds satisfies the Rating Agency Condition;]
|
|
·
|
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;
|
|
·
|
on the initial distribution date, the collection account initial deposit and any amounts transferred into the collection account from the supplemental purchase account following the end of the supplemental purchase period;
|
|
·
|
on the _______ 20__ and _______ 20__ distribution dates, all funds then on deposit in the capitalized interest account that are transferred into the collection account on those distribution dates;
|
|
·
|
if neither of conditions (1) and (2) described under “Description of the Notes—The Notes—The Class B Notes—Subordination of the Class B Notes” in this prospectus supplement are in effect, the amount on deposit in the capitalized interest account on the distribution date following those distributions with respect to clauses (a) through (e) under “Description of the Notes—Distributions—Distributions from the Collection Account” in this prospectus supplement, or
|
|
·
|
if either of conditions (1) or (2) described under “Description of the Notes— The Notes—The Class B Notes—Subordination of the Class B Notes” above is in effect, the excess, if any, of (x) the amount on deposit in the capitalized interest account on the distribution date following those distributions with respect to clauses (a) through (d) under “Description of the Notes—Distributions—Distributions from the Collection Account” in this prospectus supplement over (y) the Class B Noteholders’ Interest Distribution Amount.
|
|
·
|
the amount of interest that was payable on the preceding distribution date to each class of class A notes, over
|
|
·
|
the amount of interest actually distributed with respect to each class of class A notes on that preceding distribution date,
|
|
·
|
the amount of interest accrued at the respective class A note interest rate for the related accrual period on the aggregate outstanding balance of the class A notes on the applicable immediately preceding distribution date (or in the case of the initial distribution date, the closing date) after giving effect to all principal distributions to class A noteholders on preceding distribution dates; and
|
|
·
|
the Class A Note Interest Shortfall for that distribution date.
|
|
·
|
the amount of interest that was payable on the preceding distribution date to the class B notes, over
|
|
·
|
the amount of interest actually distributed with respect to the class B notes on that preceding distribution date,
|
|
·
|
the amount of interest accrued at the class B note interest rate for the related accrual period on the outstanding balance of the class B notes on the immediately preceding distribution date (or in the case of the first distribution date, the closing date) after giving effect to all principal distributions to class B noteholders on preceding distribution dates, and
|
|
·
|
the Class B Note Interest Shortfall for that distribution date.
|
|
(1)
|
the Principal Distribution Amount for that distribution date, over
|
|
(2)
|
the Class A Noteholders’ Principal Distribution Amount for that distribution date;
|
|
·
|
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 for trust student loans repurchased by the depositor or purchased by any of the sellers or the servicer [subservicer];
|
|
·
|
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 of defaulted trust student loans through that date are reduced from 100% to such other applicable percentages as are required by the risk sharing provisions of the Higher Education Act.
|
|
(a)
|
[__]% of the Adjusted Pool Balance for that distribution date; and
|
|
(a)
|
[___]% of the Pool Balance as of the close of business on the last day of the related collection period; and
|
|
(b)
|
$[______];
|
|
·
|
is a FFELP loan that is guaranteed as to at least (1) 100% with respect to trust student loans with an initial date of disbursement prior to October 1, 1993, (2) 98% with respect to trust student loans with an initial date of disbursement prior to July 1, 2006 and on or after October 1, 1993 or (3) 97% with respect to trust student loans with an initial date of disbursement on or after July 1, 2006, of its principal and interest by a guaranty agency under a guarantee agreement and the guaranty agency is, in turn, reinsured by the Department of Education in accordance with the FFELP under a guarantee agreement;
|
|
·
|
contains terms in accordance with those required by FFELP, the guarantee agreements and other applicable requirements;
|
|
·
|
[had its first disbursement prior to October 1, 2007];
|
|
·
|
is fully disbursed;
|
|
·
|
is not more than [___] days past due;
|
|
·
|
does not have a borrower who is noted in the related records of the servicer as being currently involved in a bankruptcy proceeding; and
|
|
·
|
has special allowance payments, if any, based on the three-month commercial paper rate, the 91-day Treasury bill rate or [___]-month LIBOR.
|
Aggregate Outstanding Principal Balance
|
|
Aggregate Outstanding Principal Balance—Treasury Bill
|
|
Aggregate Outstanding Principal Balance—Commercial Paper
|
|
Number of Borrowers
|
|
Average Outstanding Principal Balance Per Borrower
|
|
Number of Loans
|
|
Range of Outstanding Principal Balances
|
|
Average Outstanding Principal Balance Per Loan
—Treasury Bill
|
|
Percentage of Loans indexed to Treasury Bill
|
|
Average Outstanding Principal Balance Per Loan
—Commercial Paper
|
|
Percentage of Loans indexed to Commercial Paper
|
|
Range of Remaining Terms to Scheduled Maturity
|
|
Weighted Average Remaining Term to Scheduled Maturity
|
|
Range of Annual Borrower Interest Rates
|
|
Weighted Average Annual Borrower Interest Rate
|
|
[Percent of Stafford Loans]
|
|
[Percent of PLUS Loans]
|
|
[Percent of Consolidation Loans]
|
|
[Aggregate Outstanding Principal Balance—Stafford]
|
|
[Aggregate Outstanding Principal Balance—PLUS]
|
|
[Aggregate Outstanding Principal Balance—Consolidation]
|
|
Interest Rates
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
Less than or equal to 3.00%
|
|||
3.01% to 3.50%
|
|||
3.51% to 4.00%
|
|||
4.01% to 4.50%
|
|||
4.51% to 5.00%
|
|||
5.01% to 5.50%
|
|||
5.51% to 6.00%
|
|||
6.01% to 6.50%
|
|||
6.51% to 7.00%
|
|||
7.01% to 7.50%
|
|||
7.51% to 8.00%
|
|||
8.01% to 8.50%
|
|||
Equal to or greater than 8.51%
|
|||
Total
|
Range of Outstanding
Principal Balance
|
Number of
Borrowers
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|
Less than $5,000.00
|
||||
$ | 5,000.00 — $9,999.99 | |||
$ | 10,000.00 — $14,999.99 | |||
$ | 15,000.00 — $19,999.99 | |||
$ | 20,000.00 — $24,999.99 | |||
$ | 25,000.00 — $29,999.99 | |||
$ | 30,000.00 — $34,999.99 | |||
$ | 35,000.00 — $39,999.99 | |||
$ | 40,000.00 — $44,999.99 | |||
$ | 45,000.00 — $49,999.99 | |||
$ | 50,000.00 — $54,999.99 | |||
$ | 55,000.00 — $59,999.99 | |||
$ | 60,000.00 — $64,999.99 | |||
$ | 65,000.00 — $69,999.99 | |||
$ | 70,000.00 — $74,999.99 | |||
$ | 75,000.00 — $79,999.99 | |||
$ | 80,000.00 — $84,999.99 | |||
$ | 85,000.00 — $89,999.99 | |||
$ | 90,000.00 — $94,999.99 | |||
$ | 95,000.00 — $99,999.99 | |||
$100,000.00 and above
|
||||
Total
|
Number of Days Delinquent
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
0-30 | |||
31-60 | |||
61-90 | |||
121-150 | |||
151-180 | |||
181-210 | |||
Total
|
Number of Months
Remaining to Scheduled Maturity
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
0 to 3
|
|||
4 to 12
|
|||
13 to 24
|
|||
25 to 36
|
|||
37 to 48
|
|||
49 to 60
|
|||
61 to 72
|
|||
73 to 84
|
|||
85 to 96
|
|||
97 to 108
|
|||
109 to 120
|
|||
121 to 132
|
|||
133 to 144
|
|||
145 to 156
|
|||
157 to 168
|
|||
169 to 180
|
|||
181 to 192
|
|||
193 to 204
|
|||
205 to 216
|
|||
217 to 228
|
|||
229 to 240
|
|||
241 to 252
|
|||
253 to 264
|
|||
265 to 276
|
|||
277 to 288
|
|||
289 to 300
|
|||
301 to 312
|
|||
313 to 324
|
|||
325 to 336
|
|||
337 to 348
|
|||
349 to 360
|
|||
361 and greater
|
|||
Total
|
Current Borrower Payment Status
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of
Pool by
Outstanding
Principal Balance
|
In-School
|
|||
Grace
|
|||
Deferment
|
|||
Forbearance
|
|||
Repayment
|
|||
First year in repayment
|
|||
Second year in repayment
|
|||
Third year in repayment
|
|||
More than 3 years in repayment
|
|||
Total
|
|
·
|
may still be attending school—in school;
|
|
·
|
may be in a grace period after completing school and prior to repayment commencing—grace;
|
|
·
|
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 Remaining Months in Status
|
|||||
Current Borrower Payment Status
|
In-School
|
Grace
|
Deferment
|
Forbearance
|
Repayment
|
In-School
|
|||||
Grace
|
|||||
Deferment
|
|||||
Forbearance
|
|||||
Repayment
|
State
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
Alabama
|
|||
Alaska
|
|||
Arizona
|
|||
Arkansas
|
|||
California
|
|||
Colorado
|
|||
Connecticut
|
|||
Delaware
|
|||
District of Columbia
|
|||
Florida
|
|||
Georgia
|
|||
Hawaii
|
|||
Idaho
|
|||
Illinois
|
|||
Indiana
|
|||
Iowa
|
|||
Kansas
|
|||
Kentucky
|
|||
Louisiana
|
|||
Maine
|
|||
Maryland
|
|||
Massachusetts
|
|||
Michigan
|
|||
Minnesota
|
|||
Mississippi
|
|||
Missouri
|
|||
Montana
|
|||
Nebraska
|
|||
Nevada
|
|||
New Hampshire
|
|||
New Jersey
|
|||
New Mexico
|
|||
New York
|
|||
North Carolina
|
|||
North Dakota
|
|||
Ohio
|
|||
Oklahoma
|
|||
Oregon
|
|||
Pennsylvania
|
|||
Rhode Island
|
|||
South Carolina
|
|||
South Dakota
|
|||
Tennessee
|
|||
Texas
|
|||
Utah
|
|||
Vermont
|
|||
Virginia
|
|||
Washington
|
|||
West Virginia
|
|||
Wisconsin
|
|||
Wyoming
|
|||
Other
|
|||
Total
|
Loan Type
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
Subsidized
|
|||
Unsubsidized
|
|||
Total
|
Loan Repayment Terms
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
Level Payment(1)
|
|||
Other Repayment Options(2)
|
|||
Total
|
|
_______________________
|
Disbursement Date
|
Number of
Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
September 30, 1993 and earlier
|
|||
October 1, 1993 through June 30, 2006
|
|||
July 1, 2006 through September 30, 2007
|
|||
Total
|
Name of Guaranty Agency
|
Number of
Loans
Guaranteed
|
Aggregate
Outstanding
Principal
Balance
of Loans
Guaranteed
|
Percent of
Pool by
Outstanding
Principal
Balance
Guaranteed
|
Total
|
|
________________________
|
*
|
Additional trust student loans may be guaranteed by a guarantee agency not shown above.
|
CPR
|
0%
|
4%
|
8%
|
12%
|
16%
|
|||||
Monthly Prepayment
|
$[___]
|
$[___]
|
$[___]
|
$[___]
|
$[___]
|
|
·
|
student loans will prepay at a CPR of 1/15 of 1.0% one month after origination;
|
|
·
|
the CPR will increase by a rate of 1/15 of 1.0% per month through the 119th month after origination; and
|
|
·
|
the CPR will be constant at 8% per annum in the 120th month after origination and in all subsequent months.
|
Number of Months Seasoning
|
|||||||||||||||||||||
24 | 48 | 72 | 96 | 120 | |||||||||||||||||
Percentage of CLR
|
|||||||||||||||||||||
50% | |||||||||||||||||||||
100% | |||||||||||||||||||||
150% | |||||||||||||||||||||
200% |
|
·
|
the statistical cutoff date for the trust student loans is ________ __, 20__;
|
|
·
|
the closing date will be ________ __, 20__;
|
|
·
|
all trust student loans (as grouped within the "rep lines" described below) are in repayment status (with accrued interest having been capitalized upon entering repayment), with the exception of in-school status loans, which are assumed to have a 6-month grace period before moving to repayment, and no trust student loan moves from repayment to any other status;
|
|
·
|
[the trust student loans that are (i) non-subsidized Stafford loans not in repayment status, (ii) subsidized Stafford loans in forbearance status, or (iii) SLS or PLUS loans, have interest accrued and capitalized upon entering repayment;]
|
|
·
|
[the trust student loans that are subsidized Stafford loans and are in in-school, grace or deferment status, have interest paid (interest subsidy payments) by the Department of Education quarterly, based on a quarterly calendar accrual period;]
|
|
·
|
no delinquencies or defaults occur on any of the trust student loans, no repurchases for breaches of representations, warranties or covenants occur and all borrower payments are collected in full;
|
|
·
|
consolidation rebate fees are paid based on the principal balance of the student loans at the beginning of the related monthly collection period and reduce the amount in the collection account that would otherwise earn investment income;
|
|
·
|
there are government payment delays of 60 days for interest subsidy and special allowance payments;
|
|
·
|
index levels for calculation of borrower and government payments are:
|
|
·
|
a 91-day Treasury bill rate of [___]%;
|
|
·
|
a three-month commercial paper rate of [___]%; and
|
|
·
|
a 1-year Treasury bill rate that equals the 91-day Treasury bill rate;
|
|
·
|
distributions begin on ________ __, 20__, and payments are made monthly on the [25th] day of every calendar month thereafter, whether or not the [25th] is a business day;
|
|
·
|
the interest rate for each class of outstanding notes at all times will be equal to:
|
|
·
|
class A-1 notes: [___]%;
|
|
·
|
class A-2 notes: [___]%; and
|
|
·
|
class B notes: [___]%;
|
|
·
|
an administration fee equal to $[________] is paid monthly by the trust to the administrator, beginning in _______ 20__;
|
|
·
|
a servicing fee equal to 1/12 of the then outstanding principal amount of the trust student loans times 0.50% is paid monthly by the trust to the servicer;
|
|
·
|
the reserve account has an initial balance equal to $[________] and at all times a balance equal to the greater of (1) [___]% of the Pool Balance and (2) $[________];
|
|
·
|
the collection account has an initial balance equal to $0;
|
|
·
|
the capitalized interest account has an initial balance equal to $[________], on the _______ 20__ distribution date, funds on deposit in the capitalized interest account in excess of $[________] will be transferred to the collection account and included in Available Funds on that distribution date, and on the _______ 20__ distribution date, all funds remaining on deposit in the capitalized interest account will be included in Available Funds;
|
|
·
|
[under the interest rate swap agreement[s], the trust will pay the a LIBOR-based floating rate of interest in exchange for a fixed rate of interest with respect to the class A-2 notes;]
|
|
·
|
the trust will enter into no [other] swap or other interest rate hedging agreements;
|
|
·
|
all payments are assumed to be made at the end of the month and amounts on deposit in the collection account, reserve account and capitalized interest account, including reinvestment income earned in the previous month, net of servicing fees and consolidation rebate fees, are reinvested in eligible investments at the assumed reinvestment rate of [___]% per annum through the end of the collection period, and reinvestment earnings are available for distribution from the prior collection period;
|
|
·
|
the average loan age is [__] months;
|
|
·
|
prepayments on the trust student loans are applied monthly in accordance with CLR or CPR, as the case may be, as described above;
|
|
·
|
an optional redemption by the servicer occurs on the distribution date immediately following the collection period during which the Pool Balance equals or falls below 10% of the Initial Pool Balance; and
|
|
·
|
the pool of trust student loans consists of [__] representative loans (“rep lines”), which have been created for modeling purposes from individual trust student loans based on combinations of similar individual student loan characteristics, which include, but are not limited to, loan status, interest rate, loan type, index, margin, rate cap and remaining term to maturity.
|
Weighted Average Life (years)(1)
|
[0]% | [4]% | [8]% | [12]% | [16]% | |||||||||||||||
Class A Notes
|
||||||||||||||||||||
Class B Notes
|
||||||||||||||||||||
Expected Maturity Date
|
||||||||||||||||||||
Class A Notes
|
||||||||||||||||||||
Class B Notes
|
(1)
|
The weighted average life of the notes (assuming a 360-day year consisting of twelve 30-day months) is determined by: (1) multiplying the amount of each principal payment on the applicable class of notes by the number of years from the closing date to the related distribution date, (2) adding the results, and (3) dividing that sum by the aggregate principal amount of the applicable class of notes as of the closing date.
|
Distribution Date
|
[0]% | [4]% | [8]% | [12]% | [16]% | |||||||||||||||
Closing Date
|
100% | 100% | 100% | 100% | 100% | |||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
||||||||||||||||||||
_______ 20__
|
Distribution Date
|
[0]%
|
[4]%
|
[8]%
|
[12]%
|
[16]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
Distribution Date
|
[0]%
|
[4]%
|
[8]%
|
[12]%
|
[16]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
Weighted Average Life (years)(1)
|
[0]%
|
[4]%
|
[8]%
|
[12]%
|
[16]%
|
|||||
Class A Notes
|
||||||||||
Class B Notes
|
||||||||||
Expected Maturity Date
|
||||||||||
Class A Notes
|
||||||||||
Class B Notes
|
|
(1) The weighted average life of the notes (assuming a 360-day year consisting of twelve 30-day months) is determined by: (1) multiplying the amount of each principal payment on the applicable class of notes by the number of years from the closing date to the related distribution date, (2) adding the results, and (3) dividing that sum by the aggregate principal amount of the applicable class of notes as of the closing date.
|
Distribution Date
|
[0]%
|
[4]%
|
[8]%
|
[12]%
|
[16]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
Distribution Date
|
[0]%
|
[4]%
|
[8]%
|
[12]%
|
[16]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
Distribution Date
|
[0]%
|
[4]%
|
[8]%
|
[12]%
|
[16]%
|
|||||
Closing Date
|
100%
|
100%
|
100%
|
100%
|
100%
|
|||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
||||||||||
_______ 20__
|
ELIGIBLE LENDER TRUSTEE
[__________________]
|
DELAWARE TRUSTEE
[__________________]
|
INDENTURE TRUSTEE AND PAYING AGENT
[__________________]
|
BINGHAM MCCUTCHEN LLP
399 Park Avenue
New York, New York 10022
|
RICHARDS, LAYTON & FINGER, P.A.
920 King Street
Wilmington, Delaware 19801
|
SHEARMAN & STERLING LLP
801 Pennsylvania Avenue, N.W.
Washington, D.C. 20004 2604
|
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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Class
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Outstanding Principal Amount
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Interest Rate
|
Legal Maturity Date
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|||
Auction Rate Class [A-__]
[B-__] [C-__] Notes
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[$___________]
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Auction
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[___________ 20__]
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You should consider carefully the risk factors on page S-[___] of this prospectus supplement and on page [___] of the base prospectus. The auction rate notes are asset-backed securities issued by and are obligations of the issuing entity, which is a trust. They are not obligations of or interests in SLM Corporation, the sponsor, administrator, servicer, depositor, the selling securitiesholder, or any of their affiliates. The notes are not guaranteed or insured by the United States or any governmental agency.
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Proceeds to the
Price to Public Selling Securitiesholder
Per Auction Rate Class [A-__] [B-__] [C-__] Note [____%] [____%]
We expect the proceeds to the selling securitiesholder in respect of the notes to be [$_______] before deducting expenses payable by the selling securitiesholder estimated to be [$________].
Neither the Unites States Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved the securities or determined whether this prospectus supplement or the base prospectus is accurate or complete. Any contrary representation is a criminal offense.
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||
SLM Funding LLC
Selling Securitiesholder
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_____________ 20__
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Page
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|
Summary of Note Terms
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S-1
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· Issuing Entity
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S-1
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· Depositor
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S-1
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· [Auction Rate Notes Depositor]
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S-1
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· Selling Securitiesholder
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S-1
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· Sponsor, Servicer and Administrator
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S-1
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· Indenture Trustee
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S-1
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· Eligible Lender Trustee
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S-1
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· Delaware Trustee
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S-1
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· Broker Dealer
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S-1
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· Auction Agent
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S-1
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· Original Closing Date
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S-2
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· Reoffering Closing Date
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S-2
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· Statistical Disclosure Date
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S-2
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· Auction Rate Notes
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S-2
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· Prepayments, Extensions, Weighted Average Lives And Expected Maturities Of The Auction Rate Notes
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S-3
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· The Other Notes
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S-3
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· All Notes
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S-4
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· Indenture Trustee And Paying Agent
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S-6
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· [Luxembourg Paying Agent]
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S-6
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· Eligible Lender Trustee
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S-6
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· Delaware Trustee
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S-6
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· Auction Agent
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S-6
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· Broker-Dealer
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S-7
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· Administrator And Sponsor
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S-7
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· Information About The Trust
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S-7
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· Administration Of The Trust
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S-11
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· Termination Of The Trust
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S-16
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· Tax Considerations
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S-17
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· ERISA Considerations
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S-18
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· Ratings
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S-18
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· Listing Information
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S-18
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· Risk Factors
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S-19
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· Identification Numbers
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S-19
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Risk Factors
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S-20
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· Federal Financial Regulatory Legislation Could Have An Adverse Effect On SLM Corporation, Sallie Mae, The Servicer, The Administrator, The Depositor, The Selling Securitiesholder, The Sellers And The Trust, Which Could Result In Losses Or Delays In Payments On Your Notes
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S-20
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· Illiquidity; Illiquid Market Conditions May Occur From Time To Time
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S-21
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· The Notes Are Not Suitable Investments For All Investors
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S-22
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· Sequential Payment Of The Notes Results In A Greater Risk Of Loss
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S-22
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· Your Notes May Have A Degree Of Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal Of And Interest On Your Notes
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S-22
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· Certain Actions Can Be Taken Without Noteholder Approval
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S-23
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· The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
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S-23
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· The Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
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S-23
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· Rating Agencies May Have A Conflict Of Interest
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S-24
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· A Lowering Of The Credit Rating Of The United States of America May Adversely Affect The Market Value of Your Notes
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S-24
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· The Interest Rates On The Auction Rate Notes Are Subject To Limitations Which Could Reduce Your Yield
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S-24
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· Auction Procedures And Transfer Requirements May Limit The Liquidity And Marketability Of Your Auction Rate Notes
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S-25
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· Actions By A Broker-Dealer Could Affect Interest Rates On Your Auction Rate Notes
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S-25
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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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S-26
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Defined Terms
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S-27
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The Trust
|
S-27
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· General
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S-27
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· Capitalization of the Trust
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S-28
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· Eligible Lender Trustee
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S-29
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· Delaware Trustee
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S-30
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· Indenture Trustee
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S-31
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· SPE Seller
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S-31
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· The Selling Securitiesholder [and Depositor]
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S-31
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· [The Auction Rate Notes Depositor]
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S-32
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Use Of Proceeds
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S-32
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The Trust Student Loan Pool
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S-32
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· General
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S-32
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· Eligible Trust Student Loans
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S-33
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· Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions
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S-33
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· Characteristics of the Trust Student Loans
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S-37
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· Insurance of Student Loans; Guarantors of Student Loans
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S-38
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· Cure Period for Trust Student Loans
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S-40
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· Consolidation of Federal Benefit Billings and Receipts and Guarantor Claims with Other Trusts
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S-41
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[Recent Developments]
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S-42
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Description Of The Notes
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S-42
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· General
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S-42
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· The Notes
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S-42
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· The Auction Rate Notes
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S-46
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· Notice of Interest Rates
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S-52
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· Accounts
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S-52
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· Servicing Compensation
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S-53
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· Distributions
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S-53
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· Distributions Following an Event of Default and Acceleration of the Maturity of the Notes
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S-57
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· Voting Rights and Remedies
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S-59
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· Credit Enhancement
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S-59
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· [Potential Future Interest Rate Cap Agreement]
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S-60
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· Administration Fee
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S-61
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· Trust Fees
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S-62
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· Determination of Indices
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S-62
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· Optional Purchase
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S-62
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· Auction of Trust Assets
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S-63
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Static Pools
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S-64
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Prepayments, Extensions, Weighted Average Lives And Expected Maturities Of The Auction Rate Notes
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S-64
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U.S. Federal Income Tax Consequences
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S-65
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[European Union Directive On The Taxation Of Savings Income]
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S-66
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Erisa Considerations
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S-66
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Accounting Considerations
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S-68
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Reports To Noteholders
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S-68
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Plan Of Distribution
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S-68
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Notices To Investors
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S-69
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Listing Information
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S-70
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Ratings
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S-71
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Compliance With Article 122A Of The Capital Requirements Directive
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S-72
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Legal Matters
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S-72
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Glossary
|
S-73
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Annex A The Trust Student Loan Pool as of the Original Closing Date
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A-1
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Annex B The Trust Student Loan Pool as of the Statistical Disclosure Date
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B-1
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Exhibit I Prepayments Extensions, Weighted Remaining Average Lives And Expected Maturities Of The Auction Rate Notes
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I-1
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Page
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|
Prospectus Summary
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8
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Risk Factors
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21
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Formation of the Issuing Entities
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45
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Use of Proceeds
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47
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The Depositor
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48
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The Auction Rate Notes Depositor
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50
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The Sponsor, Servicer and Administrator
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50
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The Sellers
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52
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The Student Loan Pools
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53
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The Companies’ Student Loan Financing Business
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56
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Transfer and Servicing Agreements
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67
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Servicing and Administration
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71
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Trading Information
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84
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Description of the Notes
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86
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Additional Information Regarding the Notes
|
93
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Certain Legal Aspects of the Student Loans
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137
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U.S. Federal Income Tax Consequences
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143
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European Union Directive on the Taxation of Savings Income
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156
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State Tax Consequences
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157
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ERISA Considerations
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157
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Available Information
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160
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Reports to Noteholders
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160
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Incorporation of Documents by Reference
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161
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The Plan of Distribution
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161
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Legal Matters
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164
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Appendix A: Federal Family Education Loan Program
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A-1
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Appendix B: Undergraduate and Graduate Loan Programs
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B-1
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Appendix C: Law Loan Programs
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C-1
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Appendix D: MBA Loan Programs
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D-1
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Appendix E: Medical Loan Programs
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E-1
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Appendix F: Dental Loan Programs
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F-1
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Appendix G: Direct-to-Consumer Loan Programs
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G-1
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Appendix H: Private Consolidation Loan Program
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H-1
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Appendix I: Career Training Loan Program
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I-1
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Appendix J: EFG Loan Programs
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J-1
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Appendix K: Smart Option Student Loan Program
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K-1
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Appendix L: Global Clearance, Settlement and Tax Documentation Procedures
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L-1
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|
·
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the rate determined pursuant to the auction procedures described under “Description of the Notes—The Notes—The Auction Rate Notes” in this prospectus supplement;
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|
·
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a maximum rate, equal to the least of:
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|
·
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LIBOR for a period comparable to the auction period plus a margin expected to be approximately [1.50%] for each class of auction rate notes, depending upon the ratings of the auction rate notes;
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·
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[18.0%]; and
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|
·
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the maximum rate permitted by law; and
|
|
·
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the auction student loan rate, which is the weighted average interest rate of the trust student loans, minus specified administrative expenses.
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·
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Class [A-__] Student Loan-Backed Notes in the original principal amount of [$_________], none of which remain outstanding;
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·
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Class [A-__] Student Loan-Backed Notes in the original principal amount of [$_________], none of which remain outstanding;
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·
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Class [A-__] Student Loan-Backed Notes in the original principal amount of [$_________], and currently outstanding in the amount of [$_________];
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·
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Class [A-__] Student Loan-Backed Notes in the original principal amount of [$_________], and currently outstanding in the amount of [$_________].
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·
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Class [B-__] Student Loan-Backed Notes in the original principal amount of [$____________], and currently outstanding in the amount of [$_________].
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·
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class [A-__] [B-__] [C-__] notes as the auction rate notes;
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·
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the floating rate class A notes [and the auction rate notes] collectively as the class A notes;
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·
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the floating rate class A notes and the class [B-___] notes as the floating rate notes;
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·
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the class [B-___] notes [and the auction rate notes] as the class B notes; and
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·
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the floating rate notes [and the auction rate notes] as the notes.
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Class
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Spread
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|
Class [A-__]
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plus [___%]
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Class [A-__]
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plus [___%]
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Class [B-__]
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plus [___%]
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[Class [C-__]
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plus [__%]]
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|
·
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sequentially, to the class [A-__] and class [A-__] notes, in that order, until their respective principal balances are reduced to zero; and then
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|
·
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to the auction rate notes until their principal balance is reduced to zero (in even lots of $50,000); and
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·
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the aggregate principal balance of the class B notes, by
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·
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the aggregate principal balance of all outstanding notes determined immediately prior to that quarterly distribution date.
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Class
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Maturity Date
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|
Class [A-__]
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[______ 20__]
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Class [A-__]
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[______ 20__]
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Class [B-__]
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[______ 20__]
|
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[Class [C-__]
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[______ 20__]]
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|
·
|
there are prepayments on the trust student loans;
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·
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the servicer exercises its option to purchase all remaining trust student loans, which will not occur until the first quarterly distribution date on which the pool balance is [10%] or less of the initial pool balance; or
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·
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the servicer has exercised its purchase option described above, the indenture trustee auctions the remaining trust student loans, which absent an event of default under the indenture, will not occur until the first quarterly distribution date on which the pool balance is [10%] or less of the initial pool balance.
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|
·
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the trust student loans;
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|
·
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collections and other payments on the trust student loans;
|
|
·
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funds it currently holds or will hold from time to time in its trust accounts, including the collection account; the reserve account and the capitalized interest account;
|
|
·
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its rights under the transfer and servicing agreements, including the right to require the SPE Seller (or Sallie Mae, as servicer, acting on its behalf), SLM ECFC, the depositor or the servicer to repurchase trust student loans from it or to substitute loans under certain conditions;
|
|
·
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[its rights under any potential future interest rate cap agreement, if applicable;] and
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|
·
|
its rights under the guarantee agreements with guarantors.
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·
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[0.25%] of the pool balance at the end of the related collection period and
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·
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[$_________].
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·
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on the related maturity date for each class of class A notes [including the auction rate 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-__] notes maturity date [and the maturity date of the auction rate notes] and upon termination of the trust, to cover shortfalls in payments of the class B noteholders’ principal and accrued interest, any carryover servicing fees, and any carryover amounts.
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|
·
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first, deposit into the future distribution account for the servicer, the amounts of the primary servicing fee that will accrue for the related calendar month plus previously accrued and unpaid or set aside amounts;
|
|
·
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second, deposit into the future distribution account for the administrator, the amount of the administration fee that will accrue for the related calendar month plus previously accrued and unpaid or set aside amounts;
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|
·
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third, deposit into the future distribution account, pro rata for the auction agent and the broker-dealer, an amount equal to their respective fees expected to be payable from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts; and
|
|
·
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fourth, deposit into the future distribution account, for each class of class A notes an amount equal to interest expected to accrue on the class A notes from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts.
|
|
·
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first, from amounts deposited in the future distribution account that were allocated to the auction agent and the broker-dealer, and then from amounts on deposit in the collection account, pro rata, to the auction agent and the broker-dealer; the respective fees of the auction agent and the broker-dealer;
|
|
·
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second, from amounts deposited in the future distribution account that were allocated to the auction rate notes, and then from amounts on deposit in the collection account, pro rata, to the auction rate noteholders, an amount equal to interest payable thereon;
|
|
·
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third, from amounts deposited in the future distribution account that were allocated to the auction rate notes on the immediately preceding quarterly distribution date, pro rata, to the auction rate noteholders, an amount equal to principal payable thereon; and
|
|
·
|
fourth, from amounts deposited in the future distribution account that were allocated to the auction rate notes on the immediately preceding quarterly distribution date, pro rata, to the auction rate noteholders, an amount equal to any carryover amounts and interest on any carryover amounts with respect thereto.
|
·
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the amount of specified increases in the costs incurred by the servicer;
|
·
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the amount of specified conversion, transfer and removal fees;
|
·
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any amounts described in the first two bullets that remain unpaid from prior quarterly distribution dates; and
|
·
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interest on any unpaid amounts.
|
·
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the maturity or other liquidation of the last trust student loan and the disposition of any amount received upon its liquidation; and
|
·
|
the payment of all amounts required to be paid to the noteholders.
|
·
|
pay to noteholders the interest payable on the related quarterly distribution date; and
|
·
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reduce the outstanding principal amount of each class of notes then outstanding on the related quarterly distribution date to zero, taking into account all amounts then on deposit in any accumulation account.
|
·
|
the minimum purchase amount described under “—Optional Purchase” above (plus any amounts owed to the servicer as carryover servicing fees); and
|
·
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the fair market value of the trust student loans as of the end of the related collection period.
|
·
|
Federal tax counsel for the trust is of the opinion that the auction rate 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.
|
·
|
[For U.S. federal income tax purposes, the reoffering of the auction rate notes will be treated as a reissuance of auction rate notes.]
|
·
|
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.
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·
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an exemption from the prohibited transaction provisions of Section 406 of the Employee Retirement Income Security Act of 1974, as amended, and Section 4975 of the Internal Revenue Code of 1986, as amended, applies, so that the purchase or holding of the notes; and
|
·
|
the purchase or holding of the notes will not cause a non-exempt violation of any substantially similar federal, state, local or foreign laws.
|
CUSIP Number
|
|
International Securities Identification Number (ISIN)
|
|
European Common Code
|
Federal Financial Regulatory Legislation Could Have An Adverse Effect On SLM Corporation, Sallie Mae, The Servicer, The Administrator, The Depositor, The Selling Securitiesholder, The Sellers 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 SLM Corporation, the parent of the sponsor, the sponsor and their affiliates and the markets in which SLM Corporation, the sponsor and their affiliates operate. Pursuant to the Dodd-Frank Act, SLM Corporation and many of its subsidiaries are subject to regulations promulgated by the Consumer Financial Protection Bureau (the “CFPB”). The CFPB will have substantial power to define the rights of consumers and the responsibilities of lending institutions, including SLM Corporation’s private education lending and retail banking businesses. The CFPB began exercising its authority on July 21, 2011.
Most of the component parts of the Dodd-Frank Act will be subject to intensive rulemaking and public comment over the coming months and none of SLM Corporation, Sallie Mae or their affiliates can predict the ultimate effect the Dodd-Frank Act or required examinations of the private education loan market could have on their operations at this time. It is likely, however, that operational expenses will increase if new or additional compliance requirements are imposed on their operations and their competitiveness could be significantly affected if they are subjected to supervision and regulatory standards not otherwise applicable to their competitors.
The Dodd-Frank Act also creates a liquidation framework for the resolution of bank holding companies and other non-bank financial companies determined to be “covered financial companies.” Under that liquidation framework, it is possible that the Federal Deposit Insurance Corporation (the “FDIC”) could be appointed receiver of SLM Corporation, Sallie Mae 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. Sallie Mae 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 Sallie Mae. Any attempt by the FDIC to recharacterize the securitization transaction as a secured loan (which the FDIC could then repudiate) could cause delays in payments or losses on the notes. In addition, if the trust were to become subject to the OLA, the FDIC could repudiate the debt of the trust with the result that the noteholders would have a secured claim in the receivership of the trust. Also, if the trust were subject to OLA, noteholders would not be permitted to accelerate the debt, exercise remedies against the collateral or replace the servicer without the FDIC’s consent for 90 days after the receiver is appointed. As a result of any of these events, delays in payments on the notes and reductions in the amount of those payments could occur. See “The Trust Student Loan Pool—Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions—FDIC’s Repudiation Power Under the OLA” in this prospectus supplement.
|
|
Illiquidity; Illiquid Market Conditions May Occur From Time To Time
|
Despite federal market interventions and programs, periods of general market illiquidity may occur from time to time and may adversely affect the secondary market for your auction rate notes, as applicable. Accordingly, you may not be able to sell your auction rate notes when you want to do so or you may be unable to obtain the price that you wish to receive for your auction rate notes and, as a result, you may suffer a loss on your investment.
[The auction rate notes are currently listed on the Luxembourg Stock Exchange, however, no assurance can be made that the listing will be maintained. Prospective investors of the auction rate notes should consult with [_____________,] the Luxembourg listing agent for the auction rate notes, to determine their status.]
Any downgrade, withdrawal or qualification of the ratings of your notes, as a result of a change or deterioration in the performance of the trust student loans, errors in analysis or otherwise, may adversely affect the market value of your notes and/or limit your ability to resell your notes.
|
The Notes Are Not Suitable Investments For All Investors
|
The auction rate notes are complex investments that should be considered only by investors who, either alone or with their financial, tax and legal advisors, have the expertise to analyze the prepayment, reinvestment, default and market risk, and tax consequences of an investment, as well as the interaction of these factors.
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Sequential Payment Of The Notes Results In A Greater Risk Of Loss
|
Holders of the auction rate notes bear a greater risk of loss than do holders of the class [A-__] notes and class [A-__] notes [and class B-__ notes] because no principal will be paid to any auction rate noteholders until the class [A-__] and class [A-__] notes [and class B-__ notes] have been paid in full. If a failed auction occurs, the auction rate notes would become subject to the failed auction rate, which may be higher than the interest rate that would otherwise be applicable to such class of notes. This would reduce the amount of available funds to pay interest on other classes of notes and principal on the auction 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 May Have A Degree Of Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal Of And Interest On Your Notes
|
There is a degree of basis risk associated with the auction rate 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 or, with respect to any class of auction rate notes at a time when such notes are in fixed rate mode, do not adjust at all. If a shortfall were to occur, the trust’s ability to pay principal of and/or interest on the notes could be compromised. See “Annex B—The Trust Student Loan Pool as of the Statistical Disclosure Date” in this prospectus supplement which specifies the percentages of trust student loans that adjust based on the LIBOR rate 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.
|
Certain Actions Can Be Taken Without Noteholder Approval
|
The transaction documents provide that certain actions may be taken based upon receipt by the indenture trustee of a confirmation from each of the rating agencies that the then-current ratings assigned by the rating agencies then rating the notes will not be downgraded or withdrawn by those actions. In this event, such actions may be taken without the consent of noteholders.
|
The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
|
In the event of default by the servicer resulting solely from certain events of insolvency or the bankruptcy of the servicer, a court, conservator, receiver or liquidator may have the power to prevent any of the servicer, indenture trustee or the noteholders, as applicable, from appointing a successor and delays in the collection of payments on the related trust student loans may occur. Any delay in the collection of payments on the affected trust student loans may delay or reduce payments to noteholders. In addition, in the event of an insolvency or a bankruptcy of the servicer, a court, conservator, receiver or liquidator may permit the servicer to assign its rights and obligations as servicer to a third party without complying with the provisions of the transaction documents.
|
The Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
|
The Higher Education Act, the Servicemembers Civil Relief Act and similar state and local laws provide payment relief to borrowers who enter active military service and to borrowers in reserve status who are called to active duty after the origination of their trust student loans. Recent and 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 unanticipated delays in payment and losses on the trust student
loans.
|
Rating Agencies May Have A Conflict Of Interest
|
Sallie Mae, or an affiliate, paid a fee to two or more rating agencies to assign the initial credit ratings to the notes on or before the original closing date. The SEC has said that being paid by the sponsor, the issuer or an underwriter to issue and/or maintain a credit rating on asset backed securities creates a conflict of interest for rating agencies, and that this conflict is particularly acute because arrangers of asset-backed securities transactions provide repeat business to such rating agencies.
|
A Lowering Of The Credit Rating Of The United States of America May Adversely Affect The Market Value of Your Notes
|
The credit rating of the United States was downgraded by a nationally recognized statistical rating organization (“NRSRO”) and may potentially be downgraded by other NRSROs in the future. The impact of any such downgrade is not yet clear, and depending on the ratings assigned, the stated reasons for a lower rating and other factors, the liquidity, market value and regulatory characteristics of your notes could be materially and adversely affected.
|
The Interest Rates On The Auction Rate Notes Are Subject To Limitations Which Could Reduce Your Yield
|
The interest rates on each class of 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 the weighted average interest rate of the trust student loans, minus specified administrative expenses). If, for any accrual period, the maximum rate is less than the auction rate determined in accordance with the auction procedures, interest will be paid on the applicable class of auction rate notes at the maximum rate even though there may be sufficient available funds to pay interest at the auction rate.
|
For an auction rate distribution date on which the interest rate for a class of auction rate notes is equal to the auction student loan rate, the excess of (a) the lower of (1) the amount of interest at the auction rate determined pursuant to the auction procedures for that class of 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 will become a carryover amount, and will be allocated to the applicable auction rate notes on the succeeding quarterly distribution date (and paid on the succeeding auction rate distribution date), but only to the extent that there are funds
|
available for that purpose and other conditions are met. It is possible that such carryover amount may never be paid. Any carryover amount not paid at the time of final maturity of an auction rate note will be extinguished. See “Description of the Notes—The Notes—The Auction Rate Notes—Maximum Auction Rate and Interest Carryovers” in this prospectus supplement.
|
|
Auction Procedures And Transfer Requirements May Limit The Liquidity And Marketability Of Your Auction Rate Notes
|
The auction procedures and transfer requirements described in this prospectus supplement and the attached base prospectus may limit the liquidity and marketability of the auction rate notes and therefore may not yield an owner the best possible price for an auction rate note. In particular, if an existing holder of an auction rate note were to submit a sell order or a hold order subject to an interest rate that is determined to be greater than the maximum rate for the auction date, and sufficient clearing bids were not obtained on such auction date, the existing owner would not have its auction rate notes purchased through the auction procedures on the auction date. In that event, no assurance can be given that a broker-dealer would purchase the auction rate note or would otherwise be able to locate a purchaser prior to the auction date or that sufficient clearing bids would be obtained on any succeeding auction date.
|
Actions By A Broker-Dealer Could Affect Interest Rates On Your Auction Rate Notes
|
Each broker-dealer agreement now and in the future will provide that a broker-dealer may submit orders in auctions for its own account. Each broker-dealer also agrees in the related broker-dealer agreement to handle customers' orders in accordance with its duties under applicable securities laws and rules. Any broker-dealer submitting an order for its own account in any auction could have an advantage over other potential holders in that the broker-dealer would have knowledge of other orders placed through it in that auction. Also, a broker-dealer may exercise discretion regarding client orders, which could be an advantage to certain clients because the broker-dealer would have knowledge of the other orders placed through it in the auction. As a result of bidding by a broker-dealer in an auction, the auction rate may be higher or lower than the rate that would have prevailed had the broker-dealer not bid. A broker-dealer may also bid in an auction in order to prevent what would otherwise be (a) a failed auction, (b) an "all-hold" auction, or (c) the implementation of an auction rate that the broker-
|
dealer believes, in its sole judgment, does not reflect the market for such notes at the time of the auction. A broker-dealer may also encourage additional investor bidding in order to prevent an "all-hold" auction. One or more of the original underwriters of the notes or their affiliates may act as broker-dealers with respect to the auction rate notes. These multiple responsibilities could result in conflicts of interest.
|
|
For further information regarding broker-dealers and auction rate note procedures, please see “Description of the Notes—The Auction Rate Notes” in this prospectus supplement and “Additional Information Regarding the Notes—The Auction Rate Notes” in the base prospectus.
|
|
The Lack Of A Market for Auction Rate Securities Could Again In The Future Result In Prolonged Periods Of Failed Auctions And A Loss Of Liquidity
|
An economic downturn may cause the market for auction rate notes to cease to exist which may result in outstanding classes of auction rate notes experiencing a prolonged period of ongoing failed auctions. Holders of auction rate securities may be unable to sell their securities and may experience a potentially significant loss of market value. [The auction rate notes are currently continuing to experience an ongoing period of failed auctions and we cannot give any assurance when, if ever, in the future the auction rate notes will begin to be successfully auctioned; and, in the event that a successful auction rate market has been reestablished, whether such a market may not once again disappear.] [Although the auction rate notes are currently being successfully auctioned on each recent auction date, we cannot give any assurance whether in the future a functioning market for auction rate notes may once again disappear and your auction rate notes may be subject to an ongoing period of failed auctions.] 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.
|
|
·
|
acquiring, holding and managing the trust student loans and the other assets of the trust and related proceeds;
|
|
·
|
issuing the notes;
|
|
·
|
making payments on the notes;
|
|
·
|
[entering into 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 the trust student loans, including any special allowance payments, interest subsidy payments and any guarantor or Department of Education payments, received on or after on or after the original cutoff date;
|
|
·
|
all moneys and investments from time to time on deposit in the Trust Accounts;
|
|
·
|
[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 [___________] (the “SPE Seller”) (or Sallie Mae, as servicer, acting on behalf of the SPE Seller), SLM ECFC, 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-__] Student Loan-Backed Notes
|
$ | 0.00 | ||
Floating Rate Class [A-__] Student Loan-Backed Notes
|
0.00 | |||
Floating Rate Class [A-__] Student Loan-Backed Notes
|
||||
[Auction Rate Class [A-__] Student Loan-Backed Notes]
|
||||
Floating Rate Class [B-__] Student Loan-Backed Notes
|
||||
[Auction Rate Class [B-__] Student Loan-Backed Notes]
|
||||
[[Auction Rate] [____] Class [C-__] Student Loan-Backed Notes]
|
||||
Initial Equity
|
100.00 | |||
Total
|
$[____________]
|
|
·
|
was 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; and
|
|
·
|
did not have a borrower who was noted in the related records of the servicer as being currently involved in a bankruptcy proceeding.
|
Disbursement Date
|
Percentage
Guaranteed
|
||
Prior to October 1, 1993
|
100%
|
||
On or after October 1, 1993 but before July 1, 2006
|
98%
|
||
On or after July 1, 2006
|
97%
|
|
·
|
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-__]
|
plus [___]%
|
||
Class [A-__]
|
plus [___]%
|
||
|
·
|
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 quarterly 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 for that quarterly distribution date, or
|
|
·
|
“bid/hold orders”—specify the minimum interest rate that a current investor is willing to accept in order to continue to hold its auction rate notes for the upcoming accrual period;
|
|
·
|
“sell orders”—an order by a current investor to sell a specified principal amount of its auction rate notes, regardless of the upcoming interest rate; and
|
|
·
|
“potential bid orders”—specify the minimum interest rate that a potential investor, or a current investor wishing to purchase additional auction rate notes of a specific class of auction rate notes, is willing to accept in order to buy a specified principal amount of that class of auction rate notes.
|
|
·
|
first, deposit into the future distribution account for the servicer the amount of the primary servicing fee that will accrue for the related calendar month plus previously accrued and unpaid or set aside amounts,
|
|
·
|
second, deposit into the future distribution account for the administrator the amount of the administration fee that will accrue for the related calendar month plus previously accrued and unpaid or set aside amounts,
|
|
·
|
third, deposit into the future distribution account, for the auction agent and the broker-dealer, pro rata, an amount equal to the sum of the auction agent’s and broker-dealer’s respective fees expected to be payable from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts,
|
|
·
|
fourth, deposit into the future distribution account, for each class of class A notes, an amount equal to interest expected to accrue on the class A notes [(including the auction rate notes)] from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following quarterly distribution date or monthly allocation date, as the case may be, plus previously accrued and unpaid or set aside amounts, [and]
|
|
·
|
[fifth, deposit into the future distribution account, for each class of class B notes, an amount equal to interest expected to accrue on the class B notes [(including the auction rate notes)] from the calendar day after the current calendar month’s quarterly distribution date or monthly allocation date through the following monthly allocation date, plus previously accrued and unpaid or set aside amounts.]
|
|
·
|
first, from amounts deposited in the future distribution account for the benefit of the auction agent and the broker-dealer and then from amounts on deposit in the collection account, pro rata, to the auction agent and the broker-dealers, the respective fees of the auction agent and the broker-dealers;
|
|
·
|
second, from amounts deposited in the future distribution account for the benefit of the auction rate notes, and then from amounts on deposit in the collection account, to the auction rate notes, an amount equal to the Class [A] [B] Noteholders’ Interest Distribution Amount for the auction rate notes;
|
|
·
|
third, from amounts deposited in the future distribution account that were allocated to the auction rate notes on the immediately preceding quarterly distribution date, to the auction rate notes, an amount equal to principal payable thereon; and
|
|
·
|
fourth, from amounts deposited in the future distribution account that were allocated to the auction rate notes on the immediately preceding quarterly distribution date, to the auction rate notes, an amount equal to any carryover amounts and interest on any carryover amounts with respect thereto.
|
|
·
|
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 the controlling class of notes which has resulted in an acceleration of the notes,
|
|
·
|
an event of default under the indenture relating to an insolvency event or a bankruptcy with respect to the trust which has resulted in an acceleration of the notes, or
|
|
·
|
a liquidation of the trust assets following any event of default under the indenture,
|
Party
|
Amount
|
|
Servicer
|
The primary servicing fee(1) for any month is equal to 1/12th of an amount not to exceed [0.50%] of the outstanding principal amount of the trust student loans, plus the amount of any carryover servicing fee.
|
|
Indenture Trustee(2)
|
[$____] per annum, payable in advance.
|
|
Eligible Lender Trustee(3)
|
[$____] per annum, payable in advance.
|
|
Administrator(1)
|
[$____] per quarter, payable in arrears.
|
|
Auction Agent Fees(1)
|
Not to exceed [__%] per annum of the outstanding principal amount of the auction rate notes.
|
|
Broker-Dealer Fees(1)
|
Not to exceed [__%] per annum of the outstanding principal amount of the auction rate notes.
|
|
·
|
pay to noteholders the interest payable on the related quarterly distribution date; and
|
|
·
|
reduce the outstanding principal amount of each class of notes then outstanding on the related quarterly distribution date to zero, taking into account all amounts then on deposit in any accumulation account.
|
|
·
|
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.
|
|
·
|
the Plan’s purchase or holding of the auction rate notes will not constitute or otherwise result in a non-exempt prohibited transaction in violation of Section 406 of ERISA or Section 4975 of the Code which is not covered by a statutory exemption or a class or other applicable exemption from the prohibited transaction rules as described in the base prospectus; and
|
|
·
|
the purchase or holding of the auction rate 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 auction rate 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;
|
|
·
|
amounts transferred from the reserve account in excess of the Specified Reserve Account Balance as of that distribution date; and
|
|
·
|
[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.]
|
|
·
|
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.
|
|
·
|
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 97%, 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 [less the Specified Overcollateralization Amount,] 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)
|
[1.0%] of the Adjusted Pool Balance for that distribution date; and
|
|
(a)
|
[0.25%] of the Pool Balance as of the close of business on the last day of the related collection period; and
|
|
(b)
|
[$_____________];
|
|
·
|
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 [___] 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
|
$
|
||
Aggregate Outstanding Principal Balance – Treasury Bill
|
$
|
||
Percentage of Aggregate Outstanding Principal Balance – Treasury Bill
|
%
|
||
Aggregate Outstanding Principal Balance – One-Month LIBOR
|
$
|
||
Percentage of Aggregate Outstanding Principal Balance – One-Month LIBOR
|
%
|
||
Aggregate Outstanding Principal Balance – Other
|
$
|
||
Percentage of Aggregate Outstanding Principal Balance – Other
|
%
|
||
Number of Borrowers
|
|||
Average Outstanding Principal Balance Per Borrower
|
$
|
||
Number of Loans
|
|||
Average Outstanding Principal Balance Per Loan – Treasury Bill
|
$
|
||
Average Outstanding Principal Balance Per Loan – One-Month LIBOR
|
$
|
||
[Average Outstanding Principal Balance Per Loan – Other]
|
$
|
||
Weighted Average Remaining Term to Scheduled Maturity
|
|||
Weighted Average Annual Interest Rate
|
%
|
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%
|
||||||
3.01% to 3.50%
|
||||||
3.51% to 4.00%
|
||||||
4.01% to 4.50%
|
||||||
4.51% to 5.00%
|
||||||
5.01% to 5.50%
|
||||||
5.51% to 6.00%
|
||||||
6.01% to 6.50%
|
||||||
6.51% to 7.00%
|
||||||
7.01% to 7.50%
|
||||||
7.51% to 8.00%
|
||||||
8.01% to 8.50%
|
||||||
Equal to or greater than 8.51%
|
||||||
Total
|
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
|
||||||
$ 5,000.00-$ 9,999.99
|
||||||
$10,000.00-$14,999.99
|
||||||
$15,000.00-$19,999.99
|
||||||
$20,000.00-$24,999.99
|
||||||
$25,000.00-$29,999.99
|
||||||
$30,000.00-$34,999.99
|
||||||
$35,000.00-$39,999.99
|
||||||
$40,000.00-$44,999.99
|
||||||
$45,000.00-$49,999.99
|
||||||
$50,000.00-$54,999.99
|
||||||
$55,000.00-$59,999.99
|
||||||
$60,000.00-$64,999.99
|
||||||
$65,000.00-$69,999.99
|
||||||
$70,000.00-$74,999.99
|
||||||
$75,000.00-$79,999.99
|
||||||
$80,000.00-$84,999.99
|
||||||
$85,000.00-$89,999.99
|
||||||
$90,000.00-$94,999.99
|
||||||
$95,000.00-$99,999.99
|
||||||
$100,000.00 and above
|
||||||
Total
|
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
|
||||||
31-60 days
|
||||||
61-90 days
|
||||||
91-120 days
|
||||||
121-150 days
|
||||||
151-180 days
|
||||||
181-210 days
|
||||||
Greater than 210 days
|
||||||
Total
|
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
|
||||||
4 to12
|
||||||
13 to 24
|
||||||
25 to 36
|
||||||
37 to 48
|
||||||
49 to 60
|
||||||
61 to 72
|
||||||
73 to 84
|
||||||
85 to 96
|
||||||
97 to 108
|
||||||
109 to 120
|
||||||
121 to 132
|
||||||
133 to 144
|
||||||
145 to 156
|
||||||
157 to 168
|
||||||
169 to 180
|
||||||
181 to 192
|
||||||
193 to 204
|
||||||
205 to 216
|
||||||
217 to 228
|
||||||
229 to 240
|
||||||
241 to 252
|
||||||
253 to 264
|
||||||
265 to 276
|
||||||
277 to 288
|
||||||
289 to 300
|
||||||
301 to 312
|
||||||
313 to 324
|
||||||
325 to 336
|
||||||
337 to 348
|
||||||
349 to 360
|
||||||
361 and above
|
||||||
Total
|
||||||
* 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
|
||||||||
Forbearance
|
||||||||
Repayment
|
||||||||
First year in repayment
|
||||||||
Second year in repayment
|
||||||||
Third year in repayment
|
||||||||
More than 3 years in repayment
|
||||||||
Total
|
||||||||
|
·
|
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
|
|||
Forbearance
|
|||
Repayment
|
|||
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
|
||||||
Alaska
|
||||||
Arizona
|
||||||
Arkansas
|
||||||
California
|
||||||
Colorado
|
||||||
Connecticut
|
||||||
Delaware
|
||||||
District of Columbia
|
||||||
Florida
|
||||||
Georgia
|
||||||
Hawaii
|
||||||
Idaho
|
||||||
Illinois
|
||||||
Indiana
|
||||||
Iowa
|
||||||
Kansas
|
||||||
Kentucky
|
||||||
Louisiana
|
||||||
Maine
|
||||||
Maryland
|
||||||
Massachusetts
|
||||||
Michigan
|
||||||
Minnesota
|
||||||
Mississippi
|
||||||
Missouri
|
||||||
Montana
|
||||||
Nebraska
|
||||||
Nevada
|
||||||
New Hampshire
|
||||||
New Jersey
|
||||||
New Mexico
|
||||||
New York
|
||||||
North Carolina
|
||||||
North Dakota
|
||||||
Ohio
|
||||||
Oklahoma
|
||||||
Oregon
|
||||||
Pennsylvania
|
||||||
Rhode Island
|
||||||
South Carolina
|
||||||
South Dakota
|
||||||
Tennessee
|
||||||
Texas
|
||||||
Utah
|
||||||
Vermont
|
||||||
Virginia
|
||||||
Washington
|
||||||
West Virginia
|
||||||
Wisconsin
|
||||||
Wyoming
|
||||||
Other
|
||||||
Total
|
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
|
||||||
Other Repayment Options(1)
|
||||||
Total
|
||||||
(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
|
|||||
Unsubsidized
|
|||||
Total
|
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
|
|||||
October 1, 1993 through June 30, 2006
|
|||||
July 1, 2006 and later
|
|||||
Total
|
|||||
* 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
|
|||||
College Assist
|
|||||
Educational Credit Management Corporation
|
|||||
Florida Office Of Student Financial Assistance
|
|||||
Great Lakes Higher Education Corporation
|
|||||
Illinois Student Assistance Commission
|
|||||
Kentucky Higher Education Assistance Authority
|
|||||
Louisiana Office Of Student Financial Assistance
|
|||||
Michigan Guaranty Agency
|
|||||
New Jersey Higher Education Student Assistance
Authority
|
|||||
New York State Higher Education Services
Corporation
|
|||||
Northwest Education Loan Association
|
|||||
Oklahoma Guaranteed Student Loan Program
|
|||||
Pennsylvania Higher Education Assistance Agency
|
|||||
Student Loan Guarantee Foundation of Arkansas
|
|||||
Tennessee Student Assistance Corporation
|
|||||
Texas Guaranteed Student Loan Corporation
|
|||||
United Student Aid Funds, Inc.
|
|||||
[OTHERS TO BE ADDED AS REQUIRED]
|
|||||
Total
|
|||||
* Represents a percentage greater than 0% but less than 0.05%.
|
CPR
|
0%
|
2%
|
4%
|
6%
|
8%
|
|||||
Monthly Prepayment
|
|
·
|
the statistical disclosure date for the trust student loans is [_______, 20__];
|
|
·
|
all outstanding note balances reflect the upcoming distribution on [_______, 20__];
|
|
·
|
all trust student loans (as grouped within the “rep lines” described below) are in repayment status (with accrued interest having been capitalized upon entering repayment) and no trust student loan moves from repayment to any other status;
|
|
·
|
no delinquencies, defaults, or borrower benefits occur on any of the trust student loans, no repurchases for breaches of representations, warranties or covenants occur and all borrower payments are collected in full;
|
|
·
|
consolidation rebate fees are paid based on the principal balance of the student loans at the beginning of the related monthly collection period and reduce the amount in the collection account that would otherwise earn investment income;
|
|
·
|
government payments for interest subsidy and special allowance payments began accruing on [_______, 20__]; there are payment delays of 60 days for these payments;
|
|
·
|
index levels for calculation of borrower and government payments are:
|
|
·
|
a 91-day Treasury bill rate of [___%]; and
|
|
·
|
a one-month LIBOR rate of [___%];
|
|
·
|
all auctions of the auction rate notes are successful on auction date;
|
|
·
|
distributions begin on [_______, 20__], and payments are made quarterly on the [25th] day of every [January, April, July and October] thereafter, whether or not the [25th] is a business day;
|
|
·
|
the interest rate for each class of notes at all times will be equal to:
|
|
·
|
the auction rate notes: [___%],
|
|
·
|
class A-__ notes: [___%],
|
|
·
|
class A-__ notes: [___%],
|
|
·
|
class ___ notes: [___%], [and]
|
|
·
|
class B-__ notes: [___%]; [and]
|
|
·
|
[class C-__ notes: [___%];]
|
|
·
|
an administration fee equal to [$____________] is paid quarterly by the trust to the administrator, beginning in [______ 20__];
|
|
·
|
a servicing fee equal to 1/12 of an amount equal to [___%] of then outstanding principal balance of the trust student loans is paid monthly by the trust to the servicer beginning in [______ 20__];
|
|
·
|
the reserve account has a balance as of statistical disclosure date equal to [$_________] and at all times a balance equal to the greater of (1) [___%] of the Pool Balance and (2) [$_____________];
|
|
·
|
the collection account has a balance equal to [$0];
|
|
·
|
the initial collection period begins as of the statistical disclosure date, all payments are assumed to be made on the [15th] day of the month, and amounts on deposit in the collection account, including reinvestment income earned on such account in the previous month, are reinvested in eligible investments at the assumed reinvestment rate of [___%] per annum through the end of the collection period or the related distribution date, as applicable;
|
|
·
|
amounts on deposit in the reserve account, the capitalized interest account and the floor income rebate account are reinvested in eligible investments at the assumed reinvestment rate of [___%] per annum from the previous distribution date through the current distribution date;
|
|
·
|
prepayments on the trust student loans are applied monthly in accordance with CPR, as described above;
|
|
·
|
an optional redemption by the servicer occurs on the distribution date immediately following the collection period during which the Pool Balance equals to or falls below [10%] of the Initial Pool Balance; and
|
|
·
|
the pool of trust student loans consists of ________ representative loans (“rep lines”), which have been created for modeling purposes from individual trust student loans based on combinations of similar individual student loan characteristics, which include, but are not limited to, loan status, interest rate, loan type, index, margin, rate cap and remaining term (the rep lines have been filed as part of Report on Form 8-K and is available under CIK number __________ filed on [________ 20__] [and are available on line at the sponsor’s website at _________________)].
|
Weighted Average Life (years)*
|
0% | 2% | 4% | 6% | 8% | |||||||||||||||
Auction rate notes
|
||||||||||||||||||||
Expected Maturity Date
|
||||||||||||||||||||
Auction rate notes |
[______ 20__]
|
[______ 20__]
|
[______ 20__]
|
[______ 20__]
|
[______ 20__]
|
|||||||||||||||
*The weighted average life of the auction rate notes (assuming a 360-day year consisting of twelve 30-day months) is determined by: (1) multiplying the amount of each principal payment of the auction rate notes by the number of years from the [_______ 20__] auction date to the related distribution date, (2) adding the results and (3) dividing that sum by the aggregate principal amount of the auction rate notes as of the [_______ 20__] auction date.
|
Distribution Date
|
0% | 2% | 4% | 6% | 8% | |||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
||||||||||||||||||||
[____ 20__]
|
ELIGIBLE LENDER TRUSTEE
|
DELAWARE TRUSTEE
|
INDENTURE TRUSTEE AND PAYING AGENT
|
You should consider carefully the risk factors described in this prospectus beginning on page 21 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
SLM Funding LLC, a Delaware limited liability company, is the depositor. SLM Education Credit Finance Corporation is the sole member of SLM Funding LLC. SLM Education Credit Funding LLC, a Delaware limited liability company and an affiliate of SLM Funding LLC, is the depositor solely with respect to certain previously issued classes of auction rate notes for which SLM Funding LLC will be the selling securitiesholder. SLM Education Credit Finance Corporation is the sole member of SLM 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:
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:
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.
|
Page
|
|
Prospectus Summary
|
8
|
Principal Parties
|
8
|
The Notes
|
9
|
Assets of the Issuing Entity
|
11
|
Collection Account
|
12
|
Reserve Account
|
13
|
Pre-Funding Account
|
13
|
Capitalized Interest Account
|
13
|
Other Accounts
|
14
|
Pre-Funding Period
|
14
|
Revolving Period
|
14
|
Credit and Cash Flow or other Enhancement or Derivative Arrangements
|
14
|
Servicing Agreements
|
15
|
Servicing Fee
|
15
|
Administration Agreement
|
15
|
Administration Fee
|
16
|
Purchase Agreements
|
16
|
Sale Agreements
|
16
|
Representations and Warranties of the Depositor
|
16
|
Representations and Warranties of SLM Education Credit Finance Corporation and the Other Sellers Under the Purchase Agreements
|
17
|
Covenants of the Servicer
|
17
|
Optional Purchases
|
18
|
Call Option and Collateral Call
|
19
|
Auction of Trust Assets
|
19
|
Tax Considerations
|
20
|
ERISA Considerations
|
20
|
Ratings
|
20
|
Risk Factors
|
21
|
RISKS RELATING TO THE NOTES GENERALLY
|
21
|
Because The Notes May Not Provide Regular Or Predictable Payments, You May Not Receive The Return On Your Investment That You Expected
|
21
|
The Notes Are Not Suitable Investments For All Investors
|
21
|
If A Secondary Market For Your Notes Does Not Develop, The Value Of Your Notes May Diminish
|
21
|
The Issuing Entity Will Have Limited Assets From Which To Make Payments On The Notes, Which May Result In Losses
|
21
|
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
|
22
|
You May Be Unable To Reinvest Principal Payments At The Yield You Earn On The Notes
|
22
|
Subordination Of Some Classes Of Notes Results In A Greater Risk Of Losses Or Delays In Payment On Those Notes
|
22
|
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
|
23
|
If The Holder Of The Call Option Or Collateral Call Exercises Its Right, You May Not Be Able To Reinvest In A Comparable Note
|
23
|
The Bankruptcy Of The Depositor, ECFC Or Any Other Seller Could Delay Or Reduce Payments On Your Notes
|
23
|
Withdrawal Or Downgrade Of Initial Ratings May Decrease The Prices Of Your Notes
|
24
|
Subordinated Noteholders May Not Be Able To Direct The Indenture Trustee Upon An Event Of Default Under The Indenture
|
24
|
The Dodd-Frank Act And Future Legislation and Regulatory Reforms Could Have An Adverse Effect On Holdco’s And SMI’s Business And Operating Results
|
25
|
RISKS RELATING TO STUDENT LOANS GENERALLY
|
25
|
You Will Bear Prepayment And Extension Risk Due To Actions Taken By Individual Borrowers And Other Variables Beyond Our Control
|
25
|
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
|
26
|
The Inability Of The Depositor Or The Servicer To Meet Its Repurchase Obligation May Result In Losses On Your Notes
|
27
|
Incentive Programs May Affect Your Notes
|
27
|
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
|
28
|
The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
|
28
|
The Indenture Trustee May Have Difficulty Liquidating Trust Student Loans After An Event Of Default
|
28
|
An Issuing Entity May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
|
29
|
RISKS RELATING TO PRIVATE EDUCATION LOANS
|
29
|
Private Education Loans May Have Greater Risk Of Default
|
29
|
Past Charge-Off Rates On Holdco’s Private Education Loans May Not Be Indicative Of Future Charge-Off Rates
|
30
|
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
|
31
|
Risk Of Default By Private Guarantors
|
31
|
Consumer Protection Laws May Affect Enforceability Of Student Loans
|
32
|
Risk Of Bankruptcy Discharge Of Private Education Loans
|
32
|
RISKS RELATING TO FEDERALLY GUARANTEED STUDENT LOANS
|
32
|
You May Incur Losses Or Delays In Payments On Your Notes If Borrowers Default On The Trust Student Loans
|
32
|
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
|
33
|
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
|
34
|
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
|
34
|
The Enactment Of The Health Care And Education Act Of 2010 And Any Other Future Changes In Law May Adversely Affect Student Loans, The Guarantors, The Depositor, ECFC Or The Other Sellers And, Accordingly, Adversely Affect Your Notes
|
35
|
The Use Of Master Promissory Notes May Compromise The Indenture Trustee’s Security Interest In The Student Loans
|
36
|
RISKS RELATING TO SWAP AGREEMENTS
|
37
|
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
|
37
|
Your Notes Will Have Greater Risk If An Interest Rate Swap Agreement Terminates
|
37
|
Your Notes Will Have Greater Risk If A Currency Swap Agreement Terminates
|
38
|
RISKS RELATED TO AUCTION RATE NOTES
|
39
|
The Interest Rates On Any Auction Rate Notes Are Subject To Limitations, Which Could Reduce Your Yield
|
39
|
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
|
40
|
RISKS RELATED TO RESET RATE NOTES
|
40
|
If A Currency Swap Agreement Terminates, Additional Interest Will Not Be Paid
|
40
|
Even If You Do Not Receive Timely Notices, You Will Be Deemed To Have Tendered Your Reset Rate Notes
|
41
|
If Investments In An Accumulation Account Do Not Perform As Anticipated, Your Notes May Be Downgraded Or You May Suffer A Loss
|
42
|
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
|
42
|
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
|
43
|
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
|
43
|
If A Failed Remarketing Is Declared, The Failed Remarketing Rate You Will Receive May Be Less Than The Then-Prevailing Market Rate Of Interest
|
43
|
Formation of the Issuing Entities
|
45
|
The Issuing Entities
|
45
|
Eligible Lender Trustee or Trustee
|
46
|
Use Of Proceeds
|
47
|
The Depositor
|
48
|
The Auction Rate Notes Depositor
|
50
|
The Sponsor, Servicer and Administrator
|
50
|
The Sellers
|
52
|
The Student Loan Pools
|
53
|
FFELP Delinquencies, Defaults, Claims and Net Losses
|
54
|
Static Pool Data
|
54
|
Prepayments and Yield
|
55
|
Payment of Notes
|
55
|
Termination
|
56
|
The Companies’ Student Loan Financing Business
|
56
|
Transfer and Servicing Agreements
|
67
|
General
|
67
|
Purchase of Student Loans by the Depositor; Representations and Warranties of the Sellers
|
67
|
Sale of Student Loans to the Trust; Representations and Warranties of the Depositor
|
69
|
Custodian of Promissory Notes
|
69
|
Additional Fundings
|
70
|
Amendments to Transfer and Servicing Agreements
|
70
|
Servicing and Administration
|
71
|
General
|
71
|
Accounts
|
71
|
Servicing Procedures
|
73
|
Payments on Student Loans
|
74
|
Servicer Covenants
|
74
|
Servicing Compensation
|
76
|
Evidence as to Compliance
|
76
|
Matters Regarding the Servicer
|
77
|
Servicer Default
|
78
|
Rights Upon Servicer Default
|
80
|
Waiver of Past Defaults
|
80
|
Administration Agreement
|
80
|
Administrator Default
|
81
|
Rights Upon Administrator Default
|
82
|
Statements to Indenture Trustee and Trust
|
82
|
Evidence as to Compliance
|
84
|
Trading Information
|
84
|
Pool Factors
|
85
|
Description of the Notes
|
86
|
General
|
86
|
Principal and Interest on the Notes
|
86
|
Call Option on the Notes
|
87
|
Collateral Call
|
87
|
The Indenture
|
87
|
Additional Information Regarding the Notes
|
93
|
Fixed Rate Notes
|
93
|
Floating Rate Notes
|
93
|
Auction Rate Notes
|
94
|
The Reset Rate Notes
|
97
|
Determination of Indices
|
115
|
Distributions
|
124
|
Credit Enhancement and Other Support
|
124
|
General
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124
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Subordination of Notes
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125
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Reserve Accounts
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125
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Capitalized Interest Accounts
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125
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Cash Capitalization or Cash Collateral Accounts
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125
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Supplemental Interest Accounts
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125
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Investment Premium Purchase Accounts
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126
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Investment Reserve Accounts
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126
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Overcollateralization
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126
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Letters of Credit
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126
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Liquidity Agreements
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126
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Pool Insurance Policies
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127
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Financial Guaranty Insurance Policies or Surety Bonds
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127
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Repurchase Bonds
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127
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Swap Agreements, Cap Agreements or other Financial or Derivative Instruments
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127
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Insolvency Events
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127
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Book-Entry Registration
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128
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Reset Rate Notes
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131
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Non-U.S. Dollar Denominated Notes
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134
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Definitive Notes
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135
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List of Noteholders
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136
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Reports to Noteholders
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137
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Certain Legal Aspects of the Student Loans
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137
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Transfer of Student Loans
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137
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Consumer Protection Laws
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138
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Loan Origination and Servicing Procedures Applicable to Student Loans
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139
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Student Loans Generally Not Subject to Discharge in Bankruptcy
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139
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Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions
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140
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U.S. Federal Income Tax Consequences
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143
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Tax Characterization of the Trust
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145
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Tax Consequences to Holders of Notes in General
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145
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Special Tax Consequences to Holders of Non-U.S. Dollar Denominated Notes
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150
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Special Tax Consequences to Holders of Auction Rate Notes
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153
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Special Tax Consequences to Holders of Reset Rate Notes
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154
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European Union Directive On The Taxation Of Savings Income
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156
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State Tax Consequences
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157
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ERISA Considerations
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157
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Available Information
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160
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Reports to Noteholders
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160
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Incorporation of Documents by Reference
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161
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The Plan of Distribution
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161
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Legal Matters
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164
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Appendix A: Federal Family Education Loan Program
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A-1
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Appendix B: Undergraduate and Graduate Loan Programs
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B-1
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Appendix C: Law Loan Programs
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C-1
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Appendix D: MBA Loan Programs
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D-1
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Appendix E: Medical Loan Programs
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E-1
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Appendix F: Dental Loan Programs
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F-1
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Appendix G: Direct-to-Consumer Loan Programs
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G-1
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Appendix H: Private Consolidation Loan Program
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H-1
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Appendix I: Career Training Loan Program
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I-1
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Appendix J: EFG Loan Programs
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J-1
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Appendix K: Smart Option Student Loan® Program
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K-1
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Appendix L: Global Clearance, Settlement and Tax Documentation Procedures
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L-1
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PROSPECTUS SUMMARY
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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.
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Principal Parties
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Issuing Entity
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Each issuing entity will be a Delaware statutory trust to be formed for each series of notes under a trust agreement between the depositor, a Delaware trustee and an eligible lender trustee or trustee, as applicable. We sometimes refer to an issuing entity as a “trust” in this prospectus.
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Depositor
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The depositor is SLM Funding LLC, which is a Delaware limited liability company. SLM Education 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.
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Auction Rate Notes Depositor
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The auction rate notes depositor is SLM Education Credit Funding LLC, which is a Delaware limited liability company. SLM Education Credit Finance Corporation is the sole member of the auction rate notes depositor. The auction rate notes depositor is an affiliate of the depositor. The auction rate notes depositor will be the depositor solely with respect to certain reofferings of previously registered auction rate notes where the auction rate notes depositor was originally the related issuing entity’s depositor for the applicable series of notes and SLM Funding LLC is the selling securitiesholder of the class or classes of auction rate notes being reoffered.
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Trustee, Delaware Trustee and/or Eligible Lender Trustee
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For each series of notes, the related prospectus supplement will specify the 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” in this prospectus.
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Sponsor
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The sponsor is Sallie Mae, Inc. We sometimes refer to Sallie Mae, Inc. and its successors in interest as SMI in this prospectus.
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Servicer
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The servicer will be either SMI or another servicer specified in the prospectus supplement for your notes. SMI manages and operates the loan servicing functions for SLM Corporation and its affiliates and certain unrelated parties. We sometimes refer to SLM Corporation and its successors in interest as Holdco in this prospectus.
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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.
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Sellers
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The sellers are SLM Education Credit Finance Corporation and/or other affiliates of the depositor as identified in the related prospectus supplement. We sometimes refer to SLM Education Credit Finance Corporation and its successors in interest as ECFC in this prospectus.
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Originators
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To the extent that non-FFELP loans have been originated by one or more originators not affiliated with SMI 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.
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Indenture Trustee
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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.
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Administrator
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The administrator of the issuing entity will be either SMI 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.
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The Notes
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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.
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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.
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See “Additional Information Regarding the Notes—Book-Entry Registration” and “—Definitive Notes” in this prospectus.
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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:
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The related prospectus supplement will specify:
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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.
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If a series includes two or more classes of notes:
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The related prospectus supplement will provide this information.
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Assets of the Issuing Entity
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The assets of each issuing entity will include a pool of student loans. The loans, as specified in the related prospectus supplement, may be:
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Student loans owned by the issuing entity are called “trust student loans.”
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The assets of each issuing entity will include rights to receive payments made on these trust student loans and any proceeds related to them.
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We will purchase the student loans from ECFC or another affiliate of Holdco 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
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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.
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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.
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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.
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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.
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Collection Account
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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.
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Reserve Account
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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.
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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.
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Pre-Funding Account
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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.
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Capitalized Interest Account
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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.
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Funds in the capitalized interest account will be available to cover shortfalls in payments of primary servicing, administration, 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
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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.
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Other Accounts
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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.
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Pre-Funding Period
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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.
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Revolving Period
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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 related 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.
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Credit and Cash Flow or other Enhancement or Derivative Arrangements
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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.
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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
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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.
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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.
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Servicing Agreements
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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.
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Servicing Fee
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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.
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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.
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Administration Agreement
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SMI, in its capacity as administrator, will enter into an administration agreement with each issuing entity, the depositor, the eligible lender trustee or trustee, as applicable, the servicer and the indenture trustee. Under this agreement, SMI will undertake specific administrative duties for each issuing entity. See “Servicing and Administration—Administration Agreement” in this prospectus.
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Administration Fee
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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.
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Purchase Agreements
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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.
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Sale Agreements
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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.
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Representations and Warranties of the Depositor
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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:
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Any required repurchase or substitution will occur on the date the next collection period ends after the applicable cure period has expired.
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In addition, the depositor will have an obligation to reimburse the issuing entity for:
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See “Transfer and Servicing Agreements—Sale of Student Loans to the Trust; Representations and Warranties of the Depositor” in this prospectus.
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Representations and
Warranties of SLM
Education Credit
Finance Corporation and
the Other Sellers Under
the Purchase Agreements
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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.
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See “Transfer and Servicing Agreements—Purchase of Student Loans by the Depositor; Representations and Warranties of the Sellers” in this prospectus.
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Covenants of the Servicer
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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.
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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).
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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.
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In addition, the servicer will have an obligation to reimburse the issuing entity for:
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See “Servicing and Administration—Servicer Covenants” in this prospectus.
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Optional Purchases
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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.
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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.
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Call Option and Collateral Call
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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.
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See “Description of the Notes—Collateral Call” in this prospectus.
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Auction of Trust Assets
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Subject to any limitations described in the related prospectus supplement, the indenture trustee will 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.
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Tax Considerations
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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:
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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:
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By acquiring a note, you will agree to treat that note as indebtedness.
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See “U.S. Federal Income Tax Consequences” and “State Tax Consequences” in this prospectus.
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ERISA Considerations
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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.
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Ratings
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The sponsor expects that the notes will receive credit ratings from at least two rating agencies.
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RISKS RELATING TO THE NOTES GENERALLY
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Because The Notes May Not Provide Regular Or Predictable Payments, You May Not Receive The Return On Your Investment That You Expected
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The notes may not provide a regular or predictable schedule of payments or payment on any specific date. Accordingly, you may not receive the return on your investment that you expected.
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The Notes Are Not
Suitable Investments For All
Investors
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The 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.
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If A Secondary Market For Your Notes Does Not Develop, The Value Of Your Notes May Diminish
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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.
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The Issuing Entity Will Have Limited Assets From Which To Make Payments On The Notes, Which May Result In Losses
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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.”
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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.
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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
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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.
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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.
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You May Be Unable To Reinvest Principal Payments At The Yield You Earn On The Notes
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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.
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Subordination Of Some Classes Of Notes Results In A Greater Risk Of Losses Or Delays In Payment On Those Notes
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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.
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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
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The notes may be repaid before you expect them to be if:
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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.
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If The Holder Of The Call Option Or Collateral Call Exercises Its Right, You May Not Be Able To Reinvest In A Comparable Note
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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.
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The Bankruptcy Of The Depositor, ECFC Or Any Other Seller Could Delay Or Reduce Payments On Your Notes
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We have taken steps to assure that the voluntary or involuntary application for relief by ECFC, 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 ECFC and the other
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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 ECFC 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.
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ECFC, 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 ECFC or the other sellers should any such seller become subject to an insolvency law.
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If ECFC or any other seller were to become subject to an insolvency law, and a creditor, a trustee-in-bankruptcy or the seller itself were to take the position that the sale of student loans from the related seller to the depositor should instead be treated as a pledge of the student loans to secure a borrowing of that seller, delays in payments on the notes could occur.
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In addition, if the court ruled in favor of this position, reductions in the amount of payments on the notes could result.
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Withdrawal Or Downgrade Of Initial Ratings May Decrease The Prices Of Your Notes
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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.
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Subordinated Noteholders May Not Be Able To Direct The Indenture Trustee Upon An Event Of Default Under The Indenture
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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.
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The Dodd-Frank Act And Future Legislation and Regulatory Reforms Could Have An Adverse Effect On Holdco’s And SMI’s Business And Operating Results
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On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) to reform and strengthen supervision of the U.S. financial services industry. The Dodd-Frank Act represents a comprehensive change to existing laws, imposing significant new regulation on almost every aspect of the U.S. financial services industry.
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The Dodd-Frank Act will result in significant new regulation in key areas of the business of Holdco, the parent of the sponsor, the sponsor and their affiliates and the markets in which Holdco, 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 Holdco, 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.
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See “Certain Legal Aspects of the Student Loans—Dodd-Frank Act—Potential Applicability and Orderly Liquidation Authority Provisions” below for more information.
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RISKS RELATING TO STUDENT LOANS GENERALLY
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You Will Bear Prepayment And Extension Risk Due To Actions Taken By Individual Borrowers And Other Variables Beyond Our Control
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A borrower may prepay a student loan in whole or in part, at any time. The rate of prepayments on the 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.
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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.
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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.
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The effect of these factors is impossible to predict. To the extent they create reinvestment risk, you will bear that risk.
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A Failure To Comply With Student Loan Origination And Servicing Procedures Could Jeopardize Guarantor, Interest Subsidy And Special Allowance Payments On The Trust Student Loans, Which May Result In Delays In Payment Or Losses On Your Notes
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The rules under which the trust student loans were originated, including the Higher Education Act or the program rules 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:
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Loss of any loan program payments could adversely affect the amount of available funds and the issuing entity’s ability to pay principal and interest on your notes.
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The Inability Of The Depositor Or The Servicer To Meet Its Repurchase Obligation May Result In Losses On Your Notes
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Under some circumstances, the issuing entity has the right to require the depositor (and the depositor has the right to require the 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.
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Incentive Programs May Affect Your Notes
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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 “Sallie Mae’s Student Loan Financing Business—Servicing—Incentive Programs” in this prospectus. These current or future incentive programs may affect payments on your notes.
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For example, if one or more of the incentive programs which offer a principal balance reduction to borrowers are made available to borrowers with trust student loans and a higher than anticipated number of borrowers qualify, the principal balance of the affected trust student loans may repay faster than anticipated.
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Accordingly, your notes may experience faster than anticipated principal payments.
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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.
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Furthermore, incentive programs may reduce the amount of funds available to make payments on your notes by reducing the principal balances and yield on the trust student loans. In that case, you will bear the risk of any loss not covered by available credit enhancement.
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A Servicer Default May Result In Additional Costs, Increased Servicing Fees By A Substitute Servicer Or A Diminution In Servicing Performance, Any Of Which May Have An Adverse Effect On Your Notes
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If a servicer default occurs, the indenture trustee or the noteholders of a given series of notes may remove the servicer without the consent of the trustee or eligible lender trustee, as applicable. Only the indenture trustee or the noteholders, and not the trustee or eligible lender 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:
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In addition, the noteholders have the ability, with some exceptions, to waive defaults by the servicer.
Furthermore, the indenture trustee or the noteholders may experience difficulties in appointing a successor servicer and during any transition phase it is possible that normal servicing activities could be disrupted, resulting in increased delinquencies and/or defaults on the trust student loans.
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The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments On Your Notes
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In the event of 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.
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The Indenture Trustee May Have Difficulty Liquidating Trust Student Loans After An Event Of Default
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If an event of default occurs under 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.
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An Issuing Entity May Be Affected By Delayed Payments From Borrowers Called To Active Military Service
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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.
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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.
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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.
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RISKS RELATING TO PRIVATE EDUCATION LOANS
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(The following risk factors apply to issuing entities whose assets include private education loans.)
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Private Education Loans May
Have Greater Risk Of
Default
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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.
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Past Charge-Off Rates On Holdco’s Private Education Loans May Not Be Indicative Of Future Charge-Off Rates
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SMI as the servicer, has agreed to service the trust student loans on the same terms as they service substantially similar loans owned by Holdco and its affiliates. Holdco 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, 2012, approximately 3.50% of Holdco’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 Holdco’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.
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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.
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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
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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.
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Risk Of Default By Private
Guarantors
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If applicable to the trust student loans backing your notes, if 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.
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Consumer Protection Laws May Affect Enforceability Of Student Loans
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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.
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Risk Of Bankruptcy Discharge Of Private Education Loans
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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.
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RISKS RELATING TO FEDERALLY GUARANTEED STUDENT LOANS
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(The following risk factors apply to issuing entities whose assets include FFELP loans.)
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You May Incur Losses Or Delays In Payments On Your Notes If Borrowers Default On The Trust Student Loans
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If a borrower defaults on a trust student loan that is only 98% or 97% guaranteed, the related issuing entity will experience a loss of approximately 2% or 3%, as the case may be, of the outstanding principal and accrued interest on that student loan. If defaults occur on the trust student loans and the credit enhancement described in 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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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 against
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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 Act Of 2010 And Any Other Future Changes In Law May Adversely Affect Student Loans, The Guarantors, The Depositor, ECFC 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 ECFC, 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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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 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 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 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
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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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Holdco 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
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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 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 acquire Signature Student Loans and EXCEL Loans funded by several commercial banks in the United States. Sallie Mae Bank also funds Signature Student Loans. 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 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 the funding lender and SMI.
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Law Loans. The Companies acquire LAWLOANS and LawEXCEL Loans funded by several commercial banks in the United States. Sallie Mae Bank also funds LAWLOANS. LAWLOANS and LawEXCEL Loans provide 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 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 the funding lender and SMI.
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Medical Loans. The Companies acquire MEDLOANS and MD EXCEL Loans funded by several commercial banks in the United States. Sallie Mae Bank also funds MEDLOANS. MEDLOANS and MD EXCEL Loans provide medical students additional educational financing to help pay for the costs of attending medical school. A medical student may also receive a residency loan to finance the cost of participating in one or more medical residency programs if such student has 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 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 the funding lender and SMI.
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Dental Loans. The Companies acquire DENTALoans and Dental EXCEL Loans funded by several commercial banks in the United States. Sallie Mae Bank also funds DENTALoans. 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 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 the funding lender and SMI.
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MBA Loans. The seller acquires MBA Loans and MBA EXCEL Loans funded by several commercial banks in the United States. Sallie Mae Bank also funds MBA Loans. 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 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 the funding lender and SMI.
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Direct-to-Consumer Loans. Sallie Mae Bank funds 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 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 established by Sallie Mae Bank.
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Private Consolidation Loans. Sallie Mae Bank funds 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 Sallie Mae Bank.
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Career Training Loans. The seller acquires Career Training Loans funded by several commercial banks in the United States. Sallie Mae Bank also funds Career Training Loans. 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 established by Sallie Mae Bank.
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EFG Loans. Company 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 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 originator.
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Smart Option Student Loans. Sallie Mae Bank funds 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 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 seller 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 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 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 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.
|
|
·
|
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;
|
|
·
|
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;
|
|
·
|
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;
|
|
·
|
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);
|
|
·
|
bankers’ acceptances issued by any depository institution or trust company referred to in the second bullet point above;
|
|
·
|
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;
|
|
·
|
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
|
|
·
|
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.
|
|
·
|
collecting and depositing into the collection account all payments on the trust student loans, including claiming and obtaining any program payments;
|
|
·
|
responding to inquiries from borrowers;
|
|
·
|
attempting to collect delinquent payments; and
|
|
·
|
sending out statements and payment coupons to borrowers.
|
|
·
|
it will satisfy all of its obligations relating to the trust student loans, maintain in effect all qualifications required in order to service the loans and comply in all material respects with all requirements of law if a failure to comply would have a materially adverse effect on the interests of the related trust;
|
|
·
|
it will not permit any rescission or cancellation of a trust student loan except as ordered by a court or other government authority or as consented to by the eligible lender trustee and the indenture trustee, except that it may write off any delinquent loan if the remaining balance of the borrower’s account is less than $50;
|
|
·
|
it will do nothing to impair the rights of the noteholders in the trust student loans; and
|
|
·
|
it will not reschedule, revise, defer or otherwise compromise payments due on any trust student loan except during any applicable interest only, deferment or forbearance periods or otherwise in accordance with the same standards it uses for similar student loans owned by Holdco and its affiliates.
|
|
·
|
the shortfall, if any, between
|
|
·
|
the purchase amount of the qualified substitute trust student loans;
|
|
·
|
the purchase amount of the trust student loans being replaced; and
|
|
·
|
any accrued interest amounts not guaranteed by or that are required to be refunded to a guarantor and any interest subsidy payments or special allowance payments lost as a result of a breach.
|
|
·
|
a specified annual percentage of the pool balance;
|
|
·
|
a unit amount based on the number of accounts and other activity or event related fees;
|
|
·
|
any combination of these; or
|
|
·
|
any other formulation described in the related prospectus supplement.
|
|
·
|
collecting and posting all payments;
|
|
·
|
responding to inquiries of borrowers on the trust student loans;
|
|
·
|
investigating delinquencies;
|
|
·
|
pursuing, filing and collecting any program payments;
|
|
·
|
accounting for collections;
|
|
·
|
furnishing monthly and annual statements to the trustees; and
|
|
·
|
paying taxes, accounting fees, outside auditor fees, data processing costs and other costs incurred in administering the student loans.
|
|
·
|
the successor to the servicer’s operations assumes in writing all of the obligations of the servicer;
|
|
·
|
the sale or transfer and the assumption comply with the requirements of the servicing agreement; and
|
|
·
|
the rating agencies confirm that this will not result in a downgrading or a withdrawal of the ratings then applicable to the notes.
|
|
·
|
its obligation to purchase trust student loans from 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
|
|
·
|
any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of the servicer’s duties or because of reckless disregard of its obligations and duties.
|
|
·
|
any failure by the servicer to deposit in the trust accounts any required payment that continues for five business days after the servicer receives written notice of such failure from the indenture trustee or the trustee or eligible lender trustee, as applicable;
|
|
·
|
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 or eligible lender trustee, as applicable, or the administrator or (2) to the servicer, the indenture trustee and the trustee or eligible lender trustee, as applicable, by holders of 50% or more of the notes (or the most senior notes then outstanding, if applicable);
|
|
·
|
the occurrence of an insolvency event involving the servicer;
|
|
·
|
any failure by the servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a third-party servicer, if applicable; or
|
|
·
|
any failure by the servicer to deliver any particular information, report, certification or accountants’ letter when and as required by specified sections of the servicing agreement, which continues unremedied for fifteen (15) calendar days after the date on which such information, report, certification or accountants’ letter was required to be delivered.
|
|
·
|
directing the indenture trustee to make the required distributions from the trust accounts on each monthly servicing payment date and each distribution date;
|
|
·
|
preparing, based on periodic data received from the servicer, and providing quarterly and annual distribution statements to the trustee or eligible lender trustee, as applicable, and the indenture trustee and any related U.S. federal income tax reporting information; and
|
|
·
|
providing the notices and performing other administrative obligations required by the indenture, the trust agreement and the sale agreement.
|
|
·
|
the sub-administrator assumes in writing all of the obligations of the administrator that are sub-contracted;
|
|
·
|
the sub-administrator covenants to comply with the requirements of the administration agreement; and
|
|
·
|
the rating agencies confirm that this will not result in a downgrading or a withdrawal of the ratings then applicable to the notes.
|
|
·
|
any failure by the administrator to deliver to the indenture trustee for deposit any required payment by the business day preceding any monthly servicing payment date or distribution date, if the failure continues for five business days after notice or discovery;
|
|
·
|
any failure by the administrator to direct the indenture trustee to make any required distributions from any of the trust accounts on any monthly servicing payment date or any distribution date, if the failure continues for five business days after notice or discovery;
|
|
·
|
any failure by the administrator to observe or perform in any material respect any other term, covenant or agreement in 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:
|
|
(1)
|
to the administrator by the indenture trustee or the trustee or eligible lender trustee, as applicable,
|
|
(2)
|
to the administrator, the indenture trustee, the trustee or the eligible lender trustee, as applicable, by holders of 50% or more of the notes (or senior notes, if applicable);
|
|
·
|
the occurrence of an insolvency event involving the administrator; or
|
|
·
|
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
|
|
·
|
the amount of principal distributions for each class of notes;
|
|
·
|
the amount of interest distributions for each class of notes and the applicable interest rates;
|
|
·
|
the pool balance at the beginning and at the end of the preceding collection period;
|
|
·
|
the outstanding principal amount and the note pool factor for each class of notes for that distribution date;
|
|
·
|
the servicing fees, the administration fees and the amount of any carryover servicing fees for that collection period;
|
|
·
|
the interest rates, if available, for the next period for each class of notes or the website where those rates may be found;
|
|
·
|
the amount of any aggregate realized losses for that collection period;
|
|
·
|
the amount of any note interest shortfall and note principal shortfall, if applicable, for each class of notes, and any changes in these amounts from the preceding statement;
|
|
·
|
the amount of any note interest carryover, if applicable, for each class of notes, and any changes in these amounts from the preceding statement;
|
|
·
|
the aggregate purchase amounts for any trust student loans repurchased by the depositor, the servicer or any seller from the trust in that collection period;
|
|
·
|
the balance of trust student loans that are delinquent in each delinquency period as of the end of that collection period;
|
|
·
|
any amounts paid to any credit enhancement provider or swap counterparty;
|
|
·
|
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;
|
|
·
|
to the extent applicable, any amount of available credit enhancement drawn upon with respect to such distribution date;
|
|
·
|
any applicable triggers or asset tests are then in effect;
|
|
·
|
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
|
|
·
|
amounts distributed to the holders of the excess distribution certificates and the uses of available funds to the extent not otherwise set forth above.
|
|
·
|
borrower default, death, disability or bankruptcy;
|
|
·
|
the closing of the borrower’s school;
|
|
·
|
the school’s false certification of borrower eligibility;
|
|
·
|
liquidation of the student loan or collection of the related guarantee payments; and
|
|
·
|
purchase of a student loan by the depositor or the servicer.
|
|
·
|
the original denomination of your note; and
|
|
·
|
the applicable pool factor.
|
|
·
|
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;
|
|
·
|
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;
|
|
·
|
change the place of payment or the payment currency for any note;
|
|
·
|
impair the right to institute suit for the enforcement of provisions of the indenture regarding payment;
|
|
·
|
reduce the percentage of outstanding notes whose holders must consent to any supplemental indenture;
|
|
·
|
modify the provisions of the indenture regarding the voting of notes held by the trust, the depositor or an affiliate;
|
|
·
|
reduce the percentage of outstanding notes whose holders must consent to a sale or liquidation of the trust student loans if the proceeds of the sale would be insufficient to pay the principal amount and accrued interest on the notes;
|
|
·
|
modify the provisions of the indenture which specify the applicable percentages of principal amount of notes necessary to take specified actions except to increase these percentages or to specify additional provisions;
|
|
·
|
modify any of the provisions of the indenture to affect the calculation of interest or principal due on any note on any distribution date or to affect the rights of the noteholders to the benefit of any provisions for the mandatory redemption of the notes; or
|
|
·
|
permit the creation of any lien ranking prior or equal to the lien of the indenture on any of the collateral for that series or, except as otherwise permitted or contemplated in that indenture, terminate the lien of the indenture on any collateral or deprive the holder of any note of the security afforded by that lien.
|
|
·
|
a default for five business days or more in the payment of any interest on any note after it is due (or senior notes only if so provided in the related prospectus supplement);
|
|
·
|
a default in the payment of the principal of any note at maturity;
|
|
·
|
a default in the performance of any covenant or agreement of the trust in the indenture, or a material breach of any representation or warranty made by the trust in the 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
|
|
·
|
the occurrence of an insolvency event involving the trust.
|
|
·
|
exercise remedies as a secured party against the trust student loans and other assets of the trust that are subject to the lien of the indenture;
|
|
·
|
sell the trust student loans and other assets of the trust; or
|
|
·
|
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.
|
|
·
|
the holders of all the outstanding notes (or senior notes, if applicable) consent to the sale;
|
|
·
|
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
|
|
·
|
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).
|
|
·
|
the holder previously has given to the indenture trustee written notice of a continuing event of default;
|
|
·
|
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;
|
|
·
|
the holder or holders have offered the indenture trustee reasonable indemnity;
|
|
·
|
the indenture trustee has for 60 days after receipt of notice failed to institute the proceeding; and
|
|
·
|
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.
|
|
·
|
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;
|
|
·
|
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;
|
|
·
|
no default will occur and be continuing immediately after the merger or consolidation;
|
|
·
|
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;
|
|
·
|
any action that is necessary to maintain the lien and security interest created by the related indenture shall have been taken; and
|
|
·
|
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.
|
|
·
|
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;
|
|
·
|
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;
|
|
·
|
except as contemplated by the indenture and the related documents, dissolve or liquidate in whole or in part;
|
|
·
|
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
|
|
·
|
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 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.
|
|
·
|
is not actually or constructively a “10 percent shareholder” of Holdco or a “controlled foreign corporation” with respect to which Holdco 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. 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:
|
|
·
|
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)
|
||
|
|
As of 1992/1993
|
Variable (In-School and Grace)
|
|
|
As of 1999/2000
|
Variable (In-School, Grace, and Repayment)
|
|
|
Disbursed on or after June 1, 2004 and before March 2008, for
|
Variable (In-School, Grace, and Repayment)
|
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)
|
|
Applied for and disbursed on or after March 2008 for MEDLOANS
|
|
|
·
|
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:
|
|
|
·
|
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:
|
|
·
|
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 SMI’s established underwriting criteria.
|
|
·
|
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 SMI. 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.
|
SEC registration fee
|
$[ ]
|
|
Legal fees and expenses
|
$[ ]
|
|
Accounting fees and expenses
|
$[ ]
|
|
Blue Sky fees and expenses
|
$[ ]
|
|
Rating agency fees
|
$[ ]
|
|
Eligible Lender Trustee fees and expenses
|
$[ ]
|
|
Indenture Trustee fees and expenses
|
$[ ]
|
|
Printing expenses
|
$[ ]
|
|
Miscellaneous
|
$[ ]
|
|
Total
|
$[ ]
|
Exhibit No.
|
Description of Document
|
|
1.1
|
Form of Underwriting Agreement for Notes*
|
|
1.2
|
Form of Pricing Agreement for Notes (included as Annex 1 to Exhibit 1.1)*
|
|
3.1
|
Form of Certificate of Trust for the SLM Student Loan Trusts (included as Exhibit B to Exhibit 4.2)*
|
|
3.2
|
Certificate of Formation of SLM Funding LLC*
|
|
3.3
|
Limited Liability Company Operating Agreement of SLM Funding LLC*
|
|
3.4
|
Certificate of Formation of SLM Education Credit Funding LLC*
|
|
3.5
|
Limited Liability Company Operating Agreement of SLM Education Credit Funding LLC*
|
|
4.1
|
Form of Indenture*
|
|
4.2
|
Form of Amended and Restated Trust Agreement*
|
|
4.3
|
Form of Interim Trust Agreement (SLM Funding LLC)*
|
|
4.4
|
Form of Interim Trust Agreement (SPE Seller)*
|
|
5.1
|
Opinion of Bingham McCutchen LLP with respect to legality**
|
|
8.1
|
Opinion of Shearman & Sterling LLP with respect to tax matters**
|
|
8.2
|
Opinion of Richards, Layton & Finger, Delaware tax counsel with respect to certain Delaware tax matters**
|
|
23.1
|
Consent of Bingham McCutchen LLP (to be included as part of Exhibit 5.1)**
|
|
23.2
|
Consent of Shearman & Sterling LLP (to be included as part of Exhibit 8.1)**
|
|
23.3
|
Consent of Richards, Layton & Finger, Delaware tax counsel (to be included as part of Exhibit 8.2)**
|
|
24.1
|
Power of Attorney for SLM Funding LLC (included with this Part II)*
|
|
24.2 |
Power of Attorney for SLM Education Credit Funding LLC (included with this Part II)*
|
|
25.1
|
Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Indenture Trustee***
|
|
99.1
|
Form of Master Terms Sale Agreement*
|
|
99.2
|
Form of Servicing Agreement*
|
|
99.3
|
Form of Master Terms Purchase Agreement (SLM Education Credit Finance Corporation)*
|
|
99.4
|
Form of Master Terms Purchase Agreement (SPE Seller)*
|
|
99.5
|
Form of Administration Agreement*
|
SLM FUNDING LLC
|
|
(Co-Registrant)
|
|
By: /s/ Joseph DePaulo
|
|
Name: Joseph DePaulo
|
|
Title: President and Chief Financial Officer
|
SLM EDUCATION CREDIT FUNDING LLC
|
|
(Co-Registrant)
|
|
By: /s/ Joseph DePaulo
|
|
Name: Joseph DePaulo
|
|
Title: President and Chief Financial Officer
|
Signature
|
Capacity
|
Date
|
||
/s/ Joseph DePaulo
Joseph DePaulo*
|
Manager, President (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and as Executive Vice President, Sallie Mae, Inc.
|
August 30, 2013
|
||
/s/ Ted A. Morris
Ted A. Morris
|
Manager
|
August 30, 2013
|
Signature
|
Capacity
|
Date
|
||
/s/ Joseph DePaulo
Joseph DePaulo*
|
Manager, President (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and as Executive Vice President, Sallie Mae, Inc.
|
August 30, 2013
|
||
/s/ Ted A. Morris
Ted A. Morris
|
Manager
|
August 30, 2013
|
Exhibit No.
|
Description of Document
|
|
1.1
|
Form of Underwriting Agreement for Notes*
|
|
1.2
|
Form of Pricing Agreement for Notes (included as Annex 1 to Exhibit 1.1)*
|
|
3.1
|
Form of Certificate of Trust for the SLM Student Loan Trusts (included as Exhibit B to Exhibit 4.2)*
|
|
3.2
|
Certificate of Formation of SLM Funding LLC*
|
|
3.3
|
Limited Liability Company Operating Agreement of SLM Funding LLC*
|
|
3.4
|
Certificate of Formation of SLM Education Credit Funding LLC*
|
|
3.5
|
Limited Liability Company Operating Agreement of SLM Education Credit Funding LLC*
|
|
4.1
|
Form of Indenture*
|
|
4.2
|
Form of Amended and Restated Trust Agreement*
|
|
4.3
|
Form of Interim Trust Agreement (SLM Funding LLC)*
|
|
4.4
|
Form of Interim Trust Agreement (SPE Seller)*
|
|
5.1
|
Opinion of Bingham McCutchen LLP with respect to legality**
|
|
8.1
|
Opinion of Shearman & Sterling LLP with respect to tax matters**
|
|
8.2
|
Opinion of Richards, Layton & Finger, Delaware tax counsel with respect to certain Delaware tax matters**
|
|
23.1
|
Consent of Bingham McCutchen LLP (to be included as part of Exhibit 5.1)**
|
|
23.2
|
Consent of Shearman & Sterling LLP (to be included as part of Exhibit 8.1)**
|
|
23.3
|
Consent of Richards, Layton & Finger, Delaware tax counsel (to be included as part of Exhibit 8.2)**
|
|
24.1
|
Power of Attorney for SLM Funding LLC (included with this Part II)*
|
|
24.2 |
Power of Attorney for SLM Education Credit Funding LLC (included with this Part II)*
|
|
25.1
|
Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Indenture Trustee***
|
|
99.1
|
Form of Master Terms Sale Agreement*
|
|
99.2
|
Form of Servicing Agreement*
|
|
99.3
|
Form of Master Terms Purchase Agreement (SLM Education Credit Finance Corporation)*
|
|
99.4
|
Form of Master Terms Purchase Agreement (SPE Seller)*
|
|
99.5
|
Form of Administration Agreement*
|
Underwriter
|
Class ___
|
Class ___
|
Class ___
|
|
Principal
|
Date from Which
|
|
Delivery Date
|
Amount
|
Interest Accrues
|
....................., 20..
|
$.............
|
....................., 20..
|
....................., 20..
|
$.............
|
....................., 20..
|
Name and Address of Member
|
Contribution
|
Number of Units
|
Percentage Interest
|
Student Loan Marketing Association
11600 Sallie Mae Drive
Reston, Virginia 20193
|
All of its stock in the Company pre-conversion
|
1,000
|
100%
|
|
2.
|
The address of the registered office of the limited liability company in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801.
|
|
3.
|
The name and address of the registered agent of the limited liability company for service of process in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801.
|
|
(i)
|
The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the Managers of the Company. The Board may designate one or more Managers as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.
|
|
(ii)
|
In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member.
|
|
(iii)
|
Any such committee, to the extent provided in the resolution of the Board, and subject to, in all cases, Sections 9(j) and 10, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board when required.
|
|
(i)
|
This Section 9j is being adopted in order to comply with certain provisions required in order to qualify the Company as a “qualified special purpose entity” for the purpose of the transactions contemplated by the Trust Agreements.
|
|
(ii)
|
Subject to this Section 9j, the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 31, provided, however, that so long as any Trust Securities are outstanding, neither the Member nor the Company shall-amend, alter, change or repeal the definition of “Independent Manager” or Sections 5(b), 5(c), 5(d), 7, 8, 9, 10, 16, 20(f), 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, or 34 of this Agreement (the “Special Purpose Provisions”) without (1) the unanimous written consent of the Board (including the Independent Managers), (2) the consent of the Trustee of the Trust Securities and (3) meeting the Rating Agency Condition. In the event of any conflict between any of the Special Purpose Provisions and any other provision of this or any other document governing the formation, management or operation of the Company, the Special Purpose Provisions shall control.
|
|
(iii)
|
Notwithstanding any other provision of this Agreement or any other document governing the formation, management or operation of the Company, and any provision of law that otherwise so empowers the Company, the Member-, the Board, or any Officer or other Person, and
|
|
for so long as the Trusts Securities are outstanding, neither the Member nor the Board, any Officer or other Person shall be authorized or empowered, nor shall they permit the Company to, and the Company shall not, without the prior unanimous written consent of the Member and the Board (including the Independent Managers), take any Material Action, provided, however, that the Board may not vote on, or authorize the taking of, any Material Action, unless there are at least two Independent Managers then serving in such capacity.
|
|
(iv)
|
So long as any Trust Securities are outstanding, the Board and the Member shall cause the Company to do or cause to be done all things necessary to preserve and keep in full force and effect its existence and rights (charter and statutory); provided, however, that the Company shall not be required to preserve any such right if: (A) the Board shall determine that the preservation thereof is no longer desirable for the conduct of its business and that the loss thereof is not disadvantageous in any material respect to the Company and the holders of the Trust Securities and (B) the Rating Agency Condition is satisfied. So long as any Trust Securities are outstanding, the Board also shall cause the Company to and the Company shall:
|
|
(A)
|
maintain its own separate books and records and bank accounts;
|
|
(B)
|
at all times hold itself out to the public as a legal entity separate from the Member and any other Person, and strictly comply with all organizational formalities to maintain its separate existence;
|
|
(C)
|
have a Board composed differently from that of the Member and any other Person;
|
|
(D)
|
correct any known misunderstanding regarding its separate identity and refrain from engaging in any activity that compromises the separate legal identity of the Company;
|
|
(E)
|
maintain adequate capital and a sufficient number of employees, if any employees are so needed, in light of its contemplated business purposes, transactions and liabilities;
|
|
(F)
|
cause its Board to meet at least annually or act pursuant to written consent and keep minutes of such meetings and actions and observe all other Delaware limited liability company formalities;
|
|
(G)
|
not acquire any obligations or securities of the Member or an Affiliate;
|
|
(H)
|
file its own tax returns, if any, as may be required under applicable law, ,and pay any taxes so required to be paid under applicable law;
|
|
(I)
|
not commingle its assets with assets of any other Person except in connection with the customary operation of such cash management system as Sallie Mae, Inc. (“Sallie Mae”) may from time to time in the ordinary course of business implement (provided, that any such cash management system shall be operated such that all transfers of funds are properly documented and the respective assets and liabilities of Sallie Mae and the Company are ascertainable at all times) for Sallie Mae and its consolidated subsidiaries;
|
|
(J)
|
conduct its business in its own name;
|
|
(K)
|
maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person;
|
|
(L)
|
pay its own liabilities and expenses only out of its own funds;
|
|
(M)
|
maintain an arm’s length relationship with unaffiliated parties, and not enter into any transaction with an Affiliate of the Company except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s length transaction;
|
|
(N)
|
pay the salaries of its own employees, if any;
|
|
(O)
|
not hold out its credit or assets as being available to satisfy the obligations of any other Person nor pledge its assets for the benefit of any other Person;
|
|
(P)
|
allocate fairly and reasonably any overhead expenses that are shared with an affiliate, including and for services performed by an employee of an affiliate;
|
|
(Q)
|
use separate stationery, invoices and checks bearing its own name; and
|
|
(R)
|
cause the Managers, Officers, agents and other representatives of the Company to act at all times with respect to the Company consistently and in furtherance of the foregoing and in the best interests of the Company.
|
|
(v)
|
So long as any Trust Securities are outstanding, the Board shall not cause or permit the Company to and the Company shall not:
|
|
(A)
|
guarantee or become obligated for any debts or obligations of any other Person, including any Affiliate;
|
|
(B)
|
engage, directly or indirectly, in any business other than that required or permitted to be performed under Section 7 or this Section 9j;
|
|
(C)
|
except as provided under Section 7, incur, create or assume any indebtedness other than any indebtedness incurred in the ordinary course of its business;
|
|
(D)
|
except as provided under Section 7, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person;
|
|
(E)
|
form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest in any other entity; provided that the Company may hold ownership interests in the Trusts;
|
|
(F)
|
sell, pledge, transfer, assign or otherwise convey the interest of the Member of the Company;
|
|
(G)
|
to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, sale or other transfer of any of its assets outside the ordinary course of the Company’s business; or
|
|
(H)
|
buy or hold evidence of indebtedness issued by any other Person (other than cash, investment-grade securities, or Student Loans).
|
|
(vi)
|
Without the consent of the Independent Managers, neither the Company, the Member, nor any other Person on behalf of the Company shall have the authority to:
|
|
(A)
|
confess a judgment against the Company;
|
|
(B)
|
knowingly perform any act that would subject (1) the Member to liabilities of the Company in any jurisdiction or the Company to liabilities of the Member or (2) the Company to taxation as a corporation under relevant provisions of the Code; and
|
|
(C)
|
take any Material Action, notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company or the Member.
|
|
(i)
|
(unless such quarter is the last fiscal quarter, a balance sheet of the Company; and
|
|
(ii)
|
unless such quarter is the last fiscal quarter, an income statement of the Company for such fiscal quarter.
|
|
(i)
|
a balance sheet of the Company;
|
|
(ii)
|
an income statement of the Company for such fiscal year; and
|
|
(iii)
|
a statement of such Member’s capital account.
|
Name and Address of Member
|
Contribution
|
Number of
Units
|
Percentage
Interest
|
SLM EDUCATION CREDIT MANAGEMENT
CORPORATION
20 Hemingway Drive
East Providence, Rhode Island 02915
|
$1,000
|
1000
|
100%
|
|
Page
|
ARTICLE I
Definitions and Usage
|
|
SECTION 1.1 Definitions and Usage
|
2
|
SECTION 1.2 Incorporation by Reference of Trust Indenture Act
|
3
|
ARTICLE II
The Notes
|
|
SECTION 2.1 Form
|
3
|
SECTION 2.2 Execution, Authentication and Delivery
|
4
|
SECTION 2.3 Temporary Notes
|
4
|
SECTION 2.4 Registration; Registration of Transfer and Exchange
|
4
|
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes
|
6
|
SECTION 2.6 Persons Deemed Owner
|
7
|
SECTION 2.7 Payment of Principal and Interest; Note Interest Shortfall
|
7
|
SECTION 2.8 Cancellation
|
8
|
SECTION 2.9 Release of Collateral
|
8
|
SECTION 2.10 Book-Entry Notes
|
8
|
SECTION 2.11 Notices to Clearing Agency
|
9
|
SECTION 2.12 Definitive Notes
|
9
|
ARTICLE III
Covenants, Representations and Warranties
|
|
SECTION 3.1 Payments to Noteholders
|
10
|
SECTION 3.1A Collateral Account
|
10
|
SECTION 3.1A Collateral Account
|
11
|
SECTION 3.2 Maintenance of Office or Agency
|
12
|
SECTION 3.3 Money for Payments to be Held in Trust
|
12
|
SECTION 3.4 Existence
|
14
|
SECTION 3.5 Protection of Indenture Trust Estate
|
14
|
SECTION 3.6 Opinions as to Indenture Trust Estate
|
14
|
SECTION 3.7 Performance of Obligations; Servicing of Trust Student Loans
|
15
|
SECTION 3.8 Negative Covenants
|
18
|
SECTION 3.9 Annual Statement as to Compliance
|
18
|
SECTION 3.10 Issuer May Consolidate, etc., Only on Certain Terms
|
19
|
SECTION 3.11 Successor or Transferee
|
20
|
SECTION 3.12 No Other Business
|
21
|
SECTION 3.13 No Borrowing
|
21
|
SECTION 3.14 Obligations of Servicer and Administrator
|
21
|
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities
|
21
|
SECTION 3.16 Capital Expenditures
|
21
|
SECTION 3.17 Restricted Payments
|
21
|
SECTION 3.18 Notice of Events of Default
|
21
|
SECTION 3.19 Further Instruments and Acts
|
22
|
SECTION 3.20 Representations and Warranties
|
22
|
ARTICLE IV
Satisfaction and Discharge
|
|
SECTION 4.1 Satisfaction and Discharge of Indenture
|
23
|
SECTION 4.2 Application of Trust Money
|
24
|
SECTION 4.3 Repayment of Moneys Held by Paying Agent
|
24
|
SECTION 4.4 Auction of Trust Student Loans
|
24
|
ARTICLE V
Remedies
|
|
SECTION 5.1 Events of Default
|
25
|
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment
|
26
|
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee
|
27
|
SECTION 5.4 Remedies; Priorities
|
29
|
SECTION 5.5 Optional Preservation of the Trust Student Loans
|
31
|
SECTION 5.6 Limitation of Suits
|
32
|
SECTION 5.7 Unconditional Rights of Noteholders to Receive Principal and Interest
|
32
|
SECTION 5.8 Restoration of Rights and Remedies
|
32
|
SECTION 5.9 Rights and Remedies Cumulative
|
33
|
SECTION 5.10 Delay or Omission Not a Waiver
|
33
|
SECTION 5.11 Control by Noteholders
|
33
|
SECTION 5.12 Waiver of Past Defaults
|
33
|
SECTION 5.13 Undertaking for Costs
|
34
|
SECTION 5.14 Waiver of Stay or Extension Laws
|
34
|
SECTION 5.15 Action on Notes
|
34
|
SECTION 5.16 Performance and Enforcement of Certain Obligations.
|
34
|
ARTICLE VI
The Indenture Trustee
|
|
SECTION 6.1 Duties of Indenture Trustee
|
35
|
SECTION 6.2 Rights of Indenture Trustee
|
37
|
SECTION 6.3 Individual Rights of Indenture Trustee
|
38
|
SECTION 6.4 Indenture Trustee’s Disclaimer
|
38
|
SECTION 6.5 Notice of Defaults
|
38
|
SECTION 6.6 Reports by Indenture Trustee to Noteholders
|
38
|
SECTION 6.7 Compensation and Indemnity
|
39
|
SECTION 6.8 Replacement of Indenture Trustee
|
39
|
SECTION 6.9 Successor Indenture Trustee by Merger
|
40
|
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee.
|
41
|
SECTION 6.11 Eligibility; Disqualification
|
42
|
SECTION 6.12 Preferential Collection of Claims Against the Issuer
|
42
|
SECTION 6.13 Rule 15Ga-1 Information
|
42
|
ARTICLE VII
Noteholders’ Lists and Reports
|
|
SECTION 7.1 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders
|
43
|
SECTION 7.2 Preservation of Information; Communications to Noteholders
|
44
|
SECTION 7.3 Reports by Issuer.
|
44
|
ARTICLE VIII
Accounts, Disbursements and Releases
|
|
SECTION 8.1 Collection of Money
|
45
|
SECTION 8.2 Trust Accounts
|
45
|
SECTION 8.3 General Provisions Regarding Accounts
|
46
|
SECTION 8.4 Release of Indenture Trust Estate
|
47
|
SECTION 8.5 Opinion of Counsel
|
48
|
ARTICLE IX
Supplemental Indentures
|
|
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
|
48
|
SECTION 9.2 Supplemental Indentures With Consent of Noteholders
|
49
|
SECTION 9.3 Execution of Supplemental Indentures
|
51
|
SECTION 9.4 Effect of Supplemental Indenture
|
51
|
SECTION 9.5 Conformity with Trust Indenture Act
|
51
|
SECTION 9.6 Reference in Notes to Supplemental Indentures
|
52
|
ARTICLE X
Redemption of Notes
|
|
SECTION 10.1 Redemption
|
52
|
SECTION 10.2 Form of Redemption Notice
|
52
|
SECTION 10.3 Notes Payable on Redemption Date
|
52
|
ARTICLE XI
Miscellaneous
|
|
SECTION 11.1 Compliance Certificates and Opinions, etc
|
53
|
SECTION 11.2 Form of Documents Delivered to Indenture Trustee
|
54
|
SECTION 11.3 Acts of Noteholders
|
55
|
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies
|
56
|
SECTION 11.5 Notices to Noteholders; Waiver
|
56
|
SECTION 11.6 Alternate Payment and Notice Provisions
|
57
|
SECTION 11.7 Conflict with Trust Indenture Act
|
57
|
SECTION 11.8 Effect of Headings and Table of Contents
|
57
|
SECTION 11.9 Successors and Assigns
|
57
|
SECTION 11.10 Separability
|
57
|
SECTION 11.11 Benefits of Indenture
|
58
|
SECTION 11.12 Legal Holidays
|
58
|
SECTION 11.13 Governing Law
|
58
|
SECTION 11.14 Counterparts
|
58
|
SECTION 11.15 Recording of Indenture
|
58
|
SECTION 11.16 Trust Obligations
|
58
|
SECTION 11.17 No Petition
|
59
|
SECTION 11.18 Inspection
|
59
|
SECTION 11.19 Waiver of Jury Trial
|
59
|
SECTION 11.20 Limited Recourse
|
59
|
SECTION 11.21 Force Majeure
|
60
|
SECTION 11.22 Compliance with Applicable Law
|
60
|
SECTION 11.23 Additional Matters
|
60
|
ARTICLE XII
Compliance with Regulation AB
|
|
SECTION 12.1 Intent of the Parties; Reasonableness
|
60
|
ARTICLE XIII
Tax Considerations
|
|
SECTION 13.1 Acknowledgement of Parties
|
61
|
therein shall be assigned to the Indenture Trustee, for the benefit of the Noteholders, pursuant to the terms of the Granting Clause of this Indenture. All sums on deposit and securities held in any Swap Agreement Collateral Account shall be used only for the purposes set forth in the related credit support agreement to be entered into between the Issuer and the Swap Counterparty (each, a “Swap Agreement Credit Support Agreement”); provided, however, that the Indenture Trustee is not a party to the Swap Agreement Credit Support Agreement and shall have no obligations or responsibilities under the Swap Agreement Credit Support Agreement, nor any obligation to monitor the Issuer’s or the Swap Counterparty’s compliance with the terms of the Swap Agreement Credit Support Agreement. Any Swap Agreement Collateral Account shall constitute an additional Trust Account. Amounts on deposit in any Swap Agreement Collateral Account may be invested in Eligible Investments at the written direction of the Administrator or its delegee. On each Distribution Date occurring prior to an Event of Default under the related Swap Agreement or a Swap Termination Event, all Investment Earnings actually earned and received on the related Swap Collateral shall be paid directly to the applicable Swap Counterparty, as directed by the Issuer in writing, and not become part of Available Funds in accordance with the terms of the related Swap Agreement Credit Support Agreement. The Indenture Trustee shall not be liable for the selection of, or any losses arising from, such investments made in accordance with the Administrator’s direction. All amounts deposited in a Swap Agreement Collateral Account shall be paid to the Issuer (and become part of Available Funds on the related Distribution Date) or returned to the applicable Swap Counterparty, from time to time, as directed by the Issuer, in writing, and in accordance with the provisions set forth in the related Swap Agreement Credit Support Agreement.]
|
Account shall be paid to the Issuer (and become part of Available Funds on the related Distribution Date) or returned to the related potential future cap counterparty (in either case, upon receipt by the Indenture Trustee of written instructions from the Administrator to release the amounts on deposit) in accordance with the provisions set forth in the related Interest Rate Cap Credit Support Agreement.]
|
(A) to the Class A Noteholders for amounts due and unpaid on the Class A Notes for interest, ratably, without preference or priority of any kind among the classes of Class A Notes, according to the amounts due and payable on the Class A Notes for such interest; and
|
[(B) to each Swap Counterparty, the amount of any Swap Termination Payments due to such Swap Counterparty under the related Swap Agreement due to (i) a Swap Termination Event or Event of Default (as defined in the related Swap Agreement) where the Issuer is the sole affected party or defaulting party, respectively, or (ii) a “Tax Event” or “Illegality” (each as defined in the related Swap Agreement), irrespective of which party is the affected party; provided, that if any amounts
|
|
(a) 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 will be the sum of that Pool Balance, [Capitalized Interest] and the Specified Reserve Account Balance for that Distribution Date, or
|
|
(b) 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 will be the [sum of that] Pool Balance [and Capitalized Interest].
|
|
(a)
|
all collections received by the Servicer 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 or to be repaid to Obligors, 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]; and
|
|
(3)
|
amounts deposited into the Floor Income Rebate Account during the related Collection Period;
|
|
(b)
|
any Interest Subsidy Payments and Special Allowance Payments with respect to the Trust Student Loans during that Collection Period;
|
|
(c)
|
all Liquidation Proceeds from any Trust Student Loans which became Liquidated Student Loans 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 Obligors 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;
|
|
(d)
|
the aggregate Purchase Amounts received during that Collection Period for those Trust Student Loans repurchased by the Depositor or purchased by the Servicer, as the case may be, or for Trust Student Loans sold to another eligible lender pursuant to Section 3.11E of the Servicing Agreement;
|
|
(e)
|
the aggregate Purchase Amounts received during that Collection Period for those Trust Student Loans repurchased by SLM ECFC, [Bluemont Funding, Town Center Funding, Town Hall Funding, or VL Funding];
|
|
(f)
|
[Reserved];
|
|
(g)
|
the aggregate amounts, if any, received from any of SLM ECFC, [Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding,] 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, a Purchase Agreement or Section 3.5 of the Servicing Agreement, respectively;
|
|
(h)
|
amounts received by the Trust pursuant to Sections 3.1 and 3.12 of the Servicing Agreement during that Collection Period as to yield or principal adjustments (other than prepayments to the Borrower Benefit Account);
|
|
(i)
|
any interest remitted by the Administrator to the Collection Account prior to such Distribution Date;
|
|
(j)
|
Investment Earnings for that Distribution Date earned on amounts on deposit in each Trust Account (other than [on amounts on deposit in any Swap Agreement Collateral Account and] the Borrower Benefit Account);
|
|
(k)
|
amounts transferred from the Reserve Account in excess of the Specified Reserve Account Balance for that Distribution Date;
|
|
(l)
|
[amounts received from any Swap Counterparty for that Distribution Date; provided, that, in the event of the termination of a Swap Agreement, any Swap Termination Payments received shall be used, to the extent required therefore, to enter into a Replacement Transaction and shall not constitute Available Funds until such time as the inclusion of such amounts as a part of Available Funds satisfies the Rating Agency Condition; ]
|
|
(m)
|
once the Department of Education has netted all payments, any amounts on deposit in the Floor Income Rebate Account that were deposited into such account during the related Collection Periods;
|
|
(n)
|
[all amounts received by the Trust from any interest rate cap counterparty under any interest rate cap agreement entered pursuant to Section 2.3 (vii) of the Trust Agreement for deposit into the Collection Account for that Distribution Date;]
|
|
(o)
|
on the initial Distribution Date, the Collection Account Initial Deposit and any amounts transferred into the Collection Account from the Supplemental Purchase Account following the end of the Supplemental Purchase Period;
|
|
(p)
|
[on the [____] 20[__] and [____] 20[__] Distribution Dates, all funds that are transferred from the Capitalized Interest Account into the Collection Account on those Distribution Dates;]
|
|
(q)
|
[Reserved];
|
|
(r)
|
[Reserved];
|
|
(s)
|
on each Distribution Date, any amounts transferred into the Collection Account from the Borrower Benefit Account pursuant to Section 2.10(f) of the Administration Agreement; and
|
|
(t)
|
amounts required to be transferred from the Borrower Benefit Account for such Distribution Date, to the extent funds are on deposit therein.
|
|
(a)
|
all payments received by the Trust through that date from Obligors, the Guarantors and the Department;
|
|
(b)
|
all amounts received by the Trust through that date from repurchases of the Trust Student Loans by SLM ECFC, [Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding], or the Depositor, as applicable, or purchases by the Servicer;
|
|
(c)
|
all Liquidation Proceeds and Realized Losses on the Trust Student Loans liquidated through that date;
|
|
(d)
|
the amount of any adjustments to the outstanding principal balances of the Trust Student Loans that the Servicer makes under the Servicing Agreement through that date; and
|
|
(e)
|
the amount by which Guarantor reimbursements of principal on defaulted Trust Student Loans through that date are reduced from 100% to 98%, from 99% to 97%, or from and to such other applicable percentages as are required by the risk sharing provisions of the Higher Education Act.
|
|
(a)
|
(i) for any Distribution Date occurring prior to the [____], 20[__] Distribution Date, [____]% of the Pool Balance as of the end of the related Collection Period, and (ii) for any Distribution Date occurring on or after the [____], 20[__] Distribution Date, [____]% of the Pool Balance as of the end of the related Collection Period; and
|
|
(b)
|
$[____];
|
Location of Trust Student Loan Files
|
EXHIBIT A
|
NUMBER
|
PRINCIPAL AMOUNT: $[_______]
|
|
[__]
|
CUSIP NO.: [_______]
|
|
ISIN: [_______]
|
||
EUROPEAN COMMON CODE: [_______]
|
||
Reference
|
Criteria
|
Applicability
|
General Servicing Considerations
|
||
1122(d)(1)(i)
|
Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the Basic Documents.
|
N/A
|
1122(d)(1)(ii)
|
If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.
|
N/A
|
1122(d)(1)(iii)
|
Any requirements in the Basic Documents to maintain a back-up servicer for the trust student loans are maintained.
|
N/A
|
1122(d)(1)(iv)
|
A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the Basic Documents.
|
N/A
|
Cash Collection and Administration
|
||
1122(d)(2)(i)
|
Payments on trust student loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in Basic Documents.
|
N/A
|
1122(d)(2)(ii)
|
Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.
|
|
1122(d)(2)(iii)
|
Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the Basic Documents.
|
N/A
|
1122(d)(2)(iv)
|
The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the Basic Documents.
|
N/A
|
1122(d)(2)(v)
|
Each custodial account is maintained at a federally insured depository institution as set forth in the Basic Documents. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
|
N/A
|
1122(d)(2)(vi)
|
Unissued checks are safeguarded so as to prevent unauthorized access.
|
N/A
|
1122(d)(2)(vii)
|
Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the Basic Documents; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the Basic Documents.
|
N/A
|
Investor Remittances and Reporting
|
Reference
|
Criteria
|
Applicability
|
1122(d)(3)(i)
|
Reports to investors, including those to be filed with the Commission, are maintained in accordance with the Basic Documents and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the Basic Documents; (B) provide information calculated in accordance with the terms specified in the Basic Documents; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of student loans serviced by the Servicer.
|
N/A
|
1122(d)(3)(ii)
|
Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the Basic Documents.
|
N/A
|
1122(d)(3)(iii)
|
Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the Basic Documents.
|
N/A
|
1122(d)(3)(iv)
|
Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.
|
N/A
|
Pool Asset Administration
|
||
1122(d)(4)(i)
|
Collateral or security on student loans is maintained as required by the Basic Documents or related student loan documents.
|
N/A
|
1122(d)(4)(ii)
|
Student loan and related documents are safeguarded as required by the Basic Documents.
|
N/A
|
1122(d)(4)(iii)
|
Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the Basic Documents.
|
N/A
|
1122(d)(4)(iv)
|
Payments on student loans, including any payoffs, made in accordance with the related student loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the Basic Documents, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related student loan documents.
|
N/A
|
1122(d)(4)(v)
|
The Servicer’s records regarding the student loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.
|
N/A
|
1122(d)(4)(vi)
|
Changes with respect to the terms or status of an obligor's student loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the Basic Documents and related pool asset documents.
|
N/A
|
1122(d)(4)(vii)
|
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the Basic Documents.
|
N/A
|
1122(d)(4)(viii)
|
Records documenting collection efforts are maintained during the period a student loan is delinquent in accordance with the Basic Documents. Such records are maintained on at least a monthly basis, or such other period specified in the Basic Documents, and describe the entity’s activities in monitoring delinquent student loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
|
N/A
|
1122(d)(4)(ix)
|
Adjustments to interest rates or rates of return for student loans with variable rates are computed based on the related student loan documents.
|
N/A
|
1122(d)(4)(x)
|
Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s student loan documents, on at least an annual basis, or such other period specified in the Basic Documents; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable student loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related student loans, or such other number of days specified in the Basic Documents.
|
N/A
|
Reference
|
Criteria
|
Applicability
|
1122(d)(4)(xi)
|
Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the Basic Documents.
|
N/A
|
1122(d)(4)(xii)
|
Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.
|
N/A
|
1122(d)(4)(xiii)
|
Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the Basic Documents.
|
N/A
|
1122(d)(4)(xiv)
|
Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the Basic Documents.
|
N/A
|
1122(d)(4)(xv)
|
Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the Basic Documents.
|
N/A
|
Page
|
||
ARTICLE I
|
1
|
|
SECTION 1.1
|
Definitions and Usage
|
1
|
ARTICLE II
|
ORGANIZATION
|
1
|
SECTION 2.1
|
Creation of Trust; Name
|
1
|
SECTION 2.2
|
Office
|
1
|
SECTION 2.3
|
Purposes and Powers
|
2
|
SECTION 2.3A
|
Covenants of the Trust.
|
3
|
SECTION 2.4
|
Appointment of Eligible Lender Trustee and Delaware Trustee
|
3
|
SECTION 2.5
|
Initial Capital Contribution of Trust Estate
|
3
|
SECTION 2.6
|
Declaration of Trust
|
4
|
SECTION 2.7
|
Liability of the Excess Distribution Certificateholder
|
4
|
SECTION 2.8
|
Title to Trust Property
|
4
|
SECTION 2.9
|
Representations, Warranties and Covenants of the Depositor
|
4
|
SECTION 2.10
|
[Reserved]
|
5
|
SECTION 2.11
|
Authorization of the Administrator
|
5
|
ARTICLE III
|
BENEFICIAL OWNERSHIP AND EXCESS DISTRIBUTION CERTIFICATE
|
5
|
SECTION 3.1
|
Initial Beneficial Ownership
|
5
|
SECTION 3.2
|
Corporate Trust Office
|
6
|
SECTION 3.3
|
The Excess Distribution Certificate
|
6
|
ARTICLE IV
|
ACTIONS BY ELIGIBLE LENDER TRUSTEE
|
11
|
SECTION 4.1
|
Prior Notice to the Excess Distribution Certificateholder With Respect to Certain Matters
|
11
|
SECTION 4.2
|
Action with Respect to Sale of the Trust Student Loans
|
12
|
SECTION 4.3
|
Action with Respect to Bankruptcy
|
12
|
SECTION 4.4
|
Restrictions
|
12
|
ARTICLE V
|
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
|
12
|
SECTION 5.1
|
Application of Trust Funds
|
12
|
SECTION 5.2
|
Method of Payment
|
12
|
SECTION 5.3
|
No Segregation of Moneys; No Interest
|
13
|
SECTION 5.4
|
Reports to the Excess Distribution Certificateholder, the Internal Revenue Service and Others
|
13
|
ARTICLE VI
|
AUTHORITY AND DUTIES OF ELIGIBLE LENDER TRUSTEE
|
13
|
SECTION 6.1
|
General Authority
|
13
|
SECTION 6.2
|
General Duties
|
14
|
SECTION 6.3
|
Action Upon Instruction
|
14
|
SECTION 6.4
|
No Duties Except as Specified in this Agreement or in Instructions
|
15
|
SECTION 6.5
|
No Action Except Under Specified Documents or Instructions
|
15
|
SECTION 6.6
|
Restrictions
|
15
|
ARTICLE VII
|
CONCERNING THE ELIGIBLE LENDER TRUSTEE AND THE DELAWARE TRUSTEE
|
16
|
SECTION 7.1
|
Acceptance of Trusts and Duties
|
16
|
SECTION 7.2
|
[Reserved]
|
17
|
SECTION 7.3
|
Representations and Warranties of the Eligible Lender Trustee and the Delaware Trustee
|
17
|
SECTION 7.4
|
Reliance; Advice of Counsel
|
18
|
SECTION 7.5
|
Not Acting in Individual Capacity
|
19
|
SECTION 7.6
|
Eligible Lender Trustee and Delaware Trustee Not Liable for Excess Distribution Certificate or Trust Student Loans
|
19
|
SECTION 7.7
|
Eligible Lender Trustee or Delaware Trustee May Own Notes
|
20
|
SECTION 7.8
|
Duties of the Delaware Trustee
|
20
|
ARTICLE VIII
|
COMPENSATION AND INDEMNITY OF THE TRUSTEES
|
20
|
SECTION 8.1
|
Eligible Lender Trustee’s and Delaware Trustee’s Fees and Expenses
|
20
|
SECTION 8.2
|
Payments to the Eligible Lender Trustee and to the Delaware Trustee
|
20
|
SECTION 8.3
|
Indemnity
|
21
|
ARTICLE IX
|
TERMINATION OF TRUST AGREEMENT
|
21
|
SECTION 9.1
|
Termination of Trust Agreement
|
21
|
ARTICLE X
|
SUCCESSOR ELIGIBLE LENDER TRUSTEES AND DELAWARE TRUSTEES AND ADDITIONAL ELIGIBLE LENDER TRUSTEES AND DELAWARE TRUSTEES
|
21
|
SECTION 10.1
|
Eligibility Requirements for Eligible Lender Trustee and Delaware Trustee
|
21
|
SECTION 10.2
|
Resignation or Removal of Eligible Lender Trustee or the Delaware Trustee
|
22
|
SECTION 10.3
|
Successor Eligible Lender Trustee or Delaware Trustee
|
23
|
SECTION 10.4
|
Merger or Consolidation of Eligible Lender Trustee or Delaware Trustee
|
24
|
SECTION 10.5
|
Appointment of Co-Eligible Lender Trustee or Separate Eligible Lender Trustee
|
24
|
ARTICLE XI
|
MISCELLANEOUS
|
25
|
SECTION 11.1
|
Supplements and Amendments
|
25
|
SECTION 11.2
|
No Legal Title to Trust Estate in the Excess Distribution Certificateholder
|
26
|
SECTION 11.3
|
Limitations on Rights of Others
|
26
|
SECTION 11.4
|
Notices
|
27
|
SECTION 11.5
|
Severability
|
27
|
SECTION 11.6
|
Separate Counterparts
|
27
|
SECTION 11.7
|
Successors and Assigns
|
27
|
SECTION 11.8
|
No Petition
|
27
|
SECTION 11.9
|
No Recourse
|
28
|
SECTION 11.10
|
Headings
|
28
|
SECTION 11.11
|
Governing Law
|
28
|
SECTION 11.12
|
Waiver of Jury Trial
|
28
|
ARTICLE XII
|
COMPLIANCE WITH REGULATION AB
|
28
|
SECTION 12.1
|
Intent of the Parties; Reasonableness
|
28
|
Exhibit A
|
Form of Excess Distribution Certificate
|
|
Exhibit B
|
Form of Certificate of Trust
|
|
Exhibit C
|
Form of Transferor Letter
|
|
Exhibit D-1
|
Form of Transferee Letter (Non-Rule 144A)
|
|
Exhibit D-2
|
Form of Transferee Letter (Rule 144A)
|
evidencing a fractional undivided interest in the Trust, as defined below, the property of which includes a pool of student loans sold to the Trust by SLM Funding LLC on the Closing Date.
|
(This Excess Distribution Certificate does not represent an interest in or obligation of SLM Funding LLC, the Servicer (as defined below), the Eligible Lender Trustee (as defined below) or any of their respective affiliates, except to the extent described below.)
|
|
1.
|
As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice President or other executive officer of the Buyer.
|
|
2.
|
In connection with purchases by the Buyer, the Buyer is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”) because (i) the Buyer owned and/or invested on a discretionary basis $____________1 in securities (except for the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A) and (ii) the Buyer satisfies the criteria in the category marked below.
|
|
___
|
Corporation, etc. The Buyer is a corporation (other than a bank, savings and loan association or similar institution), Massachusetts or similar business trust, partnership, or charitable organization described in Section 501 (c) (3) of the Internal Revenue Code of 1986, as amended.
|
|
___
|
Bank. The Buyer (a) is a national bank or banking institution organized under the laws of any State, territory or the District of Columbia, the business of which is substantially confined to banking and is supervised by the State or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.
|
|
___
|
Savings and Loan. The Buyer (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar institution, which is supervised and examined by a State or federal authority having supervision over any such institutions or is a foreign savings and loan association or equivalent institution and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.
|
1
|
Buyer must own and/or invest on a discretionary basis at least $100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or invest on a discretionary basis at least $10,000,000 in securities.
|
|
___
|
Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.
|
|
___
|
Insurance Company. The Buyer is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a State, territory or the District of Columbia.
|
|
___
|
State or Local Plan. The Buyer is a plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of the State or its political subdivisions, for the benefit of its employees.
|
|
___
|
ERISA Plan. The Buyer is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974.
|
|
___
|
Investment Advisor. The Buyer is an investment advisor registered under the Investment Advisors Act of 1940.
|
|
___
|
Small Business Investment Company. The Buyer is a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.
|
|
___
|
Business Development Company. The Buyer is a business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
|
|
___
|
Qualified Institutional Buyers. The Buyer owned and/or invested on a discretionary basis less than $100,000,000, but it is an entity in which all of the equity owners are qualified institutional buyers.
|
|
3.
|
The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Buyer, (ii) securities that are part of an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank deposit notes and certificates of deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities owned but subject to a repurchase agreement and (viii) currency, interest rate and commodity swaps.
|
|
4.
|
For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Buyer, the Buyer used the cost of such securities to the Buyer and did not include any of the securities referred to in the preceding paragraph, except (i) where the Buyer reports its securities holdings in its financial statements on the basis of their market value, and (ii) no current information with respect to the cost of those securities has been published. If clause (ii) in the preceding sentence applies, the securities may be valued at market. Further, in determining such aggregate amount, the Buyer may have included securities owned by subsidiaries of the Buyer, but only if such
|
|
5.
|
The Buyer acknowledges that it is familiar with Rule 144A and understands that the seller to it and other parties related to the Certificate are relying and will continue to rely on the statements made herein because one or more sales to the Buyer may be in reliance on Rule 144A.
|
|
6.
|
Until the date of purchase of the Rule 144A Securities, the Buyer will notify each of the parties to which this certification is made of any changes in the information and conclusions herein. Until such notice is given, the Buyer’s purchase of the Certificate will constitute a reaffirmation of this certification as of the date of such purchase. In addition, if the Buyer is a bank or savings and loan is provided above, the Buyer agrees that it will furnish to such parties updated annual financial statements promptly after they become available.
|
|
1.
|
As indicated below, the undersigned is the President, Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”) because Buyer is part of a Family of Investment Companies (as defined below), is such an officer of the Adviser.
|
|
2.
|
In connection with purchases by Buyer, the Buyer is a “qualified institutional buyer” as defined in SEC Rule 144A because (i) the Buyer is an investment company registered under the Investment Company Act of 1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer’s Family of Investment Companies, owned at least $100,000,000 in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year. For purposes of determining the amount of securities owned by the Buyer or the Buyer’s Family of Investment Companies, the cost of such securities was used, except (i) where the Buyer or the Buyer’s Family of Investment Companies reports its securities holdings in its financial statements on the basis of their market value, and (ii) no current information with respect to the cost of those securities has been published. If clause (ii) in the preceding sentence applies, the securities may be valued at market.
|
|
___
|
The Buyer owned $______________ in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).
|
|
___
|
The Buyer is part of a Family of Investment Companies which owned in the aggregate $_____________ in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).
|
|
3.
|
The term “Family of Investment Companies” as used herein means two or more registered investment companies (or series thereof) that have the same investment adviser or investment advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or because one investment adviser is a majority owned subsidiary of the other).
|
|
4.
|
The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Buyer or are part of the Buyer’s Family of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities owned but subject to a repurchase agreement and (vii) currency, interest rate and commodity swaps.
|
|
5.
|
The Buyer is familiar with Rule 144A and understands that the parties listed in the Rule 144A Transferee Letter to which this certification relates are relying and will continue to rely on the statements made herein because one or more sales to the Buyer will be in reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer’s own account.
|
|
6.
|
Until the date of purchase of the Certificate, the undersigned will notify the parties listed in the Rule 144A Transferee Letter to which this certification relates of any changes in the information and conclusions herein. Until such notice is given, the Buyer’s purchase of the Certificate will constitute a reaffirmation of this certification by the undersigned as of the date of such purchase.
|
Page | ||
ARTICLE I
|
Definitions and Usage
|
1
|
ARTICLE II
|
Appointment of Interim Eligible Lender Trustee
|
2
|
SECTION 2.1
|
Appointment of Interim Eligible Lender Trustee
|
2
|
SECTION 2.2
|
Declaration of Trust
|
2
|
SECTION 2.3
|
Title to Interim Trust Loans
|
2
|
ARTICLE III
|
Representations and Warranties of the Depositor
|
2
|
ARTICLE IV
|
Authority and Duties of Interim Eligible Lender Trustee
|
3
|
SECTION 4.1
|
General Authority
|
3
|
SECTION 4.2
|
General Duties
|
3
|
SECTION 4.3
|
No Duties Except as Specified in this Agreement
|
3
|
SECTION 4.4
|
No Action Except Under Specified Documents
|
4
|
SECTION 4.5
|
Restrictions
|
4
|
ARTICLE V
|
Concerning the Interim Eligible Lender Trustee
|
4
|
SECTION 5.1
|
Acceptance of Trust and Duties
|
4
|
SECTION 5.2
|
Representations and Warranties
|
4
|
SECTION 5.3
|
Not Acting in Individual Capacity
|
5
|
SECTION 5.4
|
Interim Eligible Lender Trustee Not Liable for the Interim Trust Loans
|
5
|
ARTICLE VI
|
Compensation and Indemnity of Interim Eligible Lender Trustee
|
6
|
ARTICLE VII
|
Termination of Interim Trust Agreement
|
6
|
ARTICLE VIII
|
Successor Interim Eligible Lender Trustees
|
6
|
SECTION 8.1
|
Eligibility Requirements for Interim Eligible Lender Trustee
|
6
|
SECTION 8.2
|
Resignation or Removal of Interim Eligible Lender Trustee
|
6
|
SECTION 8.3
|
Successor Interim Eligible Lender Trustee
|
7
|
SECTION 8.4
|
Merger or Consolidation of Interim Eligible Lender Trustee
|
7
|
ARTICLE IX
|
Miscellaneous
|
8
|
SECTION 9.1
|
Supplements and Amendments
|
8
|
SECTION 9.2
|
Notices
|
9
|
SECTION 9.3
|
Severability
|
9
|
SECTION 9.4
|
Separate Counterparts
|
9
|
SECTION 9.5
|
Successors and Assigns
|
9
|
SECTION 9.6
|
Headings
|
9
|
SECTION 9.7
|
Governing Law
|
9
|
SECTION 9.8
|
Force Majeure
|
9
|
SECTION 9.9
|
Waiver of Jury Trial
|
9
|
|
a.
|
to hold legal title to the Interim Trust Loans on behalf and for the benefit of the Depositor;
|
|
b.
|
to enter into and perform its obligations as the Interim Eligible Lender Trustee under this Agreement, the Purchase Agreements and the Sale Agreement (including any Additional Purchase Agreements and Additional Sale Agreements entered into during the Supplemental Purchase Period); and
|
|
c.
|
to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.
|
|
1.
|
It is duly organized and validly existing as a Delaware limited liability company in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted.
|
|
2.
|
It has all necessary power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement has been duly authorized by all necessary action.
|
|
3.
|
This Agreement constitutes a legal, valid and binding obligation of the Depositor enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization and similar laws relating to creditors’ rights generally and subject to general principles of equity.
|
|
4.
|
The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the certificate of formation or limited liability company operating agreement, in effect as of the date hereof, of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than as contemplated by the Basic Documents); nor violate any law or any order, rule or regulation applicable to the Depositor of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties.
|
|
1.
|
The Interim Eligible Lender Trustee shall not be liable for any error of judgment made by a responsible officer of the Interim Eligible Lender Trustee.
|
|
2.
|
No provision of this Agreement, the Purchase Agreements or the Sale Agreement shall require the Interim Eligible Lender Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under the Purchase Agreements or the Sale Agreement, if the Interim Eligible Lender Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it.
|
|
3.
|
The Interim Eligible Lender Trustee shall not be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Depositor or for the form, character, genuineness, sufficiency, value or validity of any of the Interim Trust Loans or for or in respect of the validity or sufficiency of the Purchase Agreements or the Sale Agreement.
|
|
4.
|
In no event shall the Interim Eligible Lender Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever irrespective of whether the Interim Eligible Lender Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
|
|
1.
|
It is duly organized and validly existing in good standing under the laws of its governing jurisdiction and has an office located within the State of [_______], at which it will act as trustee for the Trust. It has all requisite power and authority to execute, deliver and perform its obligations under the Purchase Agreements, the Sale Agreement and this Agreement.
|
|
2.
|
It has taken all action necessary to authorize the execution and delivery by it of the Purchase Agreements, the Sale Agreement and this Agreement, and the Purchase Agreements, the Sale Agreement and this Agreement have been executed and delivered by [one] [two] of its officers who are duly authorized to execute and deliver the same on its behalf.
|
|
3.
|
Neither the execution nor the delivery by it of the Purchase Agreements, the Sale Agreement or this Agreement, nor the consummation by it of the transactions contemplated thereby or hereby nor compliance by it with any of the terms or provisions thereof or hereof will contravene any Federal or [____] state law, governmental rule or regulation governing the banking or trust powers of the Interim Eligible Lender Trustee or any judgment or order binding on it, or constitute any default under its charter documents or by-laws.
|
|
4.
|
It is and will maintain its status as an “eligible lender” (as such term is defined in Section 435(d) of the Higher Education Act) for purposes of holding legal title to the Interim Trust Loans as contemplated by this Agreement, the Purchase Agreements and the Sale Agreement.
|
Page
|
||
ARTICLE I Definitions and Usage
|
1
|
|
ARTICLE II Appointment of [SPE Seller] Eligible Lender Trustee
|
2
|
|
SECTION 2.1.
|
Appointment of [SPE Seller] Eligible Lender Trustee
|
2
|
SECTION 2.2.
|
Declaration of Trust
|
2
|
SECTION 2.3.
|
Title to Interim Trust Loans
|
2
|
ARTICLE III Representations and Warranties of [SPE Seller]
|
2
|
|
ARTICLE IV Authority and Duties of [SPE Seller] Eligible Lender Trustee
|
3
|
|
SECTION 4.1.
|
General Authority
|
3
|
SECTION 4.2.
|
General Duties
|
3
|
SECTION 4.3.
|
No Duties Except as Specified in this Agreement
|
3
|
SECTION 4.4.
|
No Action Except Under Specified Documents
|
4
|
SECTION 4.5.
|
Restrictions
|
4
|
ARTICLE V Concerning the [SPE Seller] Eligible Lender Trustee
|
4
|
|
SECTION 5.1.
|
Acceptance of Trust and Duties
|
4
|
SECTION 5.2.
|
Representations and Warranties
|
5
|
SECTION 5.3.
|
Not Acting in Individual Capacity
|
5
|
SECTION 5.4.
|
[SPE Seller] Eligible Lender Trustee Not Liable for the Interim Trust Loans
|
6
|
ARTICLE VI Compensation and Indemnity of [SPE Seller] Eligible Lender Trustee
|
6
|
|
ARTICLE VII Termination of Interim Trust Agreement
|
6
|
|
ARTICLE VIII Successor [SPE Seller] Eligible Lender Trustees
|
6
|
|
SECTION 8.1.
|
Eligibility Requirements for [SPE Seller] Eligible Lender Trustee
|
6
|
SECTION 8.2.
|
Resignation or Removal of [SPE Seller] Eligible Lender Trustee
|
7
|
SECTION 8.3.
|
Successor [SPE Seller] Eligible Lender Trustee
|
7
|
SECTION 8.4.
|
Merger or Consolidation of [SPE Seller] Eligible Lender Trustee
|
8
|
ARTICLE IX Miscellaneous
|
8
|
|
SECTION 9.1.
|
Supplements and Amendments
|
8
|
SECTION 9.2.
|
Notices
|
9
|
SECTION 9.3.
|
Severability
|
9
|
SECTION 9.4.
|
Separate Counterparts
|
9
|
SECTION 9.5.
|
Successors and Assigns
|
9
|
SECTION 9.6.
|
Headings
|
9
|
SECTION 9.7.
|
Governing Law
|
9
|
SECTION 9.8.
|
Force Majeure
|
10
|
SECTION 9.9.
|
Waiver of Jury Trial
|
10
|
a.
|
to hold legal title to the Interim Trust Loans on behalf and for the benefit of [SPE Seller];
|
b.
|
to enter into and perform its obligations as the [SPE Seller] Eligible Lender Trustee under this Agreement and the [SPE Seller] Purchase Agreement (including any Additional Purchase Agreements entered into during the Supplemental Purchase Period); and
|
c.
|
to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.
|
1.
|
It is duly organized and validly existing as a Delaware limited liability company in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted.
|
2.
|
It has all necessary power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement has been duly authorized by [SPE Seller] by all necessary action.
|
3.
|
This Agreement constitutes a legal, valid and binding obligation of [SPE Seller] enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization and similar laws relating to creditors’ rights generally and subject to general principles of equity.
|
4.
|
The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the certificate of formation or limited liability company operating agreement, in effect as of the date hereof, of [SPE Seller], or any indenture, agreement or other instrument to which [SPE Seller] is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than as contemplated by the Basic Documents); nor violate any law or any order, rule or regulation applicable to [SPE Seller] of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over [SPE Seller] or its properties.
|
1.
|
The [SPE Seller] Eligible Lender Trustee shall not be liable for any error of judgment made by a responsible officer of the [SPE Seller] Eligible Lender Trustee.
|
2.
|
No provision of this Agreement or the [SPE Seller] Purchase Agreement shall require the [SPE Seller] Eligible Lender Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under the [SPE Seller] Purchase Agreement, if the [SPE Seller] Eligible Lender Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it.
|
3.
|
The [SPE Seller] Eligible Lender Trustee shall not be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by [SPE Seller] or for the form, character, genuineness, sufficiency, value or validity of any of the Interim Trust Loans or for or in respect of the validity or sufficiency of the [SPE Seller] Purchase Agreement.
|
4.
|
In no event shall the [SPE Seller] Interim Eligible Lender Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever irrespective of whether the [SPE Seller] Interim Eligible Lender Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
|
1.
|
It is duly organized and validly existing in good standing under the laws of its governing jurisdiction and has an office located within the State of [_______], at which it will act as trustee for the Trust. It has all requisite power and authority to execute, deliver and perform its obligations under the [SPE Seller] Purchase Agreement and this Agreement.
|
2.
|
It has taken all action necessary to authorize the execution and delivery by it of the [SPE Seller] Purchase Agreement and this Agreement, and the [SPE Seller] Purchase Agreement and this Agreement have been executed and delivered by [one] [two] of its officers who are duly authorized to execute and deliver the same on its behalf.
|
3.
|
Neither the execution nor the delivery by it of the [SPE Seller] Purchase Agreement or this Agreement, nor the consummation by it of the transactions contemplated thereby or hereby nor compliance by it with any of the terms or provisions thereof or hereof will contravene any Federal or [____] state law, governmental rule or regulation governing the banking or trust powers of the [SPE Seller] Eligible Lender Trustee or any judgment or order binding on it, or constitute any default under its charter documents or by-laws.
|
4.
|
It is and will maintain its status as an “eligible lender” (as such term is defined in Section 435(d) of the Higher Education Act) for purposes of holding legal title to the Interim Trust Loans as contemplated by this Agreement and the [SPE Seller] Purchase Agreement.
|
|
1.
|
loan application, and any supplement thereto,
|
|
2.
|
original promissory note and any addendum thereto (or a certified copy thereof if more than one loan is represented by a single promissory note and all loans so represented are not being sold) or the electronic records evidencing the same,
|
|
3.
|
evidence of guarantee,
|
|
4.
|
any other document and/or record which the Purchaser may be required to retain pursuant to the Higher Education Act,
|
|
5.
|
if applicable, payment history (or similar document) including (i) an indication of the Principal Balance and the date through which interest has been paid, each as of the Statistical Cutoff Date, in the case of the Initial Loans, or, the related Subsequent Cutoff Date, in the case of any Additional Loan or Substituted Loan and (ii) an accounting of the allocation of all payments by the Borrower or on the Borrower’s behalf to principal and interest on the Loan,
|
|
6.
|
if applicable, documentation which supports periods of current or past deferment or past forbearance,
|
|
7.
|
if applicable, a collection history, if the Loan was ever in a delinquent status, including detailed summaries of contacts and including the addresses or telephone numbers used in contacting or attempting to contact the Borrower and any endorser and, if required by the Guarantor, copies of all letters and other correspondence relating to due diligence processing,
|
|
8.
|
if applicable, evidence of all requests for skip-tracing assistance and current address of the Borrower, if located,
|
|
9.
|
if applicable, evidence of requests for pre-claims assistance, and evidence that the Borrower’s school(s) has/have been notified, and
|
|
10.
|
if applicable, a record of any event resulting in a change to or confirmation of any data in the related Trust Student Loan File.
|
|
SECTION 3.1 SALE/PURCHASE OF INITIAL LOANS
|
|
SECTION 3.2 SALE/PURCHASE OF ADDITIONAL LOANS AND SUBSTITUTION OF SUBSTITUTED LOANS
|
|
SECTION 3.3 GENERAL
|
|
(1)
|
status (i.e., in-school, grace, deferment, forbearance or repayment);
|
|
(2)
|
program type (i.e., Unsubsidized [Stafford]/[Consolidation] Loan or Subsidized [Stafford Loan (pre-1993 v. post-1993), PLUS Loan or SLS Loan]/[Consolidation Loan]),
|
|
(3)
|
guarantee percentage;
|
|
(4)
|
school type;
|
|
(5)
|
total return;
|
|
(6)
|
principal balance; and
|
|
(7)
|
remaining term to maturity.
|
SLM FUNDING LLC
(Seller)
By: __________________________
Name:
Title:
|
SLM STUDENT LOAN TRUST 20[__]-[__]
(Purchaser)
By: [_____________], not in its individual
capacity but solely as Eligible Lender Trustee
By: __________________________
Name:
Title:
|
[_____________], not in its individual
capacity but solely as Interim Eligible Lender
Trustee
By: __________________________
Name:
Title:
|
[_____________], not in its individual
capacity but solely as Eligible Lender Trustee
By: __________________________
Name:
Title:
|
|
|
INITIAL SALE AGREEMENT
|
|
TERMS, CONDITIONS AND COVENANTS
|
SLM FUNDING LLC
(Seller)
By:___________________________________
Name:
Title:
|
SLM STUDENT LOAN TRUST 20[__]-[__]
(Purchaser)
by [_____________], not in its individual
capacity but solely as Eligible Lender Trustee
By:___________________________________
Name:
Title:
|
[_____________], not in its individual
capacity but solely as Interim Eligible
Lender Trustee
By:___________________________________
Name:
Title:
|
[_____________], not in its individual
capacity but solely as Eligible Lender Trustee
By:___________________________________
Name:
Title:
|
SELLER
[_____________], not in its individual capacity
but solely as Interim Eligible Lender Trustee
for the Benefit of SLM Funding LLC
Lender Code: [_______]
By:______________________________
(Signature of Authorized Officer)
Name:
Title:
|
PURCHASER
[_____________], not in its individual capacity
but solely as Eligible Lender Trustee on behalf
of SLM Student Loan Trust 20[__]-[__]
By:______________________________
(Signature of Authorized Signatory for the Purchaser)
Name:
Title:
Date of Purchase: [_____], 20[__]
|
■
|
Not in claims status, not previously rejected
|
■
|
Not in litigation
|
■
|
Last disbursement was on or before the Statistical Cutoff Date
|
■
|
Loan is not swap-pending
|
SELLER
[_____________], not in its individual capacity
but solely as Interim Eligible Lender Trustee for
the benefit of SLM Funding LLC
Lender Code: [_____]
By:____________________________
(Signature of Authorized Officer)
Name:
Title:
|
PURCHASER
[_____________], not in its individual capacity
but solely as Eligible Lender Trustee on behalf
of SLM Student Loan Trust 20[__]-[__]
By:____________________________
(Signature of Authorized Signatory for the Purchaser)
Name:
Title:
Date of Purchase: [_____], 20[__]
|
|
Dated as of [________, 20__]
|
|
TERMS, CONDITIONS AND COVENANTS
|
SELLER
[_____________], not in its individual capacity
but solely as Interim Eligible Lender Trustee for
the benefit of SLM Funding LLC
Lender Code: [_______]
By: ____________________________
(Signature of Authorized Officer)
Name: _________________________
Title: __________________________
|
PURCHASER
[_____________], not in its individual capacity
but solely as Eligible Lender Trustee on behalf of
SLM Student Loan Trust 20[__]-[__]
By: _____________________________
(Signature of Authorized Signatory for the Purchaser)
Name: __________________________
Title: ___________________________
Date of Purchase: _________________
|
SELLER
[_____________], not in its individual capacity
but solely as Interim Eligible Lender Trustee for
the benefit of SLM Funding LLC
Lender Code: [_______]
By: ____________________________
(Signature of Authorized Officer)
Name: _________________________
Title: __________________________
|
PURCHASER
[_____________], not in its individual capacity
but solely as Eligible Lender Trustee on behalf
of SLM Student Loan Trust 20[__]-[__]
By: _____________________________
(Signature of Authorized Signatory for the Purchaser)
Name: __________________________
Title: ___________________________
Date of Purchase: _________________
|
■
|
Not in claims status, not previously rejected
|
■
|
Not in litigation
|
■
|
Last disbursement was on or before the related Cutoff Date
|
■
|
Loan is not swap-pending
|
SELLER
[_____________], not in its individual capacity
but solely as Interim Eligible Lender Trustee for
the benefit of SLM Funding LLC
Lender Code: [______]
By: ___________________________
(Signature of Authorized Officer)
Name: _________________________
Title: __________________________
|
PURCHASER
[_____________], not in its individual capacity
but solely as Eligible Lender Trustee on behalf
of SLM Student Loan Trust 20[__]-[__]
By: _____________________________
(Signature of Authorized Signatory for the Purchaser)
Name: __________________________
Title: ___________________________
Date of Purchase: _________________
|
Additional Loans
|
Principal Balance
as of the related Subsequent Cutoff Date
|
Purchase Price
|
||
Page
|
||
ARTICLE I.
|
||
Section 1.1.
|
Definitions and Usage
|
1
|
ARTICLE II.
|
||
Section 2.1.
|
Custody of Trust Student Loan Files
|
1
|
Section 2.2.
|
Duties of Servicer as Custodian
|
2
|
Section 2.3.
|
Maintenance of and Access to Records
|
2
|
Section 2.4.
|
Release of Documents
|
3
|
Section 2.5.
|
Instructions; Authority to Act
|
3
|
Section 2.6.
|
[Reserved].
|
3
|
Section 2.7.
|
Effective Period and Termination
|
3
|
ARTICLE III.
|
||
Section 3.1.
|
Duties of Servicer
|
3
|
Section 3.2.
|
Collection of Trust Student Loan Payments.
|
4
|
Section 3.3.
|
Realization upon Trust Student Loans
|
6
|
Section 3.4.
|
No Impairment
|
6
|
Section 3.5.
|
Purchase of Trust Student Loans; Reimbursement.
|
6
|
Section 3.6.
|
Primary Servicing Fee; Carryover Servicing Fee
|
8
|
Section 3.7.
|
Access to Certain Documentation and Information Regarding Trust Student Loans
|
9
|
Section 3.8.
|
Servicer Expenses
|
9
|
Section 3.9.
|
Appointment of Subservicers or Subcontractors.
|
9
|
Section 3.10.
|
Reports
|
10
|
Section 3.11.
|
Covenants and Agreements of the Issuer, Administrator, Eligible Lender Trustee and Servicer
|
11
|
Section 3.12.
|
Special Programs
|
12
|
Section 3.12A
|
Prepayments Relating to Borrower Benefit Yield Reductions
|
12
|
Section 3.13.
|
Financial Statements
|
13
|
Section 3.14.
|
Insurance
|
13
|
Section 3.15.
|
Administration Agreement
|
13
|
Section 3.16.
|
Lender Identification Number
|
13
|
Section 3.17.
|
Privacy and Information Security Provisions
|
13
|
ARTICLE IV.
|
||
Section 4.1.
|
Representations of Servicer
|
14
|
Section 4.2.
|
Indemnities of Servicer
|
15
|
Section 4.3.
|
Merger or Consolidation of, or Assumption of the Obligations of, Servicer
|
16
|
Section 4.4.
|
Limitation on Liability of Servicer
|
16
|
Section 4.5.
|
Sallie Mae, Inc. Not to Resign as Servicer
|
17
|
ARTICLE V.
|
||
Section 5.1.
|
Servicer Default
|
17
|
Section 5.2.
|
Appointment of Successor.
|
18
|
Section 5.3.
|
Notification to Noteholders
|
19
|
Section 5.4.
|
Waiver of Past Defaults
|
19
|
ARTICLE VI.
|
||
Section 6.1.
|
Amendment.
|
20
|
Section 6.2.
|
Notices
|
20
|
Section 6.3.
|
Counterparts
|
22
|
Section 6.4.
|
Entire Agreement; Severability
|
22
|
Section 6.5.
|
Governing Law
|
22
|
Section 6.6.
|
Relationship of Parties
|
22
|
Section 6.7.
|
Captions
|
22
|
Section 6.8.
|
Nonliability of Directors, Officers and Employees of Servicer, the Eligible Lender Trustee, the Indenture Trustee and the Administrator
|
22
|
Section 6.9.
|
Assignment
|
22
|
Section 6.10.
|
Limitation of Liability of Eligible Lender Trustee and Indenture Trustee.
|
22
|
ARTICLE VII.
|
||
Section 7.1.
|
Intent of the Parties; Reasonableness
|
23
|
Section 7.2.
|
Reporting Requirements.
|
23
|
Section 7.3.
|
Servicer Compliance Statement
|
24
|
Section 7.4.
|
Report on Assessment of Compliance and Attestation
|
24
|
Attachment A Schedule of Fees
|
||
Attachment B Servicer Locations
|
||
Attachment C Reports
|
||
Attachment D Form of Annual Certification
|
||
Attachment E Servicing Criteria to be Addressed in Assessment of Compliance
|
|
(a) the original fully executed copy of the note (or all electronic records evidencing the same) evidencing the Trust Student Loan; and
|
|
(b) any and all other documents and computerized records that the Servicer shall keep on file, in accordance with its customary procedures, relating to such Trust Student Loan or any Obligor with respect thereto.
|
|
(1)
|
status (i.e., in-school, grace, deferment, forbearance or repayment),
|
|
(2)
|
program type (i.e., unsubsidized or subsidized Stafford Loans (pre-1993 v. post-1993)]/[Consolidation,] PLUS Loans or SLS Loans;
|
|
(3)
|
guarantee percentage,
|
|
(4)
|
school type,
|
|
(5)
|
total return,
|
|
(6)
|
principal balance, and
|
|
(7)
|
remaining term to maturity.
|
|
(a)
|
[Reserved]
|
|
(b)
|
Within 30 days following the end of each calendar quarter, to the Department, owner’s request for interest and Special Allowance Payments (ED 799);
|
|
(c)
|
To credit reporting agencies as may be selected by the Servicer, credit reporting agency reporting in accordance with the Higher Education Act;
|
|
(d)
|
At any time the Eligible Lender Trustee or the Indenture Trustee, as the case may be, shall have reasonable grounds to believe that such request would be necessary in connection with its performance of its duties under related documents, and within five (5) Business Days of receipt of a request therefor, the Servicer shall furnish to the Eligible Lender Trustee or to the Indenture Trustee a list of all Trust Student Loans (by borrower loan identification number, type and outstanding principal balance) and any additional information requested relating to the Trust Student Loans; and
|
|
(e)
|
From time to time as may be reasonably requested, reports and data providing additional information on the Trust Student Loans.
|
|
(i) the Servicer is prohibited from disclosing or using any “non-public personal information” (as defined in the GLB Regulations) disclosed or provided by the Trust or on the Trust’s behalf to the Servicer, except solely to carry out the purposes for which it was disclosed, including use under an exception contained in 12 CFR sections 40.14 or 40.15 or 16 CFR sections 313.14 or 313.15, as applicable, of the GLB Regulations in the ordinary course of business to carry out those purposes; and
|
|
(ii) the Servicer has implemented and will maintain an information security program designed to meet the objectives of the Interagency Guidelines Establishing Standards for Safeguarding Customer Information, Final Rule (12 CFR Part 30, Appendix B) and the Federal Trade Commission’s Standards for Safeguarding Customer Information (16 CFR Part 314).
|
|
(1)
|
any failure by the Servicer (i) to deliver to the Indenture Trustee for deposit in the Trust Accounts any payment required by the Basic Documents to which the Servicer is a signatory or (ii) in the event that daily deposits into the Collection Account are not required, to deliver to the Administrator any payment required by the Basic Documents, which failure in case of either clause (i) or (ii) continues unremedied for five Business Days after written notice of such failure is received by the Servicer from the Eligible Lender Trustee, the Indenture Trustee or the Administrator or five Business Days after discovery of such failure by an officer of the Servicer; or
|
|
(2)
|
any failure by the Servicer duly to observe or to perform in any material respect any other covenant or agreement of the Servicer set forth in this Agreement or any other Basic Document to which the Servicer is a signatory, which failure shall (i) materially and adversely affect the rights of the Indenture Trustee, on behalf of the Noteholders, or the Noteholders and (ii) continues unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the Indenture Trustee, the Eligible Lender Trustee or the Administrator or (B) to the Servicer, and to the Indenture Trustee and the Eligible Lender Trustee by the Noteholders representing at least a majority of the Outstanding Amount of the Notes;
|
|
(3)
|
an Insolvency Event occurs with respect to the Servicer; or
|
|
(4)
|
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; or
|
|
(5)
|
any failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification or accountants’ letter when and as required under Article VII (including, without limitation, any failure by the Servicer to identify any Subcontractor “participating in the servicing function” within the meaning of Item 1122 of Regulation AB), 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;
|
|
(i)
|
if requested by the Administrator, on behalf of the Issuer, deliver to the Issuer a report (in form and substance reasonably satisfactory to the Issuer) regarding the Servicer’s assessment of compliance with the Servicing Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to the Issuer and signed by an authorized officer of the Servicer, and shall address each of the Servicing Criteria specified on a certification substantially in the form of Attachment C attached to this Agreement;
|
|
(ii)
|
if requested by the Administrator, on behalf of the Issuer, deliver to the
|
|
(iii)
|
cause each Subservicer and Subcontractor, determined by the Servicer to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Administrator, acting on behalf of the Issuer, an assessment of compliance and accountants’ attestation as and when provided in paragraphs (i) and (ii) of this Section; and
|
|
(iv)
|
if requested by the Administrator, on behalf of the Issuer, not later than February 1 of the calendar year in which such certification is to be delivered, deliver to the Issuer, the Administrator and any other Person that will be responsible for signing the Sarbanes Certification on behalf of an Issuer with respect to this securitization transaction the Annual Certification in the form attached hereto as Attachment D.
|
|
REPORTS
|
|
5.
|
Other reports or data requested from time to time that are necessary for the Issuer to comply with Regulation AB.
|
|
Re:
|
The Servicing Agreement dated as of [_____], 20[__] (the “Agreement”), among SLM Student Loan Trust 20[__]-[__], as Issuer, Sallie Mae, Inc., as Servicer, Sallie Mae, Inc., as Administrator, [___________], as Eligible Lender Trustee, and [___________], as Indenture Trustee
|
|
(1)
|
I have reviewed the servicer compliance statement of the Servicer provided in accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the report on assessment of the Servicer’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing Assessment”), the registered public accounting firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all servicing reports, officer’s certificates and other information relating to the servicing of the Trust Student Loans by the Servicer during 20[ ] that were delivered by the Servicer to the Administrator, on behalf of the Issuer, pursuant to the Agreement (collectively, the “Company Servicing Information”);
|
|
(2)
|
Based on my knowledge, the Company Servicing Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which such statements were made, not misleading with respect to the period of time covered by the Company Servicing Information;
|
|
(3)
|
Based on my knowledge, all of the Company Servicing Information required to be provided by the Servicer under the Agreement has been provided to the Administrator, on behalf of the Issuer;
|
|
(4)
|
I am responsible for reviewing the activities performed by the Servicer under the Agreement, and based on my knowledge and the compliance review conducted in preparing the Compliance Statement and except as disclosed in the Compliance Statement, the Servicing Assessment or the Attestation Report, the Servicer has fulfilled its obligations under the Agreement in all material respects; and
|
|
(5)
|
The Compliance Statement required to be delivered by the Servicer pursuant to the Agreement, and the Servicing Assessment and Attestation Report required to be provided by the Servicer and by any Subservicer or Subcontractor pursuant to the Agreement, have been provided to the Administrator, on behalf of the Issuer. Any material instances of noncompliance described in such reports have been disclosed to the Administrator, on behalf of the Issuer. Any material instance of noncompliance with the Servicing Criteria has been disclosed in such reports.
|
|
By:
|
________________________________
|
|
Name:
|
|
Title:
|
Reference
|
Criteria
|
Applicability
|
General Servicing Considerations
|
||
1122(d)(1)(i)
|
Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the Basic Documents.
|
|
1122(d)(1)(ii)
|
If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.
|
|
1122(d)(1)(iii)
|
Any requirements in the Basic Documents to maintain a back-up servicer for the trust student loans are maintained.
|
|
1122(d)(1)(iv)
|
A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the Basic Documents.
|
|
Cash Collection and Administration
|
||
1122(d)(2)(i)
|
Payments on trust student loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the Basic Documents.
|
|
1122(d)(2)(ii)
|
Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.
|
N/A
|
1122(d)(2)(iii)
|
Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the Basic Documents.
|
|
1122(d)(2)(iv)
|
The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the Basic Documents.
|
N/A
|
1122(d)(2)(v)
|
Each custodial account is maintained at a federally insured depository institution as set forth in the Basic Documents. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
|
N/A
|
1122(d)(2)(vi)
|
Unissued checks are safeguarded so as to prevent unauthorized access.
|
N/A
|
1122(d)(2)(vii)
|
Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing
|
N/A
|
Reference
|
Criteria
|
Applicability
|
accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the Basic Documents; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the Basic Documents.
|
||
Investor Remittances and Reporting
|
||
1122(d)(3)(i)
|
Reports to investors, including those to be filed with the Commission, are maintained in accordance with the Basic Documents and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the Basic Documents; (B) provide information calculated in accordance with the terms specified in the Basic Documents; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of student loans serviced by the Servicer.
|
N/A
|
1122(d)(3)(ii)
|
Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the Basic Documents.
|
N/A
|
1122(d)(3)(iii)
|
Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the Basic Documents.
|
N/A
|
1122(d)(3)(iv)
|
Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.
|
N/A
|
Pool Asset Administration
|
||
1122(d)(4)(i)
|
Collateral or security on student loans is maintained as required by the Basic Documents or related student loan documents.
|
|
1122(d)(4)(ii)
|
Student loan and related documents are safeguarded as required by the Basic Documents
|
|
1122(d)(4)(iii)
|
Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the Basic Documents.
|
N/A
|
1122(d)(4)(iv)
|
Payments on student loans, including any payoffs, made in accordance with the related student loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the Basic Documents, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related student loan documents.
|
|
1122(d)(4)(v)
|
The Servicer’s records regarding the student loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.
|
Reference
|
Criteria
|
Applicability
|
1122(d)(4)(vi)
|
Changes with respect to the terms or status of an obligor’s student loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the Basic Documents and related pool asset documents.
|
|
1122(d)(4)(vii)
|
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the Basic Documents.
|
|
1122(d)(4)(viii)
|
Records documenting collection efforts are maintained during the period a student loan is delinquent in accordance with the Basic Documents. Such records are maintained on at least a monthly basis, or such other period specified in the Basic Documents, and describe the entity’s activities in monitoring delinquent student loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
|
|
1122(d)(4)(ix)
|
Adjustments to interest rates or rates of return for student loans with variable rates are computed based on the related student loan documents.
|
|
1122(d)(4)(x)
|
Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s student loan documents, on at least an annual basis, or such other period specified in the Basic Documents; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable student loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related student loans, or such other number of days specified in the Basic Documents.
|
|
1122(d)(4)(xi)
|
Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the Basic Documents.
|
|
1122(d)(4)(xii)
|
Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.
|
|
1122(d)(4)(xiii)
|
Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the Basic Documents.
|
|
1122(d)(4)(xiv)
|
Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the Basic Documents.
|
|
1122(d)(4)(xv)
|
Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the Basic Documents.
|
N/A
|
|
1.
|
loan application, and any supplement thereto,
|
|
2.
|
original promissory note and any addendum thereto (or a certified copy thereof if more than one loan is represented by a single promissory note and all loans so represented are not being sold) or the electronic records evidencing the same,
|
|
3.
|
evidence of guarantee,
|
|
4.
|
any other document and/or record which Funding may be required to retain pursuant to the Higher Education Act,
|
|
5.
|
if applicable, payment history (or similar document) including (i) an indication of the Principal Balance and the date through which interest has been paid, each as of the Statistical Cutoff Date, in the case of the Initial Loans, or the related Subsequent Cutoff Date, in the case of any Additional Loan or Substituted Loan, and (ii) an accounting of the allocation of all payments by the Borrower or on the Borrower’s behalf to principal and interest on the Loan,
|
|
6.
|
if applicable, documentation which supports periods of current or past deferment or past forbearance,
|
|
7.
|
if applicable, a collection history, if the Loan was ever in a delinquent status, including detailed summaries of contacts and including the addresses or telephone numbers used in contacting or attempting to contact Borrower and any endorser and, if required by the Guarantor, copies of all letters and other correspondence relating to due diligence processing,
|
|
8.
|
if applicable, evidence of all requests for skip-tracing assistance and current address of Borrower, if located,
|
|
9.
|
if applicable, evidence of requests for pre-claims assistance, and evidence that the Borrower’s school(s) have been notified, and
|
|
10.
|
if applicable, a record of any event resulting in a change to or confirmation of any data in the related Trust Student Loan File.
|
|
SECTION 3.1 SALE/PURCHASE OF INITIAL LOANS
|
|
(A) Consummation of Sale and Purchase
|
|
(B) Settlement of the Initial Payment
|
|
(C) Interest Subsidy and Special Allowance Payments and Rebate Fees
|
|
SECTION 3.2 SALE/PURCHASE OF ADDITIONAL LOANS AND SUBSTITUTION OF SUBSTITUTED LOANS
|
|
(A) Requirements Relating to Additional Loans
|
|
(B) Consummation of Sale and Purchase
|
|
(C) Settlement of the Purchase Price
|
|
(D) Interest Subsidy and Special Allowance Payments and Rebate Fees
|
|
1.
|
status (i.e., in-school, grace, deferment, forbearance or repayment),
|
|
2.
|
program type (i.e., Unsubsidized [Stafford]/[Consolidation] Loan, Subsidized [Stafford Loan (pre 1993 vs. post 1993), PLUS Loan or SLS Loan]/[Consolidation Loan]),
|
|
3.
|
guarantee percentage,
|
|
4.
|
school type,
|
|
5.
|
total return,
|
|
6.
|
principal balance, and
|
|
7.
|
remaining term to maturity.
|
|
Dated as of [________, 20__]
|
|
TERMS, CONDITIONS AND COVENANTS
|
SELLER
SLM Education Credit Finance Corporation
2001 Edmund Halley Drive
Reston, Virginia 20191
Lender Code: 833 253
By: _____________________________
(Signature of Authorized Officer)
Name: ___________________________
Title: ___________________________
|
PURCHASER
[_________], not in its individual capacity but solely as Interim Eligible Lender Trustee for the benefit of SLM Funding LLC
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: ___________________________
Title: ___________________________
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: ___________________________
Title: ___________________________
Date of Purchase: [________, 20__]
|
■
|
Not in claims status, not previously rejected
|
■
|
Not in litigation
|
■
|
Last disbursement was on or before the Statistical Cutoff Date
|
■
|
Loan is not swap-pending
|
SELLER
SLM Education Credit Finance Corporation
2001 Edmund Halley Drive
Reston, Virginia 20191
Lender Code: ____________________
By: _____________________________
(Signature of Authorized Officer)
Name:___________________________
Title: ___________________________
|
PURCHASER
[_________], not in its individual capacity but solely as Interim Eligible Lender Trustee for the benefit of SLM Funding LLC
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: ___________________________
Title: ___________________________
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: ___________________________
Title: ___________________________
Date of Purchase: [________, 20__]
SELLER
SLM Funding LLC
2001 Edmund Halley Drive
Reston, Virginia 20191
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: ___________________________
|
Title: ___________________________
Date of Purchase: [________, 20__]
|
|
Dated as of [ ], 2013
|
|
TERMS, CONDITIONS AND COVENANTS
|
SELLER
SLM Education Credit Finance Corporation
2001 Edmund Halley Drive
Reston, Virginia 20191
Lender Code: ____________________
By: ____________________________
(Signature of Authorized Officer)
Name: _________________________
Title: __________________________
|
PURCHASER
[_________], not in its individual capacity but solely as Interim Eligible Lender Trustee for the benefit of SLM Funding LLC
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: __________________________
Title: ___________________________
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: __________________________
Title: ___________________________
Date of Purchase: _________________
|
■
|
Not in claims status, not previously rejected
|
■
|
Not in litigation
|
■
|
Last disbursement was on or before the related Subsequent Cutoff Date
|
■
|
Loan is not swap-pending
|
SELLER
SLM Education Credit Finance Corporation
2001 Edmund Halley Drive
Reston, Virginia 20191
Lender Code: ____________________
By: ____________________________
(Signature of Authorized Officer)
Name: _________________________
Title: __________________________
|
PURCHASER
[_________], not in its individual capacity but solely as Interim Eligible Lender Trustee for the benefit of SLM Funding LLC
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: __________________________
Title: ___________________________
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: __________________________
Title: ___________________________
Date of Purchase:__________________
PURCHASER
SLM Funding, LLC
2001 Edmund Halley Drive
Reston, Virginia 20191
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: __________________________
|
Title: ___________________________
Date of Purchase:__________________
|
Additional Loans
|
Principal Balance
as of the related Subsequent Cutoff Date
|
Purchase Price
|
||
|
1.
|
loan application, and any supplement thereto,
|
|
2.
|
original promissory note and any addendum thereto (or a certified copy thereof if more than one loan is represented by a single promissory note and all loans so represented are not being sold) or the electronic records evidencing the same,
|
|
3.
|
evidence of guarantee,
|
|
4.
|
any other document and/or record which Funding may be required to retain pursuant to the Higher Education Act,
|
|
5.
|
if applicable, payment history (or similar document) including (i) an indication of the Principal Balance and the date through which interest has been paid, each as of the Statistical Cutoff Date, in the case of the Initial Loans, or the related Subsequent Cutoff Date, in the case of any Additional Loan or Substituted Loan, and (ii) an accounting of the allocation of all payments by the Borrower or on the Borrower’s behalf to principal and interest on the Loan,
|
|
6.
|
if applicable, documentation which supports periods of current or past deferment or past forbearance,
|
|
7.
|
if applicable, a collection history, if the Loan was ever in a delinquent status, including detailed summaries of contacts and including the addresses or telephone numbers used in contacting or attempting to contact Borrower and any endorser and, if required by the Guarantor, copies of all letters and other correspondence relating to due diligence processing,
|
|
8.
|
if applicable, evidence of all requests for skip-tracing assistance and current address of Borrower, if located,
|
|
9.
|
if applicable, evidence of requests for pre-claims assistance, and evidence that the Borrower’s school(s) have been notified, and
|
|
10.
|
if applicable, a record of any event resulting in a change to or confirmation of any data in the related Trust Student Loan File.
|
|
(A) Requirements Relating to Additional Loans
|
|
(B) Consummation of Sale and Purchase
|
|
(C) Settlement of the Purchase Price
|
|
(D) Interest Subsidy and Special Allowance Payments and Rebate Fees
|
|
(E) Grant of Contract Right
|
|
1.
|
status (i.e., in-school, grace, deferment, forbearance or repayment),
|
|
2.
|
program type (i.e., Unsubsidized [Stafford]/[Consolidation] Loan or Subsidized [Stafford Loan (pre 1993 vs. Post 1993), PLUS Loan or SLS Loan]/[Consolidation Loan]),
|
|
3.
|
guarantee percentage,
|
|
4.
|
school type,
|
|
5.
|
total return,
|
|
6.
|
principal balance, and
|
|
7.
|
remaining term to maturity.
|
|
Dated as of [________], 20[__]
|
|
TERMS, CONDITIONS AND COVENANTS
|
SELLER
[____________], not in its individual capacity but solely as [SPE Seller] Eligible Lender Trustee for the benefit of [SPE Seller]
Lender Code:________
By: _____________________________
(Signature of Authorized Signatory
for Seller)
Name:
Title:
By: _____________________________
(Signature of Authorized Signatory
for Seller)
Name:
Title:
|
PURCHASER
[____________], not in its individual capacity but solely as Interim Eligible Lender Trustee for the benefit of SLM Funding LLC
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name:
Title:
By: _____________________________
(Signature of Authorized Signatory
for Purchaser)
Name:
Title:
Date of Purchase: [________], 20[__]
|
■
|
Not in claims status, not previously rejected
|
■
|
Not in litigation
|
■
|
Last disbursement was on or before the Statistical Cutoff Date
|
■
|
Loan is not swap-pending
|
SELLER
[____________], not in its individual capacity but solely as [SPE Seller] Eligible Lender Trustee for the benefit of [SPE Seller]
Lender Code:________
By: _____________________________
(Signature of Authorized Signatory
for Seller)
Name:
Title:
By: _____________________________
(Signature of Authorized Signatory
for Seller)
Name:
Title:
By: _____________________________
(Signature of Authorized Signatory
for Seller)
Name:
Title:
|
PURCHASER
[____________], not in its individual capacity but solely as Interim Eligible Lender Trustee for the benefit of SLM Funding LLC
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name:
Title:
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name:
Title:
Date of Purchase: [________], 20[__]
PURCHASER
SLM Funding LLC
2001 Edmund Halley Drive
Reston, Virginia 20191
By: ________________________
(Signature of Authorized Officer)
Name:
Title:
Date of Purchase: [________], 20[__]
|
|
Dated as of [ ], 20[__]
|
|
TERMS, CONDITIONS AND COVENANTS
|
SELLER
[____________], not in its individual capacity but solely as [SPE Seller] Eligible Lender Trustee for the benefit of [SPE Seller]
Lender Code:________
By: ____________________________
(Signature of Authorized Signatory for Seller)
Name: _________________________
Title: __________________________
By: ____________________________
(Signature of Authorized Signatory for Seller)
Name: _________________________
Title: __________________________
|
PURCHASER
[____________], not in its individual capacity but solely as Interim Eligible Lender Trustee for the benefit of SLM Funding LLC
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: __________________________
Title: ___________________________
Date of Purchase: _________________
|
■
|
Not in claims status, not previously rejected
|
■
|
Not in litigation
|
■
|
Last disbursement was on or before the related Subsequent Cutoff Date
|
■
|
Loan is not swap-pending
|
SELLER
[____________], not in its individual capacity but solely as [SPE Seller] Eligible Lender Trustee for the benefit of [SPE Seller]
Lender Code:________
By: ____________________________
(Signature of Authorized Officer)
Name: _________________________
Title: __________________________
By: ____________________________
(Signature of Authorized Officer)
Name: _________________________
Title: __________________________
By: ____________________________
(Signature of Authorized Officer)
Name: _________________________
Title: __________________________
|
PURCHASER
[____________], not in its individual capacity but solely as Interim Eligible Lender Trustee for the benefit of SLM Funding LLC
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: __________________________
Title: ___________________________
By: _____________________________
(Signature of Authorized Signatory for Purchaser)
Name: __________________________
Title: ___________________________
Date of Purchase: _________________
PURCHASER
SLM Funding LLC
2001 Edmund Halley Drive
Reston, Virginia 20191
By: ________________________
(Signature of Authorized Officer)
Name:
Title:
Date of Purchase: [________], 20[__]
|
Additional Loans
|
Principal Balance
as of the related Subsequent Cutoff Date
|
Purchase Price
|
||
Page
|
||
ARTICLE I
|
2
|
|
Section 1.1
|
Definitions and Usage
|
2
|
ARTICLE II
|
2
|
|
Section 2.1
|
Duties with Respect to the Indenture
|
2
|
Section 2.2
|
Duties with Respect to the Issuer
|
5
|
Section 2.3
|
Establishment of Trust Accounts
|
7
|
Section 2.4
|
Collections; Collection Account
|
11
|
Section 2.5
|
Application of Collections
|
11
|
Section 2.6
|
Additional Deposits
|
11
|
Section 2.7
|
Distributions
|
12
|
Section 2.8
|
Priority of Distributions
|
13
|
Section 2.9
|
Reserve Account
|
16
|
Section 2.10
|
Investment Earnings; Other Trust Accounts
|
17
|
Section 2.11
|
Statements to Excess Distribution Certificateholder and Noteholders
|
19
|
Section 2.12
|
Non-Ministerial Matters
|
21
|
Section 2.13
|
Exceptions
|
22
|
Section 2.14
|
Compensation
|
22
|
Section 2.15
|
Servicer and Administrator Expenses
|
22
|
ARTICLE III
|
22
|
|
Section 3.1
|
Administrator’s Certificate; Servicer’s Report
|
22
|
Section 3.2
|
Annual Statement as to Compliance; Notice of Default; Financial Statements
|
23
|
Section 3.3
|
Annual Independent Certified Public Accountants’ Report
|
24
|
ARTICLE IV
|
24
|
|
Section 4.1
|
Representations of Administrator
|
24
|
Section 4.2
|
Liability of Administrator; Indemnities
|
25
|
Section 4.3
|
Merger or Consolidation of, or Assumption of the Obligations of, Administrator
|
27
|
Section 4.4
|
Limitation on Liability of Administrator and Others
|
28
|
Section 4.5
|
Administrator May Own Excess Distribution Certificate or Notes
|
29
|
Section 4.6
|
Sallie Mae, Inc. Not to Resign as Administrator
|
29
|
Section 4.7
|
Privacy and Security Provisions
|
29
|
ARTICLE V
|
30
|
|
Section 5.1
|
Administrator Default
|
30
|
Section 5.2
|
Appointment of Successor
|
31
|
Section 5.3
|
Notification to Noteholders and Certificateholder
|
32
|
Section 5.4
|
Waiver of Past Defaults
|
32
|
ARTICLE VI
|
32
|
|
Section 6.1
|
Termination
|
32
|
ARTICLE VII
|
33
|
|
Section 7.1
|
Protection of Interests in Trust
|
33
|
ARTICLE VIII
|
35
|
|
Section 8.1
|
Independence of the Administrator
|
35
|
Section 8.2
|
No Joint Venture
|
35
|
Section 8.3
|
Other Activities of Administrator
|
35
|
Section 8.4
|
Powers of Attorney
|
36
|
Section 8.5
|
Amendment
|
36
|
Section 8.6
|
Assignment
|
37
|
Section 8.7
|
Limitations on Rights of Others
|
37
|
Section 8.8
|
Assignment to Indenture Trustee
|
37
|
Section 8.9
|
Nonpetition Covenants
|
37
|
Section 8.10
|
Limitation of Liability of Eligible Lender Trustee and Indenture Trustee
|
38
|
Section 8.11
|
Governing Law
|
39
|
Section 8.12
|
Headings
|
39
|
Section 8.13
|
Counterparts
|
39
|
Section 8.14
|
Severability
|
39
|
Section 8.15
|
Excess Distribution Certificate
|
39
|
Section 8.16
|
Notices
|
39
|
Section 8.17
|
Waiver of Jury Trial
|
39
|
Section 8.18
|
Force Majeure
|
39
|
ARTICLE IX
|
39
|
|
Section 9.1
|
Intent of the Parties; Reasonableness
|
39
|
Section 9.2
|
Reporting Requirements
|
40
|
Section 9.3
|
Administrator Compliance Statement
|
40
|
Section 9.4
|
Report on Assessment of Compliance and Attestation
|
41
|
Reference
|
Criteria
|
Applicability
|
General Servicing Considerations
|
||
1122(d)(1)(i)
|
Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the Basic Documents.
|
N/A
|
1122(d)(1)(ii)
|
If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.
|
N/A
|
1122(d)(1)(iii)
|
Any requirements in the Basic Documents to maintain a back-up servicer for the trust student loans are maintained.
|
N/A
|
1122(d)(1)(iv)
|
A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the Basic Documents
|
N/A
|
Cash Collection and Administration
|
||
1122(d)(2)(i)
|
Payments on trust student loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the Basic Documents.
|
N/A
|
1122(d)(2)(ii)
|
Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.
|
|
1122(d)(2)(iii)
|
Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the Basic Documents.
|
N/A
|
1122(d)(2)(iv)
|
The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the Basic Documents.
|
N/A
|
1122(d)(2)(v)
|
Each custodial account is maintained at a federally insured depository institution as set forth in the Basic Documents. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
|
N/A
|
1122(d)(2)(vi)
|
Unissued checks are safeguarded so as to prevent unauthorized access.
|
N/A
|
1122(d)(2)(vii)
|
Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the Basic Documents; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the Basic Documents.
|
N/A
|
Reference
|
Criteria
|
Applicability
|
Investor Remittances and Reporting
|
||
1122(d)(3)(i)
|
Reports to investors, including those to be filed with the Commission, are maintained in accordance with the Basic Documents and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the Basic Documents; (B) provide information calculated in accordance with the terms specified in the Basic Documents; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of student loans serviced by the Servicer.
|
N/A
|
1122(d)(3)(ii)
|
Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the Basic Documents.
|
N/A
|
1122(d)(3)(iii)
|
Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the Basic Documents.
|
N/A
|
1122(d)(3)(iv)
|
Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.
|
N/A
|
Pool Asset Administration
|
||
1122(d)(4)(i)
|
Collateral or security on student loans is maintained as required by the Basic Documents or related student loan documents.
|
N/A
|
1122(d)(4)(ii)
|
Student loan and related documents are safeguarded as required by the Basic Documents.
|
N/A
|
1122(d)(4)(iii)
|
Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the Basic Documents.
|
N/A
|
1122(d)(4)(iv)
|
Payments on student loans, including any payoffs, made in accordance with the related student loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the Basic Documents, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related student loan documents.
|
N/A
|
1122(d)(4)(v)
|
The Servicer’s records regarding the student loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.
|
N/A
|
1122(d)(4)(vi)
|
Changes with respect to the terms or status of an obligor’s student loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the Basic Documents and related pool asset documents.
|
N/A
|
1122(d)(4)(vii)
|
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the Basic Documents.
|
N/A
|
1122(d)(4)(viii)
|
Records documenting collection efforts are maintained during the period a student loan is delinquent in accordance with the Basic Documents. Such records are maintained on at least a monthly basis, or such other period specified in the Basic Documents, and describe the entity’s activities in monitoring delinquent student loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
|
N/A
|
1122(d)(4)(ix)
|
Adjustments to interest rates or rates of return for student loans with variable rates are computed based on the related student loan documents.
|
N/A
|
Reference
|
Criteria
|
Applicability
|
1122(d)(4)(x)
|
Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s student loan documents, on at least an annual basis, or such other period specified in the Basic Documents; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable student loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related student loans, or such other number of days specified in the Basic Documents.
|
N/A
|
1122(d)(4)(xi)
|
Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the Basic Documents.
|
N/A
|
1122(d)(4)(xii)
|
Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.
|
N/A
|
1122(d)(4)(xiii)
|
Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the Basic Documents.
|
N/A
|
1122(d)(4)(xiv)
|
Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the Basic Documents.
|
N/A
|
1122(d)(4)(xv)
|
Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the Basic Documents.
|
N/A
|