Delaware | 6189 | 04-03480392 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. employer identification no.) |
Reed Auerbach, Esquire | Charles E. Bryan, Esquire | |
McKee Nelson LLP | Cadwalader, Wickersham & Taft LLP | |
5 Times Square, 35th Floor | 1201 F Street, N.W., Suite 1100 | |
New York, NY 10036 | Washington, DC 20004 | |
(917) 777-4400 | (202) 862-2200 |
Proposed Maximum | Proposed Maximum | |||||||
Title of Each Class of | Amount to be | Per Unit Offering Price | Aggregate Offering | Amount of | ||||
Securities to be Registered | Registered | (1) | Price (1) | Registration Fee (2) | ||||
Student Loan-Backed Securities | $10,000,000,000 | 100% | $10,000,000,000 | $1,087,379.88 | ||||
(1) | Estimated solely for the purposes of calculating the registration fee. |
(2) | Pursuant to Rule 457(p) under the Securities Act of 1933 of the $5.6 billion of Student Loan-Backed Securities previously registered on Form S-3 (File No. 333-109004), we are carrying forward $1,106,334,018 to this Registration Statement. The Registrant previously paid the Commission a filing fee of $453,103 in connection with the filing of that Form S-3 of which $89,502.42 is attributable to the securities being carried forward. We also paid the Commission a filing fee of $117.70 in connection with the filing of this Registration Statement. We are therefore paying the Commission a filing fee of $1,087,379.88 in connection with the Securities not previously registered with the Commission. |
The information in this document is subject to completion and amendment. This document does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be a sale of the notes in any jurisdiction in which such offer, solicitation or sale would be unlawful. The definitive terms of the transactions described herein will be described in the final version of this document. |
Class A Notes | ||||||||||||
Class A-1 | Class A-2 | Class A-3 | Class A-4 | Class B | Class C | |||||||
Notes | Notes | Notes | Notes | Notes | Notes | |||||||
Principal | $ | $ | $ | $ | $ | $ | ||||||
Interest Rate | 3-month LIBOR plus % | 3-month LIBOR plus % | 3-month LIBOR plus % | 3-month LIBOR plus % | 3-month LIBOR plus % | 3-month LIBOR plus % | ||||||
Maturity |
You should consider carefully the risk factors beginning on page S-22 of this supplement and on page 19 of the prospectus. | ||
The notes are asset-backed securities issued by a trust. They are not obligations of SLM Corporation, the depositor, any seller of loans to the depositor, the administrator, the servicer or any of their affiliates. | ||
The notes are not guaranteed or insured by the United States or any governmental agency. |
Proceeds | ||||||||||||
Price to | Underwriting | to the | ||||||||||
Public | Discount | Depositor | ||||||||||
Per Class A-1 Note | % | % | % | |||||||||
Per Class A-2 Note | % | % | % | |||||||||
Per Class A-3 Note | % | % | % | |||||||||
Per Class A-4 Note | % | % | % | |||||||||
Per Class B Note | % | % | % | |||||||||
Per Class C Note | % | % | % |
We expect the proceeds to the depositor to be $ before deducting expenses payable by the depositor estimated to be $ . | |
Neither the SEC nor any state securities commission has approved or disapproved the securities or determined whether this supplement or the prospectus is accurate or complete. Any contrary representation is a criminal offense. |
[Joint Book-Runners] |
, 2005 |
Page | ||||||
The Information in this Prospectus Supplement and the Accompanying Prospectus | S-4 | |||||
Summary of Terms | S-5 | |||||
• | Issuer | S-5 | ||||
• | Depositor | S-5 | ||||
• | The Securities | S-5 | ||||
• | Dates | S-5 | ||||
• | Information about the Notes | S-6 | ||||
• | Information about the Certificates | S-8 | ||||
• | Indenture Trustee and Paying Agent | S-9 | ||||
• | Trustee | S-9 | ||||
• | Luxembourg Paying Agent | S-9 | ||||
• | Administrator | S-9 | ||||
• | Information about the Trust | S-9 | ||||
Formation of the Trust | S-9 | |||||
Its Assets | S-10 | |||||
• | Administration of the Trust | S-13 | ||||
Distributions | S-13 | |||||
Transfer of the Assets to the Trust | S-15 | |||||
Servicing of the Assets | S-15 | |||||
Optional Purchase of Delinquent Loans | S-15 | |||||
Compensation of the Servicer | S-16 | |||||
• | Termination of the Trust | S-16 | ||||
Optional Purchase of the Trust Assets | S-16 | |||||
Auction of the Trust Assets | S-17 | |||||
• | Interest Rate Cap Agreements | S-18 | ||||
• | Swap Agreements | S-18 | ||||
• | Tax Considerations | S-19 | ||||
• | ERISA Considerations | S-19 | ||||
• | Rating of the Notes | S-20 | ||||
• | Listing Information | S-20 | ||||
• | Risk Factors | S-20 | ||||
• | Identification Numbers | S-20 | ||||
Risk Factors | S-21 | |||||
• | Sequential Payment of the Class A, Class B and Class C Notes and Subordination of the Class B and Class C Notes Results in a Greater Risk of Loss For Some Holders | S-21 | ||||
• | The Trust Will Not Have the Benefit of Any Guarantees or Insurance on the Trust Student Loans | S-22 | ||||
• | Your Notes Will Have Basis Risk and the Swap Agreements Do Not Eliminate All of This Basis Risk | S-23 | ||||
• | Failure to Pay Interest on the Subordinated Classes of Notes is Not an Event of Default | S-24 | ||||
• | The Occurrence of an Event of Default Under the Indenture May Delay Payments on the Class B Notes and the Class C Notes | S-25 | ||||
• | Subordinated Noteholders May Not Be Able to Direct the Indenture Trustee Upon an Event of Default Under the Indenture | S-25 | ||||
• | Risk of Bankruptcy Discharge of Private Credit Student Loans | S-25 | ||||
• | Certain Actions Can Be Taken Without Noteholder Approval | S-26 | ||||
Defined Terms | S-27 | |||||
Formation of the Trust | S-27 | |||||
The Trust | S-27 | |||||
Capitalization of the Trust | S-28 | |||||
Trustee | S-29 | |||||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | S-30 | |||||
Sources of Capital and Liquidity | S-30 | |||||
Results of Operations | S-30 | |||||
Use of Proceeds | S-30 | |||||
The Trust Student Loan Pool | S-30 | |||||
Insurance of Student Loans | S-46 | |||||
Cure Period for Trust Student Loans | S-46 | |||||
Description of the Notes | S-47 |
S-2
Page | ||||||
General | S-47 | |||||
Interest | S-47 | |||||
Determination of LIBOR | S-48 | |||||
Notice of Interest Rates | S-49 | |||||
Accounts | S-49 | |||||
Distributions | S-50 | |||||
Principal Distributions | S-52 | |||||
Priority of Payments Following Certain Events of Default Under the Indenture | S-53 | |||||
Voting Rights and Remedies | S-54 | |||||
Cash Capitalization Account | S-54 | |||||
Credit Enhancement | S-56 | |||||
Administration Fee | S-58 | |||||
Servicing Compensation | S-58 | |||||
Swap Agreements | S-59 | |||||
Interest Rate Cap Agreements | S-63 | |||||
U.S. Federal Income Tax Consequences | S-65 | |||||
ERISA Considerations | S-66 | |||||
Reports to Securityholders | S-67 | |||||
Underwriting | S-68 | |||||
Listing Information | S-70 | |||||
Ratings of the Securities | S-72 | |||||
Legal Matters | S-72 | |||||
Glossary for Prospectus Supplement | S-74 |
Page | ||||
Prospectus Summary | 7 | |||
Risk Factors | 19 | |||
Formation of the Trusts | 31 | |||
Use of Proceeds | 32 | |||
The Depositor, the Sellers, the Servicer and the Administrator | 32 | |||
The Student Loan Pools | 38 | |||
Transfer and Servicing Agreements | 42 | |||
Servicing and Administration | 45 | |||
Trading Information | 55 | |||
Description of the Notes | 57 | |||
Description of the Certificates | 63 | |||
Additional Information Regarding the Securities | 64 | |||
Certain Legal Aspects of the Student Loans | 71 | |||
U.S. Federal Income Tax Consequences | 73 | |||
European Union Directive on the Taxation of Savings Income | 79 | |||
State Tax Consequences | 79 | |||
ERISA Considerations | 81 | |||
Available Information | 83 | |||
Reports to Securityholders | 84 | |||
Incorporation of Certain Documents by Reference | 84 | |||
The Plan of Distribution | 84 | |||
Legal Matters | 86 | |||
Appendix A: Federal Family Education Loan Program | A-1 | |||
Appendix B: Signature Student Loan® Program | B-1 | |||
Appendix C: LAWLOANS® Program | C-1 | |||
Appendix D: MBA Loans® Program | D-1 | |||
Appendix E: MEDLOANS® Program | E-1 | |||
Appendix F: Global Clearance, Settlement and Tax Documentation Procedures | F-1 |
S-3
• | the accompanying prospectus, which begins after the end of this prospectus supplement and which 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. |
S-4
• | 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 A-3 Student Loan-Backed Notes in the amount of $ ; | |
• | Floating Rate Class A-4 Student Loan-Backed Notes in the amount of $ ; | |
• | Floating Rate Class B Student Loan-Backed Notes in the amount of $ ; and | |
• | Floating Rate Class C Student Loan-Backed Notes in the amount of $ . |
S-5
Class | Spread | |
Class A-1 | % | |
Class A-2 | % | |
Class A-3 | % | |
Class A-4 | % | |
Class B | % | |
Class C | % |
x = | -month LIBOR, and |
y = -month LIBOR. |
S-6
• | first, to the class A-1, class A-2, class A-3 and class A-4 notes, in that order, until their collective share of the principal distribution amount is paid in full; | |
• | second, to the class B notes until their share of the principal distribution amount is paid in full; and | |
• | third, to the class C notes until their share of the principal distribution amount is paid in full. |
Class | Maturity | |||
Class A-1 | ||||
Class A-2 | ||||
Class A-3 | ||||
Class A-4 | ||||
Class B | ||||
Class C |
• | there are prepayments on the trust student loans; | |
• | the servicer exercises its option to purchase delinquent 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). |
S-7
• | Payments of interest on the class B notes will be subordinate to the payment of interest and, to the extent described in this prospectus supplement, to payments of principal on the class A notes. | |
• | Payments of principal on the class B notes will be subordinate to the payment of both interest and principal on the class A notes. | |
• | Payments of interest on the class C notes will be subordinate to the payment of interest and, to the extent described in this prospectus supplement, to payments of principal on the class A and class B notes. | |
• | Payments of principal on the class C notes will be subordinate to the payment of both interest and principal on the class A and class B notes. |
S-8
S-9
• | the trust student loans; the trust student loans consist of private credit student loans, which are education loans 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; | |
• | collections and other payments on the trust student loans; | |
• | funds it will hold in its trust accounts, including a collection account, a cash capitalization account and a reserve account; and | |
• | its rights under the swap agreements described under“—Swap Agreements” below. |
• | Trust Student Loans. All of the trust student loans are private credit student loans made to students and parents of students that are not guaranteed or reinsured under FFELP or any other federal student loan program. The loan programs under which these education loans were made and underwritten are the Signature Student Loan Program, the LAWLOANS Program, the MBA Loans Program and the MEDLOANS Program. They are summarized in Appendices B, C, D and E to the prospectus. |
S-10
• | 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. The deposit will be in cash or eligible investments equal to approximately $ plus the excess, if any, of the pool balance as of the cutoff date over the pool balance as of the closing date. The administrator will deposit collections on the trust student loans and any payments received from the swap counterparties described below into the collection account as described in this prospectus supplement and the prospectus. | |
• | 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 from the sale of the notes into the cash capitalization account. The deposit will be in cash or eligible investments equal to $ . |
S-11
• | Reserve Account.The administrator will establish and maintain the reserve 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 reserve account. The initial deposit will be in cash or eligible investments equal to $ . |
Funds in the reserve account may be replenished on each distribution date by additional funds available after all prior required distributions have been made. The amount required to be on deposit in the reserve account at any time, or the specified reserve account balance, is the lesser of $ and the outstanding balance of the notes. See“Description of the Notes—Distributions” in this prospectus supplement. | |
The administrator will instruct the indenture trustee to withdraw funds from the reserve account to cover (a) shortfalls, if any, in the payments described in the 1st through 4th, 6th and 8th items in the chart on page S- of this prospectus supplement, to the extent such shortfalls are not covered by amounts on deposit in the cash capitalization account or in the collection account, and (b) the 5th, 7th and 9th items in the chart on page S- of this prospectus supplement on the respective maturity dates of each class of notes, to cover the unpaid balance of the maturing class of notes to the extent such principal payment is not covered by amounts on deposit in the cash capitalization account or in the collection account. | |
The reserve account further enhances the likelihood of payment to the noteholders of interest on and, in some limited circumstances, principal of, the notes. In some circumstances, however, the reserve account could be depleted. This depletion could result in shortfalls in distributions to you. If the market value of the reserve account on any distribution date is sufficient, when taken together with amounts on deposit in the collection account, to pay the remaining principal balance on |
S-12
the notes and the interest accrued on the notes, any payments owing to the swap counterparties and any unpaid primary servicing and administration fees, amounts on deposit in the reserve account will be so applied on that distribution date. |
S-13
![(FLOW CHART)](https://capedge.com/proxy/S-3A/0000950133-05-003217/w07952a1w0795299.gif)
S-14
S-15
• | 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 holders of the securities. |
S-16
• | 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 of the Trust Assets”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. |
S-17
Period | Cap Rate | |||
From and including the 20 distribution date through and including the 20 distribution date | % | |||
From and including the 20 distribution date through and including the 20 distribution date | % | |||
From and including the 20 distribution date through and including the 20 distribution date | % |
• | in the case of the first basis swap, the prime rate for the applicable quarter minus %; or | |
• | in the case of the second basis swap, the weighted average of the prime rates for each of the three months in the applicable quarter minus %. |
S-18
• | Federal tax counsel for the trust is of the opinion that the notes will be characterized as debt for federal income tax purposes. | |
• | Federal tax counsel is also of the opinion that, for U.S. federal income tax purposes, the trust will not be taxable as a corporation. | |
• | In the opinion of Delaware tax counsel for the trust, the same characterizations would apply for Delaware state income tax purposes as for U.S. federal income tax purposes. Delaware tax counsel is also of the opinion that holders of the notes who are not otherwise subject to Delaware taxation on income will not become subject to Delaware tax as a result of their ownership of the notes or the certificates. |
S-19
• | Class A notes: The highest rating category from at least [two] of Fitch Ratings, Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. | |
• | Class B notes: One of the [three] highest rating categories from at least two of Fitch, Moody’s or S&P. | |
• | Class C notes: One of the [four] highest rating categories from at least two of Fitch, Moody’s or S&P. |
• | Class A-1 notes: |
• | Class A-2 notes: |
• | Class A-3 notes: |
• | Class A-4 notes: |
• | Class B notes: |
• | Class C notes: |
• | Class A-1 notes: |
• | Class A-2 notes: |
• | Class A-3 notes: |
• | Class A-4 notes: |
• | Class B notes: |
• | Class C notes: |
• | Class A-1 notes: |
• | Class A-2 notes: |
• | Class A-3 notes: |
• | Class A-4 notes: |
• | Class B notes: |
• | Class C notes: |
S-20
Sequential Payment of the Class A, Class B and Class C Notes and Subordination of the Class B and Class C Notes Results in a Greater Risk of Loss For Some Holders | Class C noteholders, to a lesser extent class B noteholders, to a still lesser extent class A-4 noteholders, to a still lesser extent class A-3 noteholders, and to a still lesser extent class A-2 noteholders, bear a greater risk of loss than do class A-1 noteholders because: | ||
• | In general, no principal will be paid on the class A-2, class A-3 or class A-4 notes until each class of the class A notes having a lower numerical designation has been paid in full. | ||
• | Distributions of interest on the class B notes will be subordinate to the payment of interest and, to the extent described in this prospectus supplement, payments of principal on the class A notes. Distributions of principal on the class B notes will be subordinate to the payment of both interest and principal on the class A notes. | ||
• | Distributions of interest on the class C notes will be subordinate to the payment of interest and, to the extent described in this prospectus supplement, payments of principal on the class A and class B notes. Distributions of principal on the class C notes will be subordinate to the payment of both interest and principal on the class A and class B notes. |
S-21
• | Unless the balances of the class A notes have been reduced to zero, the class B and class C notes will not be entitled to any principal distributions until the distribution date, or during any period thereafter in which cumulative realized losses on the trust student loans exceed specified levels. As a result, the weighted average lives of the class B and class C notes will be longer than would be the case if distributions of principal were allocated among all of the notes at the same time. As a result of the longer weighted average lives of the class B and class C notes, holders of those notes have a greater risk of suffering a loss on their investments. | ||
The yields to maturity on the class A-2, class A-3, class A-4, class B and class C notes may be more sensitive than the yield to maturity of 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 the losses are not covered by any applicable credit enhancement. The timing of receipt of principal and interest on the class A-2, class A-3, class A-4, class B and class C notes may be adversely affected by the losses even if those notes do not ultimately bear such losses. | |||
The Trust Will Not Have the Benefit of Any Guarantees or Insurance on the Trust Student Loans | Although the trust student loans are insured by HICA, the trust does not have the benefit of this insurance or any other insurance or external credit enhancement. The only credit enhancement for the notes is overcollateralization, the reserve account and, in the case of the class A notes, the subordination of the class B and class C notes and, in the case of the class B notes, the subordination of the class C notes. The amount of credit enhancement is limited and |
S-22
can be depleted over time. In this event, you may suffer a loss. | |||
Your Notes Will Have Basis Risk and the Swap Agreements Do Not Eliminate All of This Basis Risk | The trust will enter into swap agreements with one or more eligible swap counterparties. Each swap is intended to mitigate some of 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 indexes or are fixed and the notes adjust on the basis of a different index. The notional amount of each swap will equal the aggregate principal balance of the prime rate-based trust student loans which are associated with the particular swap (i.e., prime rate, reset quarterly or prime rate, reset monthly). However, their combined notional balances will not exceed the aggregate principal balance of the notes. The notional amount does not include the principal balances of the fixed rate or T-bill 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 agreements. | ||
Each swap agreement is scheduled to terminate, by its terms, on the distribution date. In addition, an early termination of a swap agreement may occur in the event that either: | |||
• | the trust or the related swap counterparty fails to make a required payment within three business days of the date that payment was due; or | ||
• | the related swap counterparty fails, within [30] calendar days of the date on which the credit ratings of the swap |
S-23
counterparty fall below the required ratings, to: | |||
• | obtain a replacement swap agreement with terms substantially the same as the swap agreement; | ||
• | obtain a rating reaffirmation on the notes; or | ||
• | establish a collateral arrangement or any other arrangement satisfactory to the trust and the applicable rating agencies. | ||
Upon the early termination of either swap agreement, you cannot be certain that the trust will be able to enter into a substitute swap agreement. The trust will not enter into any substitute swap agreement after the swap agreements terminate on the 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. In addition, if a payment is due to the trust under either swap agreement, a default by the related swap counterparty may reduce the amount of available funds for any collection period and thus impede the trust’s ability to pay principal and interest on the notes. | |||
Failure to Pay Interest on the Subordinated Classes of Notes is Not an Event of Default | The indenture provides that failure to pay interest when due on any outstanding subordinated class or classes of notes will not be an event of default under the indenture. For example, for so long as any of the class A notes are outstanding, the failure to pay interest on the class B or class C notes will not be an event of default under the indenture. Under these circumstances, the holders of the applicable outstanding subordinated notes will not have any right to declare an event of default, to cause the maturity of the notes to be accelerated or to |
S-24
direct any remedial action under the indenture. | |||
The Occurrence of an Event of Default Under the Indenture May Delay Payments on the Class B Notes and the Class C Notes | The trust will not make any distributions of principal or interest on a subordinate class of notes until payment in full of principal and interest is received on the controlling class of notes, which is the most senior class of notes outstanding, following: | ||
• | an event of default under the indenture relating to the payment of principal on any class of notes at their maturity date or 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. | ||
This may result in a delay or default in making payments on the class B or class C notes. | |||
Subordinated 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 controlling class of notes 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 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. | ||
Risk of Bankruptcy Discharge of Private Credit Student Loans | Private credit student loans are generally not dischargeable by a borrower in bankruptcy if they have been made under any program funded in whole or in part by a governmental |
S-25
unit or non-profit institution. While we believe the trust student loans are non-dischargeable in bankruptcy, there can be no assurance that a bankruptcy court will not take a contrary position. If you own any notes, you will bear any risk of loss resulting from the discharge of any borrower of a private credit student loan to the extent the amount of the default is not covered by the trust’s credit enhancement. | ||
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 confirmation from each of the rating agencies that the outstanding ratings assigned by such rating agencies to the notes will not be impaired by those actions. To the extent those actions are taken after issuance of the notes, investors in the notes will be depending on the evaluation by the rating agencies of those actions and their impact on credit quality. |
S-26
• | acquiring, holding and managing the trust student loans and the other assets of the trust and related proceeds; | |
• | issuing the certificates and the notes; | |
• | making payments on them; | |
• | [entering into the swap agreements and making the payments required under those agreements;] | |
• | [entering into the interest rate caps and making the upfront payments required under those agreements; and] | |
• | engaging in other activities that are necessary, suitable or convenient to accomplish, or are incidental to, the foregoing. |
S-27
Floating Rate Class A-1 Student Loan-Backed Notes | $ | |||
Floating Rate Class A-2 Student Loan-Backed Notes | ||||
Floating Rate Class A-3 Student Loan-Backed Notes | ||||
Floating Rate Class A-4 Student Loan-Backed Notes | ||||
Floating Rate Class B Student Loan-Backed Notes | ||||
Floating Rate Class C Student Loan-Backed Notes | ||||
Overcollateralization | ||||
Equity | ||||
Total | $ | |||
S-28
S-29
S-30
• | contains terms in accordance with those required by the loan program under which it was originated (the Signature Student Loan Program, the LAWLOANS Program, the MBA Loans Program or the MEDLOANS Program, as applicable), the loan purchase agreements, the HICA surety bonds and other applicable requirements; | |
• | is not 30 days or more past due; and | |
• | does not have a borrower who is noted in the related records of the servicer as being currently involved in a bankruptcy proceeding. |
S-31
Aggregate Outstanding Principal Balance—Treasury Bill | $ | ||||
Aggregate Outstanding Principal Balance—Prime | $ | ||||
Aggregate Outstanding Principal Balance—Fixed | $ | ||||
Number of Borrowers | |||||
Average Outstanding Principal Balance Per Borrower | $ | ||||
Number of Loans | |||||
Weighted Average Remaining Term to Maturity | months | ||||
Weighted Average Annual Interest Rate | % | ||||
Weighted Average Margin—Treasury Bill | % | ||||
Weighted Average Margin—Prime | % | ||||
Weighted Average Annual Interest Rate—Fixed | % |
S-32
Aggregate | Percent of Pool | ||||||||||||
Number of | Outstanding | by Outstanding | |||||||||||
Loan Program | Loans | Principal Balance | Principal Balance | ||||||||||
Signature Student Loans1 | $ | % | |||||||||||
LAWLOANS | |||||||||||||
MBA Loans | |||||||||||||
MEDLOANS | |||||||||||||
Total | $ | 100.0 | % | ||||||||||
1 | Includes approximately $ of Signature Student Loans for students attending 2-year institutions. |
Aggregate | Percent of Pool | ||||||||||||
Number of | Outstanding | by Outstanding | |||||||||||
Interest Rates | Loans | Principal Balance | Principal Balance | ||||||||||
Less than % | $ | % | |||||||||||
% to % | |||||||||||||
% to % | |||||||||||||
Greater than % | �� | ||||||||||||
Total | $ | 100.0 | % | ||||||||||
S-33
Aggregate | Percent of Pool | ||||||||||||
Number of | Outstanding | by Outstanding | |||||||||||
Range of Outstanding Principal Balance | Borrowers | Principal Balance | Principal Balance | ||||||||||
Less than $5,000 | $ | % | |||||||||||
$5,000 to $9,999 | |||||||||||||
$10,000 to $14,999 | |||||||||||||
$15,000 to $19,999 | |||||||||||||
$20,000 to $24,999 | |||||||||||||
$25,000 to $29,999 | |||||||||||||
$30,000 to $34,999 | |||||||||||||
$35,000 to $39,999 | |||||||||||||
$40,000 to $44,999 | |||||||||||||
$45,000 to $49,999 | |||||||||||||
$50,000 to $54,999 | |||||||||||||
$55,000 to $59,999 | |||||||||||||
$60,000 to $64,999 | |||||||||||||
$65,000 to $69,999 | |||||||||||||
$70,000 to $74,999 | |||||||||||||
$75,000 to $79,999 | |||||||||||||
$80,000 to $84,999 | |||||||||||||
$85,000 to $89,999 | |||||||||||||
$90,000 to $94,999 | |||||||||||||
$95,000 to $99,999 | |||||||||||||
$100,000 and greater | |||||||||||||
Total | $ | 100.0 | % | ||||||||||
S-34
Aggregate | Percent of Pool | ||||||||||||
Number of | Outstanding | by Outstanding | |||||||||||
Number of Months Remaining to Scheduled Maturity | Loans | Principal Balance | Principal Balance | ||||||||||
1 to 84 | $ | % | |||||||||||
85 to 144 | |||||||||||||
145 to 192 | |||||||||||||
193 to 228 | |||||||||||||
229 to 276 | |||||||||||||
277 to 348 | |||||||||||||
349 and greater | |||||||||||||
Total | $ | 100.0 | % | ||||||||||
Aggregate | Percent of Pool | |||||||||||||
Number | Outstanding | by Outstanding | ||||||||||||
Current Borrower Payment Status | of Loans | Principal Balance | Principal Balance | |||||||||||
In-School | $ | % | ||||||||||||
Grace | ||||||||||||||
Deferral | ||||||||||||||
Forbearance | ||||||||||||||
Repayment | ||||||||||||||
First year in repayment | ||||||||||||||
Second year in repayment | ||||||||||||||
Third year in repayment | ||||||||||||||
More than 3 years in repayment | ||||||||||||||
Total | $ | 100.0 | % | |||||||||||
• | may still be attending school—in-school; | |
• | may be in a grace period after completing school and prior to repayment commencing—grace; |
S-35
• | may be currently required to repay the loan—repayment;or | |
• | may have temporarily ceased repaying the loan through adeferralor aforbearanceperiod. |
Scheduled Remaining | ||||||||||||||||||||
Months in Status | ||||||||||||||||||||
Current Borrower Payment Status | In-School | Grace | Deferral | Forbearance | Repayment | |||||||||||||||
In-School | — | — | ||||||||||||||||||
Grace | — | — | — | |||||||||||||||||
Deferral | — | — | — | |||||||||||||||||
Forbearance | — | — | — | |||||||||||||||||
Repayment | — | — | — | — |
S-36
Aggregate | Percent of Pool | ||||||||||||
Number | Outstanding | by Outstanding | |||||||||||
State | of Loans | Principal Balance | 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 | $ | 100.0 | % | ||||||||||
S-37
S-38
Aggregate | Percent of Pool | ||||||||||||
Number of | Outstanding | by Outstanding | |||||||||||
Loan Repayment Terms | Loans | Principal Balance | Principal Balance | ||||||||||
Level Repayment | $ | % | |||||||||||
Other Repayment Options | |||||||||||||
Total | $ | 100.0 | % | ||||||||||
S-39
Aggregate | Percent of Pool | ||||||||||||
Number of | Outstanding | by Outstanding | |||||||||||
Disbursement Date | Loans | Principal Balance | Principal Balance | ||||||||||
1986 | $ | % | |||||||||||
1987 | |||||||||||||
1988 | |||||||||||||
1989 | |||||||||||||
1990 | |||||||||||||
1991 | |||||||||||||
1992 | |||||||||||||
1993 | |||||||||||||
1994 | |||||||||||||
1995 | |||||||||||||
1996 | |||||||||||||
1997 | |||||||||||||
1998 | |||||||||||||
1999 | |||||||||||||
2000 | |||||||||||||
2001 | |||||||||||||
2002 | |||||||||||||
2003 | |||||||||||||
2004 | |||||||||||||
Total | $ | 100.0 | % | ||||||||||
Aggregate | Percent of Pool | ||||||||||||
Number of | Outstanding | by Outstanding | |||||||||||
Days Late | Loans | Principal Balance | Principal Balance | ||||||||||
0 - 29 days | $ | % | |||||||||||
Total | $ | 100.0 | % | ||||||||||
S-40
Aggregate | Percent of Pool | ||||||||
Outstanding | by Outstanding | ||||||||
FICO Score | Principal Balance | Principal Balance | |||||||
Less than 630 | $ | % | |||||||
630 - 639 | |||||||||
640 - 649 | |||||||||
650 - 659 | |||||||||
660 - 669 | |||||||||
670 - 679 | |||||||||
680 - 689 | |||||||||
690 - 699 | |||||||||
700 - 709 | |||||||||
710 - 719 | |||||||||
720 - 729 | |||||||||
730 - 739 | |||||||||
740 - 749 | |||||||||
750 - 759 | |||||||||
760 - 769 | |||||||||
770 - 779 | |||||||||
780 - 789 | |||||||||
790 - 799 | |||||||||
800 - 809 | |||||||||
810 - 819 | |||||||||
820 - 829 | |||||||||
830 - 839 | |||||||||
840 - 849 | |||||||||
850 and greater | |||||||||
Other2 | |||||||||
Total | $ | 100.0 | % | ||||||
S-41
Aggregate | Percent by | ||||||||
Outstanding | Outstanding | ||||||||
FICO Score | Principal Balance | Principal Balance | |||||||
Less than 630 | $ | % | |||||||
630–639 | |||||||||
640–649 | |||||||||
650–659 | |||||||||
660–669 | |||||||||
670–679 | |||||||||
680–689 | |||||||||
690–699 | |||||||||
700–709 | |||||||||
710–719 | |||||||||
720–729 | |||||||||
730–739 | |||||||||
740–749 | |||||||||
750–759 | |||||||||
760–769 | |||||||||
770–779 | |||||||||
780–789 | |||||||||
790–799 | |||||||||
800–809 | |||||||||
810–819 | |||||||||
820–829 | |||||||||
830–839 | |||||||||
840–849 | |||||||||
850 and greater | |||||||||
Other | |||||||||
Total | $ | 100.0 | % | ||||||
S-42
Aggregate | Percent by | ||||||||
Outstanding | Outstanding | ||||||||
FICO Score | Principal Balance | Principal Balance | |||||||
Less than 630 | $ | % | |||||||
630–639 | |||||||||
640–649 | |||||||||
650–659 | |||||||||
660–669 | |||||||||
670–679 | |||||||||
680–689 | |||||||||
690–699 | |||||||||
700–709 | |||||||||
710–719 | |||||||||
720–729 | |||||||||
730–739 | |||||||||
740–749 | |||||||||
750–759 | |||||||||
760–769 | |||||||||
770–779 | |||||||||
780–789 | |||||||||
790–799 | |||||||||
800–809 | |||||||||
810–819 | |||||||||
820–829 | |||||||||
830–839 | |||||||||
840–849 | |||||||||
850 and greater | |||||||||
Other | |||||||||
Total | $ | 100.0 | % | ||||||
S-43
[ ] | ||||||||||||||||||||||||
months | ||||||||||||||||||||||||
ended | Years ended December 31, | |||||||||||||||||||||||
[ ] | 2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||||
Gross charge-offs, managed1 | $ | $ | 116,037 | $ | 83,001 | $ | 75,639 | $ | 39,280 | $ | 11,011 | |||||||||||||
Recoveries, managed2 | (14,007 | ) | (11,096 | ) | (9,039 | ) | (3,306 | ) | (897 | ) | ||||||||||||||
Total charge-offs, net of recoveries3 | $ | 102,030 | $ | 71,905 | $ | 66,600 | $ | 35,974 | $ | 10,114 | ||||||||||||||
Average managed private education loans (in millions) | $ | $ | 10,290 | $ | 7,303 | $ | 5,198 | $ | 3,766 | $ | 2,690 | |||||||||||||
Net charge-offs as a percentage of average managed private education loans | % | 0.99 | % | 0.98 | % | 1.28 | % | 0.96 | % | 0.38 | % | |||||||||||||
Ending managed private education loans in repayment (in millions)4 | $ | $ | 6,194 | $ | 4,421 | $ | 3,356 | $ | 2,555 | $ | 2,035 | |||||||||||||
Net charge-offs as a percentage of ending managed private education loans in repayment4 | % | 1.65 | % | 1.63 | % | 1.98 | % | 1.41 | % | 0.50 | % |
1 | Represents the unpaid principal balance and accrued interest of loans at least 180 days past due recorded in the period when SLM Corporation’s management has deemed, in accordance with its practices and procedures in effect for such period, any further collections to be unlikely. |
2 | Represents the amount of cash collected during the period on previously charged-off loans without giving effect to any collection costs. Also represents the outstanding principal balance of previously charged-off loans that were rehabilitated (generally, loans brought current during the period in which the sixth consecutive on-time payment was received). |
3 | An amount equal to gross charge-offs less recoveries during the reporting period. |
4 | Excludes loans for borrowers who still may be attending school or engaging in other permitted educational activities and are not yet required to make payments on the loans, e.g., residency periods for medical students or a grace period for bar exam preparation. Excludes loans for borrowers who have requested an extension of a grace period during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with the established loan program servicing procedures and policies. |
S-44
[ ] | |||||||||||||||||||||||||||||||||||||||||||||||||
months | |||||||||||||||||||||||||||||||||||||||||||||||||
ended | Years ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||
[ ] | 2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||||||||||||||||||||||||||||
Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | ||||||||||||||||||||||||||||||||||||||
Loans in-school/grace/deferment1 | $ | $ | 5,409 | $ | 3,828 | $ | 2,393 | $ | 1,472 | $ | 892 | ||||||||||||||||||||||||||||||||||||||
Loans in forbearance2 | 500 | 491 | 365 | 322 | 214 | ||||||||||||||||||||||||||||||||||||||||||||
Loans in repayment and percentage of each status: | |||||||||||||||||||||||||||||||||||||||||||||||||
Loans current | % | 5,746 | 93 | % | 4,064 | 92 | % | 3,126 | 93 | % | 2,312 | 90 | % | 1,715 | 84 | % | |||||||||||||||||||||||||||||||||
Loans delinquent 31-60 days3 | 208 | 3 | 154 | 3 | 109 | 3 | 104 | 4 | 207 | 10 | |||||||||||||||||||||||||||||||||||||||
Loans delinquent 61-90 days | 84 | 1 | 77 | 2 | 46 | 2 | 46 | 2 | 37 | 2 | |||||||||||||||||||||||||||||||||||||||
Loans delinquent greater than 90 days | 156 | 3 | 126 | 3 | 75 | 2 | 93 | 4 | 76 | 4 | |||||||||||||||||||||||||||||||||||||||
Total Private Education Loans in repayment | % | 6,194 | 100 | % | 4,421 | 100 | % | 3,356 | 100 | % | 2,555 | 100 | % | 2,035 | 100 | % | |||||||||||||||||||||||||||||||||
Total Private Education Loans, gross | 12,103 | 8,740 | 6,114 | 4,349 | 3,141 | ||||||||||||||||||||||||||||||||||||||||||||
Private Education Loan unamortized (discount)/premium | (306 | ) | (176 | ) | (98 | ) | 68 | 53 | |||||||||||||||||||||||||||||||||||||||||
Total Private Education Loans | 8,564 | 6,016 | 4,417 | 3,194 | |||||||||||||||||||||||||||||||||||||||||||||
Private Education Loan allowance for losses | (315 | ) | (259 | ) | (194 | ) | (194 | ) | (172 | ) | |||||||||||||||||||||||||||||||||||||||
Private Education Loans, net | $ | $ | 11,482 | $ | 8,305 | $ | 5,822 | $ | 4,223 | $ | 3,022 | ||||||||||||||||||||||||||||||||||||||
1 | Loans for borrowers who still may be attending school or engaging in other permitted educational activities and are not yet required to make payments on the loans, e.g., residency periods for medical students or a grace period for bar exam preparation. |
2 | Loans for borrowers who have requested extension of grace period during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with the established loan program servicing policies and procedures. |
3 | The period of delinquency is based on the number of days scheduled payments are contractually past due. |
S-45
S-46
S-47
Class of Notes | Spread | |||
Class A-1 | % | |||
Class A-2 | % | |||
Class A-3 | % | |||
Class A-4 | % | |||
Class B | % | |||
Class C | % |
S-48
• | “LIBOR Determination Date” means, for each accrual period, the second business day before the beginning of that accrual period. | |
• | “Telerate Page 3750” means the display page so designated on the Moneyline Telerate Service or any other page that may replace that page on that service for the purpose of displaying comparable rates or prices. | |
• | “Reference Banks” means four major banks in the London interbank market selected by the administrator. |
S-49
S-50
(a) to the class A noteholders, the Class A Noteholders’ Interest Distribution Amount; and | |
(b) pari passu, to the swap counterparties, the amount of any swap termination payments due to the swap counterparties under the swap agreements due to a swap termination event resulting from a payment default by the trust or the insolvency of the trust; provided, that if any amounts allocable to the class A notes are not needed to pay the Class A Noteholders’ Interest Distribution Amount as of such distribution date, such amounts will be applied to pay the portion, if any, of any swap termination payments referred to above remaining unpaid; |
S-51
First, an amount up to theClass A Noteholders’ Principal Distribution Amountwill be distributed sequentially, first to the class A-1 notes, second to the class A-2 notes, third to the class A-3 notes and fourth to the class A-4 notes, until the respective balances thereof have been reduced to zero;provided,however, that on any distribution date on which the Class A Note Parity Trigger is in effect, the Principal Distribution Amount will be distributed pro rata to the class A-1 notes, class A-2 notes, class A-3 |
S-52
notes and class A-4 notes, based on their outstanding balances, until the balances thereof have been reduced to zero; | |
Second, amounts remaining in the principal distribution account up to theClass B Noteholders’ Principal Distribution Amountwill be distributed to the class B notes, until the balance thereof has been reduced to zero; | |
Third, amounts remaining in the principal distribution account up to theClass C Noteholders’ Principal Distribution Amountwill be distributed to the class C notes, until the balance thereof has been reduced to zero; and | |
Fourth,amounts remaining in the principal distribution account after making all of the distributions in clausesFirst, SecondandThird, above will be paid to the class C notes until the balance of the class C notes has been reduced to zero. Once the balance of the class C notes has been reduced to zero, holders of the class B notes will be entitled to receive all remaining amounts until the balance of the class B notes has been reduced to zero. Similarly, once the balance of the class B notes has been reduced to zero, the holders of the class A notes will be entitled to receive all remaining amounts, on a pro rata basis, until the balance of the class A notes has been reduced to zero. |
• | 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; |
S-53
(1) to the class A noteholders, pro rata, an amount sufficient to reduce their respective principal balances to zero; | |
(2) to the class B noteholders, all accrued and unpaid interest; | |
(3) to the class B noteholders, an amount sufficient to reduce their principal balances to zero; | |
(4) to the class C noteholders, all accrued and unpaid interest; | |
(5) to the class C noteholders, an amount sufficient to reduce their principal balances to zero; and | |
(6) any remaining amounts, to the same persons and in the same order of priority as items (12), (13) and (15) under“—Distributions— Distributions from the Collection Account”above. |
S-54
• | the sum of (1) the Pool Balance as of the last day of the second preceding collection period and (2) the amount on deposit in the cash capitalization account immediately following the preceding distribution date, minus the aggregate outstanding balance of the notes immediately following the preceding distribution date, is greater than or equal to $ , which is the amount of overcollateralization that existed on the closing date; and | |
• | at least % of the trust student loans by principal balance are in repayment and are not more than 30 days past due as of the end of the collection period for the current distribution date. |
• | the sum of (1) the Pool Balance as of the last day of the second preceding collection period and (2) the amount on deposit in the cash capitalization account immediately following the preceding distribution date, minus the aggregate outstanding balance of the notes immediately following the preceding distribution date, is greater than or equal to $ , which is twice the amount of overcollateralization that existed on the closing date; and | |
• | at least % of the trust student loans by principal balance are in repayment and are not more than 30 days past due as of the end of the collection period for the current distribution date. |
• | the sum of (1) the Pool Balance as of the last day of the second preceding collection period and (2) the amount on deposit in the cash capitalization account immediately following the preceding distribution date, minus the aggregate outstanding balance of the notes immediately following the preceding distribution date, is greater than or equal to |
S-55
$ , which is twice the amount of overcollateralization that existed on the closing date; and | ||
• | at least % of the trust student loans by principal balance are in repayment and are not more than 30 days past due as of the end of the collection period for the current distribution date. |
• | the sum of (1) the Pool Balance as of the last day of the second preceding collection period and (2) the amount on deposit in the cash capitalization account immediately following the preceding distribution date, minus the aggregate outstanding balance of the notes immediately following the preceding distribution date, is greater than or equal to $ , which is twice the amount of overcollateralization that existed on the closing date; and | |
• | at least % of the trust student loans by principal balance are in repayment and are not more than 30 days past due as of the end of the collection period for the current distribution date. |
S-56
S-57
S-58
• | three-month LIBOR, except for the first accrual period, as determined for the accrual period related to the applicable distribution date, over | |
• | 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 closing date), of the trust student loans bearing interest based upon the prime rate, reset quarterly; 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 prime rate published inThe Wall Street Journalin the “Interest Rates & Bonds��� section, “Consumer Rates” table as of the 15th of the immediately preceding March, June, September or December (or ifThe Wall Street Journalis not published on that date the first preceding day for which that rate is published inThe Wall Street Journal) minus %; |
S-59
• | 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 closing date), of the trust student loans bearing interest based upon the prime rate, reset quarterly; 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. |
• | three-month LIBOR, except for the first accrual period, as determined for the accrual period related to the applicable distribution date, over | |
• | 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 closing 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 inThe Wall Street Journalin 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 ifThe Wall Street Journalis not published on any such date the first preceding day for which that rate is published inThe 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 closing date), of the trust |
S-60
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 any amount when due under that swap agreement after giving effect to the applicable grace period; provided, that with respect to the trust, the trust has available, after all prior obligations of the trust, sufficient funds to make the payment; | |
• | the occurrence of a bankruptcy of the trust; | |
• | an event of insolvency or bankruptcy of the swap counterparty; | |
• | 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 |
S-61
• | the following other standard events of default under the 1992 ISDA Master Agreement: “Breach of Agreement” (not applicable to the trust), “Credit Support Default” (not applicable to the trust), “Default Under Specified Transaction” (not applicable to the trust), “Cross-Default” (not applicable to the trust, except as set forth in the two immediately preceding bullets) and “Merger Without Assumption” (not applicable to the trust), as described in Sections 5(a)(ii), 5(a)(iii), 5(a)(v), 5(a)(vi) and 5(a)(viii), respectively, of the 1992 ISDA Master Agreement. |
S-62
Effective Date | Termination Date | |||||||
First interest rate cap | ||||||||
Second interest rate cap | ||||||||
Third interest rate cap |
S-63
• | the excess, if any, of three-month LIBOR, except for the first accrual period, as determined for the accrual period related to the applicable distribution date, over the applicable cap rate, and | |
• | a notional amount equal to $ . |
Cap Rate | Period | |||||
First interest rate cap | % | From and including the distribution date through and including the distribution date. | ||||
Second interest rate cap | % | From and including the distribution date through and including the distribution date. | ||||
Third interest rate cap | % | From and including the distribution date through and including the distribution date. |
• | the failure of the cap counterparty to pay any amount when due under the interest rate cap agreement after giving effect to the applicable grace period, | |
• | the occurrence of a bankruptcy of the trust or an event of insolvency or bankruptcy of the cap counterparty, | |
• | an acceleration of the principal of the notes following an event of default under the indenture, and | |
• | the following other standard events of default under the 1992 ISDA Master Agreement: “Credit Support Default” (not applicable to the trust), “Cross- |
S-64
Default” (not applicable to the trust) and “Merger Without Assumption” (not applicable to the trust), as described in Sections 5(a)(iii) and 5(a)(viii) of the 1992 ISDA Master Agreement. |
S-65
S-66
• | 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 objectives; and | |
• | whether under the general fiduciary standards of investment procedure and diversification an investment in the notes is appropriate for the Plan, taking into account the overall investment policy of the Plan and the composition of the Plan’s investment portfolio. |
S-67
Class A-1 | Class A-2 | Class A-3 | ||||||||||
Underwriter | Notes | Notes | Notes | |||||||||
$ | $ | $ | ||||||||||
$ | $ | $ | ||||||||||
$ | $ | $ | ||||||||||
Total | $ | $ | $ | |||||||||
Class A-4 | Class B | Class C | ||||||||||
Underwriter | Notes | Notes | Notes | |||||||||
$ | $ | $ | ||||||||||
$ | $ | $ | ||||||||||
$ | $ | $ | ||||||||||
Total | $ | $ | $ | |||||||||
Initial Public | Underwriting | Proceeds to | ||||||||||||||||||
Offering Price | Discount | the Depositor | Concession | Reallowance | ||||||||||||||||
Per Class A-1 Note | % | % | % | % | % | |||||||||||||||
Per Class A-2 Note | % | % | % | % | % | |||||||||||||||
Per Class A-3 Note | % | % | % | % | % | |||||||||||||||
Per Class A-4 Note | % | % | % | % | % | |||||||||||||||
Per Class B Note | % | % | % | % | % | |||||||||||||||
Per Class C Note | % | % | % | % | % | |||||||||||||||
Total | $ | $ | $ |
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S-69
S-70
S-71
S-72
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CI = the amount on deposit in the cash capitalization account on the last day of the related collection period less the excess for that distribution date of (i) interest due on the notes plus any primary servicing and administrative fees, any swap payments owed to a swap counterparty by the trust and any swap termination payments owed by the trust that arepari passuwith interest payments on the class A notes due,over(ii) Available Funds on deposit in the collection account. In no case shall CI be less than zero; | |
PB = the Pool Balance at the last day of the related collection period; and | |
R = the amount to be released from the cash capitalization account on such distribution date pursuant to the third and fourth paragraphs under“Description of the Notes—Cash Capitalization Account”in this prospectus supplement; |
• | all collections received by the servicer from borrowers on the trust student loans; | |
• | allRecoveriesreceived during that collection period; |
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• | the aggregate purchase amounts received during that collection period for those trust student loans repurchased by the depositor or purchased by the servicer, VG Funding or SLM Education Credit Finance Corporation [or ]; | |
• | 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 and any interest remitted by the administrator to the collection account prior to such distribution date or monthly servicing payment date; | |
• | [payments received under the interest rate cap agreements; and] | |
• | [amounts received from the swap counterparty or counterparties for that distribution date.] |
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(a) | the amount of interest that was payable to the class A notes on the preceding distribution date,over | |
(b) | the amount of interest actually distributed to the class A notes on that preceding distribution date, |
(a) | the amount of interest accrued at the class A note interest rates for the related accrual period with respect to all classes of class A notes on the aggregate outstanding principal balances of these classes of class A notes (1) on the immediately preceding distribution date after giving effect to all principal distributions to class A noteholders on that preceding distribution date or (2) in the case of the first distribution date, on the closing date, and | |
(b) | theClass A Note Interest Shortfallfor that distribution date. |
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(a) | the Class B Noteholders’ Interest Distribution Amount on the preceding distribution date,over | |
(b) | the amount of interest actually distributed to the class B noteholders on that preceding distribution date, plus interest on the amount of that excess, to the extent permitted by law, at the class B note interest rate from that preceding distribution date to the current distribution date. |
(a) | 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 |
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(i) on the immediately preceding distribution date, after giving effect to all principal distributions to class B noteholders on that preceding distribution date or (ii) in the case of the first distribution date, the closing date, and | ||
(b) | the Class B Note Interest Shortfall for that distribution date. |
(a) | the Class C Interest Distribution Amount on the preceding distribution date,over | |
(b) | the amount of interest actually distributed to the class C noteholders on that preceding distribution date, plus interest on the amount of that excess, to the extent permitted by law, at the class C note interest rate from that preceding distribution date to the current distribution date. |
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(a) | the amount of interest accrued at the class C note interest rate for the related accrual period on (i) the outstanding balance of the class C notes on the immediately preceding distribution date, after giving effect to all principal distributions to class C noteholders on that preceding distribution date or (ii) in the case of the first distribution date, the closing date, and | |
(b) | the Class C Note Interest Shortfall for that distribution date. |
Percentage of | ||||
Distribution Date | Initial Pool Balance | |||
through | % | |||
through | % | |||
and thereafter | % |
S-79
AN – AB |
AN = the aggregate outstanding balance of the class A notes on (i) the immediately preceding distribution date (after giving effect to any principal payments made on the class A notes on such preceding distribution date) or (ii) in the case of the first distribution date, the closing date; | |
AB = the Asset Balance for such distribution date; |
• | if a Class A Note Parity Trigger is in effect, then the First Priority Principal Distribution Amount shall equal the Class A Noteholders’ Principal Distribution Amount. |
• | on or after the class A-1 maturity date, the First Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding balance of the class A-1 notes to zero; | |
• | on or after the class A-2 maturity date, the First Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding balance of the class A-2 notes to zero; | |
• | on or after the class A-3 maturity date, the First Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding balance of the class A-3 notes to zero; and | |
• | on or after the class A-4 maturity date, the First Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding balance of the class A-4 notes to zero. |
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• | 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 SLM Education Credit Finance Corporation, VG Funding 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. |
(N – (AB – SOA)) – (FPDA + SPDA + TPDA) |
N = the sum of the aggregate outstanding balance of all of the notes on (i) the immediately preceding distribution date (after giving effect to any principal payments made on the notes on such preceding distribution date) or (ii) in the case of the first distribution date, the closing date, as the case may be; | |
AB = the Asset Balance for such distribution date; | |
SOA = the Specified Overcollateralization Amount for such distribution date; | |
FPDA = the First Priority Principal Distribution Amount, if any, for such distribution date; |
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SPDA = the Second Priority Principal Distribution Amount, if any, for such distribution date; and | |
TPDA = the Third Priority Principal Distribution Amount, if any, for such distribution date; |
• | the Regular Principal Distribution Amount shall not exceed the sum of the aggregate outstanding balance of all of the notes on such distribution date (after taking into account the allocation of the First Priority Principal Distribution Amount, the Second Priority Principal Distribution Amount and the Third Principal Distribution Amount, if any, on such distribution date. |
(ABN – AB) – FPDA |
ABN = the aggregate outstanding balance of the class A and class B notes on (i) the immediately preceding distribution date (after giving effect to any principal payments made on the class A and class B notes on such preceding distribution date) or (ii) in the case of the first distribution date, the closing date; | |
AB = the Asset Balance for such distribution date; and | |
FPDA = the First Priority Principal Distribution Amount, if any, with respect to such distribution date; |
• | if a Class B Note Parity Trigger is in effect, then the Second Priority Principal Distribution Amount shall equal (a) the sum of (i) the Class A Noteholders’ Principal Distribution Amount and (ii) the Class B Noteholders’ Principal Distribution Amount less (b) the First Priority Principal Distribution Amount; | |
• | on or after the maturity date for the class B notes, the Second Priority Principal Distribution Amount shall not be less than the amount that is necessary to reduce the outstanding balance of the class B notes to zero; and | |
• | the Second Priority Principal Distribution Amount shall not exceed the aggregate outstanding balance of the class A and class B notes as of such distribution date (after taking into account the allocation of the First Priority Principal Distribution Amount, if any, on such distribution date). |
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(N – AB) – (FPDA + SPDA) |
N = the aggregate outstanding balance of all of the notes on (i) the immediately preceding distribution date (after giving effect to any principal payments made on the notes on such preceding distribution date) or (ii) in the case of the first distribution date, the closing date; | |
AB = the Asset Balance for such distribution date; | |
FPDA = the First Priority Principal Distribution Amount, if any, for such distribution date; and | |
SPDA = the Second Priority Principal Distribution Amount, if any, for such distribution date; |
• | if a Class C Note Parity Trigger is in effect, then the Third Priority Principal Distribution Amount shall equal (a) the sum of (i) the Class A Noteholders’ Principal Distribution Amount, (ii) the Class B Noteholders’ Principal Distribution Amount and (iii) the Class C Noteholders’ Principal Distribution Amount less (b) the First Priority Principal Distribution Amount plus the Second Priority Principal Distribution Amount; | |
• | on or after the maturity date for the class C notes, the Third Priority Principal Distribution Amount shall not be less than the amount that is |
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necessary to reduce the outstanding balance of the class C notes to zero; and | ||
• | the Third Priority Principal Distribution Amount shall not exceed the aggregate outstanding balance of all of the notes on such distribution date (after taking into account the allocation of the First Priority Principal Distribution Amount and the Second Priority Principal Distribution Amount, if any, on such distribution date). |
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The information in this document is subject to completion and amendment. This document does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be a sale of the notes in any jurisdiction in which such offer, solicitation or sale would be unlawful. The definitive terms of the transactions described herein will be described in the final version of this document. |
You should consider carefully the risk factors described in this prospectus beginning on page 19 and in the prospectus supplement that accompanies this prospectus. | ||
Each issue of securities represents obligations of, or interests in, the applicable trust only. They do not represent interests in or obligations of SLM Corporation, SLM Education Credit Finance Corporation, any other seller of loans to the depositor, the depositor, the servicer, the administrator or any of their affiliates. | ||
The securities are not guaranteed or insured by the United States of America or any governmental agency. | ||
This prospectus may be used to offer and sell any series of securities only if accompanied by the prospectus supplement for that series. |
SLM Education Credit Funding LLC is a wholly-owned subsidiary of SLM Education Credit Finance Corporation. |
The depositor intends to form trusts to issue student loan-backed securities. These securities may be in the form of notes or certificates. Each issue will have its own series designation. We will sell the securities from time to time in amounts, at prices and on terms determined at the time of offering and sale. | |
Each series may include: |
• | one or more classes of certificates that represent ownership interests in the assets of the trust for that issue; and | ||
• | one or more classes of notes secured by the assets of that trust. |
A class of certificates or notes may: |
• | be senior or subordinate to other classes; and | ||
• | receive payments from one or more forms of credit or cash flow enhancements designed to reduce the risk to investors caused by shortfalls in payments on the related student loans. |
Each class of certificates or notes has 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. |
The assets of each trust will include: |
• | education loans to students or parents of students; and | ||
• | other moneys, investments and property. |
A supplement to this prospectus will describe the specific amounts, prices and terms of the notes and certificates of each series. The supplement will also give details of the specific student loans, credit enhancement, and other assets of the trust. |
• | this prospectus, which provides general information, some of which may not apply to your series of securities; and | |
• | the related prospectus supplement that describes the specific terms of your series of securities, 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; | |
• | the ratings; and | |
• | the method of selling the securities. |
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Page | ||||||
Prospectus Summary | 7 | |||||
• | Principal Parties | 7 | ||||
• | The Notes | 8 | ||||
• | The Certificates | 9 | ||||
• | Assets of the Trust | 10 | ||||
• | Collection Account | 12 | ||||
• | Pre-Funding Account | 12 | ||||
• | Reserve Account | 12 | ||||
• | Credit and Cash Flow or other Enhancement or Derivative Arrangements | 13 | ||||
• | Purchase Agreements | 13 | ||||
• | Sale Agreements | 13 | ||||
• | Servicing Agreements | 14 | ||||
• | Servicing Fee | 14 | ||||
• | Administration Agreement | 14 | ||||
• | Administration Fee | 14 | ||||
• | Representations and Warranties of the Depositor | 15 | ||||
• | Representations and Warranties of SLM Education Credit Finance Corporation and the Other Sellers Under the Purchase Agreements | 16 | ||||
• | Covenants of the Servicer | 16 | ||||
• | Optional Purchase | 17 | ||||
• | Auction of Trust Assets | 17 | ||||
• | Tax Considerations | 17 | ||||
• | ERISA Considerations | 18 | ||||
• | Ratings | 18 | ||||
Risk Factors | 19 | |||||
• | Because The Securities May Not Provide Regular Or Predictable Payments, You May Not Receive The Return On Investment That You Expected | 19 | ||||
• | The Securities Are Not Suitable Investments For All Investors | 19 | ||||
• | If A Secondary Market For Your Securities Does Not Develop, The Value Of Your Securities May Diminish | 19 | ||||
• | The Trust Will Have Limited Assets From Which To Make Payments On The Securities, Which May Result In Losses | 19 | ||||
• | Private Student Loans May Have Greater Risk Of Default | 20 | ||||
• | Interests Of Other Persons In The Private Student Loans Could Be Superior To A Trust’s Interest, Which May Result In Reduced Payments On Your Securities | 20 | ||||
• | Risk Of Default Of Unguaranteed Student Loans | 21 | ||||
• | Risk Of Default By Private Guarantors | 21 | ||||
• | You May Incur Losses Or Delays In Payments On Your Securities If Borrowers Default On The Student Loans | 21 | ||||
• | If A Guarantor Or Surety Of The Student Loans Experiences Financial Deterioration Or Failure, You May Suffer Delays In Payment Or Losses On Your Securities | 21 | ||||
• | The Department Of Education’s Failure To Make Reinsurance Payments May Negatively Affect The Timely Payment Of Principal And Interest On Your Securities | 22 | ||||
• | You Will Bear Prepayment And Extension Risk Due To Actions Taken By Individual Borrowers And Other Variables Beyond Our Control | 22 | ||||
• | You May Be Unable To Reinvest Principal Payments At The Yield You Earn On The Securities | 23 | ||||
• | A Failure To Comply With Student Loan Origination And Servicing Procedures Could Jeopardize Guarantor, Interest Subsidy And Special Allowance Payments On The Student Loans, Which May Result In Delays In Payment Or Losses On Your Securities | 24 |
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Page | |||||||
• | The Inability Of The Depositor Or The Servicer To Meet Its Repurchase Obligation May Result In Losses On Your Securities | 24 | |||||
• | The Noteholders’ Right To Waive Defaults May Adversely Affect Certificateholders | 24 | |||||
• | Subordination Of The Certificates Or Some Classes Of Notes Results In A Greater Risk Of Losses Or Delays In Payment On Those Securities | 24 | |||||
• | The Securities 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 | 25 | |||||
• | The Principal Of The Student Loans May Amortize Faster Because Of Incentive Programs | 25 | |||||
• | Payment Offsets On FFELP Loans By Guarantors Or The Department Of Education Could Prevent The Trust From Paying You The Full Amount Of The Principal And Interest Due On Your Securities | 25 | |||||
• | 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 Securities | 26 | |||||
• | The Bankruptcy Of The Depositor, SLM Education Credit Finance Corporation Or Any Other Seller Could Delay Or Reduce Payments On Your Securities | 27 | |||||
• | The Indenture Trustee May Have Difficulty Liquidating Student Loans After An Event Of Default | 27 | |||||
• | The Federal Direct Student Loan Program Could Result In Reduced Revenues For The Servicer And The Guarantors | 28 | |||||
• | Changes In Law May Adversely Affect Student Loans, The Guarantors, The Depositor Or SLM Education Credit Finance Corporation And The Other Sellers And, Accordingly, Adversely Affect Your Securities | 28 | |||||
• | The Use Of Master Promissory Notes May Compromise The Indenture Trustee’s Security Interest In The Student Loans | 28 | |||||
• | Withdrawal Or Downgrade Of Initial Ratings May Decrease The Prices Of Your Securities | 29 | |||||
• | A Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service | 29 | |||||
• | Consumer Protection Laws May Affect Enforceability of Student Loans | 30 | |||||
Formation of the Trusts | 31 | ||||||
• | The Trusts | 31 | |||||
• | Eligible Lender Trustee | 31 | |||||
Use of Proceeds | 32 | ||||||
The Depositor, The Sellers, The Servicer and The Administrator | 32 | ||||||
• | The Depositor | 32 | |||||
• | The Sellers | 33 | |||||
• | SLM Education Credit Finance Corporation’s Student Loan Financing Business | 34 | |||||
• | The Servicer and the Administrator | 37 | |||||
The Student Loan Pools | 38 | ||||||
Servicing | 38 | ||||||
Incentive Programs | 40 | ||||||
• | Delinquencies, Defaults, Claims and Net Losses | 40 | |||||
• | Payment of Notes | 40 | |||||
• | Depositor Liability | 41 | |||||
• | Termination | 41 |
4
Page | |||||||
Transfer and Servicing Agreements | 42 | ||||||
• | General | 42 | |||||
• | Purchase of Student Loans by the Depositor; Representations and Warranties of SLM Education Credit Finance Corporation and the Other Sellers | 42 | |||||
• | Sale of Student Loans to the Trust; Representations and Warranties of the Depositor | 43 | |||||
• | Custodian of Promissory Notes | 43 | |||||
• | Additional Fundings | 44 | |||||
• | Amendments to Transfer and Servicing Agreements | 44 | |||||
Servicing and Administration | 45 | ||||||
• | General | 45 | |||||
• | Accounts | 45 | |||||
• | Servicing Procedures | 45 | |||||
• | Payments on Student Loans | 46 | |||||
• | Servicer Covenants | 46 | |||||
• | Servicing Compensation | 48 | |||||
• | Net Deposits | 48 | |||||
• | Evidence as to Compliance | 48 | |||||
• | Matters Regarding the Servicer | 49 | |||||
• | Servicer Default | 50 | |||||
• | Rights Upon Servicer Default | 50 | |||||
• | Waiver of Past Defaults | 51 | |||||
• | Administration Agreement | 51 | |||||
• | Administrator Default | 52 | |||||
• | Rights Upon Administrator Default | 52 | |||||
• | Statements to Indenture Trustee and Trust | 53 | |||||
• | Evidence as to Compliance | 53 | |||||
Trading Information | 55 | ||||||
• | Pool Factors | 56 | |||||
Description of the Notes | 57 | ||||||
• | General | 57 | |||||
• | Principal and Interest on the Notes | 57 | |||||
• | The Indenture | 58 | |||||
General | 58 | ||||||
Modification of Indenture | 58 | ||||||
Events of Default; Rights Upon Event of Default | 59 | ||||||
Certain Covenants | 61 | ||||||
Indenture Trustee’s Annual Report | 62 | ||||||
Satisfaction and Discharge of Indenture | 62 | ||||||
The Indenture Trustee | 62 | ||||||
Description of the Certificates | 63 | ||||||
• | General | 63 | |||||
• | Distributions on the Certificate Balance | 63 | |||||
Additional Information Regarding the Securities | 64 | ||||||
• | Fixed Rate Securities | 64 | |||||
• | Floating Rate Securities | 64 | |||||
• | Distributions | 64 | |||||
• | Credit and Cash Flow or other Enhancement or Derivative Arrangements | 65 | |||||
General | 65 | ||||||
Reserve Account | 65 | ||||||
• | Insolvency Events | 66 | |||||
• | Book-Entry Registration | 66 | |||||
• | Definitive Securities | 69 | |||||
• | List of Securityholders | 70 | |||||
• | Reports to Securityholders | 70 | |||||
Certain Legal Aspects of the Student Loans | 71 | ||||||
• | Transfer of Student Loans | 71 | |||||
• | Consumer Protection Laws | 72 | |||||
• | Loan Origination and Servicing Procedures Applicable to the Trust Student Loans | 72 | |||||
• | FFELP Student Loans Generally Not Subject to Discharge in Bankruptcy | 73 | |||||
U.S. Federal Income Tax Consequences | 73 | ||||||
• | Tax Characterization of the Trust | 74 |
5
Page | |||||||
• | Tax Consequences to Holders of Securities | 74 | |||||
Treatment of the Securities as Indebtedness | 74 | ||||||
Stated Interest | 75 | ||||||
Original Issue Discount | 75 | ||||||
Market Discount | 76 | ||||||
Amortizable Bond Premium | 77 | ||||||
Election to Treat all Interest as OID | 77 | ||||||
Sale or Other Disposition | 77 | ||||||
Waivers and Amendments | 77 | ||||||
Tax Consequences to Foreign Investors | 77 | ||||||
Information Reporting and Backup Withholding | 78 | ||||||
European Union Directive on the Taxation of Savings Income | 79 | ||||||
State Tax Consequences | 79 | ||||||
ERISA Considerations | 81 | ||||||
• | The Notes | 82 | |||||
• | The Certificates | 82 | |||||
Available Information | 83 | ||||||
Reports To Securityholders | 84 | ||||||
Incorporation Of Documents By Reference | 84 | ||||||
The Plan Of Distribution | 84 | ||||||
Legal Matters | 86 | ||||||
Appendix A: Federal Family Education Loan Program | A-1 | ||||||
Appendix B: Signature Student Loan® Program | B-1 | ||||||
Appendix C: LAWLOANS® Program | C-1 | ||||||
Appendix D: MBA Loans® Program | D-1 | ||||||
Appendix E: MEDLOANS® Program | E-1 | ||||||
Appendix F: Global Clearance, Settlement and Tax Documentation Procedures | F-1 |
6
Issuer | A Delaware statutory trust to be formed for each series of securities under a trust agreement between the depositor and a trustee. | |
Depositor | The depositor is SLM Education Credit Funding LLC, a wholly-owned, special purpose subsidiary of SLM Education Credit Finance Corporation. Because the depositor is not an institution eligible to hold legal title to student loans made under the FFELP program, an interim eligible lender trustee specified in the prospectus supplement for your securities will hold legal title to any FFELP student loans on our behalf. References to the “depositor” also include the interim trustee where the context involves the holding or transferring of legal title to FFELP student loans. | |
Trustee and Eligible Lender Trustee | For each series of securities, the related prospectus supplement will specify the trustee and eligible lender trustee, as applicable, for the related trust.See “Formation of the Trusts— Eligible Lender Trustee.” | |
Servicer | The servicer is Sallie Mae, Inc. or another servicer specified in the prospectus supplement for your securities. Sallie Mae, Inc. is a wholly owned subsidiary of SLM Corporation. Sallie Mae, Inc. manages and operates the loan servicing functions for SLM Corporation and its affiliates and various unrelated parties. Until December 31, 2003, the servicer was Sallie Mae Servicing L.P. Effective as of December 31, 2003, Sallie Mae Servicing L.P. merged with and into Sallie Mae, Inc. | |
Under the circumstances described in this prospectus, the servicer may transfer its obligations to other entities. It may also contract with various other servicers or sub-servicers. The related prospectus supplement will describe any sub-servicers.See “Servicing and Administration— Certain Matters Regarding the Servicer.” |
7
Indenture Trustee | For each series of securities, the related prospectus supplement will specify the indenture trustee for the notes.See “Description of the Notes— The Indenture— The Indenture Trustee.” | |
Administrator | Sallie Mae, Inc. will act as administrator of each trust. Under the circumstances described in this prospectus, Sallie Mae, Inc. may transfer its obligations as administrator.See “Servicing and Administration— Administration Agreement.” | |
The Notes | Each series of securities may include one or more classes of student loan-backed notes. The notes will be issued under an indenture between the trust and the related indenture trustee. We may offer each class of notes publicly or privately, as specified in the related prospectus supplement. | |
The notes will be available for purchase in multiples of $1,000 or as otherwise provided in the related prospectus supplement. They will be available initially in book-entry form only. Investors who hold the notes in book-entry form will be able to receive definitive notes only in the limited circumstances described in this prospectus or in the related prospectus supplement.See “Additional Information Regarding the Securities— Book-Entry Registration” and “— Definitive Securities.” | ||
Each class of notes will have a stated principal amount and will bear interest at a specified rate. Classes of notes may also have different interest rates. The interest rate may be: | ||
• fixed, | ||
• variable, | ||
• adjustable, | ||
• auction rate, or | ||
• any combination of these rates. | ||
The related prospectus supplement will specify: | ||
• the principal amount of each class of notes; and | ||
• the interest rate for each class of notes or the method for determining the interest rate. |
8
See “Description of the Notes— Principal and Interest on the Notes.” | ||
If a series includes two or more classes of notes: | ||
• the timing and priority of payments, seniority, interest rates or amount of payments of principal or interest may differ for each class; or | ||
• payments of principal or interest on a class may or may not be made, depending on whether specified events occur. | ||
The related prospectus supplement will provide this information. | ||
The Certificates | Each series of securities may also include one or more classes of certificates. The certificates will be issued under the trust agreement for that series. We may offer each class of certificates publicly or privately, as specified in the related prospectus supplement. | |
If issued, certificates may be available for purchase in a minimum denomination of $100,000 and additional increments of $1,000. They will be available initially in book-entry form only. Investors who hold the certificates in book-entry form will be able to receive definitive certificates only in the limited circumstances described in this prospectus or in the related prospectus supplement.See “Additional Information Regarding the Securities— Book-Entry Registration” and “— Definitive Securities.” | ||
Each class of certificates will have a stated certificate balance. The certificates may, also, yield a return on that balance at a specified certificate rate. That rate of return may be: | ||
• fixed, | ||
• variable, | ||
• adjustable, | ||
• auction rate, or | ||
• any combination of these rates. |
9
The related prospectus supplement will specify: | ||
• the certificate balance for each class of certificates; and | ||
• the rate of return for each class of certificates or the method for determining the rate of return. | ||
If a series includes two or more classes of certificates: | ||
• the timing and priority of distributions, seniority, allocations of losses, certificate rates or distributions on the certificate balance may differ for each class; and | ||
• distributions on a class may or may not be made, depending on whether specified events occur. | ||
The related prospectus supplement will provide this information. | ||
See “Description of the Certificates— Distributions on the Certificate Balance.” | ||
Distributions on the certificates may be subordinated in priority of payment to payments of principal and interest on the notes. If this is the case, the related prospectus supplement will provide this information. | ||
Assets of the Trust | The assets of each trust will include a pool of student loans. They may be: | |
• education loans to students or parents of students made under the Federal Family Education Loan Program, also known as FFELP; or | ||
• if so specified in the prospectus supplement, other education loans not made under the FFELP. | ||
We call the student loans owned by a specific trust “trust student loans”. | ||
The assets of the trust will include rights to receive payments made on these trust student loans and any proceeds related to them. | ||
We will purchase the student loans from SLM Education Credit Finance Corporation or another seller under a purchase agreement. If the seller is an entity other than SLM Education Credit Finance Corporation or an eligible |
10
lender acting on behalf of SLM Education Credit Finance Corporation, the prospectus supplement for your securities will describe the seller of the student loans. The student loans will be selected based on criteria listed in that purchase agreement. | ||
We will sell the student loans to the trust under a sale agreement. The related prospectus supplement will specify the aggregate principal balance of the loans sold. The property of each trust also will include amounts on deposit in specific trust accounts, including a collection account, any reserve account, any pre-funding account and any other account identified in the applicable prospectus supplement and the right to receive payments under any swap agreements entered into by the trust.See “Formation of the Trusts— The Trusts.” | ||
Each FFELP loan sold to a trust will be 98% guaranteed— or 100% for loans disbursed before October 1, 1993— as to the payment of principal and interest by a state guaranty agency or a private non-profit guarantor. These guarantees are contingent upon compliance with specific origination and servicing procedures as prescribed by various federal and guarantor regulations. Each guarantor is reinsured by the Department of Education for between 75% and 100% 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— Guarantee Agencies under the FFELP.” | ||
Non-FFELP loans or “private credit loans” may or may not be insured by a private guarantor or surety. If guaranteed private credit loans are included in a trust, the trust and the holders of publicly offered securities may or may not have the benefit of the guarantee. The prospectus supplement for your securities will describe each private guarantor or surety for any private credit loans related to your securities if your securities have the benefit of the guarantee. |
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A trust may also have among its assets various agreements with counterparties providing for interest rate swaps, caps and similar financial contracts. These agreements will be described in the related prospectus supplement. | ||
Collection Account | For each trust, the administrator will establish and maintain accounts to hold all payments made on the trust student loans. We refer to these accounts as the collection account. The collection account will be in the name of the indenture trustee on behalf of the holders of the notes and the certificates. The prospectus supplement will describe the permitted uses of funds in the collection account and the conditions for their application. | |
Pre-Funding Account | A prospectus supplement may indicate that a portion of the net proceeds of the sale of the securities may be kept in a pre-funding account for a period of time 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 trust. The prospectus supplement will describe the permitted uses of any funds in the pre-funding account and the conditions to their application. | |
Reserve Account | The administrator will establish an account for each series called the reserve account. This account will be in the name of the indenture trustee and will be an asset of the trust. On the closing date, we will make a deposit into the reserve account, as specified in the prospectus supplement. The initial deposit into the reserve account may also be supplemented from time to time by additional deposits. The prospectus supplement will describe the amount of these additional deposits. | |
The prospectus supplement for each trust will describe how amounts in the reserve account will be available to cover shortfalls in payments due on the securities. 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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Credit and Cash Flow or other Enhancement or Derivative Arrangements | Credit or cash flow enhancement for any series of securities may include one or more of the following: | |
• subordination of one or more classes of securities; | ||
• a reserve account or a cash capitalization account; | ||
• overcollateralization; | ||
• letters of credit, credit or liquidity facilities; | ||
• surety bonds; | ||
• guaranteed investment contracts; | ||
• interest rate, currency or other swaps, exchange agreements, interest rate protection agreements, repurchase obligations, put or call options and other yield protection agreements; | ||
• agreements providing for third party payments; or | ||
• other support, deposit or derivative arrangements. | ||
If any credit or cash flow enhancement applies to a trust or any of the securities issued by that trust, the related prospectus supplement will describe the specific enhancement as well as the conditions for their application. A credit or cash flow enhancement may have limitations and exclusions from coverage. If applicable, the related prospectus supplement will describe these limitations or exclusions.See “Additional Information Regarding the Securities— Credit and Cash Flow or other Enhancement or Derivative Arrangements.” | ||
Purchase Agreements | For each trust, the depositor will acquire the related student loans under a purchase agreement. We will assign our rights under the purchase agreement to the trustee or eligible lender trustee, as applicable, on behalf of the trust. The trust will further assign these rights to the indenture trustee as collateral for the notes.See “Transfer and Servicing Agreements.” | |
Sale Agreements | The depositor will sell the trust student loans to the trust under a sale agreement. The trustee or eligible lender trust, as applicable, will hold legal title to the trust student loans. The trust will assign its rights under the sale agreement to the indenture trustee as collateral for the notes.See “Transfer and Servicing Agreements.” |
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Servicing Agreements | The servicer will enter into one or more servicing agreements covering the student loans held by each trust. 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 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.” | |
Servicing Fee | The servicer will receive a servicing fee specified in the related prospectus supplement. It will also receive reimbursement for expenses and charges, as specified in that prospectus supplement. These amounts will be payable monthly. | |
The servicing fee and any portion of the servicing fee that remains unpaid from prior dates will be payable before any payments are made on the related securities unless any portion of the servicing fee is expressly subordinated to payments on the securities, as specified in the related prospectus supplement. | ||
See “Servicing and Administration— Servicing Compensation.” | ||
Administration Agreement | Sallie Mae, Inc. in its capacity as administrator, will enter into an administration agreement or administration agreements covering the student loans held by each trust. | |
Under the administration agreement, Sallie Mae, Inc. will undertake specific administrative duties for each trust.See “Servicing and Administration— Administration Agreement.” | ||
Administration Fee | The administrator will receive an administration fee 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 securities, as specified in the related prospectus |
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supplement.See “Servicing and Administration— Administration Agreement.” | ||
Representations and Warranties of the Depositor | Under the sale agreement for each trust, the depositor, as the seller of the loans to the trust, will make specific representations and warranties to the trust concerning the student loans. We will have an obligation to repurchase any trust student loan if the trust is materially and adversely affected by a breach of our representations or warranties, unless we can cure the breach within the period specified in the applicable prospectus supplement. | |
Alternatively, we may substitute qualified substitute student loans rather than repurchasing the affected loans. Qualified substitute student loans are student loans that comply, on the date of substitution, with all of the representations and warranties made by us in the sale agreement. Qualified substitute student loans must also be substantially similar on an aggregate basis to the loans they are being substituted for with regard to the following characteristics: | ||
• principal balance; | ||
• status— in-school, grace, deferment, forbearance or repayment; | ||
• program type— Unsubsidized Stafford, Subsidized Stafford, PLUS, SLS, Consolidation or non-FFELP loans; | ||
• school type; | ||
• total return; and | ||
• remaining term to maturity. | ||
Any required repurchase or substitution will occur on the date the next collection period ends after the applicable cure period has expired. | ||
In addition, the depositor will have an obligation to reimburse the trust for: | ||
• any shortfall between the balance of the qualified substitute student loans and the balance of the loans being replaced, and | ||
• any accrued interest not guaranteed by, or that is required to be refunded to, a guarantor and any program |
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payments lost as a result of a breach of our representations and warranties. | ||
See “Transfer and Servicing Agreements— Sale of Student Loans to the Trust; Representations and Warranties of the Depositor.” | ||
Representations and Warranties of SLM Education Credit Finance Corporation and the Other Sellers under the Purchase Agreements | In each purchase agreement, the related seller of the student loans will make representations and warranties to the depositor concerning the student loans covered by the related purchase agreement. These representations and warranties will be similar to the representations and warranties made by the depositor under the related sale agreement. The related seller will have repurchase, substitution and reimbursement obligations under the purchase agreement that match those of the depositor under the sale agreement. | |
See “Transfer and Servicing Agreements— Purchase of Student Loans by the Depositor; Representations and Warranties of SLM Education Credit Finance Corporation and the Other Sellers.” | ||
Covenants of the Servicer | The servicer will agree to service the trust student loans in compliance with the servicing agreement and, as applicable, the Higher Education Act or the program rules for the private credit loans. It will have an obligation to purchase from a trust, or substitute qualified substitute student loans for, any trust student loan if the trust is materially and adversely affected by a breach of any covenant of the servicer concerning that student loan. Any breach that relates to compliance with the Higher Education Act or the program rules, 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. | |
If the servicer does not cure a breach within the period specified in the applicable prospectus supplement, the purchase or substitution will be made on the next collection period end date after the applicable cure period has expired, or as described in the related prospectus supplement. |
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In addition, the servicer has an obligation to reimburse the trust for: | ||
• any shortfall between the balance of the qualified substitute student loans and the balance of the loans being replaced, and | ||
• any accrued interest not guaranteed by, or that is required to be refunded to, a guarantor and any program payments lost as a result of a breach of the servicer’s covenants. | ||
See “Servicing and Administration— Servicer Covenants.” | ||
Optional Purchase | Subject to any limitations described in the applicable prospectus supplement, the servicer or another entity specified in the related prospectus supplement may, at its option, purchase, or arrange for the purchase of, all remaining student loans owned by a trust on any distribution date when their pool balance is 10% or less of the initial pool balance. The exercise of this purchase option will result in the early retirement of the securities issued by that trust.See “The Student Loan Pools— Termination” in this prospectus. | |
Auction of Trust Assets | Subject to any limitations described in the applicable prospectus supplement, the indenture trustee will offer for sale all remaining trust student loans at the end of the collection period when their pool balance reduces to 10% or less of the initial pool balance. 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 securities issued by that trust.See “The Student Loan Pools— Termination” in this prospectus and “Summary of Terms— Auction of Trust Assets” in the related prospectus supplement. | |
Tax Considerations | On the closing date for a series, Shearman & Sterling LLP or another law firm identified in the prospectus supplement for your securities, as federal tax counsel to the applicable |
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trust, will deliver an opinion that, for U.S. federal income tax purposes: | ||
• the notes of that series will be characterized as debt; and | ||
• the trust will not be characterized as an association or a publicly traded partnership taxable as a corporation. | ||
In addition, a law firm identified in the applicable prospectus supplement as Delaware tax counsel will deliver an opinion that: | ||
• the same characterizations would apply for Delaware state income tax purposes as for U.S. federal income tax purposes; and | ||
• holders of the securities that are not otherwise subject to Delaware taxation on income will not become subject to Delaware state tax as a result of their ownership of the securities. | ||
By acquiring a note, you will agree to treat that note as indebtedness. By acquiring a certificate, you will agree to treat the related trust either as a partnership in which you are a partner for U.S. federal income tax purposes, or as otherwise described in the related prospectus supplement.See “U.S. Federal Income Tax Consequences” and “ State Tax Consequences.” | ||
ERISA Considerations | A fiduciary of any employee benefit plan or other retirement arrangement subject to Title I of ERISA or Section 4975 of the Internal Revenue Code, should carefully review with its legal advisors whether the plan’s purchase or holding of any class of securities could give rise to a transaction prohibited or otherwise impermissible under ERISA or the Internal Revenue Code.See “ERISA Considerations” in this prospectus and in the related prospectus supplement. | |
Ratings | All of the securities will be rated in one of the four highest rating categories. The prospectus supplement for each trust will specify the ratings for the securities being issued. |
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Because The Securities May Not Provide Regular Or Predictable Payments, You May Not Receive The Return On Investment That You Expected | The securities may not provide a regular or predictable schedule of payments or payment on any specific date. Accordingly, you may not receive the return on investment that you expected. | |
The Securities Are Not Suitable Investments For All Investors | The securities are not a suitable investment if you require a regular or predictable schedule of payments or payment on any specific date. The securities 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, the tax consequences of an investment, and the interaction of these factors. | |
If A Secondary Market For Your Securities Does Not Develop, The Value Of Your Securities May Diminish | The securities will be a new issue without an established trading market. While we intend to list the securities on a European exchange if specified in the related prospectus supplement, we do not intend to list the securities on any exchange in the United States. While we intend to list the securities on a European exchange if specified in the related prospectus supplement, we do not intend to list the securities on any national exchange in the United States. We cannot assure you that listing on a European exchange will be accepted nor, in any event, that a secondary market for the securities will develop. If a secondary market does not develop, the spread between the bid price and the asked price for your securities may widen, thereby reducing the net proceeds to you from the sale of your securities. | |
The Trust Will Have Limited Assets From Which To Make Payments On The Securities, Which May Result In Losses | The trust will not have, nor will it be permitted to have, significant assets or sources of funds other than the trust student loans, the guarantee agreements, and, if so provided in the related prospectus supplement, a reserve account, any other accounts established in the trust’s name, any derivative contracts and other credit or cash flow enhancements. |
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Consequently, you must rely upon payments on the trust student loans from the borrowers and guarantors, and, if available, amounts on deposit in the trust accounts, amounts received from derivative counterparties any other credit or cash flow enhancements to repay your securities. If these sources of funds are insufficient to repay your securities, you may experience a loss on your investment. | ||
Private Student Loans May Have Greater Risk Of Default | The private student loans are made to students who may have higher debt burdens than student loan borrowers as a whole. Borrowers of private student loans such as the portfolio loans typically have already borrowed up to the maximum annual or aggregate limits under FFELP loans. As a result, borrowers of private student loans may be more likely 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 student loans or an increase in deference or forbearances could affect the timing and amount of available funds for any collection period and adversely affect a trust’s ability to pay principal and interest on your securities. In addition, the private student loans are not secured by any collateral of the borrowers and are not insured by any FFELP guaranty agency or by any governmental agency. Consequently, if a borrower defaults on a private student loan, you will bear the risk of loss to the extent that the reserve account or other credit enhancement provided in the structure is insufficient to cover such default. | |
Interests Of Other Persons In The Private Student Loans Could Be Superior To A Trust’s Interest, Which May Result In Reduced Payments On Your Securities | Another person could acquire an interest in a private student loan that is superior to a trust’s interest in that student loan because the promissory notes evidencing private student loans will not be segregated or marked as belonging to a trust 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 a trust’s interest in the related private student loans. The servicer will also mark its books and records accordingly. However, the servicer will continue to hold the promissory notes evidencing private student loans. If another party purchases (or takes a security interest in) one or more private student loans for new value in the ordinary course of business and obtains possession of those promissory notes evidencing private student loans without actual knowledge of the trust’s interests because of the failure to segregate or mark those promissory notes, the new |
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purchaser (or secured party) will acquire an interest in those private student loans superior to the interest of the applicable trust. | ||
Risk Of Default Of Unguaranteed Student Loans | Some of the student loans are not guaranteed or insured by any federal or private guarantor, or by any other party or governmental agency. Consequently, you will bear any risk of loss resulting from the default by any borrower of a non-guaranteed student loan to the extent the amount of the default is not covered by the limited credit enhancement of the financing structure. | |
Risk Of Default By Private Guarantors | 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 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 of the financing structure. | |
You May Incur Losses Or Delays In Payments On Your Securities If Borrowers Default On The Student Loans | Most FFELP loans owned by the trust will be only 98% guaranteed. If a borrower defaults on a student loan that is only 98% guaranteed, the related trust will experience a loss of approximately 2% 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 securities. | |
If A Guarantor Or Surety Of The Student Loans Experiences Financial Deterioration Or Failure, You May Suffer Delays In Payment Or Losses On Your Securities | All of the 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. Student loans acquired by each trust may be subject to guarantee or surety agreements with a number of individual guarantors or insurance companies. A deterioration in the financial status of a guarantor and its ability to honor guarantee claims could result in a failure of that guarantor to make its guarantee payments to the eligible lender trustee in a timely manner. A guarantor’s financial condition could be adversely affected by a number of factors including the amount of claims made against that guarantor as a result of borrower defaults. |
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A FFELP guarantor’s financial condition could be adversely affected by a number of other factors including: |
• | the continued voluntary waiver by the guarantor of the guarantee fee payable by a borrower upon disbursement of a student loan; | |
• | the amount of claims made against that guarantor as a result of borrower defaults; | |
• | the amount of claims reimbursed to that guarantor from the Department of Education, which range from 75% to 100% of the 98% guaranteed portion of the loan depending on the date the loan was made and the performance of the guarantor; and | |
• | changes in legislation that may reduce expenditures from the Department of Education that support federal guarantors or that may require guarantors to pay more of their reserves to the Department of Education. |
If the financial condition of a guarantor deteriorates, it may fail to make guarantee payments in a timely manner. In that event, you may suffer delays in payment or losses on your securities. | ||
The Department Of Education’s Failure To Make Reinsurance Payments May Negatively Affect The Timely Payment Of Principal And Interest On Your Securities | If a FFELP guarantor is unable to meet its guarantee obligations, the trust may submit claims directly to the Department of Education for payment. The Department of Education’s obligation to pay guarantee claims directly is dependent upon it determining that the guarantor is unable to meet its obligations. If the Department of Education delays in making this determination, you may suffer a delay in the payment of principal and interest on your securities. In addition, if the Department of Education determines that the FFELP guarantor is able to meet its obligations, the Department of Education will not make guarantee payments to the trust. The Department of Education may or may not make the necessary determination or, if it does, 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. | |
You Will Bear Prepayment And Extension Risk Due To Actions Taken By Individual Borrowers And Other Variables Beyond Our Control | A borrower may prepay a student loan in whole or in part, at any time. The rate of prepayments on the student loans may be influenced by a variety of economic, social, competitive and other factors, including changes in interest rates, the availability of alternative financing and the general economy. The likelihood of prepayments is higher as a |
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result of various loan consolidation programs. In addition, a trust may receive unscheduled payments due to defaults and to purchases by the servicer or the depositor. 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. Because a pool will include thousands of student loans, it is impossible to predict the amount and timing of payments that will be received and paid to securityholders in any period. Consequently, the length of time that your securities are outstanding and accruing interest may be shorter than you expect. | ||
On the other hand, the student loans may be extended as a result of grace periods, deferment periods and 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 securities are outstanding and accruing interest may be longer than you expect. | ||
The optional purchase right 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 securityholders. | ||
The effect of these factors is impossible to predict. To the extent they create reinvestment risk, you will bear that risk. | ||
You May Be Unable To Reinvest Principal Payments At The Yield You Earn On The Securities | Asset-backed securities 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 securities. Similarly, you are likely to receive less money to reinvest when other investments generally are producing higher yields than the yield on the securities. |
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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 Student Loans, Which May Result In Delays In Payment Or Losses On Your Securities | The rules under which the trust student loans were originated, including the Higher Education Act or the program rules and surety agreements for private credit loans, require lenders making and servicing student loans and the guarantors, if any, guaranteeing those loans to follow specified procedures, including due diligence procedures, to ensure that the student loans are properly made, disbursed and serviced. | |
Failure to follow these procedures may result in: |
• | the guarantors’ or sureties’ inability or refusal to make guarantee or insurance payments on the trust student loans; or | |
• | the Department of Education’s refusal to make reinsurance payments to the applicable guarantor or to make interest subsidy payments and special allowance payments on the trust student loans. |
Loss of any program payments could adversely affect the amount of available funds and the trust’s ability to pay principal and interest on your securities. | ||
The Inability Of The Depositor Or The Servicer To Meet Its Repurchase Obligation May Result In Losses On Your Securities | Under some circumstances, the trust has the right to require the depositor or the servicer to purchase or substitute for a trust 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 trust, if the breach is not cured within the applicable cure period. We cannot guarantee you, however, that we or the servicer will have the financial resources to make a purchase or substitution. In this case, you will bear any resulting loss. | |
The Noteholders’ Right To Waive Defaults May Adversely Affect Certificateholders | The noteholders have the ability, with specified exceptions, to waive defaults by the servicer or the administrator, including defaults that could materially and adversely affect the certificateholders. | |
Subordination Of The Certificates Or Some Classes Of Notes Results In A Greater Risk Of Losses Or Delays In Payment On Those Securities | Payments on the certificates may be subordinated to payments due on the notes of that series. In addition, some classes of notes may be subordinate to other classes. Consequently, holders of the certificates and the holders of some classes of notes may bear a greater risk of losses or delays in payment. The prospectus supplement will describe the nature and the extent of any subordination. |
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The Securities May Be Repaid Early Due To An Auction Sale Or The Exercise Of The Purchase Option. If This Happens, Your Yield May Be Affected And You Will Bear Reinvestment Risk | The securities may be repaid before you expect them to be if: |
• | the indenture trustee successfully conducts an auction sale, or | |
• | the servicer or other applicable entity exercises its option to purchase of all the trust student loans occurs. |
Either event would result in the early retirement of the securities outstanding on that date. If this happens, your yield on the securities may be affected. Because your securities will no longer be outstanding, you will not receive the additional interest payments that you would have received had the securities remained outstanding. You will bear the risk that you cannot reinvest the money you receive in comparable securities at as high a yield. | ||
The Principal Of The Student Loans May Amortize Faster Because Of Incentive Programs | Various incentive programs may be made available to borrowers by the sellers of the student loans. The servicer may also make these incentive programs available to borrowers with trust student loans. Any incentive program that effectively reduces borrower payments or principal balances on trust student loans and is not required by the Higher Education Act will be applicable to the trust student loans only if the servicer receives payment from SLM Education Credit Finance Corporation and the other sellers in an amount sufficient to offset the effective yield reductions. If these benefits are made available to borrowers with trust student loans, the principal of the affected trust student loans may amortize faster than anticipated. | |
Payment Offsets On FFELP Loans By Guarantors Or The Department Of Education Could Prevent The Trust From Paying You The Full Amount Of The Principal And Interest Due On Your Securities | The eligible lender trustee will use the same Department of Education lender identification number for FFELP student loans in a trust as it uses for other FFELP student loans it holds on behalf of other trusts established by the depositor. If so, the billings submitted to the Department of Education and the claims submitted to the guarantors will be consolidated with the billings and claims for payments for trust student loans under other trusts using the same lender identification number. Payments on those billings by the Department of Education as well as claim payments by the applicable guarantors will be made to the eligible lender trustee, or to the servicer on behalf of the eligible lender trustee, in lump sum form. Those payments must be allocated by the administrator among the various trusts that reference the same lender identification number. |
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If the Department of Education or a guarantor determines that the eligible lender trustee owes it a liability on any trust student loan, including loans it holds on behalf of the trust for your securities or other trusts, the Department or the applicable guarantor may seek to collect that liability by offsetting it against payments due to the eligible lender trustee under the terms of the trust. 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 trust’s ability to pay you principal and interest on the securities. | ||
The servicing agreement for the trust student loans securing your securities and other servicing agreements of the depositor will contain provisions for cross-indemnification concerning those payments and offsets. Even with cross-indemnification provisions, however, the amount of funds available to the trust from indemnification would not necessarily be adequate to compensate the trust and investors in the securities for any previous reduction in the available funds. | ||
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 Securities | If a servicer default occurs, the indenture trustee or the noteholders in a given series of securities may remove the servicer without the consent of the trustee or eligible lender trustee or any of the certificateholders of that series. Only the indenture trustee or the noteholders, and not the eligible lender trustee or the certificateholders, have the ability to remove the servicer if a servicer default occurs. In the event of the removal of the servicer and the appointment of a successor servicer, we cannot predict: |
• | the cost of the transfer of servicing to the successor, | |
• | the ability of the successor to perform the obligations and duties of the servicer under the servicing agreement, or | |
• | the servicing fees charged by the successor. |
In addition, the noteholders have the ability, with some exceptions, to waive defaults by the servicer, including defaults that could materially and adversely affect the certificateholders. |
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The Bankruptcy Of The Depositor, SLM Education Credit Finance Corporation Or Any Other Seller Could Delay Or Reduce Payments On Your Securities | We have taken steps to assure that the voluntary or involuntary application for relief by SLM Corporation, SLM Education Credit Finance Corporation or any other 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 SLM Corporation, SLM Education Credit Finance Corporation or any other seller. 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 SLM Corporation, SLM Education Credit Finance Corporation 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 securities or reductions in these amounts could result. | |
SLM Education Credit Finance Corporation, the other sellers and the depositor intend that each transfer of student loans to the depositor will constitute a true sale. | ||
If a transfer constitutes a true sale, the student loans and their proceeds would not be property of SLM Education Credit Finance Corporation or the other sellers should it become the subject of any insolvency law. | ||
If SLM Education Credit Finance Corporation 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 should instead be treated as a pledge of the student loans to secure a borrowing of that seller, delays in payments on the securities could occur. In addition, if the court ruled in favor of this position, reductions in the amounts of these payments could result. | ||
If the transfer of student loans by SLM Education Credit Finance Corporation or any other seller to us is treated as a pledge instead of a sale, a tax or government lien on the property of SLM Education Credit Finance Corporation or the applicable seller arising before the transfer of those student loans to the depositor may have priority over that trust’s interest in the student loans. | ||
The Indenture Trustee May Have Difficulty Liquidating Student Loans After An Event Of Default | Generally if an event of default occurs under an indenture, the indenture trustee may sell the trust student loans, without the consent of the certificateholders. 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 |
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those loans may not be high enough to make securityholders whole, especially certificateholders. | ||
The Federal Direct Student Loan Program Could Result In Reduced Revenues For The Servicer And The Guarantors | The federal direct student loan program, established under the Higher Education Act, may result in reductions in the volume of loans made under the Federal Family Education Loan Program. If so, the servicer may experience increased costs due to reduced economies of scale. These cost increases could reduce the ability of the servicer to satisfy its obligations to service the trust student loans. This increased competition from the federal direct student loan program could also reduce revenues of the guarantors that would otherwise be available to pay claims on defaulted FFELP loans. The level of demand currently existing in the secondary market for loans made under the Federal Family Education Loan Program could be reduced, resulting in fewer potential buyers of the student loans and lower prices available in the secondary market for those loans. The Department of Education also has implemented a direct consolidation loan program, which may reduce the volume of loans outstanding under the Federal Family Education Loan Program and result in prepayments of student loans held by the trust. | |
Changes In Law May Adversely Affect Student Loans, The Guarantors, The Depositor Or SLM Education Credit Finance Corporation and the Other Sellers And, Accordingly, Adversely Affect Your Securities | The Higher Education Act or other relevant federal or state laws, rules and regulations may be amended or modified in the future in a manner 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. Future changes could affect the ability of SLM Education Credit Finance Corporation, 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 trust or the securities that it issues. | |
The Use Of Master Promissory Notes May Compromise The Indenture Trustee’s Security Interest In The Student Loans | For loans disbursed on or after July 1, 1999, a master promissory note may evidence any student loan made to a borrower under the Federal Family Education Loan Program. If 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 |
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originates multiple student loans to the same student, all the student loans are evidenced by a single promissory note. | ||
Under the Higher Education Act, each student loan made under a master promissory note may be sold independently of any other student loan made under that same master promissory note. Each student loan is separately enforceable on the basis of an original or copy of the master promissory note. 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. | ||
It is possible that student loans transferred to the trust 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. | ||
Withdrawal Or Downgrade Of Initial Ratings May Decrease The Prices Of Your Securities | The prospectus supplement for your securities will specify the minimum required ratings for the securities. 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. You should analyze the significance of each rating independently from any other rating. A rating agency may revise or withdraw its rating at any time if it believes circumstances have changed. A subsequent downward change in rating is likely to decrease the price a subsequent purchaser will be willing to pay for your securities. | |
A Trust May Be Affected By Delayed Payments From Borrowers Called To Active Military Service | The Servicemembers Civil Relief Act provides 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 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 Federal Family Education Loan Program to |
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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. As a result, there may be delays in payment and increased losses on the student loans. | ||
We do not know how many student loans have been or may be affected by the application of the Servicemembers Civil Relief Act. | ||
Consumer Protection Laws May Affect Enforceability of Student Loans | Numerous federal and state consumer protection laws, including various state usury laws and related regulations, impose substantial requirements upon lenders and servicers involved in consumer finance. Some states impose finance charge ceilings and other restrictions on certain consumer transactions and require contract disclosures in addition to those required under federal law. These requirements impose specific statutory liability that could affect an assignee’s ability to enforce consumer finance contracts such as the student loans. In addition, the remedies available to the indenture trustee or the noteholders upon an event of default under the indenture may not be readily available or may be limited by applicable state and federal laws. |
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• | acquire, hold, sell and manage trust student loans, the other trust assets and related proceeds; | |
• | enter into one or more swap agreements and/or interest rate cap agreements, from time to time; | |
• | issue the securities; | |
• | make payments on the securities; and | |
• | engage in other incidental or related activities. |
• | the trust student loans themselves, legal title to which either the trustee or the trustee acting as the eligible lender trustee will hold; | |
• | all funds collected on the trust student loans on or after the date specified in the prospectus supplement, including any guarantor or surety and Department of Education payments; | |
• | all moneys and investments on deposit in the collection account, any reserve account, any pre-funding account and any other trust accounts or any other form of credit enhancement; | |
• | all applicable rights under each applicable swap agreement and/or interest rate cap agreement then in effect; | |
• | 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; | |
• | rights under the guarantee or surety agreements with guarantors or insurers; and | |
• | any other property described in the prospectus supplement. |
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• | shortly after loan origination; | |
• | while the borrowers are still in school; | |
• | just before their conversion to repayment after borrowers graduate or otherwise leave school; or | |
• | while the loans are in repayment. |
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• | Signature Student Loans. The seller acquires Signature Student Loans originated by several commercial banks in the United States. Signature Student Loans provide undergraduate and graduate students (other than law, medical, dental or business school students) supplemental funding that allows such students the opportunity to share the responsibility of education financing with or without a cosigner. Signature Student Loans were introduced to students in 1995 and are serviced on behalf of the seller by the servicer or a subservicer identified in the prospectus supplement for your securities. Subject to the satisfaction of the conditions imposed by the applicable program and the applicable guarantee agreement, Signature Student Loans are fully guaranteed against nonpayment of principal and interest as a result of a borrower’s default, death, disability or bankruptcy by HEMAR Insurance Company of America, also known as HICA. They are not guaranteed by any federal guarantor, or by any governmental agency. In order to qualify for the guarantee from HICA, Signature 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, Inc. and the commercial banks originating these loans, and approved by HICA. If a trust includes Signature Student Loans, the holders of security may or may not have the benefit of the guarantee. | |
• | LAWLOANS. The seller acquires LAWLOANS originated by several commercial banks in the United States. LAWLOANS 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 were introduced to students in 1986 and are serviced on behalf of the |
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seller by the servicer. Subject to the satisfaction of the conditions imposed by the applicable program and the applicable guarantee agreement, LAWLOANS are fully guaranteed against nonpayment of principal and interest as a result of a borrower’s default, death, disability or bankruptcy by HICA. They are not guaranteed by any federal guarantor, or by any other governmental agency. In order to qualify for the guarantee from HICA, such LAWLOANS 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, Inc. and the commercial banks originating these loans, and approved by the private guarantors. If a trust includes LAWLOANS, the holders of the securities may or may not have the benefit of the guarantee. | ||
• | MEDLOANS. The seller acquires MEDLOANS originated by several commercial banks in the United States. MEDLOANS provide medical students additional educational financing to help pay for the costs of attending medical school. A medical or dental student may also receive a residency loan to finance the cost of participating in one or more medical or dental residency programs if such student has applied for the loan within a limited period or after graduation. MEDLOANS were introduced to students in 1992 and are serviced on behalf of the seller by the servicer. Subject to the satisfaction of the conditions imposed by the applicable program and the applicable guarantee agreement, MEDLOANS are fully guaranteed against nonpayment of principal and interest as a result of a borrower’s default, death, disability or bankruptcy by HICA. They are not guaranteed by any federal guarantor, or by any governmental agency. In order to qualify for the guarantee from HICA, such MEDLOANS 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, Inc. and the commercial banks originating these loans, and approved by HICA. If a trust includes MEDLOANS, the holders of the securities may or may not have the benefit of the guarantee. | |
• | MBA Loans. The seller acquires MBA Loans originated by several commercial banks in the United States. MBA Loans provide business school students additional educational financing to help pay for the costs of attending graduate school. MBA Loans were introduced to students in 1990 and are serviced on behalf of the seller by the servicer. Subject to the satisfaction of the conditions imposed by the applicable program and the applicable guarantee agreement, MBA Loans are fully guaranteed against nonpayment of principal and interest as a result of a borrower’s default, death, disability or bankruptcy by HICA. They are not guaranteed by any federal guarantor, or by any other governmental agency. In order to qualify for the guarantee from HICA, such MBA 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, Inc. and the commercial banks originating these loans, and approved by HICA. If a trust includes MBA Loans, the holders of the securities may or may not have the benefit of the guarantee. |
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• | Other Private Credit Loan Programs. From time to time the seller may acquire private credit loans originated under other loan programs. If the trust for your securities were to purchase any of those loans, the prospectus supplement for your securities would describe the loans and the loan program. |
• | Signature Student Loans, LAWLOANS and MBA Loans. Credit underwriting criteria were developed and established by the credit departments of affiliates of SLM Corporation in conjunction with HICA and approved by the commercial banks originating these loans. Prior to 1998, judgmental criteria were applied and considered such elements of a borrower’s credit history as: number of late payments, record of bankruptcies, foreclosures, garnishments, judgements, unpaid liens, educational loan defaults, etc., and in the case of co- borrowers, debt to income ratios and job history. Beginning in May 1998, FICO scoring was employed along with additional judgmental tests, including debt to income tests for co- borrowers. Freshmen borrowers, in all cases, require a co-borrower and other students who fail the underwriting criteria are only granted credit if they obtain a credit-worthy co-borrower. |
• | MEDLOANS. Credit underwriting criteria were developed and established by the credit departments of affiliates of SLM Corporation in conjunction with HICA and approved by the commercial banks originating these loans. Since inception, judgmental criteria have been applied and considered such elements of a borrower’s credit history as: number of late payments, record of bankruptcies, foreclosures, garnishments, judgments, unpaid liens, educational loan defaults, etc. |
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• | The loan is guaranteed as to principal and interest by a guarantor and is reinsured by the Department of Education under the FFELP. | |
• | Each loan was originated in the United States, its territories or its possessions in accordance with the FFELP. | |
• | Each loan contains terms required by the program and the applicable guarantee agreements. | |
• | Each loan provides for periodic payments that will fully amortize the amount financed over its term to maturity, exclusive of any deferral or forbearance periods. | |
• | Each loan satisfies any other criteria described in the related prospectus supplement. |
• | The loan may be guaranteed or insured as to principal and interest by a guarantor or insurer identified in the prospectus supplement. | |
• | Each loan was originated in the United States, its territories or its possessions in accordance with the rules of the specific loan program. | |
• | Each loan contains terms required by the program and the applicable guarantee agreements. | |
• | Each loan provides for periodic payments that will fully amortize the amount financed over its term to maturity, exclusive of any deferral or forbearance periods. | |
• | Each loan satisfies any other criteria described in the related prospectus supplement. |
• | The composition of the pool, | |
• | The distribution of the pool by loan type, payment status, interest rate basis and remaining term to maturity, | |
• | the borrowers’ states of residence, and | |
• | the percentages of the student loans guaranteed by the applicable guarantors. |
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• | Great Rewardssm. Under the Great Rewardssm program, which is available for all student loans that were disbursed prior to June 30, 2002 and enter repayment after July 1993, if a borrower makes 48 consecutive scheduled payments in a timely fashion, the effective interest rate is reduced permanently by 2% per annum. | |
• | Great Returnssm. Under the Great Returnssm program, borrowers whose loans were disbursed prior to June 30, 2002 and who make 24 consecutive scheduled payments in a timely fashion get a reduction in principal equal to any amount over $250 that was paid as part of the borrower’s origination fee to the extent that the fee does not exceed 3% of the principal amount of the loan. | |
• | Direct Repay plan. Under the Direct Repay plan, borrowers who make student loan payments electronically through automatic monthly deductions from a savings, checking or NOW account receive a 0.25% effective interest rate reduction as long as they continue in the Direct Repay plan. | |
• | Cash Back plan. Under the Cash Back plan, borrowers whose loans were disbursed between July 1, 2002 and June 30, 2003 and who enroll in Manage Your Loanssm, the servicer’s on-line account manager, agree to receive their account information by e-mail and 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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• | the maturity or other liquidation of the last trust student loan and the disposition of any amount received upon liquidation of any remaining trust student loan, and | |
• | the payment to the securityholders of all amounts required to be paid to them. |
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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, | |
• | the information provided about the student loans is true and correct as of the cutoff date, | |
• | 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 | |
• | with respect to FFELP loans, each student loan is guaranteed by the applicable guarantor. |
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• | for any shortfall between: |
• | the purchase amount of the qualified substitute student loans |
• | the purchase amount of the trust student loans being replaced; and |
• | for 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; | |
• | the length of the funding period; and | |
• | 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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• | a segregated account with an 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 | |
• | a segregated trust account with the corporate trust department of a depository institution having corporate trust powers, so long as any of the securities of that depository institution have an investment grade credit rating from each applicable rating agency. |
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• | 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 interest of the trust; | |
• | it will not permit any rescission or cancellation of a trust student loan except as ordered by a court or other government authority or as consented to by the trustee or eligible lender trustee, as applicable, and the indenture trustee, except that it may |
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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 certificateholders and 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, deferral or forbearance periods or otherwise in accordance with all applicable standards and requirements for servicing of the loans. |
• | for the shortfall, if any, between |
• | the purchase amount of any qualified substitute student loans, and | |
• | the purchase amount of the trust student loans being replaced; and |
• | for any accrued interest amounts not guaranteed by or that are required to be refunded to a guarantor and any interest subsidy payments or special allowance payments lost as a result of a breach. |
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• | a specified annual percentage of the pool balance; | |
• | 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. |
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• | 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 and certificates. |
• | 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 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. |
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• | any failure by the servicer to deposit in the trust accounts any required payment that continues for five business days after the servicer receives written notice from the indenture trustee, the trustee or the eligible lender trustee; | |
• | any failure by the servicer to observe or perform in any material respect any other term, covenant or agreement in the servicing agreement that materially and adversely affects the rights of noteholders or certificateholders and continues for 60 days after written notice of the failure is given (1) to the servicer by the indenture trustee, trustee, or eligible lender trustee or administrator or (2) to the servicer, the indenture trustee and the trustee or eligible lender trustee by holders of 50% or more of the outstanding notes (or the most senior notes then outstanding if applicable) or certificates (or subordinate notes, if applicable); | |
• | the occurrence of an insolvency event involving the servicer; and | |
• | 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. |
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• | directing the indenture trustee to make the required distributions from the trust accounts on each monthly servicing payment date and each distribution date; | |
• | preparing, based on periodic data received from the servicer, and providing quarterly and annual distribution statements to the trustee, the eligible lender trustee and the indenture trustee and any related U.S. federal income tax reporting information; and | |
• | providing the notices and performing other administrative obligations required by the indenture, the trust agreement and the sale agreement. |
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• | any failure by the administrator to deliver to the indenture trustee for deposit any required payment by the business day preceding any monthly servicing payment date or distribution date, if the failure continues for five business days after notice or discovery; | |
• | 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 or certificateholders and continues for 60 days after written notice of the failure is given: |
(1) | to the administrator by the indenture trustee, the trustee, or the eligible lender trustee, or | |
(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) or certificates (or subordinate notes if applicable); and |
• | the occurrence of an insolvency event involving the administrator. |
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• | the amount of principal distributions for each class; | |
• | the amount of interest distributions for each class and the applicable interest rates; | |
• | the pool balance at the end of the preceding collection period; | |
• | the outstanding principal amount and the note pool factor for each class of the notes and the certificate balance and the certificate pool factor for each class of the certificates for that distribution date; | |
• | the servicing and the administration fees for that collection period; | |
• | the interest rates, if available, for the next period for each class; | |
• | the amount of any aggregate realized losses for that collection period; | |
• | the amount of any note interest shortfall, note principal shortfall, certificate return shortfall and certificate balance shortfall, if applicable, for each class, and any changes in these amounts from the preceding statement; | |
• | the amount of any carryover servicing fee for that collection period; | |
• | the amount of any note interest carryover and certificate return carryover, if applicable, for each class of securities, 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 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; and | |
• | the balance of any reserve account, after giving effect to changes in the balance on that distribution date. |
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• | 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. |
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• | the original denomination of your note or certificate; and | |
• | the applicable pool factor. |
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• | change the due date of any installment of principal of or interest on any note or reduce its 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 |
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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 (or senior notes, if applicable) after it is due or as provided in the prospectus supplement for your securities; | |
• | 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 properties of the trust that are subject to the lien of the indenture, | |
• | sell those properties; or | |
• | elect to have the trustee or eligible lender trustee maintain ownership of the trust student loans and continue to apply collections on them as if there had been no declaration of acceleration. |
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• | 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 662/3% 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). |
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• | the entity formed by or surviving the consolidation or merger is organized under the laws of the United States, any state or the District of Columbia, | |
• | 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 of the notes and the certificates would not be reduced or withdrawn as a result of the merger or consolidation, 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 or certificates. |
• | 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. |
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• | a maximum limitation, or ceiling, on its interest rate, and | |
• | a minimum limitation, or floor, on its interest rate. |
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• | subordination of one or more classes of securities, | |
• | reserve accounts, | |
• | cash capitalization accounts, | |
• | overcollateralization, | |
• | letters of credit, credit or liquidity facilities, | |
• | cash collateral accounts, | |
• | financial insurance, | |
• | commitment agreements, | |
• | surety bonds, | |
• | guaranteed investment contracts, | |
• | swaps, including interest rate and currency swaps and cap agreements, | |
• | exchange agreements, | |
• | interest rate protection agreements, | |
• | repurchase obligations, | |
• | put or call options, | |
• | yield protection agreements, | |
• | other agreements providing for third party payments, | |
• | any combination of the foregoing, or | |
• | other support, cash deposit, derivative or other arrangements described in the related prospectus supplement. |
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• | the administrator advises the applicable trustee in writing that DTC is not willing or able to discharge its responsibilities as depository for the securities 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 or the certificates, 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 securities. |
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• | 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 eligible lender trustee 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 |
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• | acquired the student loans for new value and without actual knowledge of the related trustee’s or eligible lender trustee’s interest, |
72
73
• | a citizen or individual resident of the United States; | |
• | a corporation or partnership, including an entity treated as such, organized in or under the laws of the United States or any state thereof or the District of Columbia; | |
• | an estate the income of which is includible in gross income for U.S. federal income tax purposes, regardless of its source; or | |
• | a trust whose administration is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust. |
74
75
76
77
• | is not actually or constructively a “10 percent shareholder” of SLM Corporation or a “controlled foreign corporation” with respect to which SLM Corporation 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. |
78
79
80
• | employee benefit plans as defined in Section 3(3) of ERISA; | |
• | certain other retirement plans and arrangements described in Section 4975 of the Code, including: |
1. | individual retirement accounts and annuities, | |
2. | Keogh plans, | |
3. | 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, and | |
4. | 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. |
81
• | Prohibited Transaction Class Exemption 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.” |
82
• | 450 Fifth Street, N.W., Washington, D.C. 20549; |
• | 175 W. Jackson Boulevard, Suite 900, Chicago, Illinois 60604. | |
• | 233 Broadway, New York, New York 10279. |
83
• | show the price at which each class of notes is being offered to the public and any concessions that may be offered to dealers participating in the offering; or |
84
• | specify that the notes and certificates 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. |
85
86
• | 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. |
A-1
A-2
• | 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. |
A-3
(1) determining the average of the bond equivalent rates of 91-day Treasury bills auctioned for that quarter; | |
(2) subtracting the applicable borrower interest rate; | |
(3) adding the applicable special allowance margin described in the table below; and | |
(4) dividing the resultant percentage by 4. |
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 | ||
3.10% for PLUS, SLS and Consolidation Loans |
(1) determining the average of the bond equivalent rates of 3-month commercial paper (financial) rates quoted for that quarter; | |
(2) subtracting the applicable borrower interest rate; | |
(3) adding the applicable special allowance margin described in the table below; and | |
(4) dividing the resultant percentage by 4. |
Date of First Disbursement | Special Allowance Margin | |
From 01/01/00 | 1.74% for Stafford Loans that are in In-School, Grace or Deferment | |
2.34% for Stafford Loans that are in Repayment | ||
2.64% for PLUS and Consolidation Loans |
A-4
• | federal insurance or reinsurance 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; and | |
• | special allowance payments representing an additional subsidy paid by the Department to the holders of eligible Stafford Loans. |
Maximum | ||||||
Trigger Date | Borrower Rate | 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 | 6.8% | N/A | N/A |
• | the applicable maximum borrower rate |
• | the sum of |
A-5
• | 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 deferral periods. |
• | satisfaction of need criteria, and | |
• | continued eligibility of the loan for federal insurance or reinsurance. |
A-6
Dependent | |||||||||||||
Students | Independent Students | ||||||||||||
Additional | Maximum | ||||||||||||
Subsidized and | Unsubsidized | Annual | |||||||||||
Unsubsidized on or | only on or | Total | |||||||||||
Borrower’s Academic Level | after 10/1/93 | after 7/1/94 | Amount | ||||||||||
Undergraduate (per year): | |||||||||||||
1st year | $ | 2,625 | $ | 4,000 | $ | 6,625 | |||||||
2nd year | $ | 3,500 | $ | 4,000 | $ | 7,500 | |||||||
3rd year and above | $ | 5,500 | $ | 5,000 | $ | 10,500 | |||||||
Graduate (per year) | $ | 8,500 | $ | 10,000 | $ | 18,500 | |||||||
Aggregate Limit: | |||||||||||||
Undergraduate | $ | 23,000 | $ | 23,000 | $ | 46,000 | |||||||
Graduate (including undergraduate) | $ | 65,500 | $ | 73,000 | $ | 138,500 |
• | The loan limits include both FFELP and FDLP loans. | |
• | The amounts in the final column represent the combined maximum loan amount per year for Subsidized and Unsubsidized Stafford Loans. Accordingly, the maximum amount that a student may borrow under an Unsubsidized Stafford Loan is the difference between the combined maximum loan amount and the amount the student received in the form of a Subsidized Stafford Loan. | |
• | Independent undergraduate students, graduate students and professional students may borrow the additional amounts shown in the middle column. Dependent undergraduate students may also receive these additional loan amounts if their parents are unable to provide the family contribution amount and they 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. |
A-7
• | while the borrower returns to school at least half-time or is enrolled in an approved graduate fellowship program or rehabilitation program; | |
• | when the borrower is seeking, but unable to find, full-time employment, subject to a maximum deferment of 3 years; or | |
• | when the lender determines that repayment will cause the borrower “economic hardship”, as defined in the Act, subject to a maximum deferment of 3 years. |
A-8
• | the applicable maximum borrower rate |
• | the sum of: | |
• | the 1-year Index or the bond equivalent rate of 91-day or 52-week Treasury bills, as applicable, |
• | the applicable interest rate margin. |
Maximum Borrower | Interest Rate | |||||||
Trigger Date | Borrower Rate | 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 | 7.9% | 7.9% | 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 or 52-week Treasury bills auctioned during that quarter and the applicable interest rate margin exceeds the maximum borrower rate. |
A-9
A-10
A-11
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 | % |
A-12
Source | Basis | |
Insurance Premium | Up to 1% of the principal amount guaranteed, withheld from the proceeds of each loan disbursement | |
Loan Processing and Origination Fee | 0.40% of the principal amount guaranteed, paid by the Department of Education | |
Account Maintenance Fee | 0.10% of the original principal amount of loans outstanding, paid by the Department of Education | |
Default Aversion Fee | 1% of the outstanding amount of loans that were reported delinquent but did not default within 300 days thereafter, paid by transfers out of the Student Loan Reserve Fund | |
Collection Retention Fee | 23% of the amount collected on loans on which reinsurance has been paid (18.5% of the amount collected for a defaulted loan that is purchased by a lender for rehabilitation or consolidation), withheld from gross receipts |
A-13
A-14
• | Be enrolled or admitted at least half-time at a college or university eligible for the Signature Student Loan. |
Note: An eligible school for the Signature Student Loan Program is a 4- or 5-year college or university that also is eligible under the Federal Family Education Loan Program, also known as FFELP. Trade schools and 2-year schools generally are not eligible for the Signature Student Loan. In addition, students in certificate programs are not eligible for this loan program unless the student has already obtained a Bachelor’s Degree and is furthering his or her education through a certificate 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 co-borrower). | |
• | Have all outstanding student loans in good standing (i.e., not in default). | |
• | Meet established credit requirements. | |
• | Be 18 years or older or apply with a creditworthy co-borrower with the following exceptions: | |
• | Nebraska residents must be 19 years old. | |
• | Alabama (AL) residents attending an AL school must be 17 years old, while AL residents attending a school outside of AL must be 19 years old. |
B-1
• | The maximum borrower interest rate allowed by law, and | |
• | The sum of | |
• | Eitherthe 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 inThe Wall Street Journal, “Credit Markets” section, in the table that quotes the result as the “bond equivalent” rate of the most recent auction, | |
• | OrThe Prime Rate, as published inThe 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, and | |
• | Rounded to the nearest one-eighth (0.125) of one percent. |
• | The maximum borrower interest rate allowed by law, and | |
• | The sum of | |
• | The Prime Rate, as published inThe 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, and | |
• | Rounded to the nearest one-eighth (0.125) of one percent. |
• | At commencement of repayment. | |
• | 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. |
B-2
• | Every six (6) months during periods of in-school forbearance and at the end of each in-school forbearance period. | |
• | At the end of each hardship forbearance period. |
Total Signature Student Loan Indebtedness | Maximum Repayment Terms | |||
Less than $20,000 | 15 years (180 months) | |||
$20,000-$40,000 | 20 years (240 months) | |||
Greater than $40,000 | 25 years (300 months) |
• | Rewards Program—borrowers will receive a 0.50% interest rate reduction after the forty-eighth (48th) on-time payment of principal and interest is received. Borrowers must continue to make on-time payments to retain the interest rate reduction. The Rewards Program benefit is not available for loans first disbursed on or after June 1, 2001. | |
• | Direct Repay Plan—for loans disbursed prior to June 1, 2002, borrowers will receive a 0.25% interest rate reduction for participating in auto-debit. The Direct Repay Plan benefit is not available for loans first disbursed on or after June 1, 2002. |
B-3
• | Co-Borrower Release Option—borrowers may request the removal of the co-borrower if the first twenty-four (24) payments are made on time. The borrower will be reevaluated for credit and must qualify under the creditworthy status to obtain this benefit. |
B-4
• | Be currently enrolled or admitted at least half-time at an American Bar Association accredited law school program. | |
• | Be a U.S. citizen or national or permanent resident without conditions and with proper evidence of eligibility; international students may apply with a creditworthy U.S. citizen or permanent resident as co-borrower. | |
• | Have all outstanding student loans in good standing (i.e., not in default). | |
• | Meet established credit requirements. | |
• | For a LAWLOAN Bar Study Loan, the borrower also must be sitting for the bar exam no later than nine (9) months after graduation. |
• | The maximum borrower interest rate allowed by law, and | |
• | The sum of | |
• | Eitherthe 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 inThe Wall Street Journal, “Credit Markets” section, in the table that quotes the result, as the “bond equivalent” rate of the most recent auction, |
C-1
• | Orthe Prime Rate, as published inThe 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, and | |
• | Rounded to the nearest one-eighth (0.125) of one percent. |
• | The maximum borrower interest rate allowed by law and | |
• | The sum of | |
• | The Prime Rate, as published inThe 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, and | |
• | Rounded to the nearest one-eighth (0.125) of one percent. |
• | At commencement of repayment. | |
• | Every six (6) months during periods of in-school forbearance and at the end of each in-school forbearance period. | |
• | At the end of each hardship forbearance period. |
C-2
Total LAWLOANS Indebtedness | Maximum Repayment Terms | |||
Less than $20,000 | 15 years (180 months) | |||
$20,000-$40,000 | 20 years (240 months) | |||
Greater than $40,000 | 25 years (300 months) |
• | LAWLOANS Rewards Program—for loans disbursed between May 1, 1995 and May 31, 2002, borrowers will receive a 0.50% interest rate reduction after the forty-eighth (48th) on-time payment of principal and interest is received. Borrowers must continue to make on-time payments to retain the interest rate reduction. For loans disbursed on or after June 1, 2002, the LAWLOANS Rewards Program benefit is only available for certain loans. | |
• | Direct Repay Plan—for loans disbursed prior to June 1, 2002, borrowers will receive a 0.25% interest rate reduction for participating in auto-debit. For loans disbursed on or after June 1, 2002, the Direct Repay Plan benefit is only available for certain loans. | |
• | Co-Borrower Release Option—borrowers may request the removal of the co-borrower if the first twenty-four (24) payments are made on time. The borrower will be reevaluated for credit and must qualify under the creditworthy status established for this benefit. |
C-3
• | 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 without conditions and with proper evidence of eligibility; international students may apply with a creditworthy U.S. citizen or permanent resident co-borrower. | |
• | Meet established credit requirements. |
D-1
• | The maximum borrower interest rate allowed by law, |
• | The sum of the applicable index, |
• | The applicable interest rate margin, |
• | Rounded to the nearest one-eighth (0.125) of one percent. |
• | At commencement of repayment. | |
• | Every six (6) months during periods of in-school forbearance and at the end of each in-school forbearance period. | |
• | Every twelve (12) months during periods of internship/residency deferment or at the end of the deferment period if it is less than twelve (12) months. | |
• | At the end of each hardship forbearance period. |
D-2
• | 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 initial repayment schedule will default to fifteen (15) years at the beginning of repayment. However, the repayment schedule may extend on a case-by-case basis to prevent default, depending on the total indebtedness as outlined below. The extended repayment option was implemented in the 2000/2001 Academic Year. | |
• | Repayment terms exclude periods of in-school, grace, deferment and forbearance. | |
• | The minimum monthly payment is $50.00 per loan program. |
Total MBA Loan Indebtedness | Maximum Repayment Terms | |||
Less than $20,000 | 15 years (180 months) | |||
$20,000-$40,000 | 20 years (240 months) | |||
Greater than $40,000 | 25 years (300 months) |
• | If the borrower chooses an alternative graduated repayment schedule and the maximum repayment period allowed is twelve (12) years, the first year (12 months) |
D-3
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. |
• | MBA Loans Rewards Program—for loans disbursed prior to June 1, 2002, borrowers will receive a 0.50% interest rate reduction after the forty-eighth (48th) on-time payment of principal and interest is received. Borrowers must continue to make on-time payments to retain the interest rate reduction. For loans disbursed on or after June 1, 2002, this benefit is only available for certain loans. | |
• | Direct Repay Plan—for loans disbursed prior to June 1, 2002, borrowers will receive a 0.25% interest rate reduction for participating in auto-debit. For loans disbursed on or after June 1, 2002, this benefit is only available for certain loans. | |
• | Co-Borrower Release Option—borrowers may request the removal of the co-borrower if the first twenty-four (24) payments are made on time. The borrower will be reevaluated for credit and must qualify under the creditworthy status established for this benefit. |
D-4
• | 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). |
E-1
• | The interest rate cap as presented in the following chart. |
Interest Rate Cap | ||||||||||
App Year | Minimum | Maximum | Notes by Year Note | |||||||
1986/1987 through 1988/1989 | 6.00 | % | 20.00 | % | Rate will not change more than 10% during each year | |||||
1989/1990 and 1990/1991 | 6.00 | % | 20.00 | % | Rate will not change more than 10% during each year | |||||
1991/1992 to present | N/A | N/A | The rate will not exceed the maximum allowed by law. |
• | The sum of |
Prior to | ||||
1992/1993 | Variable (In-School and Grace) | Fixed (Repayment) | ||
• Weekly variable. • Changes each Wednesday. • The index is the weekly auction of the 91-day T-Bill that occurs each Tuesday. | • The most recent weekly average yield on United States Treasury securities adjusted to a constant maturity of 30 years published prior to the beginning of the repayment period. |
As of 1992/1993 | Variable (In-School, Grace, and Repayment) • Quarterly variable. • Changes January 1, April 1, July 1 and October 1. • The index is the average of the weekly auctions of the 91-day T-Bill for the quarter preceding the change date. | |
As of 1999/2000 | Variable (In-School, Grace, and Repayment) • Quarterly variable. • Changes January 1, April 1, July 1 and October 1. • The index is the Prime Rate published inThe Wall Street Journalon the first day of the month preceding the change date. | |
As of June 1, 2004 for MEDLOANS ALP loans, and as of August 1, 2004 for MEDEX loans | Variable (In-School, Grace, and Repayment) • Monthly variable. • Changes on the first business day of each month. • The index is the Prime Rate published inThe Wall Street Journalon the next to last business day of the month preceding the change |
• | The applicable interest rate margin. |
• | Rounded to the nearest one-eighth (0.125) of one percent. |
E-2
Prior to 1992/1993 | Interest will capitalize at the beginning of repayment and at the end of any forbearance. | |
1993/1994 through 1997/1998 | Interest will capitalize at graduation, annually until repayment begins, and at the end of any deferment or forbearance. | |
1998/1999 to Present | Interest will capitalize at the beginning of repayment and at the end of any deferment or forbearance. |
• | 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 has the choice of two (2) years of interest-only payments followed by level payments for the remaining term, or up to four (4) years of interest-only payments followed by level payments for the remaining term. | |
• | The borrower must meet certain eligibility requirements. |
E-3
• | Borrowers will receive a 0.50% interest rate reduction after the forty-eighth (48th) on-time payment of principal and interest is received. |
• | Borrowers will receive a 0.50% interest rate reduction if the borrower maintains a schedule of on-time payments. | |
• | This rate reduction is automatically granted at the beginning of repayment. If payment becomes delinquent, the borrower is no longer eligible to receive the rate reduction after the forty-eighth (48th) on-time payment of principal and interest is received. |
• | For MEDLOANS ALP Loans, the borrower will receive a 0.50% interest rate reduction if the borrower maintains a schedule of on-time monthly payments. | |
• | For MEDEX Loans, the borrower will receive a 1% interest rate reduction if the borrower maintains a schedule of on-time monthly payments. | |
• | This rate reduction is automatically granted at the beginning of repayment. If payment becomes delinquent, the borrower is no longer eligible to receive the rate reduction. |
• | For loans disbursed on or after July 1, 1995, borrowers participating in auto-debit will receive 0.25% interest rate reduction. This benefit is not available for MEDEX Loans first disbursed for Application Year 2004/2005. |
E-4
F-1
F-2
• | 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. |
F-3
• | 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: |
1. Exemption for non-U.S. person—Form W-8BEN. Non-U.S. persons that are beneficial owners can obtain a complete exemption from the withholding tax by filing a signed Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding). |
2. Exemption for non-U.S. persons with effectively connected income—Form W-8ECI. A non-U.S. person, including a non-U.S. corporation or bank with a U.S. branch, for which the interest income is effectively connected with its conduct of a trade or business in the United States, can obtain an exemption from the withholding tax by filing Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States). | |
3. Exemption or reduced rate for non-U.S. persons resident in treaty countries—Form W-8BEN. Non-U.S. persons that are beneficial owners residing in a country that has a tax treaty with the United States can obtain an exemption or reduced tax rate, depending on the treaty terms, by filing Form W-8BEN. | |
4. Exemption for U.S. persons—Form W-9. U.S. persons can obtain a complete exemption from the withholding tax by filing Form W-9 (Request for Taxpayer Identification Number and Certification). |
• | a citizen or individual resident of the United States, | |
• | a corporation or partnership (including an entity treated as such) organized in or under the laws of the United States or any state thereof or the District of Columbia, |
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• | an estate the income of which is includible in gross income for U.S. federal income tax purposes, regardless of its source, or | |
• | a trust whose administration is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust. |
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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 A-3 Student Loan-Backed Notes | |
$ | Floating Rate Class A-4 Student Loan-Backed Notes | |
$ | Floating Rate Class B Student Loan-Backed Notes | |
$ | Floating Rate Class C Student Loan-Backed Notes |
SEC registration fee | $ | 1,177,000 | |||
Legal fees and expenses | 1,000,000 | ||||
Accounting fees and expenses | 450,000 | ||||
Blue Sky fees and expenses | 60,000 | ||||
Rating agency fees | 3,500,000 | ||||
Trustee fees and expenses | 350,000 | ||||
Indenture Trustee fees and expenses | 350,000 | ||||
Printing expenses | 800,000 | ||||
Miscellaneous | 40,000 | ||||
Total | $ | 7,727,000 | |||
(a) No Member, Officer, Manager, employee or agent of the Company and no employee, representative, agent or Affiliate of the Member (collectively, the “Covered Persons”) shall be liable to the Company or any other Person who has an interest in or claim against the Company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct. | |
(b) To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this |
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Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person’s gross negligence or willful misconduct with respect to such acts or omissions,provided,any indemnity under this Section 20 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof. | |
(c) To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by a Covered Person defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in this Section 20. | |
(d) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, or any other facts pertinent to the existence and amount of assets from which distributions to the Member might properly be paid. | |
(e) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto, to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions of this Agreement or any approval or authorization granted by the Company or any other Covered Person. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Member to replace such other duties and liabilities of such Covered Person. | |
(f) The foregoing provisions of this Section 20 shall survive any termination of this Agreement. |
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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 Private Credit Student Loan Trusts (included as Exhibit B to Exhibit 4.2)† | |||
3.2 | Certificate of Formation of SLM Education Credit Funding LLC† | |||
3.3 | Limited Liability Company Operating Agreement of SLM Education Credit Funding LLC† | |||
4.1 | Form of Indenture among the Trust, the Trustee and the Indenture Trustee† | |||
4.2 | Form of Trust Agreement among SLM Education Credit Funding LLC, the Trustee and the Indenture Trustee† | |||
4.3 | Form of Note (included as an exhibit to Exhibit 4.1)† | |||
4.4 | Form of Certificate (included as an exhibit to Exhibit 4.2)† | |||
4.5 | Form of Excess Distribution Certificate (included as an exhibit to Exhibit 4.2)† | |||
5.1 | Opinion of Robert S. Lavet, Esq. 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 Robert S. Lavet, Esq. (included as part of Exhibit 5.1)† | |||
23.2 | Consent of Shearman & Sterling LLP (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 Education Credit Funding LLC (included on the signature page to this Registration Statement)† | |||
25.1 | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Indenture Trustee† | |||
99.1 | Form of Sale Agreement among SLM Education Credit Funding LLC, the Trust, and the Trustee† | |||
99.2 | Form of Servicing Agreement among the Trust, the Servicer, the Administrator, the Trustee and the Indenture Trustee† | |||
99.3 | Form of Purchase Agreement among SLM Education Credit Funding LLC, SLM Education Credit Finance Corporation and the Trustee† | |||
99.4 | Form of Administration Agreement among SLM Education Credit Funding LLC, the Trust, the Eligible Lender Trustee, the Indenture Trustee, the Administrator and the Servicer† |
† | previously filed. |
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(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | |
(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; | |
(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in the post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. |
(2) That, for purposes of determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | |
(3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. |
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(1) For purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of registration statement as of the time it was declared effective. | |
(2) For the purpose of determining any liability under the Securities Act of 1933, as amended, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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SLM Education Credit Funding LLC |
By: | /s/John F. Remondi |
John F. Remondi | |
President |
Signature | Capacity | Date | ||||
/s/John F. Remondi | President (Principal Executive Officer) and Manager | July 25, 2005 | ||||
/s/C. E. Andrews* | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Manager | July 25, 2005 | ||||
/s/Thomas J. Fitzpatrick* | Manager | July 25, 2005 | ||||
Manager | ||||||
Manager | ||||||
* By: | /s/John F. Remondi Attorney-in-Fact |
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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 Private Credit Student Loan Trusts (included as Exhibit B to Exhibit 4.2)† | |||
3.2 | Certificate of Formation of SLM Education Credit Funding LLC† | |||
3.3 | Limited Liability Company Operating Agreement of SLM Education Credit Funding LLC† | |||
4.1 | Form of Indenture among the Trust, the Trustee and the Indenture Trustee† | |||
4.2 | Form of Trust Agreement among SLM Education Credit Funding LLC, the Trustee and the Indenture Trustee† | |||
4.3 | Form of Note (included as an exhibit to Exhibit 4.1)† | |||
4.4 | Form of Certificate (included as an exhibit to Exhibit 4.2)† | |||
4.5 | Form of Excess Distribution Certificate (included as an exhibit to Exhibit 4.2)† | |||
5.1 | Opinion of Robert S. Lavet, Esq. 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 Robert S. Lavet, Esq. (included as part of Exhibit 5.1)† | |||
23.2 | Consent of Shearman & Sterling LLP (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 Education Credit Funding LLC (included on the signature page to this Registration Statement)† | |||
25.1 | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Indenture Trustee† | |||
99.1 | Form of Sale Agreement among SLM Education Credit Funding LLC, the Trust, and the Trustee† | |||
99.2 | Form of Servicing Agreement among the Trust, the Servicer, the Administrator, the Trustee and the Indenture Trustee† | |||
99.3 | Form of Purchase Agreement among SLM Education Credit Funding LLC, SLM Education Credit Finance Corporation and the Trustee† | |||
99.4 | Form of Administration Agreement among SLM Education Credit Funding LLC, the Trust, the Eligible Lender Trustee, the Indenture Trustee, the Administrator and the Servicer† |
† | previously filed. |
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