SLM Student Loan Trust 2004-5 - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - SLM Student Loan Trust 2004-5	form8k.htm

Exhibit 99.1

ANNEX A

The Trust Student Loan Pool as of November 30, 2018

The trust student loans owned by the trust were originally selected from a portfolio of consolidation student loans owned by SLMA, VG Funding and Navient SLM ELC by employing several criteria, including requirements that each trust student loan as of the original statistical cutoff date (and with respect to each additional trust student loan as of its related subsequent cutoff date):

was guaranteed as to principal and interest by a guaranty agency under a guarantee agreement and the guaranty agency was, in turn, reinsured by the Department of Education in accordance with the FFELP;

contained terms in accordance with those required by the FFELP, the guarantee agreements and other applicable requirements;

was fully disbursed;

was not more than 210 days past due;

did not have a borrower who was noted in the related records of the servicer as being currently involved in a bankruptcy proceeding; and

had special allowance payments, if any, based on the three-month commercial paper rate or the 91-day Treasury bill rate.

No trust student loan as of the applicable cutoff date was subject to any prior obligation to sell that loan to a third party.

Unless otherwise specified, all information with respect to the trust student loans is presented as of November 30, 2018, which is the statistical disclosure date.

The following tables provide a description of specified characteristics of the trust student loans as of the statistical disclosure date. The aggregate outstanding principal balance of the loans in each of the following tables includes the principal balance due from borrowers, plus accrued interest of $2,706,773 to be capitalized as of the statistical disclosure date. Percentages and dollar amounts in any table may not total 100% or whole dollars due to rounding. The following tables also contain information concerning the total number of loans and total number of borrowers in the portfolio of trust student loans. For ease of administration, the servicer separates a consolidation loan on its system into two separate loan segments representing subsidized and unsubsidized segments of the same loan. The following tables reflect those loan segments within the number of loans. In addition, 11 borrowers have more than one trust student loan.

The distribution by weighted average interest rate applicable to the trust student loans on any date following the statistical disclosure date may vary significantly from that in the following tables as a result of variations in the effective rates of interest applicable to the trust student loans and in rates of principal reduction. Moreover, the information below about the weighted average remaining term to maturity of the trust student loans as of the statistical disclosure date may vary significantly from the actual term to maturity of any of the trust student loans as a result of prepayments or the granting of deferment and forbearance periods.

A-1

The following tables also contain information concerning the total number of loans and the total number of borrowers in the portfolio of initial trust student loans.

Percentages and dollar amounts in any table may not total 100% of the initial trust student loan balance, as applicable, due to rounding.

COMPOSITION OF THE TRUST STUDENT LOANS AS OF

THE STATISTICAL DISCLOSURE DATE

Aggregate Outstanding Principal Balance	$	903,136,213
Aggregate Outstanding Principal Balance – Treasury Bill	$	126,816,758
Percentage of Aggregate Outstanding Principal Balance – Treasury Bill		14.04	%
Aggregate Outstanding Principal Balance – One-Month LIBOR	$	776,319,454
Percentage of Aggregate Outstanding Principal Balance – One-Month LIBOR		85.96	%
Number of Borrowers		24,828
Average Outstanding Principal Balance Per Borrower	$	36,376
Number of Loans		42,866
Average Outstanding Principal Balance Per Loan – Treasury Bill	$	31,151
Average Outstanding Principal Balance Per Loan – One-Month LIBOR	$	20,011
Weighted Average Remaining Term to Scheduled Maturity	189 months
Weighted Average Annual Interest Rate		4.72	%

We determined the weighted average remaining term to maturity shown in the table from the statistical disclosure date to the stated maturity date of the applicable trust student loan without giving effect to any deferment or forbearance periods that may be granted in the future. See Appendix A to the preliminary remarketing memorandum.

The weighted average annual borrower interest rate shown in the table is exclusive of special allowance payments. The weighted average spread for special allowance payments to the 91-day Treasury bill rate was 3.11% as of the statistical disclosure date.

The weighted average spread for special allowance payments to the one-month LIBOR rate was 2.64% as of the statistical disclosure date. See “Special Allowance Payments” in Appendix A to the preliminary remarketing memorandum.

For these purposes, the 91-day Treasury bill rate is the weighted average per annum discount rate, expressed on a bond equivalent basis and applied on a daily basis, for direct obligations of the United States with a maturity of thirteen weeks, as reported by the U.S. Department of the Treasury.

A-2

DISTRIBUTION OF THE TRUST STUDENT LOANS

BY BORROWER INTEREST RATES AS OF THE STATISTICAL

DISCLOSURE DATE

Interest Rates	Number of Loans		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
Less than or equal to 3.00%		7,183	$	116,348,794		12.9	%
3.01% to 3.50%		9,409		151,736,808		16.8
3.51% to 4.00%		9,089		182,355,387		20.2
4.01% to 4.50%		9,007		182,794,319		20.2
4.51% to 5.00%		1,383		39,173,641		4.3
5.01% to 5.50%		679		18,763,253		2.1
5.51% to 6.00%		554		19,827,593		2.2
6.01% to 6.50%		453		15,701,343		1.7
6.51% to 7.00%		526		17,800,034		2.0
7.01% to 7.50%		450		13,395,123		1.5
7.51% to 8.00%		1,604		51,100,069		5.7
8.01% to 8.50%		1,147		34,925,179		3.9
Equal to or greater than 8.51%		1,382		59,214,670		6.6

Total		42,866	$	903,136,213		100.0	%

We determined the interest rates shown in the table above using the interest rates applicable to the trust student loans as of the statistical disclosure date. Because trust student loans with different interest rates are likely to be repaid at different rates, this information is not likely to remain applicable to the trust student loans after the statistical disclosure date. See Appendix A to the preliminary remarketing memorandum and “The Student Loan Pools – The Student Loan Marketing Association’s Student Loan Financing Business” in the prospectus.

A-3

DISTRIBUTION OF THE TRUST STUDENT LOANS BY

OUTSTANDING PRINCIPAL BALANCE PER BORROWER

AS OF THE STATISTICAL DISCLOSURE DATE

Range of Outstanding Principal Balance	Number of Borrowers		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
Less than $5,000.00		3,217	$	7,323,809		0.8	%
$5,000.00-$ 9,999.99		3,754		28,010,362		3.1
$10,000.00-$14,999.99		2,545		31,401,574		3.5
$15,000.00-$19,999.99		2,135		37,258,355		4.1
$20,000.00-$24,999.99		1,934		43,393,331		4.8
$25,000.00-$29,999.99		1,503		41,248,220		4.6
$30,000.00-$34,999.99		1,229		39,872,332		4.4
$35,000.00-$39,999.99		1,088		40,709,937		4.5
$40,000.00-$44,999.99		940		39,847,421		4.4
$45,000.00-$49,999.99		770		36,537,341		4.0
$50,000.00-$54,999.99		692		36,322,204		4.0
$55,000.00-$59,999.99		592		33,984,536		3.8
$60,000.00-$64,999.99		506		31,609,958		3.5
$65,000.00-$69,999.99		461		31,102,004		3.4
$70,000.00-$74,999.99		338		24,443,703		2.7
$75,000.00-$79,999.99		324		25,137,294		2.8
$80,000.00-$84,999.99		294		24,227,039		2.7
$85,000.00-$89,999.99		268		23,457,687		2.6
$90,000.00-$94,999.99		243		22,442,093		2.5
$95,000.00-$99,999.99		186		18,118,924		2.0
$100,000.00 and above		1,809		286,688,088		31.7

Total		24,828	$	903,136,213		100.0	%

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DISTRIBUTION OF THE TRUST STUDENT LOANS

BY DELINQUENCY STATUS AS OF THE

STATISTICAL DISCLOSURE DATE

Number of Days Delinquent	Number of Loans		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
0-30 days		41,206	$	853,958,605		94.6	%
31-60 days		623		17,983,287		2.0
61-90 days		273		7,585,363		0.8
91-120 days		145		4,271,971		0.5
121-150 days		115		3,556,591		0.4
151-180 days		113		3,917,575		0.4
181-210 days		90		2,793,089		0.3
Greater than 210 days		301		9,069,731		1.0

Total		42,866	$	903,136,213		100.0	%

A-5

DISTRIBUTION OF THE TRUST STUDENT LOANS

BY REMAINING TERM TO SCHEDULED MATURITY

AS OF THE STATISTICAL DISCLOSURE DATE

Number of Months Remaining to Scheduled Maturity	Number of Loans		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
0 to 3		173	$	63,463		*
4 to 12		1,209		847,255		0.1	%
13 to 24		1,130		2,338,980		0.3
25 to 36		1,076		4,037,733		0.4
37 to 48		961		5,405,160		0.6
49 to 60		1,089		7,023,522		0.8
61 to 72		5,181		26,884,099		3.0
73 to 84		1,981		15,736,765		1.7
85 to 96		1,462		13,660,608		1.5
97 to 108		1,228		14,100,966		1.6
109 to 120		1,423		21,052,602		2.3
121 to 132		5,923		102,152,046		11.3
133 to 144		2,786		64,493,256		7.1
145 to 156		1,817		48,457,283		5.4
157 to 168		1,263		36,389,680		4.0
169 to 180		1,206		33,510,554		3.7
181 to 192		4,539		122,243,687		13.5
193 to 204		1,740		53,732,744		5.9
205 to 216		1,294		45,530,402		5.0
217 to 228		1,040		41,656,892		4.6
229 to 240		908		35,669,469		3.9
241 to 252		850		40,408,183		4.5
253 to 264		563		28,982,375		3.2
265 to 276		440		22,172,778		2.5
277 to 288		320		18,235,010		2.0
289 to 300		354		23,874,373		2.6
301 to 312		387		32,016,772		3.5
313 to 324		89		5,867,703		0.6
325 to 336		74		5,294,745		0.6
337 to 348		83		6,615,743		0.7
349 to 360		173		15,690,100		1.7
361 and above		104		8,991,262		1.0

Total		42,866	$	903,136,213		100.0	%

*	Represents a percentage greater than 0% but less than 0.05%.

We have determined the number of months remaining to scheduled maturity shown in the table from the statistical disclosure date to the stated maturity date of the applicable trust student loan without giving effect to any deferment or forbearance periods that may be granted in the future. See Appendix A to the preliminary remarketing memorandum and “The Student Loan Pools – The Student Loan Marketing Association’s Student Loan Financing Business” in the prospectus.

A-6

DISTRIBUTION OF THE TRUST STUDENT LOANS

BY CURRENT BORROWER PAYMENT STATUS

AS OF THE STATISTICAL DISCLOSURE DATE

Current Borrower Payment Status	Number of Loans		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
Deferment		1,328	$	33,388,057		3.7	%
Forbearance		2,400		80,267,598		8.9
Repayment
First year in repayment		627		31,165,986		3.5
Second year in repayment		472		20,986,078		2.3
Third year in repayment		536		24,115,459		2.7
More than 3 years in repayment		37,503		713,213,035		79.0

Total		42,866	$	903,136,213		100.0	%

Current borrower payment status refers to the status of the borrower of each trust student loan as of the statistical disclosure date. The borrower:

may have temporarily ceased repaying the loan through a deferment or a forbearance period; or

may be currently required to repay the loan – repayment.

See Appendix A to the preliminary remarketing memorandum and “The Student Loan Pools – The Student Loan Marketing Association’s Student Loan Financing Business” in the prospectus.

The weighted average number of months in repayment for all trust student loans currently in repayment is approximately 119.9 calculated as the term to maturity at the commencement of repayment less the number of months remaining to scheduled maturity as of the statistical disclosure date.

A-7

SCHEDULED WEIGHTED AVERAGE REMAINING MONTHS IN

STATUS OF THE TRUST STUDENT LOANS BY

CURRENT BORROWER PAYMENT STATUS AS OF THE

STATISTICAL DISCLOSURE DATE

	Scheduled Months in Status Remaining
Current Borrower Payment Status	Deferment		Forbearance		Repayment
Deferment		17.2		-		224.3
Forbearance		-		4.5		215.5
Repayment		-		-		183.8

We have determined the scheduled weighted average remaining months in status shown in the previous table without giving effect to any deferment or forbearance periods that may be granted in the future. Of the $33,388,057 aggregate outstanding principal balance of the trust student loans in deferment as of the statistical disclosure date, $24,366,645 or approximately 73.0% of such loans are to borrowers who had not graduated as of that date We expect that a significant portion of these loans could qualify for additional deferments or forbearances at the end of their current deferment periods as the related borrowers continue their education beyond their current degree programs. As a result, the overall duration of any applicable deferment and forbearance periods as well as the likelihood of future deferment and forbearance periods within this pool of trust student loans is likely to be higher than in other pools of student loans without similar numbers of in-school consolidation loans. See Appendix A to the preliminary remarketing memorandum.

A-8

GEOGRAPHIC DISTRIBUTION OF THE TRUST STUDENT LOANS

AS OF THE STATISTICAL DISCLOSURE DATE

State	Number of Loans		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
Alabama		341	$	9,734,579		1.1	%
Alaska		74		1,943,055		0.2
Arizona		934		21,572,789		2.4
Arkansas		227		4,135,848		0.5
California		4,994		114,421,799		12.7
Colorado		724		14,203,785		1.6
Connecticut		672		12,203,367		1.4
Delaware		137		3,298,550		0.4
District of Columbia		258		4,475,114		0.5
Florida		2,964		71,554,480		7.9
Georgia		1,360		37,350,882		4.1
Hawaii		188		4,637,824		0.5
Idaho		137		3,831,734		0.4
Illinois		1,735		33,878,475		3.8
Indiana		1,164		21,329,030		2.4
Iowa		180		3,108,041		0.3
Kansas		820		12,463,967		1.4
Kentucky		271		5,304,940		0.6
Louisiana		1,172		26,025,128		2.9
Maine		123		2,471,864		0.3
Maryland		1,352		29,744,501		3.3
Massachusetts		1,568		26,125,124		2.9
Michigan		820		19,332,169		2.1
Minnesota		569		10,354,969		1.1
Mississippi		324		7,263,799		0.8
Missouri		907		15,421,206		1.7
Montana		55		1,330,961		0.1
Nebraska		109		3,188,252		0.4
Nevada		277		5,735,658		0.6
New Hampshire		205		4,239,497		0.5
New Jersey		1,231		27,170,091		3.0
New Mexico		157		3,292,579		0.4
New York		3,161		65,379,229		7.2
North Carolina		878		18,801,365		2.1
North Dakota		33		711,645		0.1
Ohio		1,291		25,976,141		2.9
Oklahoma		827		15,677,512		1.7
Oregon		619		11,229,733		1.2
Pennsylvania		1,661		30,327,276		3.4
Rhode Island		108		2,530,857		0.3
South Carolina		406		10,706,401		1.2
South Dakota		39		681,265		0.1
Tennessee		527		10,466,821		1.2
Texas		3,336		70,168,513		7.8
Utah		148		3,853,986		0.4
Vermont		56		828,302		0.1
Virginia		1,306		24,484,811		2.7
Washington		1,225		24,519,213		2.7
West Virginia		233		4,338,805		0.5
Wisconsin		463		9,783,247		1.1
Wyoming		38		1,135,709		0.1
Other		462		10,391,326		1.2

Total		42,866	$	903,136,213		100.0	%

A-9

We have based the geographic distribution shown in the table on the billing addresses of the borrowers of the trust student loans shown on the servicer’s records as of the statistical disclosure date.

Each of the trust student loans provides or will provide for the amortization of its outstanding principal balance over a series of regular payments. Except as described below, each regular payment consists of an installment of interest which is calculated on the basis of the outstanding principal balance of the trust student loan. The amount received is applied first to interest accrued to the date of payment and the balance of the payment, if any, is applied to reduce the unpaid principal balance. Accordingly, if a borrower pays a regular installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if a borrower pays a monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less.

In either case, subject to any applicable deferment periods or forbearance periods, and except as provided below, the borrower pays a regular installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance of that trust student loan.

The servicer makes available to borrowers of student loans it holds (including the trust student loans) payment terms that may result in the lengthening of the remaining term of the student loans. For example, not all of the loans sold to the trust provide for level payments throughout the repayment term of the loans. Some student loans provide for interest only payments to be made for a designated portion of the term of the loans, with amortization of the principal of the loans occurring only when payments increase in the latter stage of the term of the loans. Other loans provide for a graduated phase in of the amortization of principal with a greater portion of principal amortization being required in the latter stages than would be the case if amortization were on a level payment basis. The servicer also offers an income-sensitive repayment plan, under which repayments are based on the borrower’s income. Under that plan, ultimate repayment may be delayed up to five years. Borrowers under trust student loans will continue to be eligible for the graduated payment and income-sensitive repayment plans. These programs are applicable to the trust student loans and may be offered by the servicer to related borrowers at its discretion.

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The following table provides certain information about trust student loans subject to the repayment terms described in the preceding paragraphs.

DISTRIBUTION OF THE TRUST STUDENT LOANS BY REPAYMENT

TERMS AS OF THE STATISTICAL DISCLOSURE DATE

Loan Repayment Terms	Number of Loans		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
Level Repayment		21,692	$	359,576,936		39.8	%
Other Repayment Options⁽¹⁾		17,061		377,077,577		41.8
Income-driven Repayment⁽²⁾		4,113		166,481,699		18.4

Total		42,866	$	903,136,213		100.0	%

(1)	Includes, among others, graduated repayment and interest-only period loans.

(2)	Includes income sensitive and income based repayment.

With respect to interest-only loans, as of the statistical disclosure date, there are 484 loans with an aggregate outstanding principal balance of $21,484,267 currently in an interest-only period. These interest-only loans represent approximately 2.4% of the aggregate outstanding principal balance of the trust student loans. Interest-only periods range up to 48 months in overall length.

The servicer may in the future offer repayment terms similar to those described above to borrowers of trust student loans who are not entitled to these repayment terms as of the statistical disclosure date. If repayment terms are offered to and accepted by those borrowers, the weighted average life of the securities could be lengthened.

DISTRIBUTION OF THE TRUST STUDENT LOANS BY LOAN

TYPE AS OF THE STATISTICAL DISCLOSURE DATE

Loan Type	Number of Loans		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
Subsidized		20,277	$	346,676,389		38.4	%
Unsubsidized		22,589		556,459,824		61.6

Total		42,866	$	903,136,213		100.0	%

A-11

The following table provides information about the trust student loans regarding date of disbursement.

DISTRIBUTION OF THE TRUST STUDENT LOANS

BY DATE OF DISBURSEMENT AS OF

THE STATISTICAL DISCLOSURE DATE

Disbursement Date	Number of Loans		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
September 30, 1993 and earlier		232	$	8,337,247		0.9	%
October 1, 1993 through June 30, 2006		42,634		894,798,966		99.1
July 1, 2006 and later		0		0		0.0

Total		42,866	$	903,136,213		100.0	%

A-12

Guaranty Agencies for the Trust Student Loans. The eligible lender trustee has entered into a separate guarantee agreement with each of the guaranty agencies listed below, under which each of the guarantors has agreed to serve as guarantor for specified trust student loans.

The following table provides information with respect to the portion of the trust student loans guaranteed by each guarantor.

DISTRIBUTION OF THE TRUST STUDENT LOANS

BY GUARANTY AGENCY AS OF

THE STATISTICAL DISCLOSURE DATE

Name of Guaranty Agency	Number of Loans		Aggregate Outstanding Principal Balance		Percent of Pool by Outstanding Principal Balance
American Student Assistance		2,045	$	32,913,755		3.6	%
College Assist		26		1,108,747		0.1
Educational Credit Management Corporation		664		18,304,299		2.0
Florida Off Of Student Fin'l Assistance		649		9,545,353		1.1
Great Lakes Higher Education Corporation		504		11,970,386		1.3
Illinois Student Assistance Comm		1,482		26,398,968		2.9
Kentucky Higher Educ. Asst. Auth.		86		1,668,005		0.2
Louisiana Office Of Student Financial Asst		429		8,447,408		0.9
Michigan Guaranty Agency		433		8,381,509		0.9
Nebraska National Student Loan Program		3		100,890		*
New Jersey Higher Ed Student Assistance Authority		1,597		24,623,752		2.7
New York State Higher Ed Services Corp		4,666		92,589,353		10.3
Northwest Education Loan Association		313		7,584,944		0.8
Oklahoma Guaranteed Stud Loan Prog		871		15,590,410		1.7
Pennsylvania Higher Education Assistance Agency		4,424		79,537,828		8.8
Texas Guaranteed Student Loan Corp		3,672		79,525,051		8.8
United Student Aid Funds, Inc.		21,002		484,845,555		53.7
Total		42,866	$	903,136,213		100.0	%

*	Represents a percentage greater than 0% but less than 0.05%.

SIGNIFICANT GUARANTOR INFORMATION

The information shown for the Significant Guarantors relates to all student loans, including but not limited to trust student loans, guaranteed by the Significant Guarantors.

A-13

We obtained the following information from various sources, including from the related Significant Guarantor and/or from the Department of Education. None of the depositor, the sellers, the servicer, their affiliates or the remarketing agents have audited or independently verified this information for accuracy or completeness.

UNITED STUDENT AID FUNDS, INC.

United Student Aid Funds, Inc. (“USA Funds”) was organized as a private, nonprofit corporation under the General Corporation Law of the State of Delaware in 1960. In accordance with its Certificate of Incorporation, USA Funds: (i) maintains facilities for the provision of guarantee services with respect to approved education loans made to or for the benefit of eligible students attending approved educational institutions; (ii) guaranteed education loans made pursuant to certain loan programs under the Higher Education Act, as well as loans made under certain private loan programs; and (iii) serves as the designated guarantor for education-loan programs under the Higher Education Act of 1965, as amended (“the Act”) in Arizona, Hawaii and certain Pacific Islands, Indiana, Kansas, Maryland, Mississippi, Nevada and Wyoming.

USA Funds contracts with Navient Solutions and Student Assistance Corporation. Student Assistance Corporation is a wholly owned subsidiary of Navient Solutions. Navient Solutions and its subsidiaries are not sponsored by nor are they agencies of the United States of America.

USA Funds is the sole member of the Northwest Education Loan Association, a guarantor serving the states of Washington, Idaho and the Northwest. USA Funds, Inc. became a member of Great Lakes Higher Education Corporation effective January 1, 2017.

For the purpose of providing loan guarantees under the Act, USA Funds has entered into various agreements (collectively, the “Federal Reinsurance Agreements”) with the U.S. Secretary of Education (the “Secretary”). Pursuant to the Federal Reinsurance Agreements, USA Funds serves as a “guaranty agency” as defined in Section 435(j) of the Act. The Act allows the Secretary, after giving the guaranty agency notice and the opportunity for a hearing, to terminate the Federal Reinsurance Agreements if the Secretary determines that the administrative or financial condition of the guaranty agency jeopardizes the agency’s continued ability to perform its responsibilities under its guaranty agreement, it is necessary to protect the federal financial interest, or to ensure the continued availability of loans to student- or parent- borrowers.

Reinsurance is paid to USA Funds by the Secretary in accordance with a formula based on the annual default rate of loans guaranteed by USA Funds under the Act and the disbursement date of loans. The rate of reinsurance ranges from 100 percent to 75 percent of USA Funds’ losses on default-claim payments made to lenders. The Consolidated Appropriations Act of 2016 provided for 100 percent reinsurance on all FFEL Program claims purchased beginning December 2015 and beyond. Prior to that, the Higher Education Amendments of 1998 (the “1998 Reauthorization Law”) reduced the reinsurance coverage for loans in default made on or after Oct. 1, 1998, to a range from 95 percent to 75 percent based upon the annual default claims rate of the guaranty agency. Reinsurance on non-default claims remains at 100 percent.

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The 1998 Reauthorization Law requires guaranty agencies to establish two (2) separate funds, a federal reserve fund (property of the United States) and an agency operating fund (property of the guaranty agency). The federal reserve fund is to be used to pay lender claims and to pay a default-aversion fee to the agency operating fund. The agency operating fund is to be used by the guaranty agency to pay its operating expenses.

On March 30, 2010, President Obama signed into law the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), which ended the origination and guarantee of new loans under the Federal Family Education Loan Program, effective for loans whose first disbursement was after June 30, 2010. As a result of the statute, USA Funds will continue to administer a portfolio of outstanding FFELP loans, but no longer may guarantee new federal student loans.

As of September 30, 2016, USA Funds held net assets on behalf of the Federal Reserve Fund of approximately $143 million. Through September 30, 2016, the outstanding, unpaid, aggregate amount of principal and interest on loans that had been directly guaranteed by USA Funds under the Federal Family Education Loan Program was approximately $46.6 billion. Also, as of September 30, 2016, USA Funds had operating fund assets totaling over $1.1 billion, which includes the $143 million of net assets held on behalf of the Federal Reserve Fund.

USA Funds’ “reserve ratio” complies with the Department of Education definition, which is determined by dividing the fund balance reserves in a guarantor’s federal reserve fund, by the total amount of loans outstanding. Following this formula, the reserve ratio for the federal reserve fund administered by USA Funds for the last five fiscal years, was as follows:

	Reserve Ratio
	Federal Fiscal Year
Guarantor	2013			2014			2015			2016			2017
United Student Aid Funds, Inc.		0.354	%		0.277	%		0.251	%		0.308	%		0.350	%

For the past five federal fiscal years, USA Funds’ claims rate has not exceeded 5% and, as a result, the highest allowable reinsurance has been paid on all USA Funds’ claims. The actual claims rates are as follows:

	Claims Rate
	Federal Fiscal Year
Guarantor	2013			2014			2015			2016			2017
United Student Aid Funds, Inc.		4.74	%		4.73	%		4.71	%		0.60	%		0.67	%

NEW YORK STATE HIGHER EDUCATION SERVICES CORPORATION

New York State Higher Education Services Corporation (“HESC”) was organized in 1975 as an agency of the State of New York, pursuant to an act of the New York legislature, to expand educational opportunities for students. HESC administers the New York Tuition Assistance Program and a variety of state scholarships in addition to acting as a guarantee agency under the Federal Family Education Loan Program (FFELP). HESC is the designated guarantee agency for the State of New York, and guarantees all types of FFELP loans

As a result of the 3/30/2010 enactment of the Health Care and Education Reconciliation Act of 2010 (HCERA) (HR4872), the FFELP was eliminated effective 7/1/2010. No new (first disbursed) Stafford, PLUS or consolidation loans may be disbursed through the FFELP after 6/30/2010. Existing FFELP loans will continue to be eligible for program benefits. Beginning 7/1/2010, all new Stafford, PLUS and consolidation loans will be made under the U. S. Department of Education’s Direct Loan Program.

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For the FFELP, HESC will continue to have the responsibility for providing collection assistance to lenders for delinquent loans, paying lender claims for loans in default, and collection activities on loans after purchase by HESC. In addition to the FFELP, HESC continues to perform residual administrative activities of the State guaranteed loan program in which no new loans have been guaranteed since 1984.

HESC has a Federal Student Loan Reserve Fund (the “Federal Fund”) and an Agency Operating Fund to account for FFELP activity. The Federal Fund assets, and earnings on those assets, are restricted in use and are considered property of the Department of Education. The Agency Operating Fund is considered property of HESC, and its assets and earnings may be used generally for guarantee agency and other student financial aid related activities.

As of September 30, 2017, HESC had total FFELP assets of approximately $160 million (including balances for both the Federal Fund and the Agency Operating Fund) and had a total of approximately $12.1 billion in original principal amount of loans outstanding.

Guarantee Volume. As a result of HCERA. HESC has not guaranteed any loans in the last five federal fiscal years ended September 30.

Reserve Ratio. A guarantee agency’s reserve ratio is determined by dividing its Federal Fund Balance by the original principal amount of loans outstanding. HESC’s reserve ratio for the last five federal fiscal years ending September 30 is as follows:

	Reserve Ratio as of Close of Federal Fiscal Year
Guarantor	2013			2014			2015			2016			2017
New York State Higher Education Services Corporation		0.31	%		0.29	%		0.32	%		0.45	%		0.60	%

Recovery Rates. The Department of Education calculates a guaranty agency’s recovery rate by dividing the amount recovered from borrowers during a federal fiscal year by the guaranty agency’s outstanding default loan portfolio (beginning inventory) at the end of the prior federal fiscal year. HESC’s recovery rate for each of the past five federal fiscal years ending September 30 provided below uses the Department of Education’s calculation method:

	Recovery Rate Federal Fiscal Year
Guarantor	2013			2014			2015			2016			2017
New York State Higher Education Services Corporation		25.56	%		22.74	%		21.86	%		24.86	%		25.42	%

Claims Rate. A guaranty agency’s claims rate is determined by dividing the amount of federal reinsurance claims paid by the Department of Education during a federal fiscal year by the original principal amount of loans in repayment at the end of the prior federal fiscal year. HESC’s claims rate for each of the past five federal fiscal years ending September 30 is as follows:

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	Claims Rate Federal Fiscal Year
Guarantor	2013			2014			2015			2016			2017
New York State Higher Education Services Corporation		1.51	%		1.52	%		0.93	%		0.62	%		0.78	%

HESC is headquartered at 99 Washington Avenue, Albany, New York 12255. Its most recent annual report is available on its web site.

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SLM Student Loan Trust 2004-5 - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 14, 2019

Attached files