Attached files
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8-K - 8-K - SLM Student Loan Trust 2006-5 | brhc10013490_8k.htm |
Class
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Outstanding Principal Amount
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Interest Rate
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Price
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Next Reset Date
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Legal Maturity Date
|
|||||
Class A-6B Notes
|
$200,000,000
|
3-month LIBOR
plus %
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100%
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October 26, 2020
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October 25, 2040
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|||||
Class A-6C Notes
|
$200,000,000
|
3-month LIBOR
plus %
|
100%
|
October 26, 2020
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October 25, 2040
|
|
Class A-6B Notes |
Class A-6C Notes
|
Original principal amount
|
$200,000,000
|
$200,000,000
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Current outstanding principal balance
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$200,000,000
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$200,000,000
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Principal amount being remarketed
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$200,000,000(1)
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$200,000,000(1)
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Remarketing Terms Determination Date
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July 15, 2020
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July 15, 2020
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Notice Date(2)
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July 17, 2020
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July 17, 2020
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Spread Determination Date(3)
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On or before July 22, 2020
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On or before July 22, 2020
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Current Reset Date
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July 27, 2020
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July 27, 2020
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All Hold Rate
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Three-Month LIBOR plus 0.75%
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Three-Month LIBOR plus 0.75%
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Next applicable reset date
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October 26, 2020
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October 26, 2020
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Interest rate mode
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Floating
|
Floating
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Index
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Three-Month LIBOR(4)
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Three-Month LIBOR(4)
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Spread(5)
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Plus %
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Plus %
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Day-count basis
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Actual/360
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Actual/360
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Weighted average remaining life
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(6)
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(6)
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REMARKETING TERMS SUMMARY
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i
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INTRODUCTION
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iii
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SUMMARY OF NOTE TERMS
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1
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RISK FACTORS
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22
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DEFINED TERMS
|
46 |
THE TRUST
|
46 |
USE OF PROCEEDS
|
50 |
AFFILIATIONS AND RELATIONS
|
51 |
THE DEPOSITOR
|
51 |
NAVIENT CORPORATION
|
53 |
THE SPONSOR, SERVICER AND ADMINISTRATOR
|
55 |
THE SELLERS
|
56 |
THE TRUST STUDENT LOAN POOL
|
57 |
THE COMPANIES’ STUDENT LOAN FINANCING BUSINESS
|
62 |
TRANSFER AGREEMENTS
|
66 |
SERVICING AND ADMINISTRATION
|
69 |
TRADING INFORMATION
|
80 |
DESCRIPTION OF THE NOTES
|
81 |
INDENTURE
|
116 |
CERTAIN LEGAL ASPECTS OF THE STUDENT LOANS
|
122 |
STATIC POOLS
|
127 |
PREPAYMENTS, EXTENSIONS, WEIGHTED AVERAGE REMAINING LIFE AND EXPECTED MATURITY OF THE CLASS A-5 NOTES
|
127 |
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
|
129 |
STATE AND LOCAL TAX CONSEQUENCES
|
139
|
ERISA CONSIDERATIONS
|
140 |
ACCOUNTING CONSIDERATIONS
|
143 |
REPORTS TO NOTEHOLDERS
|
143 |
REMARKETING
|
144 |
NOTICES TO INVESTORS
|
144 |
LISTING INFORMATION
|
145 |
DEPOSITOR AFFIRMATIONS
|
146 |
CERTAIN INVESTMENT COMPANY ACT CONSIDERATIONS
|
147 |
RATINGS
|
147 |
LEGAL PROCEEDINGS
|
148 |
LEGAL MATTERS
|
152 |
GLOSSARY
|
153 |
ANNEX A:
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The Trust Student Loan Pool as of May 31, 2020
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APPENDIX A:
|
Federal Family Education Loan Program
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APPENDIX B:
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Global Clearance, Settlement and Tax Documentation Procedures
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EXHIBIT I:
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Prepayments, Extensions, Weighted Average Remaining Life and Expected Maturity of the Class A-6B and Class A-6C Notes
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ISSUING ENTITY
SLM Student Loan Trust 2006-5.
Class A-6B AND CLASS A-6C notes
The Reset Rate Class A-6B Student Loan‑Backed Notes that are being remarketed hereunder were originally issued by the trust on June 21, 2006 in the principal amount of $200,000,000 and are currently outstanding in the same amount.
The Reset Rate Class A-6C Student Loan‑Backed Notes that are being remarketed hereunder were originally issued by the trust on June 21, 2006 in the principal amount of $200,000,000 and are currently outstanding in the same amount.
The “initial reset date” for the class A-6B notes was January 25, 2018. A failed remarketing was declared with respect to the class A-6B notes and its initial reset date and each subsequent reset date. Pursuant to the terms of these failed remarketings, (i) the holders of the class A-6B notes were required to retain their notes, (ii) the class A-6B notes were reset to bear interest at the failed remarketing rate, which is an annual rate equal to three-month LIBOR plus 0.75% and (iii) a three-month reset period ending on the next quarterly distribution date was established. The initial reset date for the class A-6C notes was April 25, 2018. A failed remarketing was declared with respect to the class A-6C notes on April 25, 2018 reset date. Pursuant to the terms of this failed remarketing, (i) the holders of the class A-6C notes were required to retain their notes, (ii) the class A-6C notes were reset to bear interest at the failed remarketing rate, which is an annual rate equal to three-month LIBOR plus 0.75% and (iii) a three-month reset period ending on the next quarterly distribution date was established. We refer to the July 27, 2020 reset date as the “current reset date” in this free-writing prospectus. The legal maturity date for the class A-6B and A-6C notes is October 25, 2040.
Class
|
Spread
|
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Class A-6B
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plus %
|
|
Class A-6C
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plus %
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|
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Class
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Spread
|
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Class A-6B
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plus %
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Class A-6C
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plus %
|
|
• |
the remarketing agent, in consultation with the administrator, cannot determine the applicable required reset terms on or before the remarketing terms determination date;
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• |
the remarketing agent cannot establish the required spread on the spread determination date;
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• |
the remarketing agent is unable to remarket some or all of the tendered reset rate notes at the spread set by the remarketing agent, or one or more committed purchasers default on their purchase obligations and the remarketing agent
chooses not to purchase such reset rate notes itself;
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• |
any rating agency then rating the notes has not confirmed or upgraded its then-current rating of any class of notes, if such confirmation is required; or
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• |
certain other conditions specified in the remarketing agreement are not satisfied.
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• |
all holders of the applicable class will retain their reset rate notes, including in all deemed mandatory tender situations;
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• |
the related interest rate for the applicable class of reset rate notes will be reset to a failed remarketing rate of three-month LIBOR plus 0.75% per annum; and
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• |
the related reset period will be set at three months.
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Floating Rate Class A Notes:
• |
Class A-1 Student Loan-Backed Notes in the original principal amount of $317,000,000, none of which remain outstanding;
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• |
Class A-2 Student Loan-Backed Notes in the original principal amount of $482,000,000, none of which remain outstanding;
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• |
Class A-3 Student Loan-Backed Notes in the original principal amount of $326,000,000, none of which remain outstanding;
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• |
Class A-4 Student Loan-Backed Notes in the original principal amount of $507,000,000, none of which remain outstanding;
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• |
Class A-5 Student Loan-Backed Notes in the original principal amount of $591,000,000, and currently outstanding in the amount of $66,259,985; and
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• |
Class A-6A Student Loan-Backed Notes in the original principal amount of $382,946,000.00, and currently outstanding in the same amount.
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• |
Class B Student Loan-Backed Notes in the original principal amount of $92,968,000, and currently outstanding in the amount of $ 42,941,870.74 .
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• |
the floating rate class A notes and the reset rate notes collectively as the class A notes;
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• |
the floating rate class A notes and the class B notes as the floating rate notes; and
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• |
the floating rate notes and the reset rate notes as the notes.
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Class
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Spread
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Class A‑5
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plus 0.11%
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Class A‑6A
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plus 0.16%
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Class B
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plus 0.21%
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• |
first, the class A noteholders’ principal distribution amount in the following order of priority:
|
• |
to the class A-5 notes until their principal balance is reduced to zero; and then
|
• |
pro rata, to the class A-6A, class A-6B and class A-6C notes until their respective principal balances are reduced to zero; provided, that either (a) if the class A-6B and/or class A-6C notes are then denominated in a currency other
than U.S. Dollars and are structured to receive payments of principal on each applicable distribution date, any payments due to the related reset rate noteholders will be made to the related currency swap counterparty or (b) if the
class A-6B and/or class A-6C notes are then structured not to receive a payment of principal until the end of the related reset period, any payments due to the related reset rate noteholders will be allocated to the related accumulation
account; and
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• |
second, on each distribution date on and after the stepdown date, and provided that no trigger event is in effect on such distribution date, the class B noteholders’ principal distribution
amount, to the class B notes, until their principal balance is reduced to zero.
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Class
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Maturity Date
|
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Class A-5
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January 25, 2027
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Class A-6A
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October 25, 2040
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Class A-6B
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October 25, 2040
|
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Class A-6C
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October 25, 2040
|
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Class B
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October 25, 2040
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|
|
• |
the trust student loans;
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• |
collections and other payments on the trust student loans;
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• |
funds it currently holds or will hold from time to time in its trust accounts, including a collection account; a reserve account; one or more accumulation accounts; one or more supplemental interest accounts; an investment reserve
account; an investment premium purchase account; a remarketing fee account; and if the class A-6B or class A-6C notes are denominated in a currency other than U.S. Dollars, a currency account;
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• |
its rights under the transfer and servicing agreements, including the right to require VG Funding (or Navient Solutions, LLC, as servicer, acting on its behalf), Navient CFC, the depositor or the servicer to repurchase trust student
loans from it or to substitute loans under certain conditions;
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• |
its rights under any swap agreement or potential future interest rate cap agreement, as applicable; and
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• |
its rights under the guarantee agreements with guarantors.
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• |
on the related maturity date for each class of class A notes and upon termination of the trust, to cover shortfalls in payments of the class A noteholders’ principal and accrued interest to the related class of notes; and
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• |
on the class B maturity date and upon termination of the trust, to cover shortfalls in payments of the class B noteholders’ principal and accrued interest, any carryover servicing fees, any remaining swap termination payments and
remarketing fees and expenses.
|
|
• |
if the applicable class of reset rate notes is then denominated in U.S. Dollars, on the next reset date, to the related reset rate noteholders, after all other required distributions have been made on that reset date; or
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• |
if the applicable class of reset rate notes is then denominated in a currency other than U.S. Dollars, on or about the next related reset date, to the currency swap counterparty or counterparties, which will in turn pay the applicable
currency equivalent of those amounts to the trust, for payment to the reset rate noteholders on the second business day following the related reset date, after all other required distributions have been made on that reset date.
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• |
the amount of specified increases in the costs incurred by the servicer;
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• |
the amount of specified conversion, transfer and removal fees;
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• |
any amounts described in the first two bullets that remain unpaid from prior distribution dates; and
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• |
interest on any unpaid amounts.
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• |
the maturity or other liquidation of the last trust student loan and the disposition of any amount received upon its liquidation; and
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• |
the payment of all amounts required to be paid to the noteholders.
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• |
pay to noteholders the interest payable on the related distribution date; and
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• |
reduce the outstanding principal amount of each class of notes then outstanding on the related distribution date to zero, taking into account all amounts then on deposit in the accumulation account.
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• |
is then structured not to receive a payment of principal until the end of the related reset period, the outstanding principal balance of the such class of reset rate notes will be deemed to have been reduced by any amounts on deposit,
exclusive of any investment earnings, in the accumulation account; and/or
|
• |
is then denominated in a non-U.S. Dollar currency, the U.S. Dollar equivalent of the then-outstanding principal balance of such class of reset rate notes will be determined based upon the exchange rate provided for in the currency swap
agreement or agreements.
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• |
Special tax counsel to the trust is of the opinion that the class A-6B and class A-6C notes will be characterized as debt for United States federal income tax purposes.
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• |
Special tax counsel to the trust is of the opinion that the trust will not be characterized as an association or a publicly traded partnership taxable as a corporation for United States federal income tax purposes.
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• |
Delaware tax counsel for the trust is of the opinion that the same characterizations will apply for Delaware state income tax purposes as for federal income tax purposes and noteholders who were not otherwise subject to Delaware
taxation on income would not become subject to Delaware tax as a result of their ownership of notes.
|
|
• |
an exemption from the prohibited transaction provisions of Section 406 of the Employee Retirement Income Security Act of 1974, as amended, and Section 4975 of the Internal Revenue Code of 1986, as amended, applies, so that the purchase
or holding of the class A-6B or class A-6C notes will not result in a non-exempt prohibited transaction; and
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• |
the purchase or holding of the class A-6B or class A-6C notes will not cause a non-exempt violation of any substantially similar federal, state, local or foreign laws.
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• |
class A-5 notes: “AAAsf” by Fitch, “Aaa (sf)” by Moody’s and “AAA (sf)” by S&P.
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• |
class A-6A notes: “AAAsf” by Fitch, “Aaa (sf)” by Moody’s and “AA+ (sf)” by S&P.
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• |
class A-6B notes: “AAAsf” by Fitch, “Aaa (sf)” by Moody’s and “AA+ (sf)” by S&P.
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• |
class A-6C notes: “AAAsf” by Fitch, “Aaa (sf)” by Moody’s and “AA+ (sf)” by S&P.
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• |
class B notes: “Asf” by Fitch, “A3 (sf)” by Moody’s and “AA (sf)” by S&P.
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CUSIP Number
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83149E AJ 6
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International Securities Identification Number (ISIN)
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US83149EAJ64
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European Common Code
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025895991
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CUSIP Number
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83149E AK 3
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International Securities Identification Number (ISIN)
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US83149EAK38
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European Common Code
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025896092
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General Risks
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||
Federal Financial Regulatory Legislation Could Have An Adverse Effect On Navient Corporation, The Sponsor, The Servicer, The Depositor, The Sellers And The Trust, Which Could Result In Losses Or Delays In
Payments On Your Notes
|
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) to reform and strengthen supervision of the U.S. financial services
industry. The Dodd-Frank Act represents a comprehensive change to existing laws, imposing significant new regulation on almost every aspect of the U.S. financial services industry.
The Dodd-Frank Act has resulted in significant new regulation in key areas of the business of Navient Corporation, the direct parent of Navient Solutions, LLC and the indirect parent of Navient Funding, LLC,
and its affiliates and the markets in which Navient Corporation, the sponsor and their affiliates operate. Pursuant to the Dodd-Frank Act, Navient Corporation and many of its subsidiaries are subject to regulations promulgated by the
Consumer Financial Protection Bureau (the “CFPB”). The CFPB has substantial power to define the rights of consumers and the responsibilities of certain institutions, including Navient Corporation, the sponsor and their affiliates, in
connection with their education loan origination and servicing businesses. In addition, the CFPB has the authority to bring enforcement actions against student loan lenders and student loan servicers for violations of federal consumer
protection regulations and with respect to acts or practices that the CFPB determines to be unfair, deceptive or abusive.
It is likely that operational expenses of Navient Corporation, the sponsor or their affiliates will increase if new or additional compliance requirements under the Dodd-Frank Act are imposed on their
operations, and their competitiveness could be significantly affected if they are subjected to supervision and regulatory standards not otherwise applicable to their competitors.
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On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act provides relief to borrowers under federal direct student loans and FFELP loans owned by the U.S. Department
of Education, in the form of a 0% interest rate and a suspension of payments, until September 30, 2020. Although these borrower relief programs have not been extended to borrowers of FFELP loans held by entities other than the U.S.
Department of Education, including the trust student loans, there is no assurance that future legislation intended to mitigate the economic effects of the COVID-19 pandemic will not directly or indirectly affect the trust student loans,
or otherwise affect the servicer’s business. The majority of its implementing regulations have not yet been issued. As a result, the potential impact of the CARES Act on financial institutions and other nonbank financial companies, such
as Navient, or consumers, such as the obligors of the loans, is unknown.
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The Bankruptcy Of The Depositor, Navient CFC Or Any Other Seller Could Delay Or Reduce Payments On Your Notes
|
We have taken steps to assure that the voluntary or involuntary application for relief by the depositor, Navient CFC, which is the sole member of the depositor, or any other applicable seller under the United
States Bankruptcy Code or other insolvency laws will not result in consolidation of the assets and liabilities of the trust with those of the depositor, Navient CFC and the other sellers. However, we cannot guarantee that the activities of
the depositor, the sellers, the sponsor or the trust will not result in a court concluding that the trust’s assets and liabilities should be consolidated with those of the depositor, Navient CFC or any other seller in a proceeding under any
insolvency law. If a court were to reach this conclusion or a filing were made under any insolvency law by or against us, or if an attempt were made to litigate this issue, then delays in distributions on the notes or reductions in these
amounts could result.
Navient CFC, the other sellers of the student loans and the depositor intend that each transfer of student loans to the trust will constitute a true sale. If such transfer constitutes a true sale, the student
loans and their proceeds would no longer be considered property of the depositor, Navient CFC or the other sellers should any such seller become subject to an insolvency law.
If the depositor, Navient CFC or any other seller were to become subject to an insolvency law, and a creditor, a trustee-in-bankruptcy or the seller itself were to take the position that the sale of student
loans from the related seller to the depositor should instead be treated as a pledge of the student loans to secure a borrowing of that seller, delays in payments on the notes could occur.
In addition, if the court ruled in favor of this position, reductions in the amount of payments on the notes could result.
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The Bankruptcy Of The Servicer Could Delay The Appointment Of A Successor Servicer Or Reduce Payments on your notes
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In the event of a default by the servicer resulting solely from certain events of insolvency or the bankruptcy of the servicer, a court, conservator, receiver or liquidator (including the FDIC) may have the
power to prevent any of the servicer, the trust, the indenture trustee or the noteholders, as applicable, from appointing a successor servicer and delays in the collection of payments on the trust student loans may occur. It may also be
difficult to find a third party to act as successor servicer, and the trust may have to increase the servicing fee in order to obtain such successor servicer. Any resulting delay in the collection of payments on the affected trust student
loans may delay or reduce payments to noteholders. In addition, in the event of an insolvency or a bankruptcy of the servicer, a court, conservator, receiver or liquidator may permit the servicer to assign its rights and obligations as
servicer to a third party without complying with the provisions of the transaction documents.
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Because The Notes May Not Provide Regular Or Predictable Payments, You May Not Receive The Return On Your Investment That You Expected
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The notes may not provide a regular or predictable schedule of payments or payment on any specific date. Accordingly, you may not receive the return on your investment that you expected.
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The Notes Are Not Suitable Investments For All
Investors |
The reset rate notes are complex investments that should be considered only by investors who, either alone or with their financial, tax and legal advisors, have the expertise to analyze the prepayment,
reinvestment, default and market risk, and tax consequences of such an investment, as well as the interaction of these factors. You should not purchase the reset rate notes unless you understand the structural, prepayment, credit,
liquidity and market risks associated with the reset rate notes, the regulatory and enforcement risks relating to the trust student loans, the tax consequences of an investment in the reset rate notes and the interaction of the foregoing
factors. The interaction of the factors described in this free-writing prospectus and other factors that may affect the reset rate notes and their combined effects on the reset rate notes are not possible to predict with meaningful
certainty and are likely to change from time to time. As a result, an investment in the reset rate notes involves substantial risks and uncertainties and should be considered only by sophisticated institutional investors with substantial
investment experience with similar types of securities and who have conducted an appropriate analysis of the reset rate notes. Prospective investors must be able to bear the risk of loss (including total loss) on their investment in the
reset rate notes.
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Sequential Payment Of The Notes Results In A Greater Risk Of Loss
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Holders of the class A-6B or class A-6C notes bear a greater risk of loss than do holders of the class A-5 notes because no principal will be paid to any class A-6B or class A-6C noteholders until the class
A-5 notes have been paid in full. If a failed remarketing occurs, the reset rate notes would become subject to the failed remarketing rate, which is higher than the interest rate that would otherwise be applicable to such class of notes.
This would reduce the amount of available funds to pay interest on other classes of notes and principal on the reset rate notes. In that case, or if prepayments are much higher than anticipated, or if losses on the trust student loans are
greater than expected, you may suffer a loss.
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Illiquid Market Conditions May Occur From Time To Time
|
From time to time, the secondary market for your class A-6B or class A-6C notes may be adversely affected by periods of general market illiquidity or by events in the global financial markets in general or in
the securitization market in particular. Accordingly, you may not be able to sell your class A-6B or class A-6C notes when you want to do so or you may be unable to obtain the price that you wish to receive for your class A-6B or class
A-6C notes and, as a result, you may suffer a loss on your investment.
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School Closures And Unlicensed Schools May Result In Losses On Your Notes
|
Some of the trust student loans are subject to the so-called “Holder-in-Due-Course” rule of the Federal Trade Commission (the “Holder Rule”) the provisions of which are similar to those contained in the
Uniform Consumer Credit Code and in state statutes and common law of many states. The effect of these laws is to subject a seller (and certain lenders and their assignees, such as the trust) in a consumer credit transaction to all claims
and defenses which the obligor in the transaction can assert against the seller of the goods or services. Under these laws, the trust as holder of the trust student loans may be subject to any claims or defenses that the student borrower
may assert against its school for failure of the school to satisfy its obligations under the enrollment agreement with the student as a result of a school closure, a school bankruptcy or otherwise. If a student is successful in asserting
such a claim, the student may have the right to recover from the trust payments previously made on the related trust student loan and have a defense against making further payments. In this event, to the extent available funds and credit
enhancement are insufficient to cover such amounts, you may suffer a loss on your investment.
|
In addition, generally state law requires schools engaged in providing educational services in their state to be licensed by a state regulatory authority. In most states, if a school is not licensed at the
time the student signs the enrollment agreement, the enrollment agreement may be void and, as a result, the student will have a defense against repayment of the loan. Although each seller will represent as a condition to the sale of the
trust student loans that all of the related schools were licensed under applicable law as of the origination date of such trust student loans, to the extent that a related school became unlicensed prior to the student signing the enrollment
agreement, the related borrower may have the right to recover payments previously made on the related trust student loan and may have a defense against further payment. There is also a possibility that a school has failed to maintain its
license under applicable law since the origination of the related trust student loans, and in such event, the related borrower may be entitled to the claims or defenses with respect to payments on its trust student loan described above. In
either of these instances, to the extent available funds and credit enhancement is insufficient to cover such amounts, you may suffer a loss on your investment.
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||
The Issuing Entity Will Have Limited Assets From Which To Make Payments On The Notes, Which May Result In Losses
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The issuing entity will not have, nor will it be permitted to have, significant assets or sources of funds other than the pool of trust student loans and the related guarantee agreements. The issuing entity
will also have a reserve account established in the issuing entity’s name.
Consequently, you must rely upon payments on the trust student loans from the borrowers and guarantors, as applicable, and, if available, amounts on deposit in the trust accounts described above, and
overcollateralization to repay your notes. If these sources of funds are unavailable or insufficient to make payments on your notes, you may experience a loss on your investment.
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Your Notes May Have A Degree Of Basis Risk, Which Could Compromise The Trust’s Ability To Pay Principal And Interest On Your Notes
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There may be a degree of basis risk associated with the class A-6C notes. Basis risk is the risk that shortfalls might occur because, among other things, while the effective interest rates of the trust
student loans adjust on the basis of specified indices and those of the notes adjust on the basis of a different LIBOR index, different indices or, with respect to the reset rate notes at a time when such notes are in fixed rate mode, do
not adjust at all. If a shortfall were to occur, the trust’s ability to pay principal of and/or interest on your notes could be compromised. See “Annex A—The Trust Student Loan Pool—Composition of the Trust Student Loans as of the
Statistical Disclosure Date” in this free-writing prospectus which specifies the percentages of trust student loans that adjust based on LIBOR or the 91-day Treasury bill rate, as applicable.
|
Consequently, you must rely on other forms of credit enhancement, to the extent available, to mitigate basis risk. There can be no assurance that the amount of credit enhancement will be sufficient to cover
the basis risk associated with the notes.
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You May Be Unable To Reinvest Principal Payments At The Yield You Earn On The Notes
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Asset-backed notes usually produce increased principal payments to investors when market interest rates fall below the interest rates on the collateral—student loans in this case—and decreased principal
payments when market interest rates rise above the interest rates on the collateral. As a result, you are likely to receive more money to reinvest at a time when other investments generally are producing lower yields than the yield on the
notes. Similarly, you are likely to receive less money to reinvest when other investments generally are producing higher yields than the yield on the notes.
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Withdrawal Or Downgrade Of Ratings May Decrease The Prices Of Your Notes
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A security rating is not a recommendation to buy, sell or hold securities. Similar ratings on different types of securities do not necessarily mean the same thing. A rating agency may revise or withdraw its
rating at any time if it believes circumstances have changed. A subsequent downgrade in the rating on your notes is likely to decrease the price a subsequent purchaser will be willing to pay for your notes.
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A Conflict Of Interest May Exist Between The Rating Agencies Engaged To Rate The Notes And The Transaction Parties
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The SEC has taken the position that being paid by the sponsor, issuer or an underwriter to issue and/or maintain a credit rating on asset backed securities may create a conflict of interest for rating
agencies, and that this potential conflict is particularly acute because arrangers of asset-backed securities transactions provide repeat business to such rating agencies. Potential investors in the class A-6B or class A-6C notes should
make their own determinations regarding whether such a conflict of interest actually exists, whether any such potential conflict of interest impacts a rating from any retained rating agency and the weight given to any particular rating in
making an investment decision in the class A-6B or class A-6C notes.
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A Further Lowering Of The Credit Rating of the United States Of America May Adversely Affect The Market Value Of Your Notes
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The credit rating of the United States may potentially be downgraded by one or more nationally recognized statistical rating organizations (an “NRSRO”) within the meaning of Section 3(a)(62) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). The impact of any such potential downgrades is unknown, and depending on any lowered rating assigned, the stated reasons for a lower rating and other factors, the liquidity, market
value and regulatory characteristics of your notes could be materially and adversely affected.
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Certain Actions Can Be Taken Without Noteholder Approval
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The transaction documents provide that certain actions may be taken based upon receipt by the indenture trustee of a confirmation from each of the rating agencies that the then-current ratings assigned by the
rating agencies then rating the notes will not be downgraded or withdrawn by those actions. In this event, such actions may be taken without the consent of noteholders.
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LIBOR Manipulation Claims And Recent Announcements By The United Kingdom Financial Conduct Authority Regarding Changes To, Or Elimination Of, LIBOR May Affect the Interest Rate on Your Notes
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The interest rate on the notes is based on a spread over three-month LIBOR, as set forth on the cover of this free writing prospectus and the special allowance payments on certain of the trust student loans
are based on one-month LIBOR. The London Interbank Offered Rate, or LIBOR, serves as a global benchmark for home mortgages, student loans and what various issuers pay to borrow money determining interest rates on commercial and consumer
loans, bonds, derivatives and numerous other financial instruments.
In addition, on July 27, 2017, the Chief Executive Officer of the United Kingdom Financial Conduct Authority (the “FCA”) announced that by the end of 2021 (the “London Interbank Offered Rate Phase-Out
Date”), LIBOR would no longer be sustained through the FCA’s efforts to compel banks’ participation in setting the benchmark. The FCA’s intention is that after 2021, it will no longer be necessary for the FCA to ask, or to require,
banks to submit contributions to LIBOR. The FCA does not intend to sustain LIBOR through using its influence or legal powers beyond that date. It is possible that the ICE Benchmark Administration Limited (the “IBA”), which took over
administration of LIBOR on February 1, 2014, may be willing and able to produce LIBOR rates after 2021, but we cannot assure you that LIBOR will survive in its current form, or at all. Following the London Interbank Offered Rate
Phase-Out Date or in the event of any other disruption in the London interbank market, we refer you to “Description of the Notes—Determination of Indices—LIBOR” for the process for determining
LIBOR under the indenture.
As a result of the foregoing, the rate at which your notes bear interest could be adversely affected by changes to the rate-setting process for LIBOR, or the phasing out of the rate entirely. There may be a negative effect to you if
the LIBOR global benchmark is no longer available.
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The Notes Are Not A Suitable Investment for EU Institutional Investors Subject To The EU Risk Retention And Due Diligence Requirements
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All prospective investors in the notes whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities should consult
with their own legal, accounting and other advisors in determining whether, and to what extent, the notes will constitute legal investments for them or are subject to investment or other restrictions, unfavorable accounting treatment,
capital charges, reserve requirements or other consequences.
Investors should be aware and in some cases are required to be aware of the risk retention and due diligence requirements (the “EU Risk Retention and Due Diligence Requirements”) which under Article 5 of
Regulation (EU) 2017/2402 (the “Securitization Regulation”) apply to certain types of EU-regulated investors including institutions for occupational retirement, credit institutions, alternative investment fund managers who manage or market
alternative investment funds in the EU, investment firms, insurance and reinsurance undertakings and management companies of UCITS funds (or internally managed UCITS) (“EU Institutional Investors”). Amongst other things, the EU Risk
Retention and Due Diligence Requirements restrict an EU Institutional Investor from investing in a securitization unless the EU Institutional Investor has verified that:
(a) the originator or original lender of the securitization grants all the credits giving rise to the underlying exposures on the basis of sound and well-defined criteria and clearly established processes
for approving, amending, renewing and financing those credits and has effective systems in place to apply those criteria and processes to ensure that credit-granting is based on a thorough assessment of the obligor’s creditworthiness;
(b) the originator, sponsor or original lender of the securitization (i) retains on an ongoing basis a material net economic interest which, in any event, shall not be less than 5%, determined in
accordance with Article 6 of the Securitization Regulation, and (ii) discloses the risk retention to EU Institutional Investors (the “EU Retention Requirement”); and
(c) the originator, sponsor or securitization special purpose entity (“SSPE”) has, where applicable, made available the information required by Article 7 of the Securitization Regulation in accordance with
the frequency and modalities provided for in Article 7 of the Securitization Regulation.
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Failure on the part of an EU Institutional Investor to comply with the EU Risk Retention and Due Diligence Requirements may result in various penalties including, in the case of those investors subject to
regulatory capital requirements, the imposition of a punitive capital charge in respect of the investment in the securitization acquired by the relevant investor. Aspects of the requirements and what is or will be required to demonstrate
compliance to national regulators remain unclear.
None of the sponsor, the sellers, the depositor and the remarketing agents or any other person intends to retain a material net economic interest in the securitization constituted by the issuance of the notes in a manner that would
satisfy the EU Retention Requirement or to take any other action which may be required by EU Institutional Investors for the purposes of their compliance with the EU Risk Retention and Due Diligence Requirements, and no such person
assumes (i) any obligation to so retain or take any such other action or (ii) any liability whatsoever in connection with any Holder’s non-compliance with the EU Risk Retention and Due Diligence Requirements. Consequently, the notes are
not a suitable investment for EU Institutional Investors. As a result, the price and liquidity of the notes in the secondary market may be adversely affected.
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The Notes May Be Repaid Early Due To An Auction Sale Or The Exercise Of The Optional Purchase Right. If This Happens, Your Yield May Be Affected And You Will
Bear Reinvestment Risk
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The notes may be repaid before you expect them to be if:
• the servicer exercises its option to purchase all of the trust student loans; or
• the indenture trustee successfully conducts an auction sale.
Either event would result in the early retirement of the notes outstanding on that date. If this happens, your yield on the notes may be affected. You will bear the risk that you cannot reinvest the money
you receive in comparable notes at an equal yield.
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Negative LIBOR Rates Would Reduce The Rate Of Interest On The Notes
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The interest rate to be borne by each class of notes is based on a spread over LIBOR. The London Interbank Offered Rate, or LIBOR, serves as a global benchmark for home mortgages, student loans and what
various issuers pay to borrow money.
Changes in LIBOR will affect the rate at which the notes accrue interest and the amount of interest payments on the notes. To the extent that LIBOR decreases below 0.00% for any interest accrual period, LIBOR
for such interest accrual period will be deemed to be 0.00% and the rate at which each class of notes accrue interest for such interest accrual period will be deemed to be 0.00% plus the applicable spread for each such class of notes for
the related interest accrual period.
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Your Notes Are Subject To A Call Option
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Navient Corporation, or one of its wholly-owned subsidiaries, has the option to call, in full, the class A-6B or class A-6C notes in respect of each reset date, even if you have delivered a hold notice. If
this option is exercised, you will receive a payment of principal equal to the outstanding principal balance of your class A-6B or class A-6C notes, as applicable, less all amounts distributed to you as a payment of principal, plus all
accrued and unpaid interest on such distribution date. However, you may not be able to reinvest the proceeds you receive in a comparable security with an equivalent yield. For additional information concerning the call option and reset
periods, see “Description of the Notes—The Reset Rate Notes” in this free-writing prospectus.
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You May Be Required To Continue To Hold Your Notes If A Failed Remarketing Occurs With Respect To A Reset Date
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In connection with any remarketing of the class A-6B or class A-6C notes (including on the current reset date), if a failed remarketing is declared, your class A-6B or class A-6C notes will not be sold, even
if you attempted to tender them for remarketing or if the notes were mandatorily tendered with respect to such reset date. In this event you will be required to rely on a sale through the secondary market, which may not then exist for your
class A-6B or class A-6C notes, independent of the remarketing process.
If a failed remarketing is declared with respect to the July 27, 2020 reset date, the class A-6B and class A-6C notes will bear interest until the next reset date at the failed remarketing rate, which is
currently equal to an annual rate of three-month LIBOR plus 0.75%. We cannot assure you that the failed remarketing rate will be as high as the prevailing market rate of interest for similar securities and you may suffer a loss in
yield. For additional information concerning a failed remarketing, see “Description of the Notes—The Reset Rate Notes” in this free-writing prospectus.
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You May Experience Notification Delays In Connection With A Remarketing Of Your Notes
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Holders of beneficial interests in the class A-6B and class A-6C notes may not receive timely notifications of the reset terms for any reset date due to procedures used by the clearing agencies and financial
intermediaries. If you do not receive a copy of the notice delivered on the related remarketing terms determination date, you will nevertheless be deemed to have tendered your class A-6B or class A-6C notes unless the remarketing agent has
received a hold notice from you on or prior to the related notice date.
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You Will Bear Prepayment And Extension Risk Due To Actions Taken By Individual Borrowers And Other Variables Beyond Our Control
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A borrower may prepay a student loan in whole or in part at any time. The rate of prepayments on the trust student loans may be influenced by a variety of economic, social, competitive and other factors,
including changes in interest rates, the availability of alternative financings (including, without limitation, refinancings offered through the Department of Education’s Direct Loan program), regulatory changes affecting the student loan
market and the general economy. Various loan consolidation or refinance programs, including those offered by affiliates of the depositor, available to eligible borrowers may increase the likelihood of prepayments. Further, future
initiatives by Congress or future laws, executive orders or other policy statements to encourage or force consolidation, create debt forgiveness programs or establish other policies and programs including but not limited to those proposed
by several presidential campaigns could also affect prepayments on the trust student loans. In addition, the issuing entity may receive unscheduled payments due to borrower defaults and purchases by the servicer or the depositor. Because
a pool may include thousands of trust student loans, it is impossible to predict if or when or in what form any of these future actions may occur or to predict the amount and timing of payments that will be received and paid to noteholders
in any period. Consequently, the length of time that your notes are outstanding and accruing interest may be shorter than you expect.
On the other hand, borrowers of trust student loans might not choose to prepay their trust student loans or the trust student loans may be extended as a result of grace periods, deferment periods,
forbearance periods, income-driven repayment plans or repayment term or monthly payment amount modifications agreed to by the servicer in compliance with laws and regulations. This may slow the expected timing of principal payments or
lengthen the remaining term of the trust student loans and delay principal payments to you. In addition, the amount available for distribution to you will be reduced if borrowers fail to pay timely the principal and interest due on the
trust student loans. Consequently, the length of time that your notes are outstanding and accruing interest may be longer than you expect.
The optional purchase right of the servicer and the provision for the auction of the trust student loans, create additional uncertainty regarding the timing of payments to noteholders.
The effect of these factors is impossible to predict. To the extent they create reinvestment risk, you will bear that risk.
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A Failure To Comply With Student Loan Origination And Servicing Procedures Could Jeopardize Guarantor, Interest Subsidy And Special Allowance Payments On The Trust Student Loans That Are FFELP Loans Or
Otherwise Have An Adverse Impact On The Trust Student Loans, Which May Result In Delays In Payment Or Losses On Your Notes
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The rules under which the trust student loans were originated, including the Higher Education Act or the program rules require lenders making and servicing student loans and the guarantors guaranteeing those
loans to follow specified procedures, including due diligence procedures, to ensure that the student loans are properly made, disbursed and serviced.
Failure to follow these procedures may result in the Department of Education’s refusal to make reinsurance payments to the applicable guarantor or to make interest subsidy payments and special allowance
payments on the trust student loans that are FFELP Loans.
Loss of any loan program payments could adversely affect the amount of available funds and the issuing entity’s ability to pay principal and interest on your notes.
In addition, to the extent related to servicing practices of Navient Solutions, LLC with respect to FFELP loans or HEAL Program, an adverse ruling in litigation against Navient Solutions, LLC may have a
material adverse effect on the trust student loans, and the payments on your notes may be adversely affected. See “Navient Corporation” in this free-writing prospectus.
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The Inability Of The Depositor Or The Servicer To Meet Its Repurchase Obligation May Result In Losses On Your Notes
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Under some circumstances, the issuing entity has the right to require the depositor (and the depositor has the right to require the sellers) or the servicer to purchase a trust student loan or provide the
issuing entity with a substitute student loan. This right arises generally if a breach of the representations, warranties or covenants of the depositor or the servicer, as applicable, has a material adverse effect on the issuing entity,
and is not cured within the applicable cure period. We cannot guarantee to you, however, that the depositor (and, in turn, the sellers) or the servicer will have the financial resources to make a purchase or substitution.
For example, the depositor, the sellers, and the servicer are subsidiaries of Navient Corporation and, as a result, an adverse ruling in litigation against Navient Corporation could also give rise to an
obligation of the depositor, the servicer, or a seller to purchase, repurchase, or substitute trust student loans as set forth in the related transaction documents and may have an adverse impact on the financial ability of the depositor,
the servicer, or a seller to fulfill their respective obligations to purchase, repurchase or substitute trust student loans. See “Navient Corporation” in this free-writing prospectus.
If the depositor, the sellers, or the servicer do not have the financial resources to make a required purchase or substitution, you will bear any resulting loss.
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Incentive Programs May Affect Your Notes
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At the present time, the borrowers with respect to certain of the initial trust student loans may be eligible for various incentive programs. In addition, under the terms of the servicing agreement, the
servicer may make new incentive programs available to borrowers with trust student loans. See “The Companies’ Student Loan Financing Business—Servicing—Incentive Programs” in this free-writing
prospectus. These current or future incentive programs may affect payments on your notes.
For example, if one or more of the incentive programs which offer a principal balance reduction to borrowers are made available to borrowers with trust student loans and a higher than anticipated number of
borrowers qualify, the principal balance of the affected trust student loans may repay faster than anticipated.
Accordingly, your notes may experience faster than anticipated principal payments.
Conversely, the existence of these incentive programs may discourage a borrower from prepaying an affected trust student loan. If this were to occur, the principal balance of your notes may be reduced over a
longer period than would be the case if there were no such incentive program.
Furthermore, incentive programs may reduce the amount of funds available to make payments on your notes by reducing the principal balances and yield on the trust student loans. In that case, you will bear
the risk of any loss not covered by available credit enhancement.
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A Servicer Default May Result In Additional Costs, Increased Servicing Fees By A Substitute Servicer Or A Diminution In Servicing Performance, Any Of Which May Have An Adverse Effect On Your Notes
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If a servicer default occurs, the indenture trustee or the noteholders may remove the servicer without the consent of the eligible lender trustee. Only the indenture trustee or such noteholders, and not the
eligible lender trustee, has the ability to remove the servicer if a servicer default occurs. In the event of the removal of the servicer and the appointment of a successor servicer, we cannot predict:
• the ability of the successor servicer to perform the obligations and duties of the servicer under the servicing agreement; or
• the servicing fees charged by the successor servicer.
In addition, the noteholders have the ability, with some exceptions, to waive defaults by the servicer.
Furthermore, the indenture trustee or the noteholders may experience difficulties in appointing a successor servicer and during any transition phase it is possible that normal servicing activities could be
disrupted, resulting in increased delinquencies and/or defaults on the trust student loans.
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The Indenture Trustee May Have Difficulty Liquidating Trust Student Loans After An Event Of Default
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If an event of default occurs under the indenture, the indenture trustee may sell the trust student loans, without the consent of the noteholders (but only in the event that there has been a payment default
on the class A notes, and in all other cases, if the purchase price received from the sale of the trust student loans is sufficient to repay all noteholders in full). However, the indenture trustee may not be able to find a purchaser for
the trust student loans in a timely manner or the market value of those loans may not be high enough to make noteholders whole.
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You May Incur Losses Or Delays In Payments On Your Notes If Borrowers Default On The Trust Student Loans
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If a borrower defaults on a trust student loan that is only 98% or 97% guaranteed, the related issuing entity will experience a loss of approximately 2% or 3%, as the case may be, of the outstanding principal
and accrued interest on that student loan. If defaults occur on the trust student loans and the credit enhancement described in this free-writing prospectus is insufficient, you may suffer a delay in payment or losses on your notes.
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If A Guarantor Of The Trust Student Loans Experiences Financial Deterioration Or Failure, You May Suffer Delays In Payment Or Losses On Your Notes
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All of the trust student loans will be unsecured. As a result, the only security for payment of a FFELP guaranteed student loan is the guarantee provided by the applicable guarantor. FFELP loans acquired by
the issuing entity may be subject to guarantee agreements with a number of individual guarantors. A deterioration of a guarantor’s financial condition and ability to honor guarantee claims could result in a failure of that guarantor to
make guarantee payments to the eligible lender trustee in a timely manner, or at all. The financial condition of a guarantor could be adversely affected by a number of factors, including the amount of claims made against that guarantor as
a result of borrower defaults.
A guarantor’s financial condition and ability to honor guarantee claims with respect to FFELP loans could also be adversely affected by a number of other factors including:
• the continued voluntary waiver by the guarantor of the guarantee fee payable by a borrower upon disbursement of a student loan;
• the amount of claims made against that guarantor as a result of borrower defaults;
• the amount of claims reimbursed to that guarantor from the Department of Education, which range from 75% to 100% of the guaranteed portion of the loan, depending on the date the loan was made and the
historical performance of the guarantor; and
• changes in legislation that may reduce expenditures from the Department of Education that support federal guarantors or that may require guarantors to pay more of their reserves to the Department of
Education.
If the financial condition of a guarantor deteriorates, it may fail to make guarantee payments in a timely manner, or at all. In that event, you may suffer delays in payment or losses on your notes.
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The Department Of Education’s Failure To Make Reinsurance Payments May Negatively Affect The Timely Payment Of Principal And Interest On Your Notes
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If a guarantor is unable to meet its guarantee obligations, the issuing entity may submit claims directly to the Department of Education for payment. The Department of Education’s obligation to pay guarantee
claims directly is dependent upon its determination that the guarantor is unable to meet its guarantee obligations. If the Department of Education delays in making this determination, you may suffer a delay in the payment of principal and
interest on your notes. In addition, if the Department of Education determines that the guarantor is able to meet its guarantee obligations, the Department of Education will not make guarantee payments to the issuing entity. The Department
of Education may or may not make the necessary determination that the guarantor is unable to meet its guarantee obligations. If the Department of Education determines that the guarantor is unable to meet its guarantee obligations, it may
or may not make this determination or the ultimate payment of the guarantee claims in a timely manner. This could result in delays or losses on your investment.
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Payment Offsets By Guarantors Or The Department Of Education Could Prevent The Issuing Entity From Paying You The Full Amount Of The Principal And Interest Due On Your Notes
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The eligible lender trustee may use the same Department of Education lender identification number for FFELP loans of the issuing entity as it uses for other FFELP loans it holds on behalf of other issuing
entities established by the sponsor. If it does, the billings submitted by the eligible lender trustee or the servicer to the Department of Education (for items such as special allowance payments or interest subsidy payments) and the
claims submitted to the guarantors will be consolidated with the billings and claims for payments for trust student loans under other issuing entities using the same lender identification number. Payments on those billings by the Department
of Education as well as claim payments by the applicable guarantors will be made to the eligible lender trustee, or to the servicer on behalf of the eligible lender trustee, in a lump sum. Those payments must be allocated by the
administrator among the various issuing entities that reference the same lender identification number.
If the Department of Education or a guarantor determines that the eligible lender trustee owes it a liability on any trust student loan, including loans it holds on behalf of the issuing entity for your notes
or other issuing entities, the Department of Education or the applicable guarantor may seek to collect that liability by offsetting it against payments due to the eligible lender trustee of the issuing entity. Any offsetting or shortfall
of payments due to the eligible lender trustee could adversely affect the amount of available funds for any collection period and thus the issuing entity’s ability to pay you principal and interest on your notes.
The servicing agreement for your notes contains provisions for cross-indemnification concerning those payments and offsets. Such provisions require one entity to compensate the other or accept a lesser
payment to the extent the latter has been assessed for the liability of the former. Even with cross-indemnification provisions, however, the amount of funds available to the issuing entity from indemnification would not necessarily be
adequate to compensate the issuing entity and investors in the notes for any previous reduction in the available funds.
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The Enactment Of The Health Care And Education Reconciliation Act Of 2010 And Any Other Future Changes In Law May Adversely Affect Student Loans, The Guarantors, The Depositor or Navient CFC And, Accordingly,
Adversely Affect Your Notes
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On March 30, 2010, the Health Care and Education Reconciliation Act of 2010 (the “Reconciliation Act”) was enacted into law. Effective July 1, 2010, the Reconciliation Act eliminated the FFELP. The terms of
existing FFELP loans are not materially affected by the Reconciliation Act. The Higher Education Act or other relevant federal or state laws, rules and regulations may be further amended or modified in the future in a manner, including as
part of any reauthorization of the Higher Education Act, that could adversely affect the federal student loan programs as well as the student loans made under these programs and the financial condition of the guarantors. Among other
things, the level of guarantee payments may be adjusted from time to time. The elimination of FFELP and any other future changes could affect the ability of Navient CFC, the depositor or the servicer to satisfy their obligations to purchase
or substitute student loans. Future changes could also have a material adverse effect on the revenues received by the guarantors that are available to pay claims on defaulted student loans in a timely manner. We cannot predict whether any
changes will be adopted or, if adopted, what impact those changes would have on any issuing entity or the notes.
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The Use Of Master Promissory Notes May Compromise The Indenture Trustee’s Security Interest In The Student Loans
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For loans disbursed on or after July 1, 1999, a master promissory note evidences any student loan made to a borrower under the Federal Family Education Loan Program. When a master promissory note is used, a
borrower executes only one promissory note with each lender. Subsequent student loans from that lender are evidenced by a confirmation sent to the student. Therefore, if a lender originates multiple student loans to the same student, all of
the related student loans are evidenced by a single promissory note.
Under the Higher Education Act, each student loan made under a master promissory note may be sold independently of any other student loan made under that same master promissory note. Each student loan is
separately enforceable on the basis of an original or copy of the master promissory note.
It is possible that student loans transferred to the issuing entity may be originated under a master promissory note. If the servicer were to deliver a copy of the master promissory note, in exchange for
value, to a third-party that did not have knowledge of the indenture trustee’s lien, that third-party may also claim an interest in the student loan. It is possible that the third-party’s interest could be prior to or on parity with the
interest of the indenture trustee.
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The Trust May Be Affected
By Delayed Payments From
Borrowers Called To Active Military Service
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The Servicemembers Civil Relief Act and similar state and local laws provide payment relief to borrowers who enter active military service and to borrowers in reserve status who are called to active duty
after the origination of their trust student loans. Military operations by the United States may increase the number of citizens who are in active military service, including persons in reserve status who have been called or may be called
to active duty.
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A Deterioration of General Economic Conditions May Reduce Payments on Your Notes
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A deterioration in economic conditions in the United States or globally, such as an increase in unemployment levels, contraction of the availability of consumer credit or an increase in interest rates, may be
caused by a variety of factors, including but not limited to, political gridlock on United States federal budget matters (including full or partial government shutdowns), public health emergencies including the ongoing global outbreak of
the 2019 novel coronavirus disease (also known as “COVID-19”), trade disputes, terrorist events, wars, and other military or civil conflicts, price volatility in commodities, natural disasters and other disruptive political, social or
economic events. Any such disruption in economic activities may be severe or unpredictable, and could adversely affect the ability and willingness of borrowers to meet their payment obligations under the trust student loans and of the
servicer to operate its business and manage and service the trust student loans, resulting in higher rates of delinquencies experienced by the trust with respect to the trust student loans. A decrease in the amount of interest or principal
received on the trust student loans could negatively affect the ability of the trust to generate sufficient cash flow to pay its obligations or the ability of the servicer to service the interest and principal payments due on the notes,
which, in turn, may cause losses on the notes. See also “Risk Factors— Forbearances Granted As a Result of the COVID-19 Pandemic May Delay Payments of Interest and Principal” in this remarketing memorandum.
The COVID-19 pandemic may adversely affect the ability of the servicer to operate its business and manage and service the trust student loans. Restrictions on movement and business activities put in place by
state and local governments may hinder the ability of the servicer and its employees to perform collection activities on the trust student loans. In addition, several states have issued guidance regarding collection practices that could
limit Navient’s collection activities for limited periods of time. As a result, the ability of the servicer to service the interest and principal payments due on the notes may be diminished, which may lead to decreased collections on the
trust student loans and may cause losses on the notes.
An improvement in economic conditions could result in prepayments by the borrowers of their payment obligations under the trust student loans. As a result, you may receive principal payments of your notes
earlier than anticipated.
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Forbearances Granted As a Result of the COVID-19 Pandemic May Delay Payments of Interest and Principal
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The Higher Education Act also permits, and in some cases requires, “forbearance” periods from loan collection in some circumstances. Interest that accrues during a forbearance period is never subsidized.
Forbearance is most often granted to borrowers for periods of economic hardship affecting the borrower, which may occur for a variety of reasons. During periods of deteriorating economic conditions in the United States or globally, such as
during disruptive political, social or economic events, forbearance requests typically increase. Forbearance is also often granted to borrowers when a federal disaster or emergency has been declared such as in response to COVID-19.
For details of forbearance policies under the FFELP, see “Appendix A—Federal Family Education Loan Program— Stafford Loans — Grace Periods, Deferral Periods and Forbearance
Periods” in this remarketing memorandum. An increase in forbearances on the trust student loans may result in a delay in payments of interest or principal on the trust student loans, which could negatively affect the ability of
the trust to generate sufficient cash flow to pay its obligations and which, in turn, may cause losses on the notes.
Forbearance requests have increased and are expected to continue increasing during the ongoing global COVID-19 pandemic. As a result of the national emergency declaration made by President Trump on March 13,
2020 in response to the continuing outbreak of COVID-19, Navient has implemented the Coronavirus Disaster Forbearance Program for its FFELP Loans. Through June 30, 2020, Navient offered up to three months of disaster forbearance to
qualified loan borrowers who request it (the “Coronavirus National Emergency Forbearance Program”). The Coronavirus National Emergency Forbearance Program brings a borrower’s eligible loans current and postpones payments for up to three
months. As of July 1, 2020, Navient began offering a short-term coronavirus forbearance to qualified loan borrowers who request it (the “Short-Term Coronavirus Forbearance Program”). The Short-Term Coronavirus Forbearance Program brings a
borrower’s eligible loans current and postpones payments for at least one full month. The Coronavirus National Emergency Forbearance Program and the Short-Term Coronavirus Forbearance Program are collectively referred to as the
“Coronavirus Disaster Forbearance Program.” During the forbearance period for the Coronavirus Disaster Forbearance Program, interest will accrue but will not be capitalized. Pursuant to the Coronavirus Forbearance granted under the
Coronavirus Disaster Forbearance Program will not count toward the total of 12 months of forbearance permitted over the life of the loan. Navient continues to monitor the changing developments with the COVID-19 pandemic, and as such, will
review and periodically revise the Coronavirus Disaster Forbearance Program to better respond to borrowers’ current needs, including without limitation to modify the forbearance period granted to borrowers.
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As a result of the COVID-19 pandemic, there has been a significant increase in forbearance requests among student loans serviced by Navient. Unlike the relief options offered for natural disasters, the
COVID-19 outbreak is affecting obligors nationwide and is expected to have a materially more significant impact on portfolio performance (including the performance of the trust student loans) than even the most severe historic natural
disasters. The increase in forbearances on the trust student loans as a result of the global COVID-19 pandemic may result in a delay in payments of interest or principal received on the trust student loans, which could negatively affect the
ability of the trust to generate sufficient cash flow to pay its obligations which, in turn, may cause losses on the notes. See “Risk Factors—Current General Economic Conditions, or a Further Deterioration
of Economic Conditions May Reduce Payments on Your Notes” in this remarketing memorandum.
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Certain Credit And Liquidity Enhancement Features Are Limited And If They Are Partially Or Fully Depleted, There May Be Shortfalls In Distributions To Noteholders
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Certain credit and liquidity enhancement features, including the reserve account, are limited in amount. In certain circumstances, if there is a shortfall in available funds, such amounts may be partially or
fully depleted. This depletion could result in shortfalls and delays in distributions to noteholders.
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The Notes May Be Assigned Lower Ratings Than Those Described In This Free-Writing Prospectus By Different Rating Agencies
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The sponsor, or an affiliate, paid a fee to two or more NRSROs (the “Rating Agencies”) to assign the initial credit ratings to the notes on or before the closing date. The SEC has said that being paid by the
sponsor, issuer or remarketing agent to issue or maintain a credit rating on asset-backed securities creates a conflict of interest for NRSROs, and that this conflict is particularly acute because arrangers of asset-backed securities
transactions provide repeat business to such NRSROs.
The sponsor has not requested a rating of the notes by any NRSRO other than the Rating Agencies. However, in preparing for the offering, the sponsor may have had discussions with, and received preliminary feedback from, NSROs other
than the Rating Agencies. Other NRSROs may assign their own ratings to any class or classes of notes at any time, even prior to the closing date. NRSROs have different methodologies, criteria, models and requirements, which may result in
ratings that are lower than those assigned by the Rating Agencies. Depending upon the level of the ratings assigned, what NRSROs are involved, what their stated reasons are for assigning a lower rating, and other factors, if a NRSRO
issues a lower rating, the liquidity, market value and regulatory characteristics of the particular class or classes of notes could be materially and adversely affected. In addition, the mere possibility that such a rating could be
issued may affect price levels in any secondary market that may develop.
|
The Replacement of LIBOR May Result in Adverse Tax Consequences to Noteholders
|
If an alternative method or index is designated in place of LIBOR for notes that have an interest rate that currently adjusts based on LIBOR, the U.S. federal income tax consequences of such a replacement are
uncertain. If such a replacement constitutes a “significant modification” of the notes under Treasury Regulation section 1.1001-3, the replacement may result in a deemed taxable exchange of the notes and the realization of gain or loss, as
well as other corollary tax consequences.
The Internal Revenue Service and the Treasury Department have recently proposed regulations, upon which taxpayers may rely until the promulgation of final regulations, that, in certain circumstances, could reduce the likelihood that
replacing a rate based on LIBOR with an alternative method or index would constitute a “significant modification” as described above. However, we can provide no assurance that these regulations, in their current form, will provide any
relief from the tax consequences described above if such a replacement is effected with respect to the notes. Holders of the notes should consult their own tax advisors with respect to the consequences of the designation of an
alternative method or index in place of LIBOR.
|
|
Current General Economic Conditions, Or A Further Deterioration of Economic Conditions May Reduce Payments on Your Notes
|
Current general economic conditions, or a further deterioration in economic conditions in the United States or globally, such as a further increase in unemployment levels, contraction of the availability of
consumer credit or an increase in interest rates, may be caused by a variety of factors, including but not limited to, political gridlock on United States federal budget matters (including full or partial government shutdowns), public
health emergencies such as the ongoing global outbreak of the 2019 novel coronavirus disease (also known as “COVID-19”), trade disputes, terrorist events, wars, and other military or civil conflicts, price volatility in commodities, natural
disasters and other disruptive political, social or economic events. Any such disruption in economic activities may be severe or unpredictable, and could adversely affect the ability and willingness of borrowers to meet their payment
obligations under the trust student loans or of the servicer to operate its business and manage and service the trust student loans, possibly resulting in higher rates of delinquencies and greater losses experienced by the trust with
respect to the trust student loans. An increase in defaults on the trust student loans, or a decrease or delay in the amount of interest or principal received on the trust student loans, either alone or in combination, could negatively
affect the ability of the trust to generate sufficient cash flow to pay its obligations or the ability of the servicer to service the interest and principal payments due on the notes, which, in turn, may cause losses on the notes.
|
|
The ongoing global outbreak of COVID-19 has led to significant disruptions in economic activities and financial markets in the United States and around the world. The COVID-19 outbreak has been declared to be
a pandemic by the World Health Organization, and on March 13, 2020, President Trump declared a national emergency in the United States. In certain areas of the United States, the COVID-19 pandemic has caused a near total cessation of all
non-essential economic activities as state and local governments have issued shelter-in-place or stay-at-home orders, banned large gatherings, required all non-essential business to close, and curtailed other business activities. Many
businesses have temporarily suspended operations and laid-off employees. As a consequence, there has been a sudden and drastic increase in unemployment in the United States and record numbers of Americans have filed for unemployment
benefits. The COVID-19 outbreak has also caused substantial disruption and volatility in the credit markets which may continue for an extended period or indefinitely and may lead to or exacerbate an economic recession in the United States
or globally. There ultimately can be no assurance that any measures undertaken by the federal government, or by state or local governments, will be effective to mitigate the impact of the COVID-19 pandemic. There is little certainty as to
when the COVID-19 pandemic will abate, the frequency or severity of any subsequent waves of COVID-19, the effects and consequences of local and regional surges in COVID-19, or the timing or extent to which the United States or global
economy will recover from the disruption caused by the outbreak of COVID-19. Because a pandemic such as COVID-19 has not occurred in recent years, historical loss experience is likely to not accurately predict the performance of the
receivables. It is, therefore, not possible to predict the effect of the COVID-19 pandemic on the performance of the trust student loans or the notes. Because a pandemic such as COVID-19 has not occurred in recent years, historical loss
experience is likely to not accurately predict the performance of the trust student loans.
|
It is possible that the COVID-19 outbreak may worsen before it improves, and that the COVID-19 pandemic, the related remedial measures and/or a resulting economic recession may result in higher levels of
unemployment than those already reported, which could adversely affect the ability and willingness of borrowers to meet their payment obligations under the trust student loans and possibly result in higher rates of delinquencies and greater
losses. In addition, it is possible that a higher than anticipated percentage of borrowers may seek relief under bankruptcy or other debtor relief laws as a result of financial and economic disruptions related to the outbreak of COVID-19.
See “Appendix A—Federal Family Education Loan Progran—Education Loan Discharges” in this remarketing memorandum. In an effort to assist borrowers impacted
by the COVID-19 pandemic, the servicer continues to work with borrowers experiencing hardships on an individual basis, primarily using the Coronavirus Disaster Forbearance Program, to provide forbearance when requested, and other assistance
programs. These programs may result in a delay in payments of interest or principal on the trust student loans and negatively impact cash flows to the trust in the near term and, if not effective in mitigating the effect of COVID-19 on
obligors, may adversely affect the notes. See “Risk Factors— Forbearances Granted As a Result of the COVID-19 Pandemic May Delay Payments of Interest and Principal” in this remarketing memorandum.
During the continuation of the COVID-19 outbreak and for an indefinite period thereafter, investors in the notes should expect increases in forbearances on the trust student loans, and such increase could be substantial. An increase in
forbearances on the trust student loans or decrease or delay in the amount of interest or principal received on the trust student loans, either alone or in combination, may lead to decreased collections on the trust student loans which, in
turn, may cause losses on the notes.
The COVID-19 pandemic may adversely affect the ability of the servicer to operate its business and manage and service the trust student loans. Restrictions on movement and business activities put in place by
state and local governments may hinder the ability of the servicer and its employees to perform collection activities on the trust student loans. The servicer has enacted necessary health safety measures which allow employees to work
remotely if their function permits. An extended period of remote work arrangements could introduce operational risk, including cybersecurity risks. The servicer also utilizes third party vendors for certain business activities. While the
servicer closely monitors the business continuity activities of these third parties, successful implementation and execution of their business continuity strategies are largely outside the servicer’s control. If any transaction party is
unable to adequately perform their obligations under the transaction documents due to a remote work environment, this may lead to decreased collections on the trust student loans and, in turn, may cause losses on the notes.
|
In addition, certain governmental authorities, including United States federal, state or local governments could enact laws, regulations, executive orders or other guidance that allow borrowers to forego
making scheduled payments for some period of time or require modification to the trust student loans, and some states have enacted executive orders that preclude creditors from exercising certain rights or taking certain actions with
respect to delinquent or defaulted loans. These programs, if enacted or expanded, could adversely affect the servicer’s ability to collect the interest and principal payments due on the notes, which may lead to decreased collections on the
trust student loans and, in turn, may cause losses on the notes.
A prolonged outbreak or new outbreaks of COVID-19, future outbreaks of coronavirus diseases or additional actions taken by governmental authorities to limit any such outbreaks could lead to further disruptions in economic activities
(including workforce reductions and reductions in borrower incomes) and in financial markets and may have a significant adverse impact on the global economy in general. Any such disruption in economic activities could further adversely
affect the ability and willingness of borrowers to meet their payment obligations under the trust student loans and of the servicer to operate its business and manage and service the trust student loans, resulting in greater losses
experienced by the trust. An increase in defaults on the trust student loans or decrease or delay in the amount of interest or principal received on the trust student loans, or a change in the ability of the servicer to service the
interest and principal payments due on the notes, either alone or in combination, may lead to decreased collections on the trust student loans which, in turn, may cause losses on the notes.
|
||
Forbearances and other Modifications Occasioned by the COVID-19 Pandemic or Otherwise May Have Adverse United States Federal Income Tax Consequences
|
The Internal Revenue Service has issued guidance providing that, in certain circumstances, forbearances and other modifications of debt instruments occasioned by the global COVID-19 pandemic will not result
in a deemed exchange thereof for United States federal income tax purposes. Such guidance does not by its terms apply to student loans.
Accordingly, it is possible that forbearances pursuant to the Coronavirus Disaster Forbearance Program or other modifications of trust student loans that are directly or indirectly occasioned by the COVID-19
global pandemic may result in a deemed exchange of such trust student loans for U.S. federal income tax purposes, and, which could result in the realization of gain or loss, as well as other corollary tax consequences, each as described
more fully below under “Certain United States Federal Income Tax Consequences.”
|
• |
acquiring, holding and managing the trust student loans and the other assets of the trust and related proceeds;
|
• |
issuing the notes;
|
• |
making payments on the notes;
|
• |
if applicable, entering into swap agreements from time to time with respect to the reset rate notes and making the required payments set forth therein;
|
• |
entering into any potential future interest rate cap agreements at the direction of the administrator from time to time and making the payments, including any upfront payments, required thereunder; and
|
• |
engaging in other activities that are necessary, suitable or convenient to accomplish, or are incidental to, the foregoing.
|
• |
the pool of trust student loans, legal title to which is held by the eligible lender trustee on behalf of the trust;
|
• |
all funds collected on trust student loans, including any special allowance payments and interest subsidy payments, on or after the applicable cutoff date;
|
• |
all moneys and investments from time to time on deposit in the Trust Accounts;
|
• |
if applicable, its rights under any and all swap agreements entered into from time to time with respect to a class of reset rate notes and the related documents;
|
• |
if applicable, its rights under any potential future interest rate cap agreement entered into from time to time and the related documents;
|
• |
its rights under the transfer and servicing agreements, including the right to require VG Funding (or Navient Solutions, LLC, as servicer, acting on its behalf), Navient CFC, the depositor or the servicer to repurchase trust student
loans from it or to substitute student loans under certain conditions; and
|
• |
its rights under the guarantee agreements with guarantors.
|
Floating Rate Class A‑1 Student Loan‑Backed Notes
|
$
|
0.00
|
||
Floating Rate Class A‑2 Student Loan‑Backed Notes
|
0.00
|
|||
Floating Rate Class A‑3 Student Loan‑Backed Notes
|
0.00
|
|||
Floating Rate Class A-4 Student Loan‑Backed Notes
|
0.00
|
|||
Floating Rate Class A‑5 Student Loan‑Backed Notes
|
66,259,985
|
|||
Floating Rate Class A-6A Student Loan-Backed Notes
|
382,946,000.00
|
|||
Reset Rate Class A-6B Student Loan-Backed Notes
|
200,000,000
|
|||
Reset Rate Class A-6C Student Loan-Backed Notes
|
200,000,000
|
|||
Floating Rate Class B Student Loan‑Backed Notes
|
42,941,870.74
|
|||
Initial Equity
|
100.00
|
|||
Total
|
$
|
892,147,955.87
|
• |
was a consolidation loan guaranteed as to principal and interest by a guaranty agency under a guarantee agreement and the guaranty agency was, in turn, reinsured by the Department of Education in accordance with the FFELP;
|
• |
contained terms in accordance with those required by the FFELP, the guarantee agreements and other applicable requirements;
|
• |
was fully disbursed;
|
• |
was not more than 210 days past due;
|
• |
did not have a borrower who was noted in the related records of the servicer as being currently involved in a bankruptcy proceeding; and
|
• |
had special allowance payments, if any, based on the three-month commercial paper rate or the 91-day Treasury bill rate.
|
Disbursement Date
|
Percentage
Guaranteed
|
|
Prior to October 1, 1993
|
100%
|
|
On or after October 1, 1993 but before July 1, 2006
|
98%
|
• |
the origination and servicing of the trust student loan being performed in accordance with the FFELP, the Higher Education Act, the guaranty agency’s rules and other applicable requirements;
|
• |
the timely payment to the guaranty agency of the guarantee fee payable on the trust student loan; and
|
• |
the timely submission to the guaranty agency of all required pre-claim delinquency status notifications and of the claim on the trust student loan.
|
• |
commercial banks, thrift institutions and credit unions;
|
• |
pension funds and insurance companies;
|
• |
educational institutions;
|
• |
various state and private nonprofit loan originating and secondary market agencies; and
|
• |
various other third parties.
|
• |
shortly after loan origination;
|
• |
while the borrowers are still in school;
|
• |
just before the loan’s conversion to repayment after borrowers graduate or otherwise leave school; or
|
• |
while the loans are in repayment.
|
• |
its automated loan administration system called PortSS® for the lender to use prior to loan sale; or
|
• |
its loan origination and interim servicing system called ExportSS®.
|
• |
Undergraduate and Graduate Loan Programs;
|
• |
Law Loan Programs;
|
• |
MBA Loan Programs;
|
• |
Medical Loan Programs;
|
• |
Dental Loan Programs;
|
• |
Direct-to-Consumer Loan Programs;
|
• |
Private Consolidation Loan Program;
|
• |
Career Training Loan Program;
|
• |
EFG Loan Programs;
|
• |
Smart Option Student Loan Program; and
|
• |
Private Education Refi Loan Program.
|
• |
Great Rewards(SM). Under the Great Rewards(SM) program, which is available for all student loans that were disbursed prior to June 30, 2002 and enter
repayment after July 1993, if a borrower makes 48 consecutive scheduled payments in a timely fashion, the effective interest rate is reduced permanently by 2% per annum.
|
• |
Great Returns(SM). Under the Great Returns(SM) program, borrowers whose loans were disbursed prior to June 30, 2002 and who make 24 consecutive scheduled
payments in a timely fashion get a reduction in principal equal to any amount over $250 that was paid as part of the borrower’s origination fee to the extent that the fee does not exceed 3% of the principal amount of the loan.
|
• |
Direct Repay/ ACH Benefit plan. Under the Direct Repay/ ACH Benefit plan, borrowers who make student loan payments electronically through automatic monthly deductions from a savings, checking or
NOW account receive a 0.25% or 0.50% effective interest rate reduction as long as loan payments continue to be successfully deducted from the borrower’s bank account.
|
• |
Cash Back plan. Under the Cash Back plan, borrowers (i) whose loans are with a Company lender partner, (ii) who enroll in Manage Your Loans(SM), the servicer’s on-line account manager, (iii) who
agree to receive their account information by e-mail and (iv) who make their first 33 scheduled payments on time, receive a 3.3% check or credit based upon their original loan amount.
|
• |
Federal Student Loan Consolidation Incentive. Borrowers with an initial consolidation loan balance of at least $10,000 who make their first 36 payments on time receive a 1.0% interest rate
reduction during periods of active repayment.
|
• |
On-Time Payment Interest Rate Reduction plan. Under the On-Time Payment Interest Rate Reduction plan, borrowers who make their first 24 scheduled payments on time, sign-up for on-line loan
management within 60 days from the first payment due date and continue to make payments on time, receive a 0.5% effective interest rate reduction.
|
• |
each student loan was free and clear of all security interests and other encumbrances and no offsets, defenses or counterclaims had been asserted or threatened;
|
• |
the information provided about the student loans was true and correct as of the original cutoff date;
|
• |
each student loan complied in all material respects with applicable federal and state laws and applicable restrictions imposed by the FFELP or under any guarantee agreement; and
|
• |
each student loan was guaranteed by the applicable guarantor.
|
• |
the shortfall, if any, between:
|
o |
the purchase amount of the qualified substitute student loans, and
|
o |
the purchase amount of the trust student loans being replaced; plus
|
• |
any accrued interest amounts not guaranteed by, or that are required to be refunded to, a guarantor and any interest subsidy payments or special allowance payments lost as a result of the breach.
|
• |
the maturity or other liquidation of the last trust student loan and the disposition of any amount received upon liquidation of any remaining trust student loan, and
|
• |
the payment to the noteholders of all amounts required to be paid to them.
|
• |
collecting and depositing into the collection account all payments on the trust student loans, including claiming and obtaining any program payments;
|
• |
responding to inquiries from borrowers;
|
• |
attempting to collect delinquent payments; and
|
• |
sending out statements and payment coupons to borrowers.
|
• |
it will satisfy all of its obligations relating to the trust student loans, maintain in effect all qualifications required in order to service the loans and comply in all material respects with all requirements of law if a failure to
comply would have a materially adverse effect on the interests of the trust;
|
• |
it will not permit any rescission or cancellation of a trust student loan except as ordered by a court or other government authority or as consented to by the eligible lender trustee and the indenture trustee, except that it may write
off any delinquent loan if the remaining balance of the borrower’s account is less than $50;
|
• |
it will do nothing to impair the rights of the noteholders in the trust student loans; and
|
• |
it will not reschedule, revise, defer or otherwise compromise payments due on any trust student loan except during any applicable interest only, deferment or forbearance periods or otherwise in accordance with the same standards it uses
for similar student loans owned by Navient and its affiliates.
|
• |
the shortfall, if any, between:
|
o |
the purchase amount of the qualified substitute trust student loans; and
|
o |
the purchase amount of the trust student loans being replaced; and
|
• |
any accrued interest amounts not guaranteed by or that are required to be refunded to a guarantor and any interest subsidy payments or special allowance payments lost as a result of a breach.
|
• |
the successor to the servicer’s operations assumes in writing all of the obligations of the servicer;
|
• |
the sale or transfer and the assumption comply with the requirements of the servicing agreement; and
|
• |
the rating agencies confirm that this will not result in a downgrading or a withdrawal of the ratings then applicable to the notes.
|
• |
its obligation to purchase trust student loans from the trust as required by the servicing agreement or to pay to the trust the amount of any program payment which a guarantor or the Department of Education refuses to pay, or requires
the trust to refund, as a result of the servicer’s actions; or
|
• |
any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of the servicer’s duties or because of reckless disregard of its obligations and duties.
|
• |
any failure by the servicer to deposit in the Trust Accounts any required payment that continues for five Business Days after the servicer receives written notice of such failure from the indenture trustee or the eligible lender trustee;
|
• |
any failure by the servicer to observe or perform in any material respect any other term, covenant or agreement in the servicing agreement that materially and adversely affects the rights of noteholders and continues for 60 days after
written notice of such failure is given (1) to the servicer by the indenture trustee, the eligible lender trustee, or the administrator or (2) to the servicer, the indenture trustee and the eligible lender trustee, by holders of 50% or more
of the notes;
|
• |
the occurrence of an insolvency event involving the servicer;
|
• |
any failure by the servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a FFELP loan servicer; or
|
• |
any failure by the servicer to deliver any particular information, report, certification or accountants’ letter when and as required by specified sections of the servicing agreement, which continues unremedied for fifteen (15) calendar
days after the date on which such information, report, certification or accountants’ letter was required to be delivered.
|
• |
directing the indenture trustee to make the required distributions from the Trust Accounts on each monthly servicing payment date and each distribution date;
|
• |
preparing, based on periodic data received from the servicer, and providing quarterly and annual distribution statements to the eligible lender trustee, and the indenture trustee and any related U.S. federal income tax reporting
information; and
|
• |
providing the notices and performing other administrative obligations required by the indenture, the trust agreement and the sale agreement.
|
• |
the sub-administrator assumes in writing all of the obligations of the administrator that are sub-contracted;
|
• |
the sub-administrator covenants to comply with the requirements of the administration agreement; and
|
• |
the rating agencies confirm that this will not result in a downgrading or a withdrawal of the ratings then applicable to the notes.
|
• |
any failure by the administrator to deliver to the indenture trustee for deposit any required payment by the Business Day preceding any monthly servicing payment date or distribution date, if the failure continues for five Business Days
after notice or discovery;
|
• |
any failure by the administrator to direct the indenture trustee to make any required distributions from any of the Trust Accounts on any monthly servicing payment date or any distribution date, if the failure continues for five Business
Days after notice or discovery;
|
• |
any failure by the administrator to observe or perform in any material respect any other term, covenant or agreement in the administration agreement or a related agreement that materially and adversely affects the rights of noteholders
and continues for 60 days after written notice of the failure is given:
|
o |
to the administrator by the indenture eligible lender trustee, or
|
o |
to the administrator, the indenture trustee or the eligible lender trustee, as applicable, by holders of 50% or more of the notes; or
|
• |
the occurrence of an insolvency event involving the administrator.
|
• |
the amount of principal distributions for each class of notes;
|
• |
the amount of interest distributions for each class of notes and the applicable interest rates;
|
• |
the Pool Balance at the beginning and at the end of the preceding collection period;
|
• |
the outstanding principal balance and the note pool factor for each class of notes for that distribution date;
|
• |
the servicing fees, the administration fees and the amount of any carryover servicing fees for that collection period;
|
• |
the interest rates, if available, for the next period for each class of notes or the website where those rates may be found;
|
• |
the amount of any aggregate Realized Losses on the trust student loans for that collection period;
|
• |
the amount of any note interest shortfall and note principal shortfall, if applicable, for each class of notes, and any changes in these amounts from the preceding statement;
|
• |
the amount of any note interest carryover, if applicable, for each class of notes, and any changes in these amounts from the preceding statement;
|
• |
the aggregate purchase amounts for any trust student loans repurchased by the depositor, the servicer or the sellers from the trust in that collection period;
|
• |
the balance of trust student loans that are delinquent in each delinquency period as of the end of that collection period;
|
• |
the balance of any reserve account after giving effect to changes in the balance on that distribution date;
|
• |
to the extent applicable, any amount drawn upon from any reserve account with respect to such distribution date;
|
• |
any applicable triggers or asset tests are then in effect;
|
• |
if applicable, the amount of trust student loans added during the supplemental purchase period and the amount of any required repurchases or substitutions of trust student loans, to the extent material, and the balance of any Trust
Accounts as of both the prior and current distribution dates; and
|
• |
amounts distributed to the holder of the excess distribution certificate and the uses of Available Funds to the extent not otherwise set forth above.
|
• |
borrower default, death, disability or bankruptcy;
|
• |
the closing of the borrower’s school;
|
• |
the school’s false certification of borrower eligibility;
|
• |
liquidation of the student loan or collection of the related guarantee payments; and
|
• |
purchase of a student loan by the depositor or the servicer.
|
• |
the original denomination of your note; and
|
• |
the applicable pool factor.
|
Class of Notes
|
Spread
|
Class A-5
|
plus 0.11%
|
Class A-6A
|
plus 0.16%
|
Class
|
Spread
|
Class A-6B
|
plus %
|
Class A-6C
|
plus %
|
• |
the outstanding principal balance of the trust student loans plus
|
• |
any accrued but unpaid interest on the trust student loans as of the last day of the related collection period plus
|
• |
the balance of the reserve account on the distribution date following those distributions made under clauses (a) through (f) under “—Distributions—Distributions from the Collection Account”
below minus
|
• |
the Specified Reserve Account Balance and the Supplemental Interest Account Deposit Amount for that distribution date, or
|
• |
if such reset rate notes are denominated in U.S. Dollars, a 360-day year consisting of twelve 30-day months; or
|
• |
if such reset rate notes are denominated in a currency other than U.S. Dollars, generally, the Actual/Actual (ISMA) accrual method as described in “—Determination of Indices” below or another
day-count convention as set forth on the related Remarketing Terms Determination Date.
|
• |
the remarketing agent, in consultation with the administrator, with respect to the length of the reset period, the applicable currency (U.S. Dollars, Euros, Pounds Sterling or another currency), whether the interest rate is fixed or
floating and, if floating, the applicable interest rate index, the day-count convention, the applicable interest rate determination dates, the interval between interest rate change dates during each accrual period, whether the reset
rate notes will be structured to amortize periodically or to receive a payment of principal only at the end of the reset period, and the related All Hold Rate (if applicable); and
|
• |
the remarketing agent with respect to the determination of the applicable fixed rate of interest or Spread to the chosen interest rate index, as applicable.
|
• |
at a floating interest rate, in which case such reset rate notes are said to be in floating rate mode, or
|
• |
at a fixed interest rate, in which case such reset rate notes are said to be in fixed rate mode,
|
• |
the weighted average life of such reset rate notes under several assumed prepayment scenarios;
|
• |
the name and contact information of the remarketing agent;
|
• |
the next reset date and reset period;
|
• |
the applicable minimum denomination and additional increments;
|
• |
the interest rate mode (i.e., fixed rate or floating rate);
|
• |
the applicable currency;
|
• |
if in foreign exchange mode, the identities of the Eligible Swap Counterparties from which bids will be solicited;
|
• |
if in foreign exchange mode, the applicable distribution dates on which interest and principal will be paid to the related reset rate noteholders, if other than quarterly;
|
• |
whether such reset rate notes will be structured to amortize periodically or to receive a payment of principal only at the end of the related reset period (as will be the case, generally, but not exclusively, whenever such reset rate
notes bear a fixed rate of interest);
|
• |
if in floating rate mode, the applicable interest rate index;
|
• |
if in floating rate mode, the interval between interest rate change dates;
|
• |
if in floating rate mode, the applicable interest rate determination date;
|
• |
if in fixed rate mode, the applicable fixed rate pricing benchmark;
|
• |
if in fixed rate mode, the identities of the Eligible Swap Counterparties from which bids will be solicited;
|
• |
if in floating rate mode, whether there will be a swap agreement and if so the identities of the Eligible Swap Counterparties from which bids will be solicited;
|
• |
the applicable interest rate day-count basis; and
|
• |
the related All Hold Rate, if applicable.
|
• |
the remarketing agent, in consultation with the administrator, cannot determine the applicable required reset terms on or before the remarketing terms determination date;
|
• |
the remarketing agent cannot establish the required spread on the spread determination date;
|
• |
the remarketing agent is unable to remarket some or all of the tendered reset rate notes at the spread set by the remarketing agent, or one or more committed purchasers default on their purchase obligations and the remarketing agent
chooses not to purchase such reset rate notes itself;
|
• |
any rating agency then rating the notes has not confirmed or upgraded its then-current rating of any class of notes, if such confirmation is required; or
|
• |
certain other conditions specified in the remarketing agreement are not satisfied.
|
• |
all holders of such class of reset rate notes will retain their notes, including in all deemed mandatory tender situations;
|
• |
the related interest rate for such class of reset rate notes will be reset to a failed remarketing rate of three-month LIBOR plus 0.75% per annum; and
|
• |
the related reset period will be set at three months.
|
• |
to facilitate the trust’s ability to pay principal and interest in the applicable currency;
|
• |
to pay additional interest at the applicable interest rate and in the applicable currency on such reset rate notes from and including the related reset date to, but excluding the second business day following the related reset date;
and
|
• |
to facilitate the exchange of all secondary market trade proceeds from a successful remarketing (or proceeds from the exercise of the call option) on the applicable reset date to the applicable currency.
|
• |
on the effective date of such currency swap agreement for the related reset date, the U.S. Dollar equivalent of all secondary market trade proceeds received from purchasers of the related class of reset rate notes using the exchange
rate established on the effective date of such currency swap agreement;
|
• |
on or before each distribution date, (1) the rate of interest on the related class of reset rate notes multiplied by the outstanding principal balance of the related class of reset rate notes denominated in the applicable currency
and (2) the currency equivalent of the U.S. Dollars such swap counterparty concurrently receives from the trust as a payment of principal allocated to the related class of reset rate notes, including, on the maturity date for the
related class of reset rate notes, if a currency swap agreement is then in effect, the remaining outstanding principal balance of the related class of reset rate notes, but only to the extent that the required U.S. Dollar equivalent
amount is received from the trust on such date, using the exchange rate established on the applicable effective date of the currency swap agreement;
|
• |
with respect to a distribution date that is also a reset date, other than for distribution dates during a reset period following a reset date upon which a failed remarketing has occurred, up to and including the reset date resulting
in a successful remarketing or an exercise of the call option, additional interest at the applicable interest rate and in the applicable currency for the related class of reset rate notes from and including the related reset date to,
but excluding, the second business day following the related reset date; and
|
• |
on the reset date corresponding to a successful remarketing or an exercise of the call option of the related class of reset rate notes, the currency equivalent of all U.S. Dollar secondary market trade proceeds or proceeds from the
exercise of the call option received as of that reset date, as applicable, using the exchange rate established on the effective date of the applicable currency swap agreement for that reset date.
|
• |
on the effective date of such currency swap agreement for the related reset date, all secondary market trade proceeds received from purchasers of the related class of reset rate notes in the applicable currency;
|
• |
on or before each distribution date, (1) an interest rate of three-month LIBOR plus or minus a spread, as determined from the bidding process described below, multiplied by that swap counterpart’s pro rata share, as applicable, of
the U.S. Dollar equivalent of the outstanding principal balance of the related class of reset rate notes, and (2) that swap counterpart’s pro rata share of all payments of principal in U.S. Dollars that are allocated to the related
class of reset rate notes; provided that, all principal payments allocated to such notes on any distribution date will be deposited into the related accumulation account and paid to each related swap counterparty on or about the next
reset date (including all amounts required to be deposited in the related accumulation account on the related reset date), but excluding all investment earnings thereon; and
|
• |
on the reset date corresponding to a successful remarketing or an exercise of the call option of the related class of reset rate notes, all U.S. Dollar secondary market trade proceeds or proceeds from the exercise of the call option,
as applicable, received (1) from the remarketing agent that the remarketing agent either received directly from the purchasers of the related class of reset rate notes, if in U.S. Dollars; (2) from the new swap counterparty or
counterparties pursuant to the related currency swap agreements for the upcoming reset period, if in a currency other than U.S. Dollars; or (3) from the holder of the call option, as applicable.
|
• |
the next succeeding related reset date resulting in a successful remarketing;
|
• |
the purchase of all outstanding notes on a reset date, following the exercise of a call option;
|
• |
the distribution date on which the outstanding principal balance of the related class of reset rate notes is reduced to zero, excluding for such purpose all amounts on deposit in the related accumulation account; or
|
• |
the maturity date of the related class of reset rate notes.
|
• |
the applicable spread as determined by the remarketing agent on the Spread Determination Date; and
|
• |
the yield to maturity on the Spread Determination Date of the applicable fixed rate pricing benchmark, selected by the remarketing agent, as having an expected weighted average life based on a scheduled maturity at the next reset
date, which would be used in accordance with customary financial practice in pricing new issues of asset-backed securities of comparable average life, provided, that the remarketing agent shall establish that fixed rate equal to the
rate that, in the reasonable opinion of the remarketing agent, will enable all of the tendered reset rate notes to be remarketed by the remarketing agent at 100% of their outstanding principal balance. However, that fixed rate of
interest will in no event be lower than the related All Hold Rate, if applicable.
|
• |
the next succeeding reset date, if the related class of reset rate notes is then denominated in U.S. Dollars, or the next succeeding reset date resulting in a successful remarketing, if that class is then in foreign exchange mode;
|
• |
the related reset date for which the call option is exercised;
|
• |
the distribution date on which the outstanding principal balance of the related class of reset rate notes is reduced to zero (including as the result of the optional purchase of the remaining trust student loans by the servicer or an
auction of the trust student loans by the indenture trustee); or
|
• |
the maturity date of the related class of reset rate notes.
|
• |
an event of default under the indenture relating to the payment of principal on any class at its maturity date or to the payment of interest on any class of notes which has resulted in an acceleration of the maturity of the notes,
|
• |
an event of default under the indenture relating to an insolvency event or a bankruptcy with respect to the trust which has resulted in an acceleration of the maturity of the notes, or
|
• |
a liquidation of the trust assets following any event of default under the indenture,
|
A: |
to the applicable noteholders of a class of reset rate notes if then denominated in U.S. Dollars and structured not to receive a payment of principal until the end of their related reset period, the amount, if any, on deposit in the
related accumulation account (excluding any investment earnings thereon) in reduction of the outstanding amount of such class of reset rate notes until they are paid in full; and/or
|
B: |
to the related currency Swap Counterparty if a class of reset rate notes is then in foreign exchange mode and structured not to receive a payment of principal until the end of their related reset period, the amount, if any, on
deposit in the related accumulation account for the reset rate notes (excluding any investment earnings thereon) to be used in reduction of the outstanding amount of such class of reset rate notes until they are paid in full;
|
A: |
to the class A noteholders (other than the noteholders of a class of reset rate notes if one or more swap agreements with respect to interest payments to be made to such noteholders is then in effect), for amounts due and unpaid on
the class A Notes for interest at the applicable rate of interest due such class, ratably, without preference or priority of any kind, according to the amounts due and payable on the class A notes for such interest;
|
B: |
if one or more swap agreement is then in effect for a class of reset rate notes with respect to interest payments to be made to the related reset rate noteholders, to each Swap Counterparty, the amount of any swap interest payments
due and payable by the trust (other than as paid to each such Swap Counterparty under clause FIRST); and
|
C: |
if any swap agreement with respect to a class of reset rate notes has been terminated, to the related Swap Counterparty, the amount of any swap termination payments due to such Swap Counterparty 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 payment referred to in this clause FIFTH remaining unpaid;
|
A: |
if one or more classes of reset rate notes are in foreign exchange mode, pro rata (1) to the class A noteholders, ratably, an amount sufficient to reduce the respective principal balance of those class A notes (other than any class
or classes of reset rate notes then in foreign exchange mode) to zero, and (2) to the applicable currency Swap Counterparties an amount sufficient to reduce the U.S. Dollar Notional Principal Balance of such class or classes of reset
rate notes to zero; or
|
B: |
if all classes of the reset rate notes are then denominated in U.S. Dollars, pro rata to the class A noteholders, ratably, an amount sufficient to reduce the respective principal balances of all class A notes to zero;
|
• |
pay to noteholders the interest payable on the related distribution date; and
|
• |
reduce the outstanding principal amount of each class of notes then outstanding on the related distribution date to zero, taking into account all amounts then on deposit in any accumulation account.
|
• |
is then structured not to receive a payment of principal until the end of the related reset period, the outstanding principal balance of that class will be deemed to have been reduced by any amounts on deposit, exclusive of any
investment earnings, in the related accumulation account; and/or
|
• |
is then denominated in a non-U.S. Dollar currency, the U.S. Dollar Notional Principal Balance of that class will be determined based upon the exchange rate provided for in the related currency swap agreement or agreements.
|
• |
the minimum purchase amount described under “—Optional Purchase” above (plus any amounts owed to the servicer as carryover servicing fees); or
|
• |
the fair market value of the trust student loans as of the end of the related collection period.
|
• |
to correct or amplify the description of any property at any time subject to the lien of the indenture, or better to assure, convey and confirm unto the indenture trustee any property subject or required to be subjected to the lien
of the indenture, or to subject to the lien of the indenture any additional property;
|
• |
to evidence the succession of another person to the trust, and the assumption by any such successor of the covenants of the trust in the indenture and in the notes;
|
• |
to add to the covenants of the trust for the benefit of the noteholders and the Swap Counterparties, as applicable, or to surrender any right or power herein conferred upon the trust;
|
• |
to convey, transfer, assign, mortgage or pledge any additional property to the indenture trustee;
|
• |
to cure any ambiguity, to correct or supplement any provision in the indenture which may be inconsistent with any other provision of the indenture; provided that such action shall not materially adversely affect the interests of the
noteholders or any Swap Counterparty; or
|
• |
to modify, eliminate or add to the provisions of the indenture to such extent as shall be necessary to effect the qualification of this indenture under the Trust Indenture Act or under any similar federal statute later enacted and to
add to the indenture such other provisions as may be expressly required by the Trust Indenture Act.
|
• |
change the date of payment of any installment of principal of or interest on any note, or reduce the principal amount thereof, the interest rate thereon or the redemption price with respect thereto, change the provisions of the
indenture relating to the application of collections on, or the proceeds of the sale of, the trust estate to payment of principal of or interest on the notes, or change any place of payment where, or the coin or currency in which, any
note or the interest thereon is payable or impair the right to institute suit for the enforcement of the provisions of the indenture requiring the application of funds available therefor to the payment of any such amount due on the
notes on or after the respective due dates thereof (or, in the case of redemption, on or after the redemption date);
|
• |
reduce the percentage of the outstanding amount of the notes, the consent of the noteholders of which is required for any such supplemental indenture, or the consent of the noteholders of which is required for any waiver of
compliance with certain provisions of the indenture or certain defaults thereunder and their consequences provided for in the indenture;
|
• |
modify or alter the provisions of the proviso to the definition of the term “Outstanding”;
|
• |
reduce the percentage of outstanding notes whose holders must consent to any supplemental indenture;
|
• |
reduce the percentage of outstanding notes whose holders must consent to a sale or liquidation of the trust student loans if the proceeds of the sale would be insufficient to pay the principal amount and accrued interest on the
notes;
|
• |
modify the provisions of the indenture which specify the applicable percentages of principal amount of notes necessary to take specified actions except to increase these percentages or to specify additional provisions;
|
• |
modify any of the provisions of the indenture to affect the calculation of interest or principal due on any note on any distribution date or to affect the rights of the noteholders to the benefit of any provisions for the mandatory
redemption of the notes; or
|
• |
permit the creation of any lien ranking prior or equal to the lien of the indenture on any of the collateral for that series or, except as otherwise permitted or contemplated in that indenture, terminate the lien of the indenture on
any collateral or deprive the holder of any note of the security afforded by that lien.
|
• |
a citizen or individual resident of the United States;
|
• |
a corporation (including an entity treated as such) organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
• |
an estate the income of which is includible in gross income for U.S. federal income tax purposes, regardless of its source; or
|
• |
a trust whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust.
|
• |
is not actually or constructively a “10 percent shareholder” of Navient, Navient Credit Finance Corporation, the depositor or the trust, or a “controlled foreign corporation” with respect to which Navient, Navient Credit Finance
Corporation, the depositor or the trust is a “related person” within the meaning of the Code, and
|
• |
provides an appropriate statement, signed under penalties of perjury, certifying that the holder is a foreign person and providing that foreign person’s name and address. For beneficial owners that are individuals or entities treated
as corporations, this certification may be made on Form W-8BEN or Form W-8BEN-E. If the information provided in this statement changes, the foreign person must report that change within 30 days of such change. The statement generally
must be provided in the year a payment occurs or in any of the three preceding years.
|
• |
the gain is not effectively connected with the conduct of a trade or business in the United States by the foreign person, and
|
• |
in the case of an individual foreign person, the foreign person is not present in the United States for 183 days or more in the taxable year and certain other requirements are met.
|
• |
employee benefit plans as defined in Section 3(3) of ERISA that are subject to Title I of ERISA;
|
• |
certain other retirement plans and arrangements described in Section 4975 of the Code, including:
|
1. |
individual retirement accounts and annuities (“IRAs”), and
|
2. |
Keogh plans;
|
• |
collective investment funds and separate accounts and, as applicable, insurance company general accounts in which those plans, accounts or arrangements are invested that are subject to the fiduciary responsibility provisions of ERISA
and Section 4975 of the Code;
|
• |
any other entity whose assets are deemed to be “plan assets” as a result of any of the above plans, arrangements, funds or accounts investing in such entity; and
|
• |
persons who are fiduciaries with respect to plans in connection with the investment of plan assets.
|
• |
Prohibited Transaction Class Exemption (“PTCE”) 96‑23, which exempts certain transactions effected on behalf of a Plan by an “in‑house asset manager”;
|
• |
PTCE 90‑1, which exempts certain transactions between insurance company separate accounts and Parties in Interest;
|
• |
PTCE 91‑38, which exempts certain transactions between bank collective investment funds and Parties in Interest;
|
• |
PTCE 95‑60, which exempts certain transactions between insurance company general accounts and Parties in Interest; or
|
• |
PTCE 84‑14, which exempts certain transactions effected on behalf of a Plan by a “qualified professional asset manager.”
|
• |
Reports on Form 8-K (Current Report), following the occurrence of events specified in Form 8-K requiring disclosure, which are required to be filed within the time-frame specified in Form 8-K related to the type of event;
|
• |
Reports on Form 10-D (Asset-Backed Issuer Distribution Report), containing the distribution and pool performance information required on Form 10-D, which are required to be filed 15 days following the distribution date; and
|
• |
Report on Form 10-K (Annual Report), containing the items specified in Form 10-K with respect to a fiscal year and the items required pursuant to Items 1122 and 1123 of Regulation AB under the Securities Act.
|
(b) |
it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and
Markets Act 2000 (“FSMA”)) received by it in connection with the issue or sale of the reset rate notes in circumstances in which Section 21 of the FSMA does not apply to the trust;
|
(c) |
it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the reset rate notes in, from or otherwise involving the United Kingdom.
|
• |
if the Pool Balance as of the last day of the related collection period is greater than 40% of the Initial Pool Balance, then the Adjusted Pool Balance shall be the sum of that Pool Balance and the Specified Reserve Account Balance
for that distribution date, or
|
• |
if the Pool Balance as of the last day of the related collection period is less than or equal to 40% of the Initial Pool Balance, then the Adjusted Pool Balance shall be that Pool Balance.
|
• |
all collections on the trust student loans, including any guarantee payments received on the trust student loans, but net of:
|
(1) |
any collections in respect of principal on the trust student loans applied by the trust to repurchase guaranteed loans from the guarantors under the guarantee agreements, and
|
(2) |
amounts required by the Higher Education Act to be paid to the Department of Education or to be repaid to borrowers, whether or not in the form of a principal reduction of the applicable trust student loan, on the trust student loans
for that collection period, including consolidation loan rebate fees;
|
• |
any interest subsidy payments and special allowance payments received by the servicer or the eligible lender trustee with respect to the trust student loans during that collection period;
|
• |
all proceeds of the liquidation of defaulted trust student loans which were liquidated during that collection period in accordance with the servicer’s customary servicing procedures, net of expenses incurred by the servicer related
to their liquidation and any amounts required by law to be remitted to the borrower on the liquidated student loans, and all recoveries on liquidated student loans which were written off in prior collection periods or during that
collection period;
|
• |
the aggregate purchase amounts received during that collection period for those trust student loans repurchased by the depositor or purchased by the servicer or for trust student loans sold to another eligible lender pursuant to the
servicing agreement;
|
• |
the aggregate purchase amounts received during that collection period for those trust student loans purchased by the sellers;
|
• |
the aggregate amounts, if any, received from the sellers, the depositor or the servicer as the case may be, as reimbursement of non-guaranteed interest amounts, or lost interest subsidy payments and special allowance payments, on the
trust student loans pursuant to the sale agreement or the servicing agreement;
|
• |
amounts received by the trust pursuant to the servicing agreement during that collection period as to yield or principal adjustments;
|
• |
any interest remitted by the administrator to the collection account prior to that distribution date or monthly servicing date;
|
• |
investment earnings for that distribution date earned on amounts on deposit in each Trust Account (other than any accumulation account and any currency account);
|
• |
investment earnings actually received by the trust for that distribution date earned on amounts on deposit in any accumulation account;
|
• |
amounts transferred from the remarketing fee account in excess of the Reset Period Target Amount for that distribution date;
|
• |
amounts transferred from any investment premium purchase account in excess of the amount required to be on deposit therein pursuant to the formula set forth in the administration agreement;
|
• |
all amounts on deposit in any investment reserve account not transferred to the accumulation account to offset realized losses on eligible investments as of that distribution date;
|
• |
all amounts on deposit in any supplemental interest account;
|
• |
amounts transferred from the reserve account in excess of the Specified Reserve Account Balance as of that distribution date;
|
• |
all amounts received by the trust from any potential future cap counterparty, or otherwise under any potential future interest rate cap agreement, for deposit into the collection account for that distribution date; and
|
• |
all amounts received by the trust from any Swap Counterparty for deposit into the collection account, but only to the extent paid in U.S. Dollars, for that distribution date;
|
• |
if such class did not have at least one related swap agreement in effect during the previous reset period, the floating rate applicable for the initial reset period during which the Failed Remarketing Rate was not in effect; or
|
• |
if such class had one or more swap agreements in effect during the previous reset period, the weighted average of the floating rates of interest that were due to the related Swap Counterparties from the trust during the previous
reset period.
|
• |
the Class A Noteholders’ Interest Distribution Amount on the preceding distribution date, over
|
• |
the amount of interest actually distributed to the class A noteholders on that preceding distribution date,
|
• |
the Class A Noteholders’ Principal Distribution Amount on that distribution date, over
|
• |
the amount of principal actually distributed or allocated to the class A noteholders or deposited into the accumulation account on that distribution date.
|
• |
the amount of interest accrued at the class A note interest rates for the related accrual period on the aggregate outstanding principal balances of all classes of class A notes on the immediately preceding distribution date, after
giving effect to all principal distributions to class A noteholders on that preceding distribution date; and
|
• |
the Class A Note Interest Shortfall for that distribution date.
|
• |
the Class B Noteholders’ Interest Distribution Amount on the preceding distribution date, over
|
• |
the amount of interest actually distributed to the class B noteholders on that preceding distribution date,
|
• |
the Class B Noteholders’ Principal Distribution Amount on that distribution date, over
|
• |
the amount of principal actually distributed to the class B noteholders on that distribution date.
|
• |
the amount of interest accrued at the class B note rate for the related accrual period on the outstanding principal balance of the class B notes on the immediately preceding distribution date, after giving effect to all principal
distributions to class B noteholders on that preceding distribution date, and
|
• |
the Class B Note Interest Shortfall for that distribution date.
|
• |
prior to the Stepdown Date or with respect to any distribution date on which a Trigger Event is in effect, zero; and
|
• |
on and after the Stepdown Date and provided that no Trigger Event is in effect, a fraction expressed as a percentage, the numerator of which is the aggregate principal balance of the class B notes immediately prior to that
distribution date and the denominator of which is the aggregate principal balance of all outstanding notes, less all amounts (other than investment earnings) on deposit in the accumulation account, immediately prior to that distribution
date.
|
• |
the remarketing agent, in consultation with the administrator, cannot establish one or more of the terms required to be set on the Remarketing Terms Determination Date,
|
• |
the remarketing agent is unable to establish the related Spread or fixed rate on the Spread Determination Date,
|
• |
the remarketing agent is unable to remarket some or all of the tendered reset rate notes at the Spread or fixed rate established on the Spread Determination Date, or committed purchasers default on their purchase obligations, and the
remarketing agent, in its sole discretion, elects not to purchase the applicable reset rate notes themselves,
|
• |
the remarketing agent, in consultation with the administrator, is unable to obtain one or more swap agreements meeting the required criteria, if applicable,
|
• |
certain conditions specified in the remarketing agreement are not satisfied, or
|
• |
any applicable Rating Agency Condition has not been satisfied.
|
• |
all payments received by the trust through that date from borrowers, the guaranty agencies and the Department of Education;
|
• |
all amounts received by the trust through that date from repurchases of the trust student loans by any of the sellers, the depositor or the servicer;
|
• |
all liquidation proceeds and Realized Losses on the trust student loans liquidated through that date;
|
• |
the amount of any adjustments to balances of the trust student loans that the servicer makes under the servicing agreement through that date; and
|
• |
the amount by which guarantor reimbursements of principal on defaulted trust student loans through that date are reduced from 100% to 98%, or other applicable percentage, as required by the risk sharing provisions of the Higher
Education Act.
|
• |
as to the initial distribution date, the amount by which the aggregate outstanding principal amount of the notes exceeds the Adjusted Pool Balance for that distribution date, and
|
• |
as to each subsequent distribution date, the amount by which the Adjusted Pool Balance for the preceding distribution date exceeds the Adjusted Pool Balance for that distribution date.
|
(a) |
0.25% of the Pool Balance as of the close of business on the last day of the related collection period; and
|
(b) |
$4,524,559;
|
• |
the product of:
|
(1) |
the difference between (a) the weighted average of the LIBOR-based rates (as determined on the LIBOR Determination Date immediately preceding that distribution date) that will be payable by the trust to any related Swap
Counterparties on the next distribution date, or the LIBOR-based rate (as determined on the LIBOR Determination Date immediately preceding that distribution date) that will be payable by the trust to the related reset rate noteholders
on the next distribution date, as applicable, and (b) an assumed rate of investment earnings that satisfies the Rating Agency Condition,
|
(2) |
the amount on deposit in the related accumulation account immediately after that distribution date, and
|
(3) |
the actual number of days from that distribution date to the applicable next reset date, divided by 360; and
|
• |
an amount that satisfies the Rating Agency Condition.
|
• |
was a consolidation loan guaranteed as to principal and interest by a guaranty agency under a guarantee agreement and the guaranty agency was, in turn, reinsured by the Department of Education in accordance with the FFELP;
|
• |
contained terms in accordance with those required by the FFELP, the guarantee agreements and other applicable requirements;
|
• |
was fully disbursed;
|
• |
was not more than 210 days past due;
|
• |
did not have a borrower who was noted in the related records of the servicer as being currently involved in a bankruptcy proceeding; and
|
• |
had special allowance payments, if any, based on the three-month commercial paper rate or the 91-day Treasury bill rate.
|
Aggregate Outstanding Principal Balance
|
$
|
878,138,673
|
||
Aggregate Outstanding Principal Balance – Treasury Bill
|
$
|
24,898,866
|
||
Percentage of Aggregate Outstanding Principal Balance – Treasury Bill
|
2.84
|
%
|
||
Aggregate Outstanding Principal Balance – One-Month LIBOR
|
$
|
850,866,913
|
||
Percentage of Aggregate Outstanding Principal Balance – One-Month LIBOR
|
96.89
|
%
|
||
Aggregate Outstanding Principal Balance – Treasury Bill Other
|
$
|
2,372,894
|
||
Percentage of Aggregate Outstanding Principal Balance – Treasury Bill Other
|
0.27
|
%
|
||
Number of Borrowers
|
30,756
|
|||
Average Outstanding Principal Balance Per Borrower
|
$
|
28,552
|
||
Number of Loans
|
54,005
|
|||
Average Outstanding Principal Balance Per Loan – Treasury Bill
|
$
|
17,448
|
||
Average Outstanding Principal Balance Per Loan – One-Month LIBOR
|
$
|
16,198
|
||
Average Outstanding Principal Balance Per Loan – Treasury Bill Other
|
$
|
47,458
|
||
Weighted Average Remaining Term to Scheduled Maturity
|
173 months
|
|||
Weighted Average Annual Interest Rate
|
4.79
|
%
|
Interest Rates
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Less than or equal to 3.00%
|
7,357
|
$
|
120,843,284
|
13.8
|
%
|
|||||||
3.01% to 3.50%
|
8,475
|
117,534,302
|
13.4
|
|||||||||
3.51% to 4.00%
|
7,108
|
108,339,461
|
12.3
|
|||||||||
4.01% to 4.50%
|
6,814
|
95,723,860
|
10.9
|
|||||||||
4.51% to 5.00%
|
6,452
|
104,243,627
|
11.9
|
|||||||||
5.01% to 5.50%
|
7,246
|
94,961,996
|
10.8
|
|||||||||
5.51% to 6.00%
|
2,358
|
47,082,613
|
5.4
|
|||||||||
6.01% to 6.50%
|
3,559
|
66,827,630
|
7.6
|
|||||||||
6.51% to 7.00%
|
1,718
|
39,537,774
|
4.5
|
|||||||||
7.01% to 7.50%
|
462
|
15,505,464
|
1.8
|
|||||||||
7.51% to 8.00%
|
1,183
|
26,111,361
|
3.0
|
|||||||||
8.01% to 8.50%
|
939
|
29,950,333
|
3.4
|
|||||||||
Equal to or greater than 8.51%
|
334
|
11,476,969
|
1.3
|
|||||||||
Total
|
54,005
|
$
|
878,138,673
|
100.0
|
%
|
Range of Outstanding
Principal Balance
|
Number of
Borrowers
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Less than $5,000.00
|
5,918
|
$
|
15,396,097
|
1.8
|
%
|
|||||||
$5,000.00-$ 9,999.99
|
5,372
|
39,738,149
|
4.5
|
|||||||||
$10,000.00-$14,999.99
|
3,589
|
44,228,695
|
5.0
|
|||||||||
$15,000.00-$19,999.99
|
2,788
|
48,586,466
|
5.5
|
|||||||||
$20,000.00-$24,999.99
|
2,267
|
50,788,439
|
5.8
|
|||||||||
$25,000.00-$29,999.99
|
1,715
|
47,009,296
|
5.4
|
|||||||||
$30,000.00-$34,999.99
|
1,372
|
44,467,236
|
5.1
|
|||||||||
$35,000.00-$39,999.99
|
1,173
|
43,866,814
|
5.0
|
|||||||||
$40,000.00-$44,999.99
|
964
|
40,850,520
|
4.7
|
|||||||||
$45,000.00-$49,999.99
|
774
|
36,659,602
|
4.2
|
|||||||||
$50,000.00-$54,999.99
|
663
|
34,739,737
|
4.0
|
|||||||||
$55,000.00-$59,999.99
|
532
|
30,593,769
|
3.5
|
|||||||||
$60,000.00-$64,999.99
|
429
|
26,799,152
|
3.1
|
|||||||||
$65,000.00-$69,999.99
|
348
|
23,459,916
|
2.7
|
|||||||||
$70,000.00-$74,999.99
|
307
|
22,233,894
|
2.5
|
|||||||||
$75,000.00-$79,999.99
|
283
|
21,931,266
|
2.5
|
|||||||||
$80,000.00-$84,999.99
|
230
|
18,953,135
|
2.2
|
|||||||||
$85,000.00-$89,999.99
|
212
|
18,521,100
|
2.1
|
|||||||||
$90,000.00-$94,999.99
|
202
|
18,651,367
|
2.1
|
|||||||||
$95,000.00-$99,999.99
|
163
|
15,888,937
|
1.8
|
|||||||||
$100,000.00 and above
|
1,455
|
234,775,087
|
26.7
|
|||||||||
Total
|
30,756
|
$
|
878,138,673
|
100.0
|
%
|
Number of Days Delinquent
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
0-30 days
|
52,244
|
$
|
840,837,358
|
95.8
|
%
|
|||||||
31-60 days
|
682
|
13,680,932
|
1.6
|
|||||||||
61-90 days
|
290
|
6,792,988
|
0.8
|
|||||||||
91-120 days
|
195
|
4,152,998
|
0.5
|
|||||||||
121-150 days
|
114
|
2,515,288
|
0.3
|
|||||||||
151-180 days
|
104
|
2,562,018
|
0.3
|
|||||||||
181-210 days
|
80
|
1,974,720
|
0.2
|
|||||||||
Greater than 210 days
|
296
|
5,622,371
|
0.6
|
|||||||||
Total
|
54,005
|
$
|
878,138,673
|
100.0
|
%
|
Number of Months
Remaining to
Scheduled Maturity
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
0 to 3
|
163
|
$
|
138,950
|
*
|
||||||||
4 to 12
|
1,023
|
2,287,869
|
0.3
|
%
|
||||||||
13 to 24
|
2,181
|
8,151,671
|
0.9
|
|||||||||
25 to 36
|
3,522
|
13,087,776
|
1.5
|
|||||||||
37 to 48
|
2,556
|
15,226,239
|
1.7
|
|||||||||
49 to 60
|
3,295
|
15,563,884
|
1.8
|
|||||||||
61 to 72
|
3,675
|
22,448,902
|
2.6
|
|||||||||
73 to 84
|
3,625
|
26,564,869
|
3.0
|
|||||||||
85 to 96
|
3,022
|
25,613,279
|
2.9
|
|||||||||
97 to 108
|
2,436
|
23,879,658
|
2.7
|
|||||||||
109 to 120
|
2,649
|
30,374,381
|
3.5
|
|||||||||
121 to 132
|
4,679
|
76,249,588
|
8.7
|
|||||||||
133 to 144
|
3,871
|
74,093,847
|
8.4
|
|||||||||
145 to 156
|
2,980
|
64,989,191
|
7.4
|
|||||||||
157 to 168
|
2,250
|
52,065,266
|
5.9
|
|||||||||
169 to 180
|
2,084
|
50,181,829
|
5.7
|
|||||||||
181 to 192
|
2,489
|
64,143,502
|
7.3
|
|||||||||
193 to 204
|
1,773
|
53,331,456
|
6.1
|
|||||||||
205 to 216
|
1,060
|
32,646,880
|
3.7
|
|||||||||
217 to 228
|
888
|
34,040,539
|
3.9
|
|||||||||
229 to 240
|
886
|
34,871,314
|
4.0
|
|||||||||
241 to 252
|
635
|
25,447,772
|
2.9
|
|||||||||
253 to 264
|
521
|
25,218,843
|
2.9
|
|||||||||
265 to 276
|
405
|
21,370,257
|
2.4
|
|||||||||
277 to 288
|
276
|
13,989,404
|
1.6
|
|||||||||
289 to 300
|
342
|
18,917,926
|
2.2
|
|||||||||
301 to 312
|
285
|
16,496,970
|
1.9
|
|||||||||
313 to 324
|
82
|
5,434,638
|
0.6
|
|||||||||
325 to 336
|
53
|
3,565,877
|
0.4
|
|||||||||
337 to 348
|
66
|
4,713,398
|
0.5
|
|||||||||
349 to 360
|
144
|
13,467,490
|
1.5
|
|||||||||
361 and above
|
89
|
9,565,208
|
1.1
|
|||||||||
Total
|
54,005
|
$
|
878,138,673
|
100.0
|
%
|
Current Borrower Payment Status
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Deferment
|
1,766
|
$
|
33,605,985
|
3.8
|
%
|
|||||||
Forbearance
|
7,835
|
196,533,413
|
22.4
|
|||||||||
Repayment
|
||||||||||||
First year in repayment
|
711
|
28,833,273
|
3.3
|
|||||||||
Second year in repayment
|
611
|
21,186,401
|
2.4
|
|||||||||
Third year in repayment
|
698
|
19,650,391
|
2.2
|
|||||||||
More than 3 years in repayment
|
42,384
|
578,329,210
|
65.9
|
|||||||||
Total
|
54,005
|
$
|
978,457,376
|
100.0
|
%
|
• |
may have temporarily ceased repaying the loan through a deferment or a forbearance period (this category includes the Coronavirus Disaster Forbearance Program); or
|
• |
may be currently required to repay the loan – repayment.
|
Scheduled Months in Status Remaining
|
||||||||||||
Current Borrower Payment Status
|
Deferment
|
Forbearance
|
Repayment
|
|||||||||
Deferment
|
17.2
|
-
|
201.8
|
|||||||||
Forbearance
|
-
|
2.8
|
194.4
|
|||||||||
Repayment
|
-
|
-
|
163.6
|
State
|
Number
of Loans
|
Aggregate Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Alabama
|
595
|
$
|
9,652,152
|
1.1
|
%
|
|||||||
Alaska
|
82
|
1,022,616
|
0.1
|
|||||||||
Arizona
|
1,301
|
20,453,542
|
2.3
|
|||||||||
Arkansas
|
248
|
4,290,829
|
0.5
|
|||||||||
California
|
4,504
|
73,701,604
|
8.4
|
|||||||||
Colorado
|
919
|
14,511,880
|
1.7
|
|||||||||
Connecticut
|
982
|
14,068,413
|
1.6
|
|||||||||
Delaware
|
159
|
2,900,749
|
0.3
|
|||||||||
District of Columbia
|
208
|
3,841,133
|
0.4
|
|||||||||
Florida
|
2,961
|
53,710,643
|
6.1
|
|||||||||
Georgia
|
1,962
|
40,491,292
|
4.6
|
|||||||||
Hawaii
|
130
|
2,058,378
|
0.2
|
|||||||||
Idaho
|
241
|
3,046,993
|
0.3
|
|||||||||
Illinois
|
2,530
|
39,931,228
|
4.5
|
|||||||||
Indiana
|
1,280
|
18,903,624
|
2.2
|
|||||||||
Iowa
|
413
|
5,845,907
|
0.7
|
|||||||||
Kansas
|
541
|
7,379,340
|
0.8
|
|||||||||
Kentucky
|
433
|
6,483,980
|
0.7
|
|||||||||
Louisiana
|
773
|
13,876,967
|
1.6
|
|||||||||
Maine
|
276
|
5,119,190
|
0.6
|
|||||||||
Maryland
|
1,504
|
28,342,400
|
3.2
|
|||||||||
Massachusetts
|
1,779
|
26,714,245
|
3.0
|
|||||||||
Michigan
|
1,772
|
28,412,411
|
3.2
|
|||||||||
Minnesota
|
1,038
|
13,276,453
|
1.5
|
|||||||||
Mississippi
|
387
|
6,484,401
|
0.7
|
|||||||||
Missouri
|
898
|
13,994,547
|
1.6
|
|||||||||
Montana
|
112
|
1,778,630
|
0.2
|
|||||||||
Nebraska
|
184
|
1,880,296
|
0.2
|
|||||||||
Nevada
|
366
|
6,857,692
|
0.8
|
|||||||||
New Hampshire
|
343
|
4,734,062
|
0.5
|
|||||||||
New Jersey
|
2,272
|
38,099,347
|
4.3
|
|||||||||
New Mexico
|
213
|
4,512,895
|
0.5
|
|||||||||
New York
|
3,874
|
64,603,351
|
7.4
|
|||||||||
North Carolina
|
1,506
|
25,023,383
|
2.8
|
|||||||||
North Dakota
|
113
|
1,599,152
|
0.2
|
|||||||||
Ohio
|
2,649
|
41,901,914
|
4.8
|
|||||||||
Oklahoma
|
542
|
7,935,947
|
0.9
|
|||||||||
Oregon
|
795
|
13,623,328
|
1.6
|
|||||||||
Pennsylvania
|
2,645
|
41,947,546
|
4.8
|
|||||||||
Rhode Island
|
179
|
2,748,900
|
0.3
|
|||||||||
South Carolina
|
588
|
10,960,285
|
1.2
|
|||||||||
South Dakota
|
125
|
1,632,359
|
0.2
|
|||||||||
Tennessee
|
724
|
11,932,080
|
1.4
|
|||||||||
Texas
|
3,620
|
54,967,044
|
6.3
|
|||||||||
Utah
|
211
|
4,001,911
|
0.5
|
|||||||||
Vermont
|
131
|
1,997,868
|
0.2
|
|||||||||
Virginia
|
1,876
|
28,602,060
|
3.3
|
|||||||||
Washington
|
1,179
|
19,287,274
|
2.2
|
|||||||||
West Virginia
|
319
|
4,121,444
|
0.5
|
|||||||||
Wisconsin
|
1,132
|
16,797,923
|
1.9
|
|||||||||
Wyoming
|
57
|
843,633
|
0.1
|
|||||||||
Other
|
334
|
7,233,430
|
0.8
|
|||||||||
Total
|
54,005
|
$
|
878,138,673
|
100.0
|
%
|
Loan Repayment Terms
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||
Level Repayment
|
30,981
|
$
|
401,674,684
|
45.7
|
%
|
|||||
Other Repayment Options(1)
|
17,412
|
312,718,382
|
35.6
|
|||||||
Income-driven Repayment(2)
|
5,612
|
163,745,608
|
18.6
|
|||||||
Total
|
54,005
|
$
|
878,138,673
|
100.0
|
%
|
Loan Type
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
Subsidized
|
26,382
|
$
|
368,675,155
|
42.0
|
%
|
|||||||
Unsubsidized
|
27,623
|
509,463,518
|
58.0
|
|||||||||
Total
|
54,005
|
$
|
878,138,673
|
100.0
|
%
|
Disbursement Date
|
Number
of Loans
|
Aggregate Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
September 30, 1993 and earlier
|
32
|
$
|
1,545,144
|
0.2
|
%
|
|||||||
October 1, 1993 through June 30, 2006
|
53,973
|
876,593,529
|
99.8
|
|||||||||
July 1, 2006 and later
|
0
|
0
|
0.0
|
|||||||||
Total
|
54,005
|
$
|
878,138,673
|
100.0
|
%
|
Name of Guaranty Agency
|
Number
of Loans
|
Aggregate
Outstanding
Principal Balance
|
Percent of Pool
by Outstanding
Principal Balance
|
|||||||||
American Student Assistance
|
6,766
|
$
|
97,097,595
|
11.1
|
%
|
|||||||
College Assist
|
75
|
1,110,025
|
0.1
|
|||||||||
Educational Credit Management Corporation
|
11,763
|
169,082,258
|
19.3
|
|||||||||
Florida Off Of Student Fin’l Assistance
|
8,161
|
123,812,145
|
14.1
|
|||||||||
Great Lakes Higher Education Corporation
|
19,690
|
370,244,122
|
42.2
|
|||||||||
Illinois Student Assistance Comm
|
622
|
10,522,201
|
1.2
|
|||||||||
Kentucky Higher Educ. Asst. Auth.
|
736
|
10,449,387
|
1.2
|
|||||||||
Louisiana Office Of Student Financial Asst
|
302
|
4,876,218
|
0.6
|
|||||||||
Michigan Guaranty Agency
|
323
|
5,850,688
|
0.7
|
|||||||||
Nebraska National Student Loan Program
|
223
|
3,377,335
|
0.4
|
|||||||||
New York State Higher Ed Services Corp
|
1,878
|
31,990,392
|
3.6
|
|||||||||
Oklahoma Guaranteed Stud Loan Prog
|
300
|
3,584,117
|
0.4
|
|||||||||
Pennsylvania Higher Education Assistance Agency
|
1,277
|
20,319,009
|
2.3
|
|||||||||
Texas Guaranteed Student Loan Corp
|
1,889
|
25,823,180
|
2.9
|
|||||||||
Total
|
54,005
|
$
|
878,138,673
|
100.0
|
%
|
*
|
Represents a percentage greater than 0% but less than 0.05%.
|
Federal Fiscal Year
|
Federal Guaranty Reserve
Fund Level 1/
|
|
2015
|
1.05%
|
|
2016
|
1.37%
|
|
2017
|
1.80%
|
|
2018
|
2.21%
|
|
2019
|
0.64%
|
Federal Fiscal Year
|
Federal Guaranty Reserve
Fund Level 1/
|
|
2014
|
0.277%
|
|
2015
|
0.251%
|
|
2016
|
0.308%
|
|
2017
|
0.350%
|
|
2018
|
0.363%
|
Federal Guaranty Reserve
Federal Fiscal Year
|
Fund Level 1/
|
|
2014
|
0.377%
|
|
2015
|
0.295%
|
|
2016
|
0.373%
|
|
2017
|
0.430%
|
|
2018
|
0.460%
|
Federal Fiscal Year
|
Claims Rate
|
|
2015
|
0.96%
|
|
2016
|
1.00%
|
|
2017
|
0.35%
|
|
2018
|
0.35%
|
|
2019
|
2.00%
|
Federal Fiscal Year
|
Claims Rate
|
|
2014
|
4.73%
|
|
2015
|
4.71%
|
|
2016
|
0.60%
|
|
2017
|
0.67%
|
|
2018
|
2.15%
|
Federal Fiscal Year
|
Claims Rate
|
|
2014
|
1.37%
|
|
2015
|
0.60%
|
|
2016
|
1.31%
|
|
2017
|
0.63%
|
|
2018
|
1.52%
|
Reserve Ratio
|
|||||||||||
Federal Fiscal Year
|
|||||||||||
Guarantor
|
2014
|
2015
|
2016
|
2017
|
2018
|
||||||
ECMC
|
1.433%
|
1.994%
|
2.532%
|
3.232%
|
3.878%
|
|
Claims Rate
|
|||||||||||
Federal Fiscal Year
|
|||||||||||
Guarantor
|
2014
|
2015
|
2016
|
2017
|
2018
|
||||||
ECMC
|
3.38%
|
0.66%
|
0.19%
|
0.05%
|
0.77%
|
|
Recovery Rate*
|
|||||||||||
Federal Fiscal Year
|
|||||||||||
Guarantor
|
2016
|
2017
|
2018
|
2019
|
2020*
|
|
|||||
ECMC
|
36.84%
|
40.43%
|
36.94%
|
17.92%
|
8.47%
|
|
Federal Fiscal Year
(Ending September 30) |
Cumulative
Recovery Rate |
|
2013
|
74.0%
|
|
2014
|
77.4
|
|
2015
|
83.0
|
|
2016
|
86.8
|
|
2017
|
89.8
|
Federal Fiscal Year
(Ending September 30) |
Reserve Ratio
|
|
2013
|
0.257%
|
|
2014
|
0.260
|
|
2015
|
0.273
|
|
2016
|
0.298
|
|
2017
|
0.311
|
Federal Fiscal Year
(Ending September 30) |
Claims Rate
|
|
2013
|
2.0%
|
|
2014
|
1.7
|
|
2015
|
0.5
|
|
2016
|
0.5
|
|
2017
|
0.5
|
ASA Fiscal Year
(Ending June 30) |
Default Claims
(Dollars in Millions) |
|
2014
|
$617
|
|
2015
|
216
|
|
2016
|
138
|
|
2017
|
115
|
|
2018
|
127
|
ASA Fiscal Year
(Ending June 30) |
Default Recoveries
(Dollars in Millions) |
|
2014
|
$548
|
|
2015
|
610
|
|
2016
|
561
|
|
2017
|
499
|
|
2018
|
382
|
• |
default of the borrower;
|
• |
the death, bankruptcy or permanent, total disability of the borrower;
|
• |
closing of the borrower’s school prior to the end of the academic period;
|
• |
false certification of the borrower’s eligibility for the loan by the school; and
|
• |
an unpaid school refund.
|
• |
Subsidized Stafford Loans to students who demonstrated requisite financial need;
|
• |
Unsubsidized Stafford Loans to students who either did not demonstrate financial need or require additional loans to supplement their Subsidized Stafford Loans;
|
• |
Parent Loans for Undergraduate Students, known as “PLUS Loans,” to parents of dependent students whose estimated costs of attending school exceeded other available financial aid; and
|
• |
Consolidation Loans, which consolidated into a single loan a borrower’s obligations under various federally authorized education loan programs.
|
• |
is a United States citizen, national or permanent resident;
|
• |
has been accepted for enrollment or is enrolled and is maintaining satisfactory academic progress at a participating educational institution;
|
• |
is carrying at least one-half of the normal full-time academic workload for the course of study the student is pursuing; and
|
• |
meets the financial need requirements for the particular loan program.
|
Date of First Disbursement
|
Special Allowance Margin
|
|
Before 10/17/86
|
3.50%
|
|
From 10/17/86 through 09/30/92
|
3.25%
|
|
From 10/01/92 through 06/30/95
|
3.10%
|
|
From 07/01/95 through 06/30/98
|
2.50% for Stafford Loans that are in In-School, Grace or Deferment
|
|
3.10% for Stafford Loans that are in Repayment and all other loans
|
||
From 07/01/98 through 12/31/99
|
2.20% for Stafford Loans that are in In-School, Grace or Deferment
|
|
2.80% for Stafford Loans that are in Repayment and Forbearance
|
||
3.10% for PLUS, SLS and Consolidation Loans
|
Date of First Disbursement
|
Special Allowance Margin
|
|
From 01/01/00 through 09/30/07
|
1.74% for Stafford Loans that are in In-School, Grace or Deferment
|
|
2.34% for Stafford Loans that are in Repayment and Forbearance
|
||
2.64% for PLUS and Consolidation Loans
|
||
From 10/01/07 and after
|
1.19% for Stafford Loans that are In-School, Grace or Deferment
|
|
1.79% for Stafford Loans that are in Repayment and PLUS
|
||
2.09% for Consolidation Loans
|
Date of First Disbursement
|
Maximum Origination Fee
|
|
Before 07/01/06
|
3.0%
|
|
From 07/01/06 through 06/30/07
|
2.0%
|
|
From 07/01/07 through 06/30/08
|
1.5%
|
|
From 07/01/08 through 06/30/09
|
1.0%
|
|
From 07/01/09 through 06/30/10
|
0.5%
|
|
From 07/01/10 and after
|
0.0%
|
• |
federal reimbursement of Stafford Loans made by eligible lenders to qualified students;
|
• |
federal interest subsidy payments on Subsidized Stafford Loans paid by the Department of Education to holders of the loans in lieu of the borrowers’ making interest payments during in-school, grace and deferment periods or, in
certain cases, during enrollment in an income-based repayment plan; and
|
• |
special allowance payments representing an additional subsidy paid by the Department of Education to the holders of eligible Stafford Loans.
|
Trigger Date
|
Borrower Rate
|
Maximum
Borrower Rate
|
Interest Rate Margin
|
|||
Before 10/01/81
|
7%
|
N/A
|
N/A
|
|||
From 01/01/81 through 09/12/83
|
9%
|
N/A
|
N/A
|
|||
From 09/13/83 through 06/30/88
|
8%
|
N/A
|
N/A
|
|||
From 07/01/88 through 09/30/92
|
8% for 48 months; thereafter, 91-day Treasury + Interest Rate Margin
|
8% for 48 months,
then 10% |
3.25% for loans made before 7/23/92 and for loans made on or before 10/1/92 to new student borrowers; 3.10% for loans made after 7/23/92
and before 7/1/94 to borrowers with outstanding FFELP loans |
|||
From 10/01/92 through 06/30/94
|
91-day Treasury + Interest Rate Margin
|
9%
|
3.10%
|
|||
From 07/01/94 through 06/30/95
|
91-day Treasury + Interest Rate Margin
|
8.25%
|
3.10%
|
|||
From 07/01/95 through 06/30/98
|
91-day Treasury + Interest Rate Margin
|
8.25%
|
2.50% (In-School, Grace
or Deferment); 3.10% (Repayment) |
|||
From 07/01/98 through 06/30/06
|
91-day Treasury + Interest Rate Margin
|
8.25%
|
1.70% (In-School, Grace or Deferment); 2.30% (Repayment)
|
|||
From 07/01/06 through 06/30/08
|
6.8%
|
N/A
|
N/A
|
|||
From 07/01/08 through 06/30/09
|
6.0% for undergraduate subsidized loans; and 6.8% for unsubsidized loans and graduate subsidized loans
|
6.0%, 6.8%
|
N/A
|
|||
From 07/01/09 through 06/30/10
|
5.6% for undergraduate subsidized loans;
and 6.8% for unsubsidized loans and graduate loans |
5.6%, 6.8%
|
N/A
|
• |
the applicable maximum borrower rate
|
• |
the sum of
|
• |
the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held before that June 1,
|
• |
the applicable interest rate margin.
|
• |
while the borrower is a qualified student,
|
• |
during the grace period,
|
• |
during prescribed deferment periods, and
|
• |
in certain cases, during a borrower’s enrollment in an income-based repayment plan.
|
• |
satisfaction of need criteria, and
|
• |
continued eligibility of the loan for federal insurance or reinsurance.
|
Dependent Students
|
Independent Students
|
|||||||||||||||||||||||||||
Borrower’s Academic Level
|
Subsidized
and Unsubsidized on or after 10/1/93 |
Subsidized
and Unsubsidized on or after 7/1/07 |
Subsidized
and Unsubsidized on or after 7/1/08 |
Additional
Unsubsidized only on or after 7/1/94 |
Additional
Unsubsidized only on or after 7/1/07 |
Additional
Unsubsidized only on or after 7/1/08 |
Maximum
Annual Total Amount |
|||||||||||||||||||||
Undergraduate (per year):
|
||||||||||||||||||||||||||||
1st year
|
$
|
2,625
|
$
|
3,500
|
$
|
5,500
|
$
|
4,000
|
$
|
4,000
|
$
|
4,000
|
$
|
9,500
|
||||||||||||||
2nd year
|
$
|
3,500
|
$
|
4,500
|
$
|
6,500
|
$
|
4,000
|
$
|
4,000
|
$
|
4,000
|
$
|
10,500
|
||||||||||||||
3rd year and above
|
$
|
5,500
|
$
|
5,500
|
$
|
7,500
|
$
|
5,000
|
$
|
5,000
|
$
|
5,000
|
$
|
12,500
|
||||||||||||||
Graduate (per year)
|
$
|
8,500
|
$
|
8,500
|
$
|
8,500
|
$
|
10,000
|
$
|
12,000
|
$
|
12,000
|
$
|
20,500
|
||||||||||||||
Aggregate Limit:
|
||||||||||||||||||||||||||||
Undergraduate
|
$
|
23,000
|
$
|
23,000
|
$
|
31,000
|
$
|
23,000
|
$
|
23,000
|
$
|
26,500
|
$
|
57,500
|
||||||||||||||
Graduate (including undergraduate)
|
$
|
65,500
|
$
|
65,500
|
$
|
65,500
|
$
|
73,000
|
$
|
73,000
|
$
|
73,000
|
$
|
138,500
|
• |
The loan limits include both FFELP and Federal Direct Lending Program (FDLP) loans.
|
• |
The amounts in the final column represent the combined maximum loan amount per year for Subsidized and Unsubsidized Stafford Loans. Accordingly, the maximum amount that a student may borrow under an Unsubsidized Stafford Loan is
the difference between the combined maximum loan amount and the amount the student received in the form of a Subsidized Stafford Loan.
|
• |
Independent undergraduate students, graduate students and professional students were permitted to borrow the additional amounts shown in the third and fourth columns. Dependent undergraduate students were also permitted to receive
these additional loan amounts if their parents were unable to provide the family contribution amount and could not qualify for a PLUS Loan.
|
• |
Students attending certain medical schools were eligible for $38,500 annually and $189,000 in the aggregate.
|
• |
The annual loan limits were sometimes reduced when the student was enrolled in a program of less than one academic year or has less than a full academic year remaining in his program.
|
Outstanding FFELP Indebtedness
|
Maximum Repayment Period
|
|
$7,500-$9,999
|
12 Years
|
|
$10,000-$19,999
|
15 Years
|
|
$20,000-$30,000
|
20 Years
|
|
$30,001-$59,999
|
25 Years
|
|
$60,000 or more
|
30 Years
|
|
Note: Maximum repayment period excludes authorized periods of deferment and forbearance.
|
• |
enrolled in an approved graduate fellowship program or rehabilitation program;
|
• |
seeking, but unable to find, full-time employment, subject to a maximum deferment of three years; or
|
• |
having an economic hardship, as defined in the Higher Education Act, subject to a maximum deferment of three years; or
|
• |
serving on active duty during a war or other military operation or national emergency, or performing qualifying National Guard duty during a war or other military operation or national emergency, subject to a maximum deferment
period of three years, and effective July 1, 2006 on loans made on or after July 1, 2001.
|
• |
the applicable maximum borrower rate
|
• |
the sum of:
|
• |
the applicable 1-year Index or the bond equivalent rate of 91-day Treasury bills, as applicable,
|
• |
the applicable interest rate margin.
|
Trigger Date
|
Borrower Rate
|
Maximum
Borrower
Rate
|
Interest
Rate
Margin
|
|||
Before 10/01/81
|
9%
|
N/A
|
N/A
|
|||
From 10/01/81 through 10/30/82
|
14%
|
N/A
|
N/A
|
|||
From 11/01/82 through 06/30/87
|
12%
|
N/A
|
N/A
|
|||
From 07/01/87 through 09/30/92
|
1-year Index + Interest Rate Margin
|
12%
|
3.25%
|
|||
From 10/01/92 through 06/30/94
|
1-year Index + Interest Rate Margin
|
PLUS 10%,
SLS 11%
|
3.10%
|
|||
From 07/01/94 through 06/30/98
|
1-year Index + Interest Rate Margin
|
9%
|
3.10%
|
|||
From 07/01/98 through 06/30/06
|
91-day Treasury + Interest Rate Margin
|
9%
|
3.10%
|
|||
From 07/01/06
|
8.5%
|
8.5%
|
N/A
|
• |
the borrower rate is set at the maximum borrower rate and
|
• |
the sum of the average of the bond equivalent rates of 91-day Treasury bills auctioned during that quarter and the applicable interest rate margin exceeds the maximum borrower rate.
|
Claims Paid Date
|
Maximum
|
5% Trigger
|
9% Trigger
|
|||
Before October 1, 1993
|
100%
|
90%
|
80%
|
|||
October 1, 1993 — September 30, 1998
|
98%
|
88%
|
78%
|
|||
On or after October 1, 1998
|
95%
|
85%
|
75%
|
Source
|
Basis
|
|
Insurance Premium
|
Up to 1% of the principal amount guaranteed, withheld from the proceeds of each loan disbursement
|
|
Loan Processing and Issuance Fee
|
0.40% of the principal amount guaranteed, paid by the Department of Education
|
|
Account Maintenance Fee
|
Originally 0.10%, which was reduced to 0.06% on October 1, 2007, of the original principal amount of loans outstanding, paid by the Department of Education
|
|
Default Aversion Fee
|
1% of the outstanding amount of loans submitted by a lender for default aversion assistance, minus 1% of the unpaid principal and interest paid on default claims, which is paid once per loan by transfers out of the Student Loan
Reserve Fund
|
|
Collection Retention Fee
|
16% of the amount collected on loans on which reinsurance has been paid (10% or 18.5% of the amount collected for a defaulted loan that is purchased by a lender for consolidation or rehabilitation, respectively), withheld from
gross receipts
|
Global Clearance, Settlement and
Tax Documentation Procedures
• |
borrowing through Clearstream, Luxembourg or Euroclear for one day until the purchase side of the day trade is reflected in their Clearstream, Luxembourg or Euroclear accounts, in accordance with the clearing system’s customary
procedures;
|
• |
borrowing the Global Securities in the U.S. from a DTC participant no later than one day before settlement, which would give the Global Securities sufficient time to be reflected in their Clearstream, Luxembourg or Euroclear
account in order to settle the sale side of the trade; or
|
• |
staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC participant is at least one day before the value date for the sale to the Clearstream, Luxembourg participant
or Euroclear participant.
|
• |
each clearing system, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business in the chain of intermediaries between the beneficial owner and the U.S. entity required to
withhold tax complies with applicable certification requirements, and
|
• |
that holder takes one of the following steps to obtain an exemption or reduced tax rate:
|
1. |
Exemption for non-U.S. person—Form W-8BEN or Form W-8BEN-E. Non-U.S. persons that are beneficial owners can obtain a complete exemption from the withholding tax. To obtain this exemption, they are generally required to file a
signed Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)) or Form W-8BEN-E (Certificate of Status of Beneficial Owner for United States Tax Withholding and
Reporting (Entities)).
|
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 partnership, for which the income is effectively connected with its conduct of a trade or
business in the United States, can obtain an exemption from the withholding tax with respect to the notes by filing Form W-8ECI (Certificate of Foreign Person’s Claim That Income Is 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 or Form W-8BEN-E. 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 or Form W-8BEN-E.
|
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) certifying that they are not subject to
U.S. backup withholding tax.
|
• |
a citizen or individual resident of the United States,
|
• |
a corporation or partnership, including an entity treated as such for U.S. federal income tax purposes, organized in or under the laws of the United States or any state thereof or the District of Columbia,
|
• |
an estate the income of which is includible in gross income for U.S. federal income tax purposes, regardless of its source, or
|
• |
a trust whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust.
|
60 Wall Street, 16th Floor
ELIGIBLE LENDER TRUSTEE
DEUTSCHE BANK TRUST COMPANY AMERICAS
60 Wall Street, 16th Floor
Mailstop NYC60-1625
New York, New York 10005
|
DELAWARE TRUSTEE
BNY MELLON TRUST OF DELAWARE
301 Bellevue Parkway
Third Floor
Wilmington, Delaware 19809
|
INDENTURE TRUSTEE AND PAYING AGENT
DEUTSCHE BANK NATIONAL TRUST COMPANY
1761 E. Saint Andrew Place
Santa Ana, California 92705 |
MORGAN, LEWIS & BOCKIUS LLP
1111 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2541
|
RICHARDS, LAYTON & FINGER, P.A.
920 N. King Street
Wilmington, Delaware 19801
|