THE TRUST STUDENT LOAN POOL

 

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

 

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

 

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

 

·	was more than 30 days past the final disbursement;

 

·	was not more than 210 days past due;

 

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

 

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

 

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

 

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

 

 

 

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

 

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

 

COMPOSITION OF THE TRUST STUDENT LOANS AS OF THE STATISTICAL DISCLOSURE DATE
Aggregate Outstanding Principal Balance		$	718,199,391
Aggregate Outstanding Principal Balance – Treasury Bill		$	18,269,109
Percentage of Aggregate Outstanding Principal Balance – Treasury Bill			2.54	%
Aggregate Outstanding Principal Balance – One-Month LIBOR		$	699,930,283
Percentage of Aggregate Outstanding Principal Balance – One-Month LIBOR			97.46	%
Number of Borrowers			26,270
Average Outstanding Principal Balance Per Borrower		$	27,339
Number of Loans			46,381
Average Outstanding Principal Balance Per Loan – Treasury Bill		$	31,229
Average Outstanding Principal Balance Per Loan – One-Month LIBOR		$	15,284
Weighted Average Remaining Term to Scheduled Maturity		189 months
Weighted Average Annual Interest Rate			4.29	%

 

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

 

The weighted average annual borrower interest rate shown in the table is exclusive of special allowance payments.  The weighted average spread for special allowance payments to the 91-day Treasury bill rate was 3.10% as of the statistical disclosure date.

 

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

 

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

 

 

DISTRIBUTION OF THE TRUST STUDENT LOANS BY BORROWER INTEREST RATES AS OF THE STATISTICAL DISCLOSURE DATE
Interest Rates		Number of Loans				Aggregate Outstanding Principal Balance				Percent of Pool by Outstanding Principal Balance
Less than or equal to 3.00%			10,099			$	155,771,585				21.7	%
3.01% to 3.50%			8,158				117,514,851				16.4
3.51% to 4.00%			8,997				124,425,692				17.3
4.01% to 4.50%			11,156				150,113,094				20.9
4.51% to 5.00%			2,324				36,196,257				5.0
5.01% to 5.50%			676				13,371,740				1.9
5.51% to 6.00%			637				13,889,048				1.9
6.01% to 6.50%			943				19,171,804				2.7
6.51% to 7.00%			1,093				25,182,587				3.5
7.01% to 7.50%			451				11,206,691				1.6
7.51% to 8.00%			770				17,644,819				2.5
8.01% to 8.50%			869				26,083,128				3.6
Equal to or greater than 8.51%			208				7,628,097				1.1
Total			46,381			$	718,199,391				100.0	%

 

 

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

 

 

 

DISTRIBUTION OF THE TRUST STUDENT LOANS BY OUTSTANDING PRINCIPAL BALANCE PER BORROWER AS OF THE STATISTICAL DISCLOSURE DATE
Range of Outstanding Principal Balance		Number of Borrowers				Aggregate Outstanding Principal Balance				Percent of Pool by Outstanding Principal Balance
Less than $5,000.00			5,612			$12,008,318					1.7	%
$  5,000.00-$ 9,999.99			4,255				32,675,781				4.5
$10,000.00-$14,999.99			3,520				43,004,234				6.0
$15,000.00-$19,999.99			2,111				36,649,208				5.1
$20,000.00-$24,999.99			1,842				41,264,155				5.7
$25,000.00-$29,999.99			1,514				41,530,835				5.8
$30,000.00-$34,999.99			1,058				34,325,111				4.8
$35,000.00-$39,999.99			836				31,333,213				4.4
$40,000.00-$44,999.99			741				31,496,149				4.4
$45,000.00-$49,999.99			663				31,420,907				4.4
$50,000.00-$54,999.99			503				26,390,521				3.7
$55,000.00-$59,999.99			436				25,014,724				3.5
$60,000.00-$64,999.99			352				21,971,635				3.1
$65,000.00-$69,999.99			345				23,244,597				3.2
$70,000.00-$74,999.99			261				18,887,619				2.6
$75,000.00-$79,999.99			233				18,040,247				2.5
$80,000.00-$84,999.99			208				17,173,339				2.4
$85,000.00-$89,999.99			202				17,641,768				2.5
$90,000.00-$94,999.99			157				14,521,461				2.0
$95,000.00-$99,999.99			159				15,498,814				2.2
$100,000.00 and above			1,262				184,106,755				25.6
Total			26,270			$718,199,391					100.0	%

 

 

DISTRIBUTION OF THE TRUST STUDENT LOANS BY DELINQUENCY STATUS AS OF THE STATISTICAL DISCLOSURE DATE
Number of Days Delinquent		Number of Loans				Aggregate Outstanding Principal Balance				Percent of Pool by Outstanding Principal Balance
0-30 days			44,620			$	680,947,857				94.8	%
31-60 days			649				12,925,606				1.8
61-90 days			318				6,421,038				0.9
91-120 days			180				3,707,304				0.5
121-150 days			151				2,854,247				0.4
151-180 days			129				3,046,336				0.4
181-210 days			92				1,565,310				0.2
Greater than 210 days			242				6,731,693				0.9
Total			46,381			$	718,199,391				100.0	%

 

 

DISTRIBUTION OF THE TRUST STUDENT LOANS BY REMAINING TERM TO SCHEDULED MATURITY AS OF THE STATISTICAL DISCLOSURE DATE
Number of Months Remaining to Scheduled Maturity		Number of Loans				Aggregate Outstanding Principal Balance				Percent of Pool by Outstanding Principal Balance
0 to 3			42			$	22,433				*
4 to12			307				201,756				*
13 to 24			4,339				4,381,279				0.6	%
25 to 36			1,919				3,750,493				0.5
37 to 48			1,562				5,082,416				0.7
49 to 60			1,373				5,979,439				0.8
61 to 72			1,398				7,895,104				1.1
73 to 84			6,195				34,794,207				4.8
85 to 96			2,729				19,318,887				2.7
97 to 108			1,799				14,887,394				2.1
109 to 120			1,575				16,965,506				2.4
121 to 132			2,648				45,739,685				6.4
133 to 144			4,697				71,533,365				10.0
145 to 156			2,137				38,570,425				5.4
157 to 168			1,320				24,971,210				3.5
169 to 180			1,089				20,153,957				2.8
181 to 192			837				18,862,522				2.6
193 to 204			3,474				89,504,288				12.5
205 to 216			1,559				47,820,176				6.7
217 to 228			1,026				34,178,457				4.8
229 to 240			1,192				46,268,740				6.4
241 to 252			826				37,262,805				5.2
253 to 264			638				31,008,931				4.3
265 to 276			526				26,813,032				3.7
277 to 288			347				17,767,029				2.5
289 to 300			300				16,051,024				2.2
301 to 312			155				9,678,629				1.3
313 to 324			106				6,431,734				0.9
325 to 336			43				3,302,925				0.5
337 to 348			57				3,950,518				0.6
349 to 360			113				9,193,349				1.3
361 and above			53				5,857,672				0.8
Total			46,381			$	718,199,391				100.0	%
* Represents a percentage greater than 0% but less than 0.05%.

 

 

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

 

 

DISTRIBUTION OF THE TRUST STUDENT LOANS BY CURRENT BORROWER PAYMENT STATUS AS OF THE STATISTICAL DISCLOSURE DATE
Current Borrower Payment Status		Number of Loans				Aggregate Outstanding Principal Balance				Percent of Pool by Outstanding Principal Balance
Deferment			1,562			$	29,471,387				4.1	%
Forbearance			1,907				47,029,751				6.5
Repayment
First year in repayment			516				17,623,814				2.5
Second year in repayment			439				15,156,134				2.1
Third year in repayment			593				17,297,142				2.4
More than 3 years in repayment			41,364				591,621,164				82.4
Total			46,381			$	718,199,391				100.0	%

 

 

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

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

·	may be currently required to repay the loan – repayment.

 

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

 

The weighted average number of months in repayment for all trust student loans currently in repayment is approximately 114.4 calculated as the term to maturity at the commencement of repayment less the number of months remaining to scheduled maturity as of the statistical disclosure date.

 

 

 

SCHEDULED WEIGHTED AVERAGE REMAINING MONTHS IN STATUS OF THE TRUST STUDENT LOANS BY CURRENT BORROWER PAYMENT STATUS AS OF THE STATISTICAL DISCLOSURE DATE
		Scheduled Months in Status Remaining
Current Borrower Payment Status		Deferment				Forbearance				Repayment
Deferment			17.7				-				215.6
Forbearance			-				4.6				214.5
Repayment			-				-				184.6

We have determined the scheduled weighted average remaining months in status shown in the previous table without giving effect to any deferment or forbearance periods that may be granted in the future.  Of the $29,471,387 aggregate outstanding principal balance of the trust student loans in deferment as of the statistical disclosure date, $19,211,915 or approximately 65.2% of such loans are to borrowers who had not graduated as of that date.  We expect that a significant portion of these loans could qualify for additional deferments or forbearances at the end of their current deferment periods as the related borrowers continue their education beyond their current degree programs.  As a result, the overall duration of any applicable deferment and forbearance periods as well as the likelihood of future deferment and forbearance periods within this pool of trust student loans is likely to be higher than in other pools of student loans without similar numbers of in-school consolidation loans.  See Appendix A to the preliminary remarketing memorandum.

 

GEOGRAPHIC DISTRIBUTION OF THE TRUST STUDENT LOANS AS OF THE STATISTICAL DISCLOSURE DATE
State		Number of Loans				Aggregate Outstanding Principal Balance				Percent of Pool by Outstanding Principal Balance
Alabama			236			$	4,632,203				0.6	%
Alaska			71				937,774				0.1
Arizona			672				10,987,553				1.5
Arkansas			254				4,316,447				0.6
California			4,401				80,828,759				11.3
Colorado			711				10,307,564				1.4
Connecticut			670				7,972,156				1.1
Delaware			65				1,181,875				0.2
District of Columbia			147				2,687,135				0.4
Florida			1,524				29,527,995				4.1
Georgia			993				17,382,293				2.4
Hawaii			118				2,223,094				0.3
Idaho			135				1,904,577				0.3
Illinois			1,663				22,605,279				3.1
Indiana			780				12,561,784				1.7
Iowa			199				2,525,928				0.4
Kansas			443				5,613,551				0.8
Kentucky			414				5,935,254				0.8
Louisiana			1,159				16,743,266				2.3
Maine			112				1,390,328				0.2
Maryland			779				13,648,773				1.9
Massachusetts			1,269				15,732,698				2.2
Michigan			1,063				17,760,535				2.5
Minnesota			533				6,435,101				0.9
Mississippi			170				2,829,245				0.4
Missouri			777				10,948,231				1.5
Montana			73				1,084,107				0.2
Nebraska			57				874,466				0.1
Nevada			224				4,796,544				0.7
New Hampshire			220				2,351,622				0.3
New Jersey			989				20,542,228				2.9
New Mexico			156				2,287,286				0.3
New York			4,690				62,757,839				8.7
North Carolina			794				14,522,912				2.0
North Dakota			23				285,873				*
Ohio			6,485				105,513,036				14.7
Oklahoma			1,047				13,576,302				1.9
Oregon			695				9,893,515				1.4
Pennsylvania			1,276				21,700,476				3.0
Rhode Island			91				1,298,021				0.2
South Carolina			297				5,440,182				0.8
South Dakota			33				858,231				0.1
Tennessee			768				10,686,621				1.5
Texas			5,217				74,198,465				10.3
Utah			145				3,940,792				0.5
Vermont			82				1,451,806				0.2
Virginia			1,107				15,108,548				2.1
Washington			1,485				20,170,642				2.8
West Virginia			123				1,531,158				0.2
Wisconsin			574				7,274,329				1.0
Wyoming			21				353,345				*
Other			351				6,081,648				0.8
Total			46,381			$	718,199,391				100.0	%
* Represents a percentage greater than 0% but less than 0.5%

 

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

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

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

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

 

 

 

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

 

DISTRIBUTION OF THE TRUST STUDENT LOANS BY REPAYMENT TERMS AS OF THE STATISTICAL DISCLOSURE DATE
Loan Repayment Terms		Number of Loans				Aggregate Outstanding Principal Balance				Percent of Pool by Outstanding Principal Balance
Level Repayment			27,162			$	335,458,725				46.7	%
Other Repayment Options(1)			16,808				313,118,266				43.6
Income-driven Repayment(2)			2,411				69,622,400				9.7
Total			46,381			$	718,199,391				100.0	%
(1) Includes, among others, graduated repayment and interest-only period loans.
(2) Includes income sensitive and income based repayment.

 

 

 

 

 

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

 

 

 

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

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

 

DISTRIBUTION OF THE TRUST STUDENT LOANS BY GUARANTY AGENCY AS OF THE STATISTICAL DISCLOSURE DATE
Name of Guaranty Agency		Number of Loans				Aggregate Outstanding Principal Balance				Percent of Pool by Outstanding Principal Balance
American Student Assistance			1,320			$	15,541,355				2.2	%
College Assist			4				39,228				*
Educational Credit Management Corporation			1,375				19,459,234				2.7
Great Lakes Higher Education Corporation			600				9,213,927				1.3
Illinois Student Assistance Comm			1,590				16,939,120				2.4
Kentucky Higher Educ. Asst. Auth.			314				3,230,285				0.4
Louisiana Office Of Student Financial Asst			711				9,097,660				1.3
Michigan Guaranty Agency			868				11,568,357				1.6
New Jersey Higher Ed Student Assistance Authority			3,306				38,544,793				5.4
New York State Higher Ed Services Corp			9,399				116,028,491				16.2
Northwest Education Loan Association			4,476				56,161,064				7.8
Oklahoma Guaranteed Stud Loan Prog			755				9,717,631				1.4
Pennsylvania Higher Education Assistance Agency			3,319				43,732,530				6.1
Texas Guaranteed Student Loan Corp			5,193				71,277,786				9.9
United Student Aid Funds, Inc.			13,151				297,647,931				41.4
Total			46,381			$	718,199,391				100.0	%
*     Represents a percentage greater than 0% but less than 0.05%.

 

 

 

SIGNIFICANT GUARANTOR INFORMATION

 

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

 

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

UNITED STUDENT AID FUNDS, INC.

 

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

 

 

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

 

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

 

 

 

 

 

 

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

 

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

 

As of September 30, 2016, USA Funds held net assets on behalf of the federal reserve fund of approximately $143 million. Through September 30, 2016 the outstanding, unpaid, aggregate amount of principal and interest on loans that had been directly guaranteed by USA Funds under the Federal Family Education Loan Program was approximately $46.6 billion.  Also, as of September 30, 2016, USA Funds had operating fund assets totaling over $1.1 billion, which includes the $146 million of net assets held on behalf of the Federal Reserve Fund.

 

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

 

USA Funds’ “recovery rate,” which provides a measure of the effectiveness of the collection efforts against defaulted borrowers after the guarantee claim has been satisfied, is determined by dividing the amount recovered from borrowers by USA Funds during the fiscal year by the aggregate amount of default claims paid by USA Funds outstanding at the end of the prior fiscal year. For the last five fiscal years, the “recovery rate” was as follows:

 

USA Funds’ “loss rate” represents the percentage of claims purchased from lenders but not covered by reinsurance. For the last five fiscal years, the “loss rate” was as follows:

 

In addition, USA Funds’ “claims rate” represents the percentage of federal reinsurance claims paid by the Secretary during any fiscal year, less amounts remitted to the Secretary for defaulted loans that are rehabilitated relative to USA Funds’ existing portfolio of loans in repayment at the end of the prior fiscal year. For the last five fiscal years, the “claims rate” was as follows:

 

 

 

NEW YORK STATE HIGHER EDUCATION SERVICES CORPORATION

 

New York State Higher Education Services Corporation (“HESC”) was organized in 1975 as an agency of the State of New York, pursuant to an act of the New York legislature, to expand educational opportunities for students.  HESC administers the New York Tuition Assistance Program and a variety of state scholarships in addition to acting as a guarantee agency under the Federal Family Education Loan Program (FFELP).  HESC is the designated guarantee agency for the State of New York, and guarantees all types of FFELP loans.  In 2009, the New York State Legislature created the New York Higher Education Loan Program (NYHELPs) and designated HESC as its administrator.  NYHELPs is a private student loan program for New York State residents attending participating institutions in the State.  However, no new funding has been recommended for the NYHELPs loan program after March 31, 2012 due to its continued underutilization.  As a result, no new NYHELPs loans will be made while the program is evaluated to determine how it can best serve New York State students and families.

 

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

 

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

 

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

 

As of September 30, 2014, HESC had total FFELP assets of approximately $149 million (including balances for both the Federal Fund and the Agency Operating Fund) and had a total of approximately $16.5 billion in original principal amount of loans outstanding.

 

Guarantee Volume.  HESC guaranteed the following amounts for the last five federal fiscal years ended September 30 (excluding consolidation loans):

 

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

 

 

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

 

 

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

 

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

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