Session GA-06 Operational Flows & Reporting for New Loan Programs Katrina Turner Pam Eliadis U.S. Department of Education

2 Agenda Program Goals and Background Operational Flows –Loan Participation Program –Loan Purchase Program –Lender of Last Resort Compliance Audit Operational Reporting Resources Questions

3 Program Goals and Background Ensuring Continuing Access to Student Loans Act of 2008 (ECASLA) –Signed May 7, 2008 –Federal Register July 1, 2008 Provided Secretary authority to purchase FFEL loans Strengthened GA Lender of Last Resort Program

4 Program Goals and Background ECASLA Objectives –Ensure that eligible students and parents receive federal student loans for the academic year –Support the FFEL Program –Ensure no net cost to the federal government

5 Program Goals and Background Loan Participation Purchase Program –ED to purchase “participation interests” in eligible loans –ED provides liquidity –Participation interest terminates 9/30/09 via Redemption by Lender Sold to ED

6 Program Goals and Background Loan Purchase Commitment Program –ED to purchase eligible loans –Called “put” –Must be fully disbursed –45-day advance notice

7 Program Goals and Background Lender of Last Resort Program –Strengthen current LLR Program –Types: Lender GA –Funded by GA –Federal Advances

8 Operational Flows: Approval of Custodian Officer’s Certificate List of Key Personnel, Title, Years of Service and Credentials Bank’s Most recent SAS70 Copy of the SEC Regulation AB reports Description of current trust activities Copies of the Bank’s Errors and omissions policy and its fidelity bond Description of Disaster Recovery

9 Operational Flows: Approval of Custodian List of EIN and all affiliates names and CEO’s phone number List of all existing LIDs Most recent audited Financial Statement

10 Operational Flows: Loan Participation Purchase Program (LPPP) To participate, each Eligible Lender must have a Notice of Intent to Participate on file with the Department of Education (ED), Submit their Master Participation Agreement and Receive approval from ED

11 Operational Flows: Master Participation Agreement (LPPP) Notice of Intent to Participate Adoption Agreement (Exhibit A) Officer’s Certificate (Exhibit E) which includes the following: –Incorporation and by-laws (Attachment I) –Resolutions (Attachment II) –Good Standing of the Sponsor (Attachment III)

12 Operational Flows: Master Participation Agreement (LPPP) Opinion of Counsel to the Sponsor (Exhibit F Initial Monthly Forecasting Report (Optional) Date of Initial Funding Request and Amount

13 Operational Flows: Loan Purchase Commitment Program (LPCP) To participate, each Eligible Lender must have a Notice of Intent to Participate on file with the Department of Education (ED), Submit their Master Loan Sales Agreement and Receive approval from ED

14 Operational Flows: Master Loan Sales Agreement (LPCP) Notice of Intent to Participate Adoption Agreement (Exhibit A) Officer’s Certificate (Exhibit C) which includes the following: –Incorporation and by-laws (Attachment I) –Resolutions (Attachment II) –Good Standing of the Seller (Attachment III) –Opinion of Counsel to the Seller (Exhibit D)

15 Operational Flows: Intake and Approval Process of the Custodian and Agreements Intake Process –Verification of submission of all required documents. –Request for additional documents (if applicable) –Issuance of Custodian LID

16 Operational Flows: Intake and Approval Process of the Custodian and Agreements to Sponsor, Custodian and Seller of the Department’s approval of their agreement package. Signed executed Adoption agreement is sent via FEDEX to Sponsor, Custodian and or Seller

17 Operational Flows: Operational Flows: Lender of Last Resort (LLR) for GA’s To participate each GA must submit an LLR Agreement to ED Agency GA may request an LLR LID

18 Compliance Audit: Lenders Participating in the Loan Participation Purchase Program Authority: Section 8(a)(5) of the Master Participation Agreement (MPA) Audit Type: Due Diligence Audit Audit Guide: Agreed Upon Procedures Attestation Engagement Guide issued October 17, 2008 by ED OIG

19 Operational Reporting Loan Participation Program –Weekly Loan Schedule –Month-End Loan Schedule –Pay.gov Remittance Activity NSLDS Reporting

20 Operational Reporting Loan Purchase Program –45 Day Notice of Intent to Sell –Loan Transfer/Conversion File –Final Pre-Sale Report –Bill of Sale and Documentation Lenders/Sponsors in Loan Participation Directly from Lender –ED Servicer report to Guaranty Agencies –NSLDS Reporting

21 Resources –Webinars –Q&A’s –Electronic Announcements –Agreement Documents sfa.html –OIG Audit Guide for Lenders Participating in LPPP

22 Questions??

23 Contact Information We appreciate your feedback and comments. We can be reached at: Phone:Pam Katrina