RISK FACTORS

 

You should carefully consider the following risk factors in order to understand the structure and characteristics of the class A-5 notes and the potential merits and risks of an investment in the class A-5 notes.  Potential investors must review and become familiar with the following risk factors in deciding whether to purchase the class A-5 notes.  All of these risk factors could affect your investment in or return on the class A-5 notes.

DEFINED TERMS

 

In later sections, we use a few terms that we define in the Glossary at the end of this free‑writing prospectus.  These terms appear in bold face when they are first used and in initial capital letters in all cases.

 

THE TRUST

 

GENERAL

 

The SLM Student Loan Trust 2005-5 (the “trust”) is a Delaware statutory trust formed under, and is currently operating pursuant to, a trust agreement dated as of June 9, 2005 between the depositor and the eligible lender trustee.  The short-form trust agreement was amended on the closing date pursuant to an amended and restated trust agreement dated as of June 29, 2005, among the depositor, the eligible lender trustee and the indenture trustee.

 

The trust has not engaged and will not engage in any activity other than:

 

 

 

 

 

 

 

Other than issuing the notes, the trust is not permitted to borrow money or make loans to other persons.  The permitted activities of the trust may be amended only with the consent of a majority of the noteholders voting separately; however, the trust agreement may be modified without noteholder consent if an opinion of counsel is provided to the effect that such proposed revisions would not adversely affect in any material respect the interests of any noteholder whose written consent has not been obtained.

 

The trust was initially capitalized with nominal equity of $100, excluding amounts that were deposited into the reserve account, the capitalized interest account, the supplemental purchase account, the add-on consolidation loan account and the collection account by the trust on the closing date.  The proceeds from the original sale of the notes were used by the eligible lender trustee to make the initial deposits into the reserve account, the capitalized interest account, the supplemental purchase account, the add-on consolidation loan account and the collection account, and to purchase, on behalf of the trust, the initial trust student loans.  The trust purchased the initial trust student loans from the depositor under a sale agreement dated as of June 29, 2005, among the depositor, the trust and the eligible lender trustee.  The depositor used the net proceeds it received from the sale of the initial trust student loans to pay the sellers the respective purchase prices for the initial trust student loans acquired from them under the purchase agreements dated June 29, 2005.

 

The property of the trust consists of:

 

 

 

 

 

 

 

The trust and its assets (other than the trust student loans) are administered by the administrator pursuant to the administration agreement.  The servicer is responsible for the servicing and administration of the trust student loans pursuant to the servicing agreement.  See “Servicing and Administration” in this free‑writing prospectus.

 

The trust does not and will not own any other assets.  The fiscal year of the trust is a calendar year.

 

The notes represent indebtedness of the trust secured by its assets.  The excess distribution certificate represents the beneficial ownership interest of the trust, which is a Delaware statutory trust and a separate legal person under Delaware law.  To facilitate servicing and to minimize administrative burden and expense, the servicer retains possession of the promissory notes and other documents related to the student loans as custodian for the trust and the eligible lender trustee.

 

The sections “The Transfer Agreements,” “Servicing and Administration” and “Summary of Note Terms—The Notes” in this free-writing prospectus contain descriptions of the material provisions of the transaction agreements.

 

The notes are secured by the property of the trust.  The collection account, the reserve account, any accumulation account, any supplemental interest account, any investment premium purchase account, any investment reserve account and any currency accounts will be maintained in the name of the indenture trustee for the benefit of the noteholders.  The remarketing fee account will be maintained in the name of the indenture trustee for the benefit of the remarketing agent and the class A-5 noteholders. To facilitate servicing and to minimize administrative burden and expense, the servicer will act as custodian of the promissory notes representing the trust student loans and other related documents.

 

The trust’s principal offices are in New York, New York, in care of Deutsche Bank Trust Company Americas, as successor eligible lender trustee, at its address shown below under “—Eligible Lender Trustee”.

 

CAPITALIZATION OF THE TRUST

 

The following table illustrates the capitalization of the trust as of the October 2024 distribution date:

ELIGIBLE LENDER TRUSTEE

 

The successor eligible lender trustee is Deutsche Bank Trust Company Americas (“DBTCA”). DBTCA is a banking corporation organized under the laws of the State of New York. Its address is 1761 East St. Andrew Place, Santa Ana, CA 92705.  DBTCA has been, and currently is, serving as eligible lender trustee for numerous securitization transactions and programs involving pools of student loan receivables.

 

DBTCA has provided the information in the prior paragraph.  Other than the prior paragraph, DBTCA has not participated in the preparation of, and is not responsible for, any other information contained in this free-writing prospectus.

 

The initial eligible lender trustee was Chase Manhattan Bank USA, National Association until its responsibilities were assigned to The Bank of New York Mellon Trust Company, National Association (“BNYMTC”) in 2007.  Effective as of May 15, 2012, BNYMTC resigned from such capacity, and DBTCA was assigned such capacity.

 

The eligible lender trustee holds on behalf of the trust legal title to all the trust student loans acquired under the sale agreement.  The eligible lender trustee, on behalf of the trust, has entered into separate guarantee agreements with each of the guaranty agencies described in this free-writing prospectus with respect to the trust student loans.  The eligible lender trustee qualifies as an eligible lender and the holder of the trust student loans for all purposes under the Higher Education Act and the guarantee agreements.  Failure of the trust student loans to be owned by an eligible lender would result in the loss of guarantor and Department of Education payments on the trust student loans.  See “Appendix A—Federal Family Education Loan Program—Eligible Lenders, Students and Educational Institutions” in this free-writing prospectus.

 

The eligible lender trustee acts on behalf of the excess distribution certificateholder and represents and exercises the rights and interests of the excess distribution certificateholder under the trust agreement.  Except as specifically delegated to the administrator in the administration agreement, the eligible lender trustee will also execute and deliver all agreements required to be entered into on behalf of the trust.

 

The liability of the eligible lender trustee in connection with the issuance and sale of the notes will consist solely of the express obligations specified in the trust agreement and sale agreement.  The eligible lender trustee is not personally liable for any actions or omissions that were not the result of its own bad faith, willful misconduct or negligence.  The eligible lender trustee is entitled to be indemnified by the administrator for any loss, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the performance of its duties under the indenture and the other transaction documents (including any supplemental indenture and/or amended administration agreement).  See “Description of the Notes,” “The Transfer Agreements” and “Servicing and Administration” in this free-writing prospectus.  Affiliates of the depositor maintain banking relations with the eligible lender trustee.

 

The eligible lender trustee may resign at any time. The administrator may also remove the eligible lender trustee if it becomes insolvent or ceases to be eligible to continue as eligible lender trustee.  In the event of such a resignation or removal, the administrator will appoint a successor. The resignation or removal of the eligible lender trustee and the appointment of a successor will become effective only when a successor accepts its appointment.  To the extent expenses incurred in connection with the replacement of the eligible lender trustee are not paid by the successor trustee, the depositor will be responsible for the payment of such expenses.

 

DELAWARE TRUSTEE

 

BNY Mellon Trust of Delaware is the Delaware trustee.  The Delaware trustee acts in the capacities required for a Delaware trust under the Delaware Statutory Trust Act.  BNY Mellon Trust of Delaware is a Delaware banking corporation with its principal place of business located at 301 Bellevue Parkway, 3^rd Floor, Wilmington, Delaware 19809.  BNY Mellon Trust of Delaware has and is currently serving as Delaware trustee for numerous securitization transactions and programs involving pools of student loan receivables.  In the ordinary course of business, The Bank of New York Mellon is named as a defendant in or made a party to pending and potential legal actions. In connection with its role as trustee of certain residential mortgage-backed securitization (“RMBS”) transactions, The Bank of New York Mellon has been named as a defendant in a number of legal actions brought by RMBS investors. These lawsuits allege that the trustee had expansive duties under the governing agreements, including the duty to investigate and pursue breach of representation and warranty claims against other parties to the RMBS transactions. While it is inherently difficult to predict the eventual outcomes of pending actions, The Bank of New York Mellon denies liability and intends to defend the litigations vigorously.

BNY Mellon Trust of Delaware has provided the information in the prior paragraph.  Other than the prior paragraph, BNY Mellon Trust of Delaware has not participated in the preparation of, and is not responsible for, any other information contained in this free-writing prospectus.

 

The liability of the Delaware trustee in connection with the issuance and sale of the notes will consist solely of the express obligations specified in the trust agreement.  The Delaware trustee will not be personally liable for any actions or omissions that were not the result of its own bad faith, willful misconduct or negligence.  The Delaware trustee will be entitled to be indemnified by the administrator (at the direction of the depositor) for any loss, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the performance of its duties under the trust agreement.  See “Description of the Notes,” “The Transfer Agreements” and “Servicing and Administration” in this free-writing prospectus.  The depositor and its affiliates maintain banking relations with the Delaware trustee and/or its affiliates.

 

The Delaware trustee may resign at any time.  The administrator may also remove the Delaware trustee if it becomes insolvent or ceases to be eligible to continue as Delaware trustee.  In the event of such a resignation or removal, the administrator will appoint a successor.  The resignation or removal of the Delaware trustee and the appointment of a successor will become effective only when a successor accepts its appointment. To the extent expenses incurred in connection with the replacement of the Delaware trustee are not paid by the successor trustee, the depositor will be responsible for the payment of such expenses.

 

INDENTURE TRUSTEE, ELIGIBLE LENDER TRUSTEE AND PAYING AGENT

 

The trust issued the notes under an indenture dated as of June 1, 2005.  Under the indenture, Deutsche Bank Trust Company Americas was the initial indenture trustee for the benefit of and to protect the interests of the noteholders and acts as paying agent for the notes.  Deutsche Bank National Trust Company, a national banking association, is the successor indenture trustee.  Its address is 1761 E. Saint Andrew Place, Santa Ana, California 92705. Deutsche Bank National Trust Company has acted as indenture trustee on numerous asset-backed securities transactions involving pools of student loans, and has worked with its affiliate Deutsche Bank Trust Company Americas in connection with numerous asset-backed securities transactions involving federally-insured and private credit student loans that were sponsored by Navient Solutions, LLC.

 

Affiliates of the depositor maintain customary banking relations on arms-length terms with the indenture trustee.

 

The indenture trustee acts on behalf of the noteholders and represents their interests in the exercise of their rights under the indenture.

 

To the extent expenses incurred in connection with the replacement of an indenture trustee are not paid by the indenture trustee that is being replaced, the depositor will be responsible for the payment of such expenses.

 

The indenture trustee will not be personally liable for any actions or omissions that were not the result of its own bad faith, willful misconduct or negligence.  The indenture trustee is entitled to be indemnified by the administrator (at the direction of the trust) for any loss, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the performance of its duties under the indenture and the other transaction documents.  Upon the occurrence of an event of default, and in the event the administrator fails to reimburse the indenture trustee, the indenture trustee is entitled to receive all such amounts owed from cashflow on the trust student loans prior to any amounts being distributed to the noteholders.

VG FUNDING LLC

 

VG Funding is a limited liability company whose sole member is Navient CFC. It was formed in Delaware on February 3, 2000. VG Funding is a limited purpose, bankruptcy remote entity formed to purchase education loans, whether originated under the FFELP loan program or other private credit loan programs, for re-sale in various securitization transactions. Navient Solutions, LLC services all loans owned by VG Funding. Deutsche Bank Trust Company Americas (as successor in interest to The Bank of New York Mellon Trust Company, National Association, formerly known as The Bank of New York Trust Company, N.A.), acts as successor interim eligible lender trustee on behalf of VG Funding.

 

USE OF PROCEEDS

 

A successful remarketing of the class A-5 notes will not result in any proceeds to the trust.  Rather all proceeds from the remarketing will be used to purchase tendered class A-5 notes from existing class A-5 noteholders at par.

 

The trust used the original net proceeds from the sale of the notes to make the initial deposits to the reserve account, the supplemental purchase account, the add-on consolidation loan account, the collection account and the capitalized interest account and to purchase the initial trust student loans from the depositor on the closing date under the sale agreement.  The depositor then used the proceeds paid to the depositor by the trust to pay to the sellers the respective purchase prices for the initial trust student loans purchased by the depositor.

 

AFFILIATIONS AND RELATIONS

 

Navient Funding, LLC, as depositor, is a wholly owned subsidiary of Navient Credit Finance Corporation, a seller, and is an affiliate of Navient Solutions, LLC, the sponsor, servicer and administrator.  Navient Solutions, LLC and Navient Credit Finance Corporation are each a wholly owned subsidiary of Navient Corporation.

 

None of the depositor, sponsor, the issuing entity or any of their affiliates have (and have not within the past two years) entered into any business relationship, agreement, arrangement, transaction or understanding with the initial purchasers, eligible lender trustee or indenture trustee, that would be material to an investor’s understanding of the notes and that is outside the ordinary course of business or is on terms other than would be obtained in an arm’s length transaction with an unrelated third party.

 

THE DEPOSITOR

 

Navient Funding, LLC (referred to herein as “Navient Funding”) is the depositor.  Navient Credit Finance Corporation, which together with its successors in interest we sometimes refer to as Navient CFC in this free-writing prospectus, is the sole member of Navient Funding.  It became the sole member of the depositor on June 29, 2004. Prior to that date, the Student Loan Marketing Association, which was liquidated on December 29, 2004, was the depositor’s sole member.  The depositor was incorporated in Delaware as SLM Funding Corporation on July 25, 1995, was converted to a limited liability company on December 31, 2002 and changed its name to Navient Funding, LLC on May 2, 2014.

 

The depositor has only limited purposes, which include purchasing student loans from Navient CFC, transferring the student loans to the trusts and other incidental and related activities.  Its principal executive offices are at 13865 Sunrise Valley Drive, Herndon, Virginia 20171.  Its telephone number is (703) 810-3000.

 

The depositor has been created as a separate, limited-purpose subsidiary with its own limited liability company identity. The depositor’s operating agreement contains limitations including:

 

 

 

Among other things, the depositor will maintain its separate limited liability company identity by:

 

 

 

Each transaction agreement also contains “non-petition” covenants to prevent the commencement of any bankruptcy or insolvency proceedings against the depositor and/or the issuing entity, as applicable, by any of the transaction parties or by the noteholders.

 

The transactions described in this free-writing prospectus were structured to assure that each transfer of the student loans by its sole member or the sellers to the depositor and by the depositor to the trust constituted a “true sale” of the student loans.  If the transfer constituted a “true sale,” the student loans and related proceeds would not be property of the sellers or the depositor should any of them become subject to any insolvency law.  Although each of the sellers, the depositor and the trust expressed its intent to treat the conveyance of the trust student loans as a sale, each of the sellers and the depositor also granted to its transferee a backup security interest in the trust student loans.  This security interest is intended to protect the interests of the noteholders if a bankruptcy court were to characterize a seller’s or the depositor’s transfer of the loans as a borrowing by such seller or the depositor secured by a pledge of the trust student loans.  In the event that a bankruptcy court did characterize the transaction as a borrowing by a seller or the depositor, that borrowing would be secured by the trust student loans in which such seller or the depositor granted a security interest to the eligible lender trustee.  Each seller and the depositor have agreed to take those actions that are necessary to maintain the security interest granted to the eligible lender trustee, as a first priority, perfected security interest in the trust student loans, including the filing of Uniform Commercial Code financing statements, if necessary.

 

Upon the issuance of notes, the depositor received the advice of counsel that, subject to various facts, assumptions and qualifications, the transfer of the student loans by the sellers to the depositor and by the depositor to the trust would be characterized as “true sales” and the student loans and related proceeds would not be property of the sellers or the depositor under the insolvency laws.

 

Each of the sellers and the depositor also represented and warranted that each sale of trust student loans by it was a valid sale of those loans.  In addition, the depositor, the eligible lender trustee and the trust treated the conveyance of the trust student loans as a sale for all purposes other than accounting and tax purposes. The depositor and each seller will take all actions that are required so the eligible lender trustee, will be treated as the legal owner of the trust student loans.

 

The depositor’s obligations after issuance of the notes included the sale of additional trust student loans to the trust to be purchased with amounts on deposit in the supplemental purchase account and/or the delivery of certain related documents and instruments, repurchasing or substituting trust student loans in the event of certain breaches of representations or warranties made by the depositor, providing tax-related information to the eligible lender trustee, and maintaining the indenture trustee’s first priority perfected security interest in, or the trust’s (and eligible lender trustee’s) ownership of, the assets of the trust.

 

NAVIENT CORPORATION

Effective April 30, 2014, pursuant to a plan approved by its board of directors, SLM Corporation (“Legacy SLM”), effected the strategic separation of its loan management, servicing and asset recovery business, now known as Navient Corporation (“Navient”), from its consumer banking business (referred to as “Sallie Mae Bank”).  Sallie Mae Bank continues to operate under the Sallie Mae brand.

 

Navient began trading on the NASDAQ under ticker symbol “NAVI” on May 1, 2014.  Navient is an independent company, and Sallie Mae Bank retains a de minimis interest in Navient.  Sallie Mae Bank and Navient have entered into a separation and distribution agreement and various other agreements related to the spin-off and the post spin-off relationship of the two companies.

 

Navient’s education loan management business includes Legacy SLM’s portfolios of FFELP loans (other than any FFELP loans held by Sallie Mae Bank at the time of separation), other FFELP loans and private education loans (that were either originated by Legacy SLM affiliates or, prior to the separation from Sallie Mae Bank or by Navient’s affiliate, Earnest Operations, LLC, or acquired from affiliated or unaffiliated sellers of private education loans), other interest-earning assets, an education loan servicing platform that services FFELP and private education loans, including, the FFELP and private education loans to be owned by each issuing entity and loans held by third parties, and related collection activities on those loans.  The sellers, the depositor, the servicer, the administrator and each issuing entity associated with Legacy SLM’s securitization program have remained subsidiaries of Navient.  The servicer while remaining a subsidiary of Navient has contributed some of its former assets and liabilities associated with its private education loan servicing business to a subsidiary of Sallie Mae Bank.

 

Navient has been named as defendant in a number of putative class action and other cases alleging violations of various state and federal consumer protection laws including the Telephone Consumer Protection Act, the Consumer Financial Protection Act of 2010 (“CFPA”), the Fair Credit Reporting Act (“FCRA”), the Fair Debt Collection Practices Act (“FDCPA”), in adversarial proceedings under the United States Bankruptcy Code, and various state consumer protection laws.  At this point in time, Navient is unable to anticipate the timing of a resolution or the impact that these legal proceedings may have on its consolidated financial position, liquidity, results of operation or cash flows. As a result, it is not possible at this time to estimate a range of potential exposure, if any, for amounts that may be payable in connection with these matters and loss contingency accruals have not been established. It is possible that an adverse ruling or rulings may have a material adverse impact on Navient, Navient Solutions and/or their affiliates or on the financial ability of the depositor, the servicer or a seller to fulfill an obligation to purchase or repurchase trust student loans in connection with a breach of representation, warranty or covenant.

 

In January 2017, the CFPB and the Attorneys General for the State of Illinois and the State of Washington initiated civil actions naming Navient and several of its subsidiaries (including Navient Solutions) as defendants alleging violations of certain Federal and State consumer protection statutes, including the CFPA, the FCRA, the FDCPA and various state consumer protection laws. The Attorneys General for the States of Pennsylvania, California, Mississippi, and New Jersey also initiated actions against Navient and certain subsidiaries alleging violations of various state and federal consumer protection laws based upon similar alleged acts or failures to act. In addition to these matters, a number of lawsuits have been filed by nongovernmental parties or, in the future, may be filed by additional governmental or nongovernmental parties seeking damages or other remedies related to similar issues raised by the CFPB and the State Attorneys General. In January 2022, Navient entered into a series of Consent Judgment and Orders (the “Agreements”) with 40 State Attorneys General to resolve all matters in dispute related to the State Attorneys General cases as well as the related investigations, subpoenas, civil investigative demands and inquiries from various other state regulators.

 

  Due to developments in the second half of 2023 and the first half of 2024 in connection with Navient’s CFPB matter, Navient concluded a loss was probable and reasonably estimable.  As of June 30, 2024, the contingency loss liability was $105 million.  Navient reached an agreement to settle the CFPB lawsuit in September 2024.  While Navient does not agree with the CFPB’s allegations, this resolution is consistent with Navient’s go-forward activities and is an important positive milestone in Navient’s transformation.  As part of the settlement, pursuant to which Navient did not admit to any wrongdoing, Navient agreed to pay $120 million, which includes a $100 million payment that will be used by the CFPB to make payments to certain borrowers as determined by the CFPB, in addition to a $20 million penalty.  In light of the contingency loss liability established in the amount of $105 million as of June 30, 2024, there was an additional $18 million of contingency expense recorded in third-quarter 2024.  The $120 million was paid prior to September 30, 2024.  The settlement prohibits Navient from servicing federal student loans (other than in the role as master servicer of Navient’s FFELP Loan portfolio), and further prohibits Navient from purchasing any FFELP Loans in the future.  These restrictions are not expected to have a material impact on Navient’s business as Navient had already exited its Direct loan servicing contract with the Department of Education in 2021, and entered into an agreement with MOHELA to service Navient’s FFELP Loan portfolio in May 2024.  It is not anticipated that the other requirements of the settlement will impact Navient’s go-forward business plans or operations.

THE SPONSOR, SERVICER, ADMINISTRATOR AND SUBSERVICERS

 

Navient Solutions, LLC acts as the sponsor of Navient’s student loan securitization program. Navient Solutions, LLC, which together with its successors in interest we sometimes refer to as Navient Solutions in this free-writing prospectus, is a wholly owned subsidiary of Navient and acts as the principal management company for most of Navient’s business activities. Navient Solutions’ servicing division manages and operates the loan servicing functions for Navient and its affiliates. Navient Solutions acts as administrator for trusts sponsored by the depositor and its affiliates.  As administrator, Navient Solutions may delegate or subcontract its duties as administrator, but no delegation or subcontract will relieve Navient Solutions of its liability under the administration agreement.  Effective as of December 31, 2003, Sallie Mae, Inc. merged with Sallie Mae Servicing L.P.  Sallie Mae, Inc. was the surviving entity and succeeded to all of the rights and obligations of Sallie Mae Servicing L.P.  Sallie Mae, Inc. changed its name to Navient Solutions, Inc. on May 1, 2014.  Effective as of January 31, 2017, Navient Solutions, Inc. became a limited liability company and changed its name to Navient Solutions, LLC.  Navient Solutions is a Delaware limited liability company and its principal executive offices are at 13865 Sunrise Valley Drive, Herndon, Virginia 20171.  Its telephone number is (703) 810‑3000.

 

Navient Solutions is an affiliate of Navient and the depositor.  For information on Navient Corporation, including recent developments, see “Navient Corporation” in this free-writing prospectus.

 

Navient Solutions is the named servicer for the vast majority of student loans owned by Navient and its affiliates.

 

Navient Solutions (in its various forms) has serviced student loans for over 20 years.  Navient Solutions itself, and as the assignee of the Student Loan Marketing Association (sometimes referred to as “SLMA”), has been the sponsor of Legacy SLM’s securitization program since it sponsored its first student loan securitization in 1995, called Sallie Mae Student Loan Trust 1995‑1.

 

In July 2024, Navient Corporation transitioned its student loan servicing to the Higher Education Loan Authority of the State of Missouri (“MOHELA”), a leading provider of student loan servicing for government and commercial enterprises with over 40 years of experience in the student loan servicing industry.  MOHELA acts as a subservicer to service substantially all of the loan servicing functions of Navient Solutions as servicer.  As the named servicer, Navient Solutions may delegate or subcontract its duties as servicer, but no delegation or subcontract will relieve Navient Solutions of its liability under the servicing agreement.

 

MOHELA was established in 1981 pursuant to the Higher Education Loan Authority Act, Title XI, Chapter 173, Section 173.350 to 173.445 of the Missouri Revised Statutes, inclusive, as amended.

 

MOHELA is one of the largest student loan servicers in the country.  MOHELA provides private student loan servicing for multiple organizations as well as private loans that it owns.  MOHELA is also a major servicer of direct loans for the U.S. Department of Education, having been awarded a servicing contract as a not for profit (NFP) servicer in September 2011.  Further, MOHELA provides student loan servicing for federal FFELP loans that it owns and for those owned by third parties.

 

As of December 31, 2024, MOHELA was servicing $71.1 billion in third party lender-owned private loans representing 2,237,008 borrowers and $101.8 million in MOHELA-owned private loans representing 4,145 borrowers.  In addition to its private loan servicing, MOHELA was also servicing $302.1 billion in federal direct loans representing 6,776,687 borrowers and $515.5 million in FFELP loans representing 26,575 borrowers as of December 31, 2024.

 

Part of MOHELA’s private loan experience includes servicing private loans in its own private loan servicing program in an amount of over $101 million for over 4,140 borrowers as of December 31, 2024.  In addition, MOHELA services private loans made by a related entity in a program that involves interest-free loans for qualifying Missouri students.  That program had approximately $30 million in loans outstanding with 6,650 borrowers in repayment as of December 31, 2024.

 

MOHELA services both private loans and federal direct loans pursuant to a license of the computer servicing system of Fiserv Solutions, LLC and it also services certain private and other loans pursuant to a license of the computer servicing system of the Pennsylvania Higher Education Assistance Agency.

 

In the normal course of business, MOHELA is subject to various claims, lawsuits and other actions.  Most of these matters involve claims by borrowers alleging the violation of laws in connection with servicing or collection activities as to student loans.  Also in the normal course of business, it is common for MOHELA to receive information and document requests from administrative and regulatory agencies relating to business practices, the industry in which it operates or the businesses with whom it conducts business.  MOHELA believes that the claims, lawsuits and matters will not, individually or collectively, have a material adverse effect on its business, financial condition or results of operations.

 

MOHELA’s address is 633 Spirit Drive, Chesterfield, Missouri 63005-1243.  The telephone number of MOHELA is (636) 733-3700 or 1-800-6MOHELA.  MOHELA’s website address is http://www.mohela.com, where its financial statements and additional information can be found in the “About Us” section.

 

As of September 30, 2024, Navient Solutions (on behalf of Navient, Legacy SLM and SLMA) has sponsored approximately 227 student loan securitizations involving approximately 153 FFELP student loan transactions and approximately 74 private education loan transactions.

 

Navient Solutions owns no loans.  As the sponsor and administrator of Navient’s student loan securitization program, Navient Solutions selects portfolios of loans from loans owned by its affiliates for sale to the trust. Navient Solutions is also chiefly responsible for structuring each transaction.

 

Navient is also the largest holder, servicer and collector of loans made under the discontinued FFELP.  Navient owns approximately $47.5 billion of student loans, of which approximately $31.5 billion, or approximately 66%, are federally insured, as of September 30, 2024.

 

In addition to federal loan programs, which have statutory limits on annual and total borrowing, Navient Solutions and its affiliates (prior to their separation from Sallie Mae Bank) sponsored a variety of private education loan programs and purchased loans made under such programs to bridge the gap between the cost of education and a student’s resources.  Navient and its subsidiaries (including Sallie Mae Bank when it was a part of Legacy SLM) originated such private education loans which are not federally guaranteed.  Most of these higher education private education loans were made in conjunction with a FFELP Stafford loan, in which case they were marketed to schools through the same marketing channels as FFELP loans by the same sales force.  In 2004, Navient Solutions expanded its direct-to-consumer loan marketing channel with its Tuition Answer(SM) loan program where Navient Solutions’ affiliates originated and purchased loans outside of the traditional financial aid process.  Navient Solutions’ affiliates also originated and purchased alternative private education loans, which are marketed by a subsidiary of Navient to technical and trade schools, tutorial and learning centers, and private kindergarten through secondary education schools.  These loans were primarily made at schools not eligible for Title IV loans.  In 2006, Navient Solutions began to sponsor a private credit consolidation loan program under which certain Navient Solutions affiliates and their lender partners made new loans available to borrowers to combine two or more existing loans into a single loan. In 2017, Navient Corporation acquired a majority interest in Earnest, Inc. and converted it to a limited liability company upon acquisition.  Founded in 2013, Earnest is based in San Francisco, California. Earnest Operations, LLC, an affiliate of Navient Solutions, originates private credit student loans made to refinance borrowers’ existing student loans.

Currently Earnest is the only Navient affiliate that originates private education loans, but other Navient affiliates retain ownership of a significant portfolio of private education loans (both for their own accounts and indirectly through the residual ownership of the issuing entities from transactions sponsored by Navient Solutions) that were originated by Legacy SLM affiliates (including Sallie Mae Bank) prior to the corporate separation.

 

THE SELLERS

 

Navient Credit Finance Corporation.  Navient Credit Finance Corporation is a wholly-owned subsidiary of Navient.  We sometimes refer to Navient Credit Finance Corporation, together with its successors in interest, as Navient CFC.  Navient CFC was formed on July 27, 1999.  It changed its name to Navient Credit Finance Corporation on May 2, 2014. Navient CFC purchases Stafford Loans, SLS Loans, PLUS Loans, consolidation loans and/or other types of federally guaranteed student loans originated by its affiliates or third parties under FFELP described in “Appendix A—Federal Family Education Loan Program” to this free-writing prospectus.  It may also purchase loans that are not originated under FFELP, including, but not limited to, Health Education Assistance Loan Program loans (referred to as “HEAL Loans”), which the Department of Education insures directly, and other private education loans programs which are not reinsured by the federal government.

 

VG Funding is a limited liability company whose sole member is Navient CFC. It was formed in Delaware on February 3, 2000. VG Funding is a limited purpose, bankruptcy remote entity formed to purchase education loans, whether originated under the FFELP loan program or other private credit loan programs, for re-sale in various securitization transactions. Navient Solutions, LLC services all loans owned by VG Funding. Deutsche Bank Trust Company Americas (as successor in interest to The Bank of New York Mellon Trust Company, National Association, formerly known as The Bank of New York Trust Company, N.A.), acts as successor interim eligible lender trustee on behalf of VG Funding.

 

Navient Solutions, LLC services all loans owned by the sellers that may be sold to the trust.

 

Third-Party Originators.  The identity of the actual originator of any particular student loan is not material.  In addition, to the extent FFELP loans are purchased in secondary market transactions the identities of the related originators are often not available.

 

Further, disclosure about separate originators of particular pool asset(s) will not enhance or increase an investor’s ability to assess the risks of these pool assets.  All FFELP loans benefit from reinsurance by the U.S. Government and this guarantee is the material provision for reviewing the investor’s risk of loss of principal with respect to these assets.  Unlike products without such U.S. Government reinsurance, the credit quality of the originator will not materially affect the likelihood of FFELP loan non-payment.  Moreover, the presence of reinsurance by the U.S. Government is not affected by the credit quality of the third party originator.  Therefore, no disclosure about any such third-party originator is included herein.

 

THE TRUST STUDENT LOAN POOL

 

GENERAL

 

On June 29, 2005, the closing date, the initial eligible lender trustee, on behalf of the trust, purchased the pool of initial trust student loans from the depositor.  The information about the trust student loans was originally calculated and presented as of May 30, 2005, the statistical cutoff date.

ELIGIBLE TRUST STUDENT LOANS

 

The trust student loans were originally selected from the portfolio of student loans owned by Navient CFC, VG Funding or one of their affiliates by employing several criteria, including requirements that each trust student loan as of the statistical cutoff date (and with respect to each additional trust student loan, as of its related subsequent cutoff date, to be specified at the time of its sale to the trust):

 

 

 

 

 

 

 

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

 

The addition of add-on consolidation loans utilizing funds on deposit in the add-on consolidation loan account was not a sale of new loans to the trust; rather, each such addition merely served to increase the principal balance of the applicable existing trust student loan and, in the event of a breach of any representation or warranty, the applicable seller is required to repurchase the entire applicable trust student loan, including the portion attributable to the add-on consolidation loan.

 

CHARACTERISTICS OF THE TRUST STUDENT LOANS

 

Unless otherwise specified, all information with respect to the trust student loans presented in this free-writing prospectus or in Annex A to this free-writing prospectus is presented as of November 30, 2024, which is the statistical disclosure date.

 

The tables contained in “Annex A – The Trust Student Loan Pool” in this free-writing prospectus provide a description of specified characteristics of the trust student loans as of the statistical disclosure date.  The aggregate outstanding principal balance of the loans in each of the tables in Annex A includes the outstanding principal balance due from borrowers, plus accrued interest of $1,713,822 to be capitalized as of the statistical disclosure date.  Percentages and dollar amounts in any table may not total 100% or whole dollars due to rounding.  The tables in Annex A also contain information concerning the total number of loans and total number of borrowers in the portfolio of trust student loans.  For ease of administration, the servicer separates a consolidation loan on its system into two separate loan segments representing subsidized and unsubsidized segments of the same loan.  The tables in Annex A reflect those loan segments within the number of loans.  In addition, approximately 10 borrowers have more than one trust student loan.

 

For a description of the FFELP, see “Appendix A—Federal Family Education Loan Program” in this free-writing prospectus.

INSURANCE OF TRUST STUDENT LOANS; GUARANTORS OF TRUST STUDENT LOANS

 

Each trust student loan is required to be guaranteed as to at least 98% of the principal and interest by one of the guaranty agencies as described below and reinsured by the Department of Education under the Higher Education Act and must be eligible for special allowance payments and, in the case of some trust student loans, interest subsidy payments by the Department of Education.

 

In general, disbursed student loans are guaranteed by the applicable guarantor, and reinsured against default by the Department of Education.  The percentage of the guarantee is based upon the date of disbursement of the student loans as follows:

 

See “Appendix A—Federal Family Education Loan Program—Guaranty Agencies under the FFELP” in this free-writing prospectus.

 

No insurance premium is charged to a borrower or a lender in connection with a consolidation loan.  However, FFELP lenders must pay a monthly rebate fee to the Department of Education at an annualized rate of 1.05% on principal of and interest on consolidation loans disbursed on or after October 1, 1993, or at an annualized rate of 0.62% on consolidation loans for which consolidation loan applications were received between October 1, 1998 and January 31, 1999.  The trust will pay this consolidation loan rebate prior to calculating Available Funds.

 

Under the Higher Education Amendments of 1992, if the Department of Education has determined that a guaranty agency is unable to meet its insurance obligations, a loan holder may submit claims directly to the Department of Education and the Department of Education is required to pay the full guarantee payment in accordance with guarantee claim processing standards no more stringent than those of the guaranty agency.  However, the Department of Education’s obligation to pay guarantee claims directly in this fashion is contingent upon the Department of Education making the determination referred to above.  We cannot assure you that the Department of Education would ever make such a determination with respect to a guaranty agency or, if such a determination was made, whether that determination or the ultimate payment of guarantee claims would be made in a timely manner.  See “Appendix A—Federal Family Education Loan Program—Guaranty Agencies under the FFELP” in this free-writing prospectus.

 

The table on page A-12 of Annex A provides information with respect to the portion of the trust student loans guaranteed by each guarantor.

 

The eligible lender trustee has entered into a separate guarantee agreement with each of the guaranty agencies shown on the table on page A-12 of Annex A to this free-writing prospectus, under which each of the guarantors has agreed to serve as guarantor for the specified trust student loans.

 

Some historical information about each guaranty agency that guarantees trust student loans comprising at least 10% of the Pool Balance as of the statistical disclosure date is provided beginning on page A-13 in Annex A.  For purposes of the tables in Annex A, we refer to these guaranty agencies as the “Significant Guarantors.”

 

The Department of Education is required to make reinsurance payments to guarantors with respect to FFELP loans in default. This requirement is subject to specified reductions when the guarantor’s claims rate for a fiscal year equals or exceeds certain trigger percentages of the aggregate original principal amount of FFELP loans guaranteed by that guarantor that are in repayment on the last day of the prior fiscal year.  See “Appendix A—Federal Family Education Loan Program—Guaranty Agencies under the FFELP” in this free-writing prospectus.

Each guaranty agency’s guarantee obligations with respect to any trust student loan is conditioned upon the satisfaction of all the conditions in the applicable guarantee agreement. These conditions include, but are not limited to, the following:

 

 

 

 

Failure to comply with any of the applicable conditions, including those listed above, may result in the refusal of the guaranty agency to honor its guarantee agreement on the trust student loan, in the denial of guarantee coverage for certain accrued interest amounts or in the loss of certain interest subsidy payments and special allowance payments.

 

Prospective investors may consult the Department of Education Data Books for further information concerning the guarantors.

 

CURE PERIOD FOR TRUST STUDENT LOANS

 

The sellers, the depositor or the servicer, as applicable, will be obligated to purchase, or to substitute qualified student loans for, any trust student loan in the event of a material breach of certain representations, warranties or covenants concerning the trust student loan, following a period during which the breach may be cured.  For purposes of trust student loans the cure period will be 210 days.  However, in the case of breaches that may be cured by the reinstatement of the guarantor’s guarantee of the trust student loan, the cure period will be 360 days.  In each case the cure period begins on the earlier of the date on which the breach is discovered and the date of the servicer’s receipt of the guarantor reject transmittal form with respect to the trust student loan.  The purchase or substitution will be made not later than the end of the 210-day cure period or not later than the 60th day following the end of the 360-day cure period, as applicable.

 

Notwithstanding the foregoing, if as of the last business day of any month the aggregate principal amount of trust student loans for which claims have been filed with and rejected by a guarantor as a result of a breach by the depositor or the servicer or for which the servicer determines that claims cannot be filed pursuant to the Higher Education Act as a result of that breach exceeds 1% of the Pool Balance, then the servicer or the depositor, as applicable, will be required to purchase, within 30 days of a written request by the eligible lender trustee or the indenture trustee, affected trust student loans in an aggregate principal amount so that after the purchases the aggregate principal amount of affected trust student loans is less than 1% of the Pool Balance.  The trust student loans to be purchased by the servicer or the depositor pursuant to the preceding sentence will be based on the date of claim rejection, with the trust student loans with the earliest of these dates to be purchased first.  See “Servicing and Administration—Servicer Covenants” and “Transfer and Servicing Agreements—Sale of Student Loans to the Trust; Representations and Warranties of the Depositor” and “—Purchase of Student Loans by the Depositor; Representations and Warranties of the Sellers” in this free-writing prospectus.

 

CONSOLIDATION OF FEDERAL BENEFIT BILLINGS AND RECEIPTS AND GUARANTOR CLAIMS WITH OTHER TRUSTS

 

Due to a Department of Education policy limiting the granting of new lender identification numbers, the eligible lender trustee will be allowed under the trust agreement to permit other trusts established by the depositor to securitize student loans to use the Department of Education lender identification number applicable to the trust. In that event, the billings submitted to the Department of Education for interest subsidy and special allowance payments on loans in the trust would be consolidated with the billings for the payments for student loans in other trusts using the same lender identification number and payments on the billings would be made by the Department of Education in lump sum form.  These lump sum payments would then be allocated on a loan-by-loan basis among the various trusts using the same lender identification number.

In addition, the sharing of the lender identification number with other trusts may result in the receipt of claim payments from guaranty agencies in lump sum form.  In that event, these payments would be allocated among the trusts in a manner similar to the allocation process for interest subsidy and special allowance payments.

 

The Department of Education regards the eligible lender trustee as the party primarily responsible to the Department of Education for any liabilities owed to the Department of Education or guaranty agencies resulting from the eligible lender trustee’s activities in the FFELP.  As a result, if the Department of Education or a guaranty agency were to determine that the eligible lender trustee owes a liability to the Department of Education or a guaranty agency on any student loan included in a trust using the shared lender identification number, the Department of Education or that guaranty agency would be likely to collect that liability by offset against amounts due the eligible lender trustee under the shared lender identification number, including amounts owed in connection with the trust.

 

In addition, other trusts using the shared lender identification number may in a given quarter incur consolidation origination fees, consolidation loan rebate fees or floor income rebates that exceed the interest subsidy and special allowance payments payable by the Department of Education on the loans in the other trusts, resulting in the consolidated payment from the Department of Education received by the eligible lender trustee under the lender identification number for that quarter equaling an amount that is less than the amount owed by the Department of Education on the loans in the trust for that quarter.

 

The servicing agreement for the trust and the servicing agreements for the other trusts established by the depositor that share the lender identification number to be used by the trust will require any trust to indemnify the other trusts against a shortfall or an offset by the Department of Education or a guaranty agency arising from the trust student loans held by the eligible lender trustee on the related trust’s behalf.

 

THE COMPANIES’ STUDENT LOAN FINANCING BUSINESS

 

The information provided below relates to the portfolio of loans originated by Legacy SLM entities (including Sallie Mae Bank) that were owned by Navient and its subsidiaries at the time of its separation from Sallie Mae Bank.

 

Navient operates its student loan financing business through several subsidiaries, including Navient CFC.  We sometimes refer to Navient and its family of subsidiaries as the Companies (or individually as a Company if the context requires). The Companies have made and/or purchase or have purchased loans insured under several other education loan programs, including, but not limited to, Health Education Assistance Loan Program loans (“HEAL Loans”), which the Department of Education insures directly, and other private education loan programs which are not reinsured by the federal government.  The Companies also originated and/or purchase student loans insured under various federally sponsored programs. The Companies purchase Stafford Loans, SLS Loans and PLUS Loans originated under the FFELP, all of which are insured by guarantors and reinsured by the Department of Education. They also originated and purchase consolidation loans.

 

They purchase insured loans from various sources including:

 

 

 

 

 

 

These purchases occur at various times including:

 

 

 

 

The purchaser directly or indirectly through the servicer, frequently provides the selling institution with operational support in the form of either:

 

 

 

Both PortSS and ExportSS provide the applicable Company entity and the lender with the assurance that the loans will be administered by the servicer’s computerized servicing systems.

 

FFELP Loans.  Substantially all payments of principal and interest with respect to loans originated through the FFELP will be guaranteed against default, death, bankruptcy or disability of the applicable borrower, and a closing of or a false certification by such borrower’s school, by certain federal guarantors pursuant to a guarantee agreement to be entered into between such federal guarantors specified in this free-writing prospectus (each a “Federal Guarantor” and collectively, the “Federal Guarantors”) and the applicable eligible lender trustee (such agreements, each as amended or supplemented from time to time, the “Federal Guarantee Agreements”).  See “Appendix A—Federal Family Education Loan Program” in this free-writing prospectus.

 

Private Education Loans.  In addition to the FFELP loans originated under the Higher Education Act, Navient CFC and other affiliates of Navient have developed student loan programs that are not federally guaranteed for undergraduate students and/or their parents (“Private Undergraduate Loans”), graduate students (“Private Graduate Loans”), private credit consolidation programs (“Private Consolidation Loans”), programs marketed directly to consumers (“Direct-to-Consumer Loans”), programs for students and/or their parents at technical and trade schools, tutorial and learning centers, and private kindergarten through secondary education schools (“Career Training Loans”) and programs that provide private supplemental funding for certificate-seeking, continuing education, undergraduate and graduate students at eligible degree-granting institutions or non-degree granting institutions (“Smart Option Student Loans”), which can be used by borrowers to supplement their FFELP loans in situations where the FFELP loans do not cover the cost of education or to cover education at non-Title IV institutions and programs for undergraduate, graduate and health professional students (“EFG Loans”), that provide borrowers with private supplemental funding.  We sometimes refer to all such loans as private education loans in this free-writing prospectus.

 

The Companies’ private education loans are serviced by Navient Solutions and may have been funded by a former affiliate or a lender partner.  These loans are typically purchased by Navient CFC (or another affiliate).

 

The trust’s assets only consist of FFELP loans and amounts on deposit in the Trust Accounts.

 

SERVICING

 

Prior to purchase of a loan by the applicable Company entity, the servicer or a third-party servicing agent surveys appropriate loan documents for compliance with Department of Education and guarantor requirements.  Such survey generally consists of the servicer or third-party servicing agent undertaking a review of certain documentation and information with respect to each purchase of a portfolio of loans with an understanding of the obligations undertaken by the relevant parties with respect to the loan guarantees in an asset-backed securitization. The reviewing party bases the scope and breadth of the review on the characteristics of the particular transaction, terms and timing of the loan and its origination and other information deemed important based on their experience in the industry and knowledge of the risks associated therein.  Once acquired, loans are serviced through the servicer or third-party servicers, in each case under contractual agreements with a Company entity.

The Department of Education and the various guarantors prescribe rules and regulations which govern the servicing of federally insured loans. These rules and regulations include specific procedures for contacting delinquent borrowers, locating borrowers who can no longer be contacted at their documented address or telephone number, and filing claims for reimbursement on loans in default. Payments under a guarantor’s guarantee agreement require strict adherence to these stated due diligence and collection procedures.

 

Regulations require that collection efforts commence within ten days of any delinquency and continue for the period of delinquency until the loan is deemed to be in default status. During the delinquency period, the holder of the loan must diligently attempt to contact the borrower, in writing and by telephone, at specified intervals. Most FFELP loans are considered to be in default when they become 210 days delinquent.

 

A guarantor may reject any claim for payment under a guarantee agreement if the specified due diligence and collection procedures required by that guarantee agreement have not been strictly followed and documented or if the claim is not timely filed. Minor errors in due diligence may result in the imposition of interest penalties, rather than a complete loss of the guarantee.  In instances in which a claim for payment under a guarantee agreement is denied due to servicing or claim-filing errors, the guaranteed status of the affected student loans may be reinstated by following specified procedures, called “curing the defect.”  Interest penalties are commonly incurred on loans that are cured. The servicer’s recent experience has been that the significant majority of all rejected claims are cured within two years, either internally or through collection agencies.

 

The servicer’s internal procedures support compliance with existing Department of Education and guarantor regulations and reporting requirements, and provide high quality service to borrowers.  It utilizes computerized servicing systems. These systems monitor all student loans serviced by its loan servicing centers. The computerized servicing systems identify loans which require due diligence or other servicing procedures and disseminate the necessary loan information to initiate the servicing or collection process. The computerized servicing systems enable the servicer to service a high volume of loans in a manner consistent with industry requirements. Navient and its subsidiaries, including Navient CFC and the depositor, also require their third-party servicers to maintain operating procedures which comply with applicable Department of Education and guarantor regulations and reporting requirements, and periodically reviews certain operations for compliance.

 

In addition, Company affiliates offer some borrowers loan repayment terms that do not provide for level payments over the repayment term of the loan. For example, under Navient CFC’s graduated repayment program, some student loans provide for an “interest only” period. During this period, the borrower is required to make payment of accrued interest only. No payment of the principal of the loan is required.  At the conclusion of the interest only period, the loan must be amortized through level payments over the remaining term of the loan.

 

In other cases, Company affiliates offer borrowers a “graduated phased in” amortization of the principal of the loans. For these loans, a greater portion of the principal amortization of the loan occurs in the later stages of the loan than would be the case if amortization were on a level payment basis.

 

Company affiliates also offer an income-driven repayment plan under which repayments are based on the borrower’s income. Under this plan, ultimate repayment may be delayed for a period significantly longer than the originally scheduled repayment term.

 

Consolidation/Repayment Programs.  Consolidation and repayment programs made available by the Companies to student loan borrowers and cosigners were made available to borrowers and cosigners with trust student loans.  Navient and its subsidiaries participated in the consolidation loan program for FFELP loans until 2008 and the consolidation loan lending program itself was terminated in 2010 in connection with the elimination of FFELP as an ongoing program.  See “Appendix A—Federal Family Education Loan Program—Consolidation Loan Program” in this free-writing prospectus.  Therefore, the transfer and servicing agreements still permit the sellers to purchase such student loans from the trust to effect consolidations at the request of borrowers.

 

In addition, many Company affiliates offer some borrowers loan repayment terms that do not provide for level payments over the repayment term of the loan. For example, under a typical graduated repayment program, some student loans provide for an “interest only” repayment option for a specified period of time, usually the first twenty-four (24) or forty-eight (48) months after the loan enters repayment. During this period, the borrower is required to make payment of accrued interest only. No payment of the principal of the loan is required.  At the conclusion of the interest only period, the loan must be amortized through level payments over the remaining term of the loan.  Borrowers can also request an extended repayment term based on the remaining loan balance.

In other cases, Company affiliates offer borrowers a “graduated phased in” amortization of the principal of the loans. For these loans, a greater portion of the principal amortization of the loan occurs in the later stages of the loan than would be the case if amortization were on a level payment basis.

 

These companies also offer various income-driven repayment plans under which repayments are based on the borrower’s income. Under these plans, ultimate repayment may be delayed for a period significantly longer than the originally scheduled repayment term.  In addition, interest rate reduction programs may be offered to borrowers experiencing periods of financial distress.

 

Incentive Programs.  Navient and its subsidiaries have offered, and intend to continue to offer, various incentive programs to student loan borrowers and cosigners. Some of the programs that may apply to student loans owned by the trusts are:

 

 

 

 

 

 

 

We cannot predict how many borrowers will participate in these programs.  These incentive programs or other programs may also be made available by the servicer to borrowers with trust student loans.

 

Application of any of these incentive programs could impact the yield 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.

 

TRANSFER AGREEMENTS

 

GENERAL

 

The following is a summary of the material terms of the sale agreement under which the trust purchased student loans from the depositor, and the purchase agreements under which the depositor acquired the student loans from the sellers.  We refer to the purchase agreements and the sale agreement, collectively, as the “transfer agreements.”  The summary does not cover every detail of these agreements, and it is subject to the provisions of the transfer agreements.

 

PURCHASE OF STUDENT LOANS BY THE DEPOSITOR; REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

On the closing date, each seller sold to the depositor (and with respect to legal title, the interim eligible lender trustee for the benefit of the depositor), without recourse, its entire interest in the student loans and all collections received on and after the statistical cutoff date.  A bill of sale in the form shown as an exhibit to the related purchase agreement was delivered in connection with the sale of the trust student loans that described the student loan pool.  The depositor applied net proceeds from the sale of the notes to purchase the student loans from the related seller.

 

Pursuant to the related transfer agreement, each seller represented and warranted to the depositor and the depositor in turn represented and warranted to the trust, that, as of the closing date or as of the date otherwise noted:

 

 

 

 

 

Upon discovery of a breach of any representation or warranty that has a materially adverse effect on the depositor, the applicable seller will repurchase the affected student loan unless the breach is cured within the applicable cure period specified in the related prospectus supplement. The purchase amount will be equal to the amount required to prepay in full that student loan including all accrued interest. Alternatively, rather than repurchasing the trust student loan, the affected seller may, in its discretion, substitute qualified student loans for that loan. In addition, the affected seller will be obligated to reimburse the depositor for:

 

 

 

and

 

 

The repurchase or substitution and reimbursement obligations of the sellers constitute the sole remedy available to the depositor for any uncured breach.  The sellers’ repurchase or substitution and reimbursement obligations are contractual obligations that the depositor or trust may enforce against the sellers, but the breach of these obligations will not constitute an event of default under the indenture.  In cases where the obligations the trust is seeking to enforce are based on a violation of the Higher Education Act, a finding by the Department of Education that the Higher Education Act was violated may be required prior to the trust being able to enforce the agreement.

 

SALE OF STUDENT LOANS TO THE TRUST; REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR

 

On the closing date, the depositor and the interim eligible lender trustee, on behalf of the depositor, sold to the trust and the eligible lender trustee, on behalf of the trust, without recourse, its entire interest in the student loans acquired by the depositor and the interim eligible lender trustee, on behalf of the depositor, from the sellers. Each student loan was listed in an exhibit to the sale agreement.  The notes were issued by the trust concurrently with that sale.  The trust purchased the student loans from the depositor in exchange for the proceeds from the issuance of the notes and the issuance of the excess distribution certificate to the depositor.

 

During the supplemental purchase period, the trust purchased additional trust student loans from the depositor which the depositor purchased from one or more of the sellers.

 

In the sale agreement, the depositor made representations and warranties concerning the student loans to the trust for the benefit of noteholders, including representations and warranties that were substantially the same as those made by the sellers to the depositor.  See, “—Purchase of the Student Loans by the Depositor; Representations of the Sellers” above.

 

Upon discovery of a breach of any representation or warranty that has a materially adverse effect on the trust, the depositor will have repurchase or substitution and reimbursement obligations that are substantially the same as those of the sellers under the purchase agreements.

 

The repurchase or substitution and reimbursement obligations of the depositor will constitute the sole remedy available to the noteholders for any uncured breach. The depositor’s repurchase or substitution and reimbursement obligations are contractual obligations that the trust may enforce against the depositor, but the breach of these obligations will not constitute an event of default under the indenture.  In cases where the obligations the trust is seeking to enforce are based on a violation of the Higher Education Act, a finding by the Department of Education that the Higher Education Act was violated may be required prior to the trust being able to enforce the agreement.

 

CUSTODIAN OF PROMISSORY NOTES

 

To assure uniform quality in servicing and to reduce administrative costs, the servicer acts as custodian of the promissory notes, in physical or electronic form, representing the trust student loans and any other related documents.  In acting as custodian, the servicer may use its own facilities or those of sub-custodians.  The depositor’s and the servicer’s records reflect the sale by the sellers of the trust student loans to the depositor and their subsequent sale by the depositor to the trust.

 

PAYMENT OF NOTES

 

Upon the payment in full of all outstanding notes, the eligible lender trustee will succeed to all the rights of the indenture trustee on behalf of the holder of the excess distribution certificate.

TERMINATION

 

The obligations of the servicer, the depositor, the administrator, the eligible lender trustee, and the indenture trustee under the transfer and servicing agreements will terminate upon:

 

 

 

The servicer, at its option, may repurchase or arrange for the purchase of all remaining trust student loans as of the end of any collection period if the outstanding Pool Balance is 10% or less of the Initial Pool Balance plus accrued interest to be capitalized as of the applicable cutoff dates.  The purchase price will equal the aggregate purchase amounts for the loans as of the end of that collection period.  It will not be less than the minimum purchase amount specified.  These amounts will be used to retire the related notes. Upon termination of the trust, any remaining assets of the trust, after giving effect to final distributions to the noteholders, will be transferred to the reserve account and paid as provided in this free-writing prospectus.

 

If the servicer or another entity fails to exercise their optional purchase right as described above, the indenture trustee may, or at the written direction of the administrator or the holders of a majority of the outstanding amount of the notes, shall, try to auction any trust student loans remaining in the trust at the end of the collection period preceding the trust auction date specified in this free-writing prospectus.  Navient CFC, its affiliates and unrelated third parties may make bids to purchase these trust student loans on the trust auction date; however, Navient CFC or its affiliates may offer bids only if the Pool Balance at that date is 10% or less of the Initial Pool Balance together with the aggregate initial principal balances of all trust student loans acquired during the supplemental purchase period plus accrued interest to be capitalized as of the applicable cutoff dates.

 

SERVICING AND ADMINISTRATION

 

GENERAL

 

The following is a summary of the important terms of the servicing agreement under which the servicer services the trust student loans and the administration agreement under which the administrator undertakes administrative duties for the trust and the trust student loans.  This summary does not cover every detail of these agreements and it is subject to all provisions of the servicing agreement and the administration agreement.  We also refer to the transfer agreements, the servicing agreement and the administration agreement, collectively, as the “transfer and servicing agreements.”

 

ACCOUNTS

 

The administrator has established and maintains, in the name of the indenture trustee and for the benefit of the reset rate noteholders and, with respect to the remarketing fee account, the class A-5 noteholders, the collection account, the remarketing fee account and the reserve account.

 

Funds in the collection account, the remarketing fee account, the reserve account, any accumulation account, any supplemental interest account, any investment premium purchase account, and any investment reserve account will be invested as provided in the indenture in eligible investments.  Eligible investments are generally limited to investments acceptable to the rating agencies as being consistent with the ratings of the notes.  Subject to some conditions, eligible investments may include debt instruments or other obligations (including asset-backed securities) issued by the depositor or its affiliates, other trusts originated by the depositor or its affiliates or third parties and repurchase obligations of those persons with respect to federally guaranteed student loans that are serviced by the servicer or an affiliate thereof.  Eligible investments are limited to obligations or debt instruments that are expected to mature not later than the business day immediately preceding the next applicable distribution date, or, with respect to the collection account only, the next monthly servicing fee payment date, to the extent of the primary servicing fee; provided, however, that with respect to funds on deposit in any accumulation account, related eligible investments may mature no later than the business day immediately preceding the next reset date for the reset rate notes.

The administrator will direct the related Swap Counterparties to pay all amounts denominated in a currency other than U.S. Dollars payable under any currency swap agreement into the applicable currency account.

 

SERVICING PROCEDURES

 

Under the servicing agreement, the servicer agreed to service all the trust student loans. The servicer is required to perform all services and duties customary to the servicing of student loans, including all collection practices.  It must use the same standard of care as it uses to service similar student loans owned by Navient and its affiliates in compliance with the applicable guarantee agreements and all other applicable federal and state laws, including the Higher Education Act.

 

The duties of the servicer include the following:

 

 

 

 

 

In addition, the servicer will keep ongoing records on the loans and its collection activities utilizing the same standards it uses for similar student loans owned by Navient and its affiliates in compliance with the applicable guarantee agreements and all other applicable federal and state laws, including the Higher Education Act.  It will also furnish periodic statements to the indenture trustee, the eligible lender trustee, and the noteholders as specifically required in the servicing agreement.  See “—Statements to Indenture Trustee and Trust” in this free-writing prospectus.

 

MODIFICATION OF TRUST STUDENT LOANS

 

Except in connection with the offering of incentive programs (the potential impact of which on the notes is described under “The Companies’ Student Loan Financing Business—Incentive Programs” in this free-writing prospectus) or as required by pursuant to the provisions of the FFELP (including repayment provision changes that are mandatory based on changes in a borrower status, e.g., in-school, grace, deferment and forbearance), the terms of the trust student loans will generally not be modified.  Any borrower incentive programs in effect on the date of the sale of the trust student loans to the trust will continue to be offered to the related borrowers and will remain in effect for so long as the related borrower remains eligible to receive such benefits.  None of the sellers, the depositor, the servicer or the administrator will reimburse the trust for any loss of yield on a trust student loan incurred as a result of such borrower incentive programs.

 

PAYMENTS ON TRUST STUDENT LOANS

 

The servicer will deposit all payments on trust student loans and proceeds that it collects during each collection period into the related collection account within two Business Days of receipt. The eligible lender trustee will deposit all interest subsidy payments and all special allowance payments on the trust student loans that it receives for each collection period into the collection account within two Business Days of receipt.

 

A Business Day for this purpose is any day other than a Saturday, a Sunday, or a day on which banking institutions or trust companies in the City of New York, or Wilmington, Delaware are authorized or obligated by law, regulation or executive order to remain closed.

The servicer may invest collections, pending deposit into the collection account, at its own risk and for its own benefit, and it will not segregate these funds.  The depositor and the servicer will pay the aggregate purchase amount of student loans repurchased by the sellers or purchased by the servicer to the administrator, and the administrator will deposit these amounts into the collection account on or before the Business Day preceding each distribution date.

 

The servicing agreement will not require the servicer to make advances to any trust and no such advances have been made by the servicer with respect to any trust student loans prior to their sale to the trust.

 

SERVICER COVENANTS

 

The servicer generally, among other things, agreed in the servicing agreement that:

 

 

 

 

 

Upon the discovery of a breach of any covenant that has a materially adverse effect on the interest of the trust, the servicer will purchase the trust student loan unless the breach is cured in the same manner as that applicable to the related seller as described under “The Trust Student Loan Pool-Cure Period for Trust Student Loans” and “Transfer Agreements—Purchase of the Student Loans by the Depositor; Representations of the Sellers” in this free-writing prospectus.  However, any breach that relates to compliance with the requirements of the Higher Education Act or the applicable guarantor but that does not affect that guarantor’s obligation to guarantee payment of a trust student loan will not be considered to have a material adverse effect.  In addition, a finding by the Department of Education that the Higher Education Act was violated or that a loan is no longer insured because of a violation of the Higher Education Act may be required prior to the trust being able to enforce the agreement.

 

The purchase price will equal the unpaid principal amount of that trust student loan plus any accrued interest.  The purchase price will also be calculated using the applicable percentage that would have been insured pursuant to Section 428(b)(1)(G) of the Higher Education Act plus any interest subsidy payments or special allowance payments not paid by, or required to be refunded to, the Department of Education for that trust student loan as a result of a breach of any covenant of the servicer. The trust’s interest in that purchased trust student loan will be assigned to the servicer or its designee.  Alternatively, rather than purchase trust student loans, the servicer may, in its sole discretion, substitute qualified, equivalent (in the aggregate as of the date of substitution) student loans for the trust student loans being substituted.

 

In addition, the servicer will be obligated to reimburse the trust for:

 

 

 

and

 

 

The purchase or substitution and reimbursement obligations of the servicer will constitute the sole remedy available to the trust for any uncured breach. The servicer’s purchase or substitution and reimbursement obligations are contractual obligations that the trust may enforce, but the breach of these obligations will not constitute an event of default under the indenture.

 

SERVICING COMPENSATION

 

The servicer will be entitled to receive the servicing fee in an amount equal to the primary servicing fee and the carryover servicing fee as compensation for performing the functions as servicer for the trust.  The primary servicing fee is payable on each monthly servicing payment date out of Available Funds and amounts on deposit in the reserve account on that date.  The carryover servicing fee is payable to the servicer on each distribution date out of Available Funds after payment on that distribution date of clauses (a) through (k) under “—Distributions—Distributions from the Collection Account”  below.  The carryover servicing fee will be subject to an increase agreed to by the administrator, the eligible lender trustee and the servicer to the extent that a demonstrable and significant increase occurs in the costs incurred by the servicer in providing the services to be provided under the servicing agreement, whether due to changes in applicable governmental regulations, guarantor program requirements or regulations, or postal rates.

 

EVIDENCE AS TO COMPLIANCE

 

The administration agreement provides that a firm of independent public accountants will furnish to the trust and indenture trustee an annual report attesting to the servicer’s compliance with the terms of the administration agreement and the servicing agreement, including all statutory provisions incorporated into those agreements. The accounting firm will base this report on its examination of various documents and records and on accounting and auditing procedures considered appropriate under the circumstances.

 

The administration agreement requires the servicer to deliver to the trust and indenture trustee, concurrently with the compliance report, a certificate signed by an officer of the servicer stating that, to such officer’s knowledge, the servicer has fulfilled its obligations under the administration agreement and the servicing agreement in all material respects.  If there has been a material default, the officer’s certificate for that period will describe the default. The servicer has agreed to give the indenture trustee and the eligible lender trustee, notice of servicer defaults under the servicing agreement.

 

You may obtain copies of these reports and certificates by a request in writing to the indenture trustee.

 

MATTERS REGARDING THE SERVICER

 

The servicing agreement provides that the servicer is an independent contractor and that, except for the services to be performed under the servicing agreement, the servicer does not hold itself out as an agent of the trust.

 

The servicing agreement provides that the servicer may not resign from its obligations and duties as servicer unless its performance of these duties is no longer legally permissible. No resignation will become effective until the indenture trustee or a successor servicer has assumed the servicer’s duties. The servicer, however, may resign as a result of any sale or transfer of substantially all of its student loan servicing operations relating to the trust student loans if:

 

 

 

•

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.

•

the administrator advises the indenture trustee in writing that DTC is not willing or able to discharge its responsibilities as depository for the reset rate notes and the administrator is unable to locate a successor;

•

the administrator, at its option, elects to terminate the book-entry system through DTC; or

•

after the occurrence of an event of default, a servicer default or an administrator default, investors holding a majority of the outstanding principal balance of the reset rate notes, advise the trustee through DTC in writing that the continuation of a book-entry system through DTC or a successor is no longer in the best interest of the holders of these reset rate notes.

•

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 the class A-5 notes are denominated in U.S. Dollars, a 360-day year consisting of twelve 30-day months; or

•

if the class A-5 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 class A-5 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 the class A-5 notes are said to be in floating rate mode, or

•

at a fixed interest rate, in which case the class A-5 notes are said to be in fixed rate mode,

•

the weighted average life of the class A-5 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 reset rate noteholders, if other than quarterly;

•

whether the class A-5 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 the class A-5 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 the class A-5 notes will retain their notes, including in all deemed mandatory tender situations;

•

the related interest rate for the class A-5 notes will be reset to a failed remarketing rate of the SOFR Rate 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 the class A-5 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 class A-5 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 class A-5 notes multiplied by the outstanding principal balance of the class A-5 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 class A-5 notes, including, on the maturity date for the class A-5 notes, if a currency swap agreement is then in effect, the remaining outstanding principal balance of the class A-5 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 class A-5 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 class A-5 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 class A-5 notes in the applicable currency;

•

on or before each distribution date, (1) an interest rate of the SOFR Rate 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 class A-5 notes, and (2) that swap counterpart’s pro rata share of all payments of principal in U.S. Dollars that are allocated to the class A-5 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 class A-5 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 class A-5 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 class A-5 notes is reduced to zero, excluding for such purpose all amounts on deposit in the related accumulation account; or

•

the maturity date of the class A-5 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 class A-5 notes are then denominated in U.S. Dollars, or the next succeeding reset date resulting in a successful remarketing, if the class A-5 notes are 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 class A-5 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 class A-5 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,

1.

to the noteholders of the reset rate notes then denominated in U.S. Dollars and then structured not to receive a payment of principal until the end of its related reset period, the amount, if any, on deposit in the related accumulation account for the reset rate notes (exclusive of investment earnings) in reduction of the outstanding principal balance of such reset rate notes until they are paid in full; and/or

2.

to the related currency Swap Counterparty if the reset rate notes are then in foreign exchange mode and are then structured not to receive a payment of principal until the end of their reset period, the amount, if any, on deposit in the related accumulation account for the reset rate notes (exclusive of investment earnings) in reduction of the outstanding amount of the reset rate notes until they are paid in full;

1.

to the class A noteholders (other than the noteholders of the reset rate notes if a swap agreement with respect to interest payments to be made to such noteholders is then in effect), the Class A Noteholders’ Interest Distribution Amount, ratably, without preference or priority of any kind, based on the amounts due and payable as the Class A Noteholders’ Interest Distribution Amount;

2.

if a swap agreement is then in effect for the reset rate noteholders with respect to interest payments to be made to such noteholders, to each Swap Counterparty, the amount of any swap interest payments due and payable by the trust (other than as paid to that Swap Counterparty under clause FIRST); and

3.

if any swap agreement with respect to the reset rate notes has been terminated, to the related Swap Counterparty, the amount of any swap termination payments due to such Swap Counterparty under the related swap agreement due to a swap termination event relating to a payment default by the trust, acceleration of the notes or the insolvency of the trust;

1.

if the reset rate notes are in foreign exchange mode, pro rata (1) to the class A noteholders (other than the holders of any reset rate notes then in foreign exchange mode), ratably, an amount sufficient to reduce the respective principal balances of those class A notes to zero, and (2) to the applicable currency Swap Counterparties an amount sufficient to reduce the U.S. Dollar equivalent principal balance of the reset rate notes then in foreign exchange mode to zero; or

2.

if 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 those class A notes to zero;

•

“Benchmark” means, initially, Compounded SOFR; provided, that if the administrator determines prior to the relevant Reference Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to SOFR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement.

•

“Benchmark Replacement” means, for any Interest Determination Date after the administrator has determined that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred, the first alternative set forth in the order below that can be determined by the administrator, without obtaining the consent of any noteholders, as of the Benchmark Replacement Date;

•

“Benchmark Replacement Adjustment” means, for any Interest Determination Date after the administrator has determined that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred, the first alternative set forth in the order below that can be determined by the administrator as of the Benchmark Replacement Date:

•

“Benchmark Replacement Conforming Changes” means, in connection with any determination and calculation of the Benchmark Replacement, any technical, administrative or operational changes (including changes to the accrual period, timing and frequency of determining rates and making payments of interest, rounding of amounts or tenors and other administrative matters) that the administrator decides in its reasonable discretion may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially consistent with market practice (or, if the administrator decides that adoption of any portion of such market practice is not administratively feasible or if the administrator determines that no market practice for use of the Benchmark Replacement exists, in such other manner as the administrator determines in its reasonable discretion is reasonably necessary).

•

“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark (including the daily published component used in the calculation thereof):

•

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark (including the daily published component used in the calculation thereof):

•

“Compounded SOFR” with respect to any U.S. Government Securities Business Day, means:

•

“Corresponding Tenor” means, with respect to a Benchmark Replacement, a tenor (including overnight) having approximately the same length (disregarding any business day adjustment) as the applicable tenor for the then-current Benchmark.

•

“FRBNY” means the Federal Reserve Bank of New York.

•

“FRBNY’s Website” means the website of the FRBNY, currently at https://apps.newyorkfed.org/markets/autorates/sofr-avg-ind or at such other page as may replace such page on the FRBNY’s website.

•

“Interest Determination Date” means, for each accrual period, the second Business Day before the beginning of that accrual period.

•

“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time.

•

“ISDA Fallback Adjustment” means the spread adjustment (which may be a positive or negative value or zero) that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event with respect to the Benchmark.

•

“ISDA Fallback Rate” means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of an index cessation date with respect to the Benchmark for the applicable tenor excluding the applicable ISDA Fallback Adjustment.

•

“Relevant Governmental Body” means the Federal Reserve Board and/or the FRBNY, or a committee officially endorsed or convened by the Federal Reserve Board and/or the FRBNY or any successor thereto.

•

“SOFR” means, with respect to any date of determination, the secured overnight financing rate for the applicable tenor published on such date by the Federal Reserve Bank of New York, as the administrator of the Benchmark (or any successor administrator of the benchmark rate) on the website of the Federal Reserve Bank of New York, or any successor source.

•

“SOFR Adjustment Conforming Changes” means, with respect to any SOFR Rate, any technical, administrative or operational changes (including changes to the accrual period, timing and frequency of determining rates and making payments of interest, rounding of amounts or tenors, and other administrative matters) that the administrator decides, from time to time, may be appropriate to adjust such SOFR rate in a manner substantially consistent with or conforming to market practice (or, if the administrator decides that adoption of any portion of such market practice is not administratively feasible or if the administrator determines that no market practice exists, in such other manner as the administrator determines is reasonably necessary).

•

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

•

“U.S. Government Securities Business Day” means any day except for a Saturday, a Sunday or a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.

•

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.

•

are then structured not to receive a payment of principal until the end of the related reset period, the outstanding principal balance of the reset rate notes will be deemed to have been reduced by any amounts on deposit, exclusive of any investment earnings, in the related accumulation account; and/or

•

are then denominated in a non-U.S. Dollar currency, the U.S. Dollar equivalent of the then-outstanding principal balance of the reset rate notes 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 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

•

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.

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a default for five Business Days or more in the payment of any interest on any note after it is due and payable;

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a default in the payment of the principal of any note at maturity;

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a default in the performance of any covenant or agreement of the trust in the indenture, or a material breach of any representation or warranty made by the trust in the indenture or in any certificate, if the default or breach has a material adverse effect on the holders of the notes and is not cured within 30 days after notice by the indenture trustee or by holders of at least 25% in principal amount of the outstanding notes; or

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the occurrence of an insolvency event involving the trust.

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exercise remedies as a secured party against the trust student loans and other assets of the trust that are subject to the lien of the indenture;

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sell the trust student loans and other assets of the trust; or

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elect to have the eligible lender trustee, maintain ownership of the trust student loans and continue to apply collections on them as if there had been no declaration of acceleration.

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the holders of all the outstanding notes consent to the sale;

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the proceeds of the sale are sufficient to pay in full the principal and accrued interest on the outstanding notes, at the date of the sale; or

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the indenture trustee determines that the collections would not be sufficient on an ongoing basis to make all payments on the notes as the payments would have become due if the notes had not been declared due and payable, and the indenture trustee obtains the consent of the holders of 66 2/3% of the outstanding notes.

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the holder previously has given to the indenture trustee written notice of a continuing event of default;

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the holders of not less than 25% of the outstanding notes, have requested in writing that the indenture trustee institute a proceeding in its own name as indenture trustee;

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the holder or holders have offered the indenture trustee reasonable indemnity;

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the indenture trustee has for 60 days after receipt of notice failed to institute the proceeding; and

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no direction inconsistent with the written request has been given to the indenture trustee during the 60-day period by the holders of a majority of the outstanding notes.

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the entity formed by or surviving the consolidation or merger is organized under the laws of the United States, any state or the District of Columbia;

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the surviving entity expressly assumes the trust’s obligation to make due and punctual payments on the notes and the performance or observance of every agreement and covenant of the trust under the indenture;

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no default will occur and be continuing immediately after the merger or consolidation;

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the trust has been advised that the ratings then applicable to the notes would not be reduced or withdrawn as a result of the merger or consolidation;

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any action that is necessary to maintain the lien and security interest created by the indenture shall have been taken; and

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the trust has received opinions of federal and Delaware tax counsel that the consolidation or merger would have no material adverse U.S. federal or Delaware state tax consequences to the trust or to any holder of the notes.

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except as expressly permitted by the indenture, the transfer and servicing agreements or other related documents, sell, transfer, exchange or otherwise dispose of any of the assets of that trust;

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claim any credit on or make any deduction from the principal and interest payable on notes of the series, other than amounts withheld under the Internal Revenue Code or applicable state law, or assert any claim against any present or former holder of notes because of the payment of taxes levied or assessed upon the trust;

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except as contemplated by the indenture and the related documents, dissolve or liquidate in whole or in part;

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permit the validity or effectiveness of the indenture to be impaired or permit any person to be released from any covenants or obligations under the indenture, except as expressly permitted by the indenture; or

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permit any lien, charge or other encumbrance to be created on the assets of the trust, except as expressly permitted by the indenture and the related documents.

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A financing statement or statements covering the student loans naming each related seller, as seller/debtor, was filed under the UCC to protect the interest of the depositor in the event that the transfer by such seller is deemed to be an assignment of collateral as security; and

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A financing statement or statements covering the trust student loans naming the depositor, as seller/debtor, was also filed under the UCC to protect the interest of the eligible lender trustee, in the event that the transfer by the depositor is deemed to be an assignment of collateral as security.

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a citizen or individual resident of the United States;

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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;

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an estate the income of which is includible in gross income for U.S. federal income tax purposes, regardless of its source; or

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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.

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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

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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.

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the gain is not effectively connected with the conduct of a trade or business in the United States by the foreign person, and

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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.

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employee benefit plans as defined in Section 3(3) of ERISA that are subject to Title I of ERISA;

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certain other retirement plans and arrangements described in Section 4975 of the Code, including:

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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;

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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

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persons who are fiduciaries with respect to plans in connection with the investment of plan assets.

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Prohibited Transaction Class Exemption (“PTCE”) 96‑23, which exempts certain transactions effected on behalf of a Plan by an “in‑house asset manager”;

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PTCE 90‑1, which exempts certain transactions between insurance company separate accounts and Parties in Interest;

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PTCE 91‑38, which exempts certain transactions between bank collective investment funds and Parties in Interest;

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PTCE 95‑60, which exempts certain transactions between insurance company general accounts and Parties in Interest; or

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PTCE 84‑14, which exempts certain transactions effected on behalf of a Plan by a “qualified professional asset manager.”

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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;

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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

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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.