1
EXHIBIT 10.8
Kentucky Higher Education Assistance Authority
Lender Participation Agreement
and
Contract of Insurance
Federal Family Education Loan (FFEL) Programs
Federal Subsidized ▇▇▇▇▇▇▇▇ Loans
Federal Unsubsidized ▇▇▇▇▇▇▇▇ Loans
Federal Parent Loans for Undergraduate Students
Federal Consolidation Loans
The parties to this contract are Star Bank, N.A. as Trustee for Student
Loan Funding (hereinafter known as Lender) and the Kentucky Higher Education
Assistance Authority (hereinafter known as Authority).
The Lender certifies that it is an Eligible Lender in accordance with
Section 435 (20 U.S.C. Section 1085) of the Federal Act. The Lender and the
Authority hereby agree that the Lender is authorized to participate as an
Eligible Lender in the Authority's Insured Student Loan Program for purposes of
making or holding the following types of loans;
Making: Holding:
Federal Consolidation Loans Federal ▇▇▇▇▇▇▇▇ Loans (Subsidized and Unsubsidized)
--------------------------- ----------------------------------------------------
Federal SLS
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Federal PLUS
------------
Federal Consolidation Loans
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Nothing contained in this contract shall obligate the Lender to
certify, acquire, or make any particular loan or number of loans under the
insured student loan programs.
In consideration of the mutual promises contained herein, the Authority
hereby agrees and covenants to reimburse the Lender in the amount of one hundred
percent of any proven loss incurred by the Lender arising out of or resulting
from default, death, permanent and total disability, closed school, false
certification or, under specified conditions, filing of a petition in bankruptcy
of a borrower on any loan held by the Lender and insured pursuant to the terms
of this contract. Notwithstanding the foregoing sentence, the reimbursement rate
applicable to default on loans made or held by the Lender (other than on a
"Lender-of-Last-Resort" arrangement with the Authority or with respect to an
Exceptional Lender designation under the Federal Act), on which the first
disbursement is made on or after October 1, 1993, shall be not less than
ninety-eight percent. The Lender hereby agrees and covenants to pay an insurance
premium as designated herein, and to abide by and comply with the terms and
conditions of this contract and state and federal statutes and regulations
applicable to the Federal Family Education Loan Programs. The Authority hereby
agrees and covenants to abide by and comply with the terms and conditions of
this contract, and to perform its obligations under this contract according to
terms established in the Act, regulations, and the Authority's policies and
procedures, and in compliance with all other applicable federal and state laws
and regulations.
Terms and Conditions
Incorporation of Law
This contract is subject to, and hereby incorporates by reference, the
current provisions of, and subsequent amendments to, Title ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code
(U.S.C.) Section 1071 et seq. (the "Federal Act"); Title 34 Code of Federal
Regulations (CFR) Part 668 and Part 682; Kentucky Revised Statutes (KRS) Chapter
164.740 et seq.; Title 11 of the Kentucky Administrative Regulations (KAR)
Chapter 3; and all other federal law applicable to the Lender under this
contract including, but not limited to Title IX of the Education Amendments of
1972 (20 U.S.C. 1681-1683); Section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794); the Age Discrimination Act (42 U.S.C. 6101 et seq.); the Americans
with Disabilities Act of 1990 (42 U.S.C. 12101); and the Equal Credit
Opportunity Act (15 U.S.C. Section 1691 et seq.), as amended. Unless generalized
or discretionary provisions of the above cited material are made specific by the
following paragraphs, including but not limited to items such as time, amount,
rate, place, or manner of performance, nothing in this contract is intended to
abrogate, modify, or limit the applicability of any of the above cited material.
The terms and conditions set forth
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in this contract shall be subject to automatic modification and revision from
time to time by the process of amendment and revision of the above cited laws
and regulations.
Electronically Transmitted Data
To the extent that the Lender participates in the process of
electronically transmitting data to the Authority in order to expedite the
processing of Authority-insured loans, the following shall apply:
1) Equipment
A) The Lender may, at its sole expense, acquire, use, and
maintain equipment (computer hardware) that is suitable for
electronic transmission of data to the Authority. If the
Authority purchases and makes available to the Lender, at the
Authority's expense, computer equipment identified herein, for
electronic transmission of data to the Authority, title and
ownership of the equipment shall remain with the Authority,
and replacement or substitution of the equipment shall be at
the Authority's sole discretion. Repair and maintenance of the
equipment shall be the responsibility of the Authority.
B) The Lender shall safeguard all equipment provided by the
Authority from damage and provide adequate security and
control to limit the use of the equipment exclusively to the
proper transmission of data for purposes of the Authority's
insured loan programs by authorized personnel and to assure
that the equipment remains functional.
C) The computer equipment provided by the Authority pursuant to
paragraph 1 is listed on Attachment A.
2) Certification of Data
A) The Lender hereby represents and warrants absolutely that any
and all data transmitted electronically to the Authority for
each loan is true, accurate, and complete to the best
knowledge of the Lender and the designated Loan Program
Officer.
B) The Lender has and shall retain all documentation necessary to
verify the data transmitted through this procedure and shall
provide access to such documentation by the Authority or its
agents.
Federal Consolidation Loans
To the extent that the Lender participates in the Authority's program
of Federal Consolidation Loans for eligible borrowers under Title IV, Part B of
the Federal Act, and in that the Authority has found that the Lender qualifies
under the provisions of such Federal Act and KRS 164.740, then it is agreed by
the parties as follows:
1) The Lender shall obtain from the eligible borrower certification that
no other application is pending for a Federal Consolidation Loan. The
Lender must hold at least one of a borrower's eligible loans for
consolidation or obtain from the borrower a certification that the
borrower has been unable to obtain a Federal Consolidation Loan with
income-sensitive repayment terms from the holders of his/her
outstanding loans selected for consolidation.
2) The Lender must meet the applicable guidelines set forth in the Federal
Act, as amended.
3) The proceeds of the Federal Consolidation Loan will be paid by the
Lender to the holder(s) of the eligible loans selected for
consolidation to discharge the liability of such loans.
4) The Lender shall offer an income-sensitive or graduated repayment
schedule, established by the Lender in accordance with the regulations
of the Secretary of the U.S. Department of Education ("Secretary"), to
the borrower of any Federal Consolidation Loan made by the Lender on or
after July 1, 1994.
5) The Lender agrees to follow such other published terms and conditions
as the Secretary or the Authority specifically requires to carry out
the Federal Consolidation Loan Program.
6) If the Lender no longer intends to make Federal Consolidation Loans
under this contract, the Lender's participation in the Authority's
Federal Consolidation Loan Program shall be terminated 20 days after
receipt of the Lender's written request. The Lender's participation in
the Authority's Federal Consolidation Loan Program under this contract
may also be terminated by the Authority in a manner provided for by
regulation. The termination of the Lender's participation in the
Authority's Federal Consolidation Loan Program under this contract
shall not affect the coverage of loans under guarantees issued prior to
such termination.
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Certificate of Comprehensive Insurance
For any Federal Consolidation Loans made by the Lender and insured by
the Authority against loss of principal and interest, in accordance with the
Federal Act, as amended, the following provisions apply:
1) That this certificate of comprehensive insurance shall be effective and
shall expire in accordance with the paragraph of this contract entitled
Effective Date. The Federal Consolidation Loan(s) will be made on or
after April 7, 1986, but no later than provided for in the Federal Act,
as amended;
2) That the total unpaid principal amount of all Federal Consolidation
Loans made under this certificate is equal to or less than
$20,000,000.00;
--------------
3) That the Lender shall establish repayment terms which shall include the
establishment of graduated or income-sensitive repayment schedules in
accordance with the regulations of the Secretary;
4) That, if the Lender, prior to the expiration of this certificate, no
longer proposes to make Federal Consolidation Loans, the Lender will so
notify the Authority in order that the certificate may be terminated.
Such terminations shall not affect the insurance on any Federal
Consolidation Loan made prior to such termination;
5) That the Lender's loan consolidation program practices are subject to
the Authority's Insured Student Loan Program Limitation, Suspension or
Termination procedures as set forth in 11 KAR 4:020. The insurance on
any Federal Consolidation Loan(s) made under this certificate prior to
the Authority's imposition of a limitation, suspension or termination
action shall not be affected by such action; and,
6) That the Lender complies with the Authority's reporting requirements.
The Authority's office at ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, is
designated as the office which will process claims and perform other
related administrative functions.
Forms
Where particular forms pertaining to the performance of obligations
imposed by this contract are approved by the Authority or by the Secretary of
the U.S. Department of Education as common forms, only those forms shall be used
by the Lender. Any addition, substitution, or alteration of these forms without
express written permission of the Authority shall be grounds for avoidance by
the Authority of any insurance obligation that would otherwise be imposed by
this contract. Except as otherwise provided herein, the Lender may use such
additional forms as it deems appropriate for its own purposes, provided that use
of said forms does not violate state or federal law, and further provided that
said forms shall be maintained with the borrower's records in accordance with
retention schedules prescribed by applicable law.
Premium
The Lender shall pay to the Authority a per-loan premium, which will be
billed on a pro rata basis upon each disbursement of each loan, for the
insurance coverage extended by the Authority on loans, other than Federal
Unsubsidized ▇▇▇▇▇▇▇▇ Loans insured prior to July 1, 1994, and Federal
Consolidation Loans. The Lender may be required to pay, as specified by the
Authority in writing, a fee to cover the costs of increased or extended
liability with respect to Federal Consolidation Loans permitted by Section
682.401(b)(12) provided, however, that the Lender shall receive reasonable prior
written notice of its obligation to pay any such fee and that any such fee shall
only be prospective in effect from the established effective date of such fee.
The insurance premium rate on any loan insured hereunder shall not exceed the
amount specified in the Federal Act (20 U.S.C. 1078(b)(1)(H) and 1078-8(f)) and
shall be specified in writing by the Authority. The Authority shall notify the
Lender in writing of any change in the insurance premium rate prior to the
effective date of such rate change, unless the change is mandated by an
amendment of the Federal Act. The premium for each loan insured under this
contract shall be paid by or on behalf of the Lender to the Authority.
Nonpayment of the premium as billed will be grounds for the avoidance by the
Authority of any insurance obligation that would otherwise be imposed pursuant
to this contract.
Promissory Note
Loans insured under this contract shall be evidenced by a promissory
note provided or approved by the Authority or approved by the Secretary of the
U.S. Department of Education. Interest on any loan insured hereunder shall be
charged to the borrower at a rate which does not exceed the maximum applicable
rate per annum prescribed by the Federal Act and/or regulations governing the
Federal Family Education Loan Programs.
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Insurability
For all loans, the Lender shall assure, and the Authority shall have
determined to its satisfaction, in accordance with reasonable and prudent
business practices, for each loan that: the loan is a legally valid, and binding
obligation of the borrower; each such loan was made and serviced in compliance
with applicable laws and regulations; and the insurance on such loan is in full
force and effect.
A Lender shall comply with due diligence requirements established by
the U.S. Department of Education and the Authority in making, disbursing,
servicing, and collecting loans insured pursuant to this contract. Failure to
exercise such due diligence, with regard to any loan insured hereunder, may,
without precluding other remedies, constitute grounds for avoidance by the
Authority of its insurance obligation on that loan. This Lender warrants that it
has and will continue to maintain itself or by contract, sufficient present
capacity to exercise due diligence in the making, servicing, and collection of
student loans and the maintenance of records pertaining thereto.
Compliance by the Lender with the terms and conditions of this contract
and applicable laws and regulations shall be deemed a condition precedent to the
insurance obligation imposed upon the Authority hereunder.
The Authority agrees that its insurance on any loan disbursed hereunder
will remain in full force and effect if the loan becomes ineligible for federal
reinsurance due to the Authority's acts or omissions in performing its
obligations under this contract. If, at any time, any loan is determined to be
either ineligible for reinsurance or legally unenforceable due to the Lender's
acts or omissions in performing its obligations under the applicable law or this
contract, then the Authority's insurance shall be voided and revoked and the
Authority may require the Lender to repurchase the loan.
Records
The Lender shall keep complete and accurate records of each loan
guaranteed under this contract.
The Lender shall, upon reasonable written request, pursuant to a
program review, make available to the Authority, the Secretary, or their duly
designated representative, for inspection and copying, any and all books,
records, documentation (including, but not limited to, memoranda,
correspondence, and computer printouts) necessary to assure compliance with this
contract and any applicable law. Except as otherwise provided below, such books,
records, and documentation shall be available during regular office hours of any
working day, no later than ten (10) working days after the request for
inspection. The Lender shall provide to the Authority loan records of individual
borrowers necessary to respond to borrower disputes, appeals, or inquiries,
within five (5) working days of written request. The material may be made
available in whatever form retained (microfilm, computer data, or print).
Notwithstanding the foregoing, in the event that the Authority or the
Secretary shall have reasonable cause to believe that there exists a potential,
substantial impairment of the interests of the Commonwealth, the Authority, the
United States Government, or any eligible student, then the Authority, acting
through its Executive Director or his designee, and the Secretary reserve the
right, upon demand, of immediate inspection of such books, records,
documentation, or other materials as may pertain or be relevant to the accuracy
and completeness of the Lender's records and reports and the Lender's compliance
with the terms and conditions of this contract.
Termination and Other Remedies
Unless otherwise provided herein, this contract may be terminated or
suspended by either party upon not less than twenty (20) days written notice,
although such termination or suspension by the Authority shall be for cause and
in accordance with the Federal Act, regulations promulgated thereunder, and the
Authority's policies and procedures, and shall not become final until the Lender
is afforded adequate notice and an opportunity for hearing on the merits of the
Authority's claims and contentions pursuant to the Federal Act and 11 KAR 4:020.
However, the Authority shall have the power to take emergency action in
accordance with 11 KAR 4:020 to suspend operation of this contract, pending the
outcome of said hearing, if the Authority determines that such action is
necessary to prevent substantial harm to the interest of the Commonwealth, the
Authority, the United States Government, or any eligible student. Termination by
either party shall not affect the obligations incurred under this contract prior
to the effective date of the termination.
In the event that the Authority shall have probable cause to believe
that any of the assurances or representations made by the Lender are incomplete,
inaccurate, or misleading and deceptive, or that there has been a failure by the
Lender to comply with the terms and conditions of this contract or applicable
laws or regulations, in any material respect, then short of termination or
suspension, the Executive Director of the Authority or his designee shall have
the right to take any reasonable action necessary including, but not limited to:
litigation, withholding of payments, probation, or limitation of participation,
or requiring reimbursement of any funds expended or obligated to be expended by
the Authority as the result of reliance upon such assurances, representations,
or anticipation of compliance. In the event that the Secretary has assumed the
Authority's functions, and if the Secretary determines that this contract
includes an impermissible transfer of the reserve funds or assets, then the
Secretary may terminate this contract upon 30 days notice.
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Unless otherwise provided, any material noncompliance with the terms
and conditions of this contract shall subject the noncomplying party to any and
all forms of remedial action, legal and equitable. No choice of remedies shall
be required of the injured party.
Assignment
Except as otherwise specified below, the Lender may, without prior
consent of the Authority, sell, assign, pledge, or otherwise transfer rights,
title, and interests, including specifically the right to receive any insurance
claim payment from the Authority for loans insured pursuant to this contract, to
an Eligible Lender or Holder, as defined in 34 CFR 682.200 and KRS 164.740, that
has in force a Contract of Insurance with the Authority. If the transferee does
not have a Contract of Insurance in place with the Authority, then said transfer
may be made only with the prior written consent of the Authority, which consent
shall not be unreasonably withheld, and in accordance with the Federal Act and
regulations thereunder. If the Lender effects a transfer of title or of other
interests in such loans that include the right to receive insurance payments
from the Authority, the Lender shall give the Authority written notice of having
done so not later than the fifteenth (15) day of the second month of the
calendar quarter that begins after said transfer as a precondition of the
Authority's insurance obligation.
Except as specified above, the Lender may transfer or assign rights
accruing under this contract, including particularly the rights to participate
in the Authority's program of Insured Student Loans and to make new loans
insurable under this contract, only to another Eligible Lender, as defined in
Section 435 (20 U.S.C. 1085) of the ▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇ 682.200 and KRS 164.740,
and only with the prior written consent of the Authority.
The terms and conditions of this agreement shall be binding upon the
heirs and successors in interest of the respective parties as though original
parties to this agreement.
Warranty
The Lender hereby warrants and covenants that all assurances and
representations, except those specified in applicable regulations on which the
Lender is given the right to rely in good faith, made by the Lender regarding
any transactions, including, but not limited to, the application for and
disbursement and servicing of Insured Student Loans, pursuant to this contract
are complete and accurate statements of fact at the time of making those
assurances and representations. Any assurances or representations made by the
Lender, unless amended, shall be binding upon and against the Lender as a
precondition of the insurability of any Insured Student Loan for the duration
of the period of insurance coverage provided for herein.
Designated Representative
Unless otherwise designated at any time over the duration of this
contract, the person(s) signing this contract on behalf of each party shall be
deemed to be the proper person(s) to whom notices and any other communications
shall be directed.
Subrogation
Upon filing of a claim for reimbursement, and as a condition precedent
to reimbursement under the terms of this contract, the Lender shall assign to
the Authority all rights and responsibilities accruing to the Lender under the
Insured Student Loan promissory note, and the Authority shall he deemed fully
subrogated to the rights and responsibilities of the Lender pursuant to that
note and to this contract as it pertains to that note.
Procedures
Subject to this contract, the specific procedures for making,
disbursing, servicing, and collecting loans insured under this contract, as well
as filing claims for insurance reimbursement on such loans are delineated in 34
CFR Part 682.
Paragraphs and Defined Terms
The paragraph headings contained in this document are included for the
sole purpose of facilitating the reading of this document and shall have no
binding, substantive effect.
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Capitalized terms herein shall indicate defined terms. The definition
of terms shall have the meaning specified in 20 U.S.C. Section 1085 and Section
1088, 34 CFR Section 668.2 and Section 682.200, KRS 164.740, and 11 KAR 3:001,
unless otherwise specified in this contract.
Modification
Unless otherwise provided herein, any modification of the terms and
conditions of this contract shall not be effective unless evidenced by a writing
signed by both parties.
Severability
Should any provision of this contract be found to be inapplicable or
otherwise not binding on the parties, it is the intention of the parties that
the remainder of the contract shall remain in full force and effect upon the
respective rights and obligations of the parties hereto.
It is hereby stated as the intention of the parties hereto that all
prior contracts, both written and oral, consistent and inconsistent, are
hereinafter superseded, except as specified below. No prior understanding,
agreement, contract, or representation shall be effective against either panty
unless henceforth made a part of this contract as evidenced by this writing.
Assurances and representations heretofore warranted by the Lender in any prior
contract of insurance respecting the eligibility of the Lender and the
insurability of any loan heretofore insured under such prior contract of
insurance are consolidated into the terms and conditions of this contract as
expressed in this document. Any contract of insurance between the parties hereto
outstanding at the time of execution of this contract is herewith terminated and
simultaneously replaced with this contract so as to allow for continued
participation in the Authority's Insured Student Loan program.
Notwithstanding the foregoing, the terms of the Kentucky Higher
Education Assistance Authority Holder Contract of Insurance Addendum dated June
21, 1996 between the Authority and the Lender relating to student loans subject
to a Guarantee Commitment by the Alabama Commission on Higher Education (ACHE),
which Addendum is attached hereto as Attachment B, are hereby incorporated by
reference herein.
Restrictions
In accordance with the Federal Act and regulations thereunder, the
Lender shall not accept any financial inducement by any educational institution
to make available Authority insured loans to its students.
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Effective Date and Signatures
This contract shall be effective from the date of execution by the
Authority. Unless otherwise terminated in accordance with the terms and
conditions set forth heretofore, this contract shall remain effective until and
shall expire upon the expiration of authorization to make Insured Student Loans
under the Federal Act.
Star Bank, N.A. as Trustee for Student
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ --------------------------------------
---------------------------------------- Lender Loan Funding
Authorized Representative
Kentucky Higher Education Assistance Authority
June 1, 1998 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------- --------------------------------------
Effective Date Authorized Representative (Type or Print)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Authorized Representative Signature
Senior Trust Officer
--------------------------------------
Title
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇
▇▇▇▇▇▇, 830631, 831008, 831299, 831455,
831640, 831692, 831785, 833361, 833207
--------------------------------------
Lender Identification Number
▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Designated Lender Representative
Manager, KHESLC Loan Servicing
--------------------------------------
Title
--------------------------------------
Other Authorized Signatory
--------------------------------------
Other Authorized Signatory
--------------------------------------
Other Authorized Signatory
Branch Offices Included in This Contract:
Office Address Designated Lender Representative*
▇▇▇▇▇ ▇▇▇▇▇▇, Portfolio Manager
------------------------------------ --------------------------------------
Student Loan Funding
One W. 4th Street, Suite 200
------------------------------------ --------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
*Please forward all newsletters and
policy notices to:
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[LOGO]
LENDER PARTICIPATION
AGREEMENT AND
CONTRACT OF INSURANCE
Attachment A
The computer equipment provided by the Kentucky Higher Education Assistance
Authority to the lender is as follows:
N/A
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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I acknowledge receipt of the above listed equipment from the Authority.
For the Lender:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Designated Lender Representative
Star Bank, NA as Trustee for Student Loan Funding
----------------------------------------
Lender Name
829626, 830631, 831008, 831299, 831455, 831640, 831692, 831785 833361, 833207
----------------------------------------
Lender ID
June 1, 1998
----------------------------------------
Effective Date
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[LOGO]
LENDER PARTICIPATION
AGREEMENT AND
CONTRACT OF INSURANCE
KHEAA ADDENDUM
Whereas, the Authority and Lender are parties to a Lender Participation
Agreement and Contract of Insurance (hereafter known as the "Agreement"); and
Whereas, the Authority has heretofore undertaken to issue a Loan Guarantee on
Insured Student Loans made and/or held by Lender that were disbursed on or after
June 2, 1995; and
Whereas, the Authority and the Alabama Higher Education Commission (ACHE) have
entered into a Document of Understanding dated February 23, 1995, between
themselves and the U.S. Department of Education providing for the transfer of
Guarantee Commitments from ACHE to the Authority; and
Whereas, pursuant to 20 U.S.C. Section 1078(b)(2)(E) and 34 C.F.R. Section
682.401(b)(18), the Authority and Lender desire to provide for a transfer of
Guarantee Commitments by the ACHE Alabama Guaranteed Student Loan Program to
the Authority;
The Authority and Lender hereby agree to amend the Agreement as follows:
DEFINITIONS
For purposes of this Addendum, the following terms shall have the specified
meanings:.
1) "Guarantee Commitments" means the insurance obligation of ACHE on
Insured Student Loans made or held by Lender pursuant to a Loan
Guarantee Agreement between ACHE and the Lender.
2) "Insured Student Loan" shall have the meaning specified in KRS
164.740(12).
3) "Loan Guarantee" shall have the meaning specified in KRS 164.740(14).
4) "Loan Guarantee Agreement" shall mean one or more of the following
agreements executed and in force as of December 1, 1995, between ACHE's
Alabama Guaranteed Student Loan Program ("AGSLP") and the Lender:
A) Unsubsidized Federal ▇▇▇▇▇▇▇▇ Loan Guarantee Agreement
B) Federal ▇▇▇▇▇▇▇▇ Loan Guarantee Agreement
C) Federal Parents Loans to Undergraduate Students (PLUS)
Guarantee Agreement
D) Federal Supplemental Loans for Students Guarantee Agreement
E) Consolidation Loans Lender Participation Agreement
5) "Outstanding Insured Student Loans" shall mean Insured Student Loans on
which:
A) The loans were initially insurable by ACHE under a Loan
Guarantee Agreement(s) and reinsurable by the U.S. Secretary
of Education;
B) The borrower owes a balance of principal or interest;
C) An insurance claim has not been paid by the Authority or ACHE,
except for loans on which a previous default has been
rehabilitated in accordance with 34 C.F.R. Section 682.405;
and
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D) The Guarantee Commitment by ACHE remains in force and
reinsurance by the U.S. Secretary of Education remains in
force or may be reinstated in accordance with procedures
prescribed in Appendix D to 34 C.F.R. Part 682.
INSURANCE OF PRIOR INSURED STUDENT LOANS
Notwithstanding the paragraph of the Agreement entitled "Effective
Date", the Authority hereby promises to insure, in accordance with the terms and
conditions of the Agreement, all Insured Student Loans made or held by Lender
upon which the Authority has issued a Loan Guarantee between June 2, 1995, and
the effective date of the Agreement, if:
A) The loans were disbursed in accordance with the federal act
and applicable regulations;
B) The Lender has paid to the Authority the Premium specified in
the Agreement pertaining to the Insured Student Loans;
C) The borrower owes a balance of principal or interest;
D) An insurance claim has not been paid by the Authority on the
loan, except for loans on which a previous default has been
rehabilitated in accordance with 34 C.F.R. Section 682.405;
and
E) The reinsurance by the U.S. Secretary of Education remains in
force or may be reinstated in accordance with procedures
prescribed in Appendix D to 34 C.F.R. Part 682.
ASSUMPTION BY AUTHORITY OF LOAN GUARANTEE COMMITMENTS OF ACHE
The Authority hereby agrees to assume, as of December 1, 1995, subject
to the tenns and conditions of the Agreement and the Federal Act and applicable
regulations, the obligation of the ACHE for Guarantee Commitments issued prior
to December 1, 1995, by ACHE Guaranteed Student Loan Program under the Federal
Act and a Loan Guarantee Agreement(s) on Outstanding Insured Student Loans held
by the Lender. Pursuant to 20 U.S.C Section 1078(b)(2)(E), the Lender hereby
consents to this transfer of said Guarantee Commitments.
LENDER:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------- ----------------------------------------------------------
Authorized Representative Name
Kentucky Higher Education Assistance Authority
07/27/98 Senior Trust Officer
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Date Title
829626, 830631, 831008, 831299, 831455,
831640, 831692, 831785, 833361, 833207
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Lender Identification Number
Star Bank, NA as Trustee for Student Loan
Funding
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Lender Name
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇
P.O. Box 1118
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Address
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