EX-10.38 2 a2201079zex-10_38.htm EX-10.38 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. PRIVATE STUDENT LOAN MONOGRAM PROGRAM AGREEMENT BETWEEN PENNSYLVANIA HIGHER...
Exhibit 10.38
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
PRIVATE STUDENT LOAN MONOGRAM PROGRAM AGREEMENT
BETWEEN
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY
AND
THE FIRST MARBLEHEAD CORPORATION
THIS PRIVATE STUDENT LOAN PROGRAM AGREEMENT (this “Agreement”) is made and dated as of February 5, 2010, by and between the Pennsylvania Higher Education Assistance Agency (d/b/a American Education Services), a public corporation and governmental instrumentality organized under the laws of the Commonwealth of Pennsylvania, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (“Servicer”) and The First Marblehead Corporation, having an address at 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (“FMC”).
WHEREAS, Servicer was created by the Commonwealth of Pennsylvania by the Act of August 7, 1963, P.L. 549 for the purpose of improving higher educational opportunities and to that end Servicer is empowered to make, guarantee, undertake commitments to make or acquire and participate with lending or postsecondary institutions in the making of loans, servicing of loans, or otherwise providing loans of money to students; and
bound, Servicer and FMC (hereinafter, the “Parties”) do hereby agree to the following:
1.01 “Account” means the Student Loans collectively of an individual Borrower owned by an Owner and for which FMC (and its affiliates) serves as Program Administrator, which are serviced pursuant to the Lender Participant Servicing Agreements.
1.02 “Administrator Services” means the services provided by FMC or its affiliates, and includes, but is not limited to post-disbursement portfolio administration, as further described in this Agreement.
1.03 “Agreement” means this Private Student Loan Program Agreement, including each Schedule provided for herein and each amendment hereafter adopted.
1.04 “Borrower” means an individual who is the maker of a Credit Agreement and who obtains a Student Loan. “Borrower” includes both the primary obligor and any Cosigner.
1.05 “Business Days” means a day of the year other than a Saturday or Sunday, or a day on which the Servicer or FMC is required or authorized by law to remain closed, and on which either does remain closed.
1.06 “Change of Control” means the sale to any other entity, individual or group of all or substantially all of the entity’s assets used to perform the Services.
1.07 “Cosigner” means an individual who is the maker of a Credit Agreement as a cosigner on a Student Loan.
1.08 “Credit Agreement” shall mean the promissory note or credit agreement executed by a Borrower evidencing a Student Loan.
1.09 “Customer Service Schedule” means the schedule of that name attached hereto and as amended by agreement of the Parties.
1.10 “Effective Date” means the date this Agreement has been executed by all Parties and is approved as to form and legality by the Office of Attorney General of the Commonwealth of Pennsylvania.
1.11 “Fee Schedule” means the schedule of that name attached hereto and as amended by agreement of the Parties.
1.12 “FMC” means The First Marblehead Corporation in its capacities as “FMC” and “Program Administrator” (as defined herein).
1.13 “FMC Administrator Loans” shall have the meaning assigned to it in Section 2.02.
1.14 “FMER” means First Marblehead Education Resources, Inc., an affiliate of FMC.
1.15 “Lender Participant” means a financial institution which is a lender in one or more of the Programs.
1.16 “Milestone” shall have the meaning given to it in Section 4.02(d).
1.17 “Private Student Loan” or “PSL” means an education loan funded by a Lender Participant to finance the costs of higher education (or private K-12 education) that is not guaranteed by the United States Department of Education nor by any state or agency of any state.
1.18 “Program Administrator” means FMC (and its affiliate FMER) in its performance of Administrator Services as set forth in this Agreement.
1.19 “Remedial Action Plan” has the meaning given to it in Section 4.03(d).
1.20 “Service”, “Services”, “Serviced”, “Servicing” shall mean to perform, the terms and conditions of the Credit Agreements, the Servicing Guidelines, and the terms and conditions of this Agreement: duties, obligations, and procedures that are required of Servicer hereunder and under the Lender Participant Servicing Agreements in connection with Student Loans.
1.21 “Servicing Guidelines” means, as applicable, the Servicing Guidelines for one or more Private Student Loan programs that have been issued by a Lender Participant and approved by FMC and Servicer attached to and made part of each Lender Participant Servicing Agreement, all as may amended by the Parties pursuant to the terms thereof.
1.22 “Service Level Schedule” means the Service Level Schedule attached hereto, as amended by agreement of the parties.
1.23 “Statement of Work” means the document that includes, without limitation, the requirements for FMC-requested changes to the Loan Origination System or procedures, as well as the identified persons working on the project, time estimates for completion, the costs for the project and any recurring fees thereafter.
1.24 “Student Loan” means any of, and “Student Loans” means all, the Private Student Loans executed by a Borrower, funded by a Lender Participant, administered by Program Administrator, and Serviced by the Servicer pursuant to a Lender Participant Servicing Agreement.
1.25 “System Access Schedule” means the schedule of that name attached hereto and as amended by agreement of the Parties.
2.02 Role of FMC as Program Administrator.
Servicer acknowledges that FMC (including its affiliates), may enter Lender Participant Servicing Agreements from time to time with Servicer and Lender Participants to act as Program Administrator with respect to Private Student Loans.
Servicer hereby authorizes FMC to offer Servicer’s post-disbursement servicing and FMC’s administration services to prospective Lender Participants. Upon the execution and effectiveness of a Lender Participant Servicing Agreement, Servicer shall (a) perform all services set forth in such Lender Participant Servicing Agreement for the Private Student Loans owned by the Lender Participant (the “FMC Administrator Loans”), and (b) where appropriate, communicate with Program Administrator on behalf of the Lender Participant for the Student Loans so owned and identified. Without limiting the foregoing, Servicer shall provide the Services (as set forth in this Agreement and/or required by the Servicing Guidelines) to Lender Participant and Program Administrator, including but not limited to:
i. product set-up and conversion;
ii. loan document custodial services;
iii. remote system access;
iv. reports, records, and other documents and data;
v. customer service;
vi. borrower billing and correspondence;
vii. collection of borrower payments;
viii. privacy policy distribution;
ix. due diligence and default prevention (except as set forth in Section 4.21);
x. governmental reporting and reporting to consumer reporting agencies; and
xi. copies of required notices, including but not limited to notices of failed standards, security breaches, and OFAC violations.
This Agreement shall commence on the Effective Date and shall continue for a period of three (3) years, and thereafter for so long as any Lender Participant Servicing Agreement shall remain in effect, unless this Agreement is terminated by either party pursuant to Section 14. With respect to product setup and conversion services, this Agreement shall continue for a period of three (3) years from the date first set forth above, unless earlier terminated by either Party pursuant to the provisions of this Agreement, and shall automatically renew for an additional one (1) year period, unless terminated by any Party by written notice of non-renewal to the other given at least one hundred and eighty (180) days prior to the end of the then current term. The fees charged for the Services shall be subjected to annual adjustment under the terms and conditions of Section 5.05.
Lender Participant.
(a) In no event shall such change abrogate or in any way modify the obligations of the Servicer to Service the Student Loans in full compliance with all applicable federal and state laws and regulations, the terms and conditions of the Credit Agreements, the Servicing Guidelines, or the terms of this Agreement.
(b) The Parties agree that they shall make reasonable efforts to provide information about the nature and effect of changes that the Parties reasonably believe may affect the operations or processes of the other(s) and shall determine the extent to which the other Parties need to be involved in the testing of changes to its own system. The parties shall discuss proposed implementation dates for system changes and shall make best efforts to avoid implementation dates that will have a material adverse impact on the operations of the other party.
(c) Collaborative Efforts for Refinements and Enhancements and Statements of Work
(i) Servicer and FMC will meet, not less than quarterly, for the purpose of discussing future enhancements to the functions performed by Servicer consistent with the Program Guidelines.
(ii) For any enhancement, modification, or change to the PHEAA System or to the procedures necessary for the Servicer to fulfill their obligations under this Agreement, a Statement of Work will be negotiated and executed to outline the requirements, expectations and fees.
SECTION 5. CHARGES AND PAYMENTS
Such increase shall be limited to Servicer’s actual incremental cost increase resulting from such changes. Servicer shall give Program Administrator and affected Lender Participants sixty (60) days prior written notice before implementing any such increase in Servicing fees pursuant to this Section. Such notice shall set forth the basis of, as well as the computation used in determining, any increase.
Servicer agrees to pay FMC for any claim, loss, liability or expense, including reasonable attorney’s fees (collectively referred to herein as “Loss”), which arises out of or relates to the Servicer’s acts or omissions with respect to the Services provided to Program Administrator under this Agreement, where the final determination of liability on the part of the Servicer to Program Administrator is established by the Commonwealth’s Board of Claims, a court of law with competent jurisdiction over the Servicer or by way of settlement agreed to by the Servicer. Further, nothing herein shall be read or construed as a waiver of the sovereign immunity of the Commonwealth of Pennsylvania, except to the extent authorized by the laws of said Commonwealth.
The Commonwealth of Pennsylvania has created the Board of Claims, pursuant to the provisions of the act of May 20, 1937, P.L. 728, as amended by the act of October 5, 1978, Act Xx. 000, 00 X.X. 0000-0 et seq., for the adjustment of claims arising from contracts entered into by the Commonwealth or an agency of the Commonwealth. Subject to the statutory jurisdictional requirements, any and all claims against Servicer respecting any matter pertaining to this Agreement or any part thereof may be instituted in the Board of Claims.
Program Administrator agrees to pay Servicer for any Loss arising out of or relating to Program Administrator’s acts or omissions with respect to the Student Loans covered by this Agreement, where the final determination of liability on the part of Program Administrator is established by a court of law or by way of settlement agreed to by Program Administrator.
This provision shall not be construed to limit the Servicer’s or Program Administrator’s rights, obligations, liabilities, claims or defenses which arise as a matter of law or pursuant to any other provision of this Agreement.
This Agreement and all the rights and obligations of any Party hereunder may not, without the prior written consent of the other Parties, which consent shall not be unreasonably withheld, be assigned or subcontracted by any Party. Any successor must acquire substantially all of the assets or business of a Party, and have the ability to perform the duties and obligations under the terms and conditions hereof.
(a) The Servicer’s failure to perform or observe any of the provisions or covenants of this Agreement and its referenced schedules, in any material respect;
(b) If the Servicer shall (i) discontinue business, or (ii) generally not pay its debts as such debts become due, or (iii) make a general assignment for the benefit of creditors, or (iv) admit by answer, default or otherwise the material allegations of petitions filed against it in any bankruptcy, reorganization, insolvency or other proceedings (whether federal or state), relating to relief of debtors, or (v) suffer or permit to continue unstayed and in effect for thirty (30) consecutive days, any judgment, decree or order, entered by a court of competent jurisdiction, which approves a petition seeking its reorganization or appoints a receiver, custodian, trustee, interim trustee or liquidator for itself or all or a substantial part of its assets, or (vi) take or omit any action in order thereby to effect any of the foregoing;
(c) If Servicer is the subject of a Change of Control, Program Administrator shall have the right to terminate this Agreement upon a minimum of thirty (30) Business Days prior written notice. Such right of termination may be exercised any time beginning upon the earlier of consummation of the Change of Control transaction or public announcement that such a transaction is pending.
In the event of an event of default as set forth in Section 8.01(a) above, the Servicer shall have the right to cure any such breach or error to Program Administrator’s full satisfaction within thirty (30) days of written notice from Program Administrator.
(a) Program Administrator’s failure to perform or observe any of the provisions or covenants of this Agreement and its referenced schedules, in any material respect; or
(b) If Program Administrator shall (a) discontinue business, or (b) generally not pay its debts as such debts become due, or (c) make a general assignment for the benefit of creditors, or (d) admit by answer, default or otherwise the material allegations of petitions filed against it in any bankruptcy, reorganization, insolvency or other proceeding (whether federal or state) relating to relief of debtors, or (e) suffer or permit to continue unstayed and in effect for thirty (30) consecutive days, any judgment, decree or order, entered by a court of competent jurisdiction, which approves a petition seeking its reorganization or appoints a receiver, custodian, trustee, interim trustee or liquidator for itself or all or a substantial part of its assets, or (f) take or omit any action in order thereby to effect any of the foregoing.
In the event of an event of default as set forth in Section 8.02(a), Program Administrator shall have the right to cure any such breach or error to Servicer’s full satisfaction within thirty (30) days of written notice from Servicer.
SECTION 9. MISCELLANEOUS PROVISIONS
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If to FMC: |
General Counsel |
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The First Marblehead Corporation |
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The Prudential Tower |
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000 Xxxxxxxx Xxxxxx, 00xx Xxxxx |
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Xxxxxx, Xxxxxxxxxxxxx 00000-0000 |
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If to Servicer: |
General Counsel |
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Pennsylvania Higher Education Assistance Agency |
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0000 Xxxxx Xxxxxxx Xxxxxx |
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Xxxxxxxxxx, Xxxxxxxxxxxx 00000 |
9.06 Interpretation of Documents. In the event of a conflict between this Private Student Loan Program Agreement and a Schedule attached hereto, this Agreement shall control.
9.11 Law Governing. This Agreement is being delivered in and shall be construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to any principles of conflict of laws.
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PENNSYLVANIA HIGHER EDUCATION |
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THE FIRST MARBLEHEAD |
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ASSISTANCE AGENCY |
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CORPORATION |
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/s/ Xxxxx X. Xxxxxxx |
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/s/ Xxxxx Skaane |
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Name: Xxxxx X. Xxxxxxx |
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Name: Xxxxx Skaane |
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Title: President and CEO |
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Title: Managing Director |
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Approved as to form and legality |
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Approved as to form and legality |
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/s/ Xxxxx Xxxxxxxx |
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/s/ Xxxxxx X. Xxxxx |
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PHEAA General Counsel |
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Deputy Attorney General |
INDEX TO SCHEDULES
Fee Schedule
System Access Schedule
Customer Service Schedule
Service Level Schedule
FEE SCHEDULE FOR
PRIVATE STUDENT LOAN MONOGRAM PROGRAM AGREEMENT
DATED FEBRUARY 5, 2009
BETWEEN
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY,
AND
THE FIRST MARBLEHEAD CORPORATION (“AGREEMENT”)
The fee for the Services provided by Servicer, together with services provided by FMC as Program Administrator, shall be payable to Servicer by the Lender Participants as set forth in this Fee Schedule and Section 5 of the Agreement.
Capitalized terms used in this Fee Schedule have the meanings assigned to them in the Agreement. In addition to the words and terms elsewhere defined in this Agreement, the following terms shall have the following meanings unless the Agreement indicates a contrary meaning or intent:
A. An “Account” is to refer to the Credit Agreements collectively of an individual Borrower of a particular Student Loan type in the same status.
B. An “Interim Account” is to refer to Credit Agreements collectively of an individual Borrower that constitute (1) an In-School (Enrolled) Account, or (2) a Grace Account.
C. A “Repayment Account” is to refer to the Credit Agreements of an individual Borrower under the terms of which the repayment period has commenced, but which is not an In-School (Enrolled) Account.
D. An “In-School (Enrolled) Account” is to refer to the Credit Agreements collectively of an individual Borrower with respect to which principal and interest payments are deferred because the Borrower is enrolled at an eligible institution, whether before of after the repayment period begins.
E. A “Grace Account” is to refer to the Credit Agreements collectively of an individual Borrower (1) with respect to which the Borrower has ceased to be enrolled at an eligible institution, and (2) under the terms of which the repayment period has not yet commenced.
F. “Standard Conversion” means the conversion of a Borrower’s Account from data provided in hard-copy format or by electronic means.
G. “On-System Conversion” means the conversion of a Borrower’s account that the Servicer is currently Servicing for an owner or holder other than the proposed new owner or holder.
II. SERVICING FEES:
1. Monthly Servicing Fees—Interim Account Status:
The Servicing fee for Student Loans in Interim Account status shall be payable by the Owner on a pro-rated monthly basis and shall be equal to [**] basis points per annum based upon the ending principal balance of the Student Loans at month end.
([**] x ending principal balance at month end divided by [**])
2. Monthly Servicing Fees—Repayment Account Status (other than Student Loans in Owner-caused Cure status):
(a) Ending Principal Balance < $[**]. If the ending principal balance of the Student Loans (including Student
Loans in Interim Account status and Repayment Account status) at month end is less than [**] ($[**]), then the Servicing fee for loans in Repayment Account status shall be payable by the Owner on a pro-rated monthly basis and shall be equal to [**] basis points per annum based upon the ending principal balance of the Student Loans at each month end.
([**] x ending principal balance at month end divided by [**])
(b) Ending Principal Balance > or Equal to $[**] and < or Equal to $[**]. If the ending principal balance of the Student Loans (including Student Loans in Interim Account status and Repayment Account status) at month end is [**] dollars ($[**]) or more, but less than or equal to [**] dollars ($[**]), then the Servicing fee for loans in Repayment Account status shall be payable by the Owner on a pro-rated monthly basis and shall be equal to [**] basis points per annum based upon the ending principal balance of the Student Loans at each month end.
([**] x ending principal balance at month end divided by [**])
(c) Ending Principal Balance > $[**]. If the ending principal balance of the Student Loans (including Student Loans in Interim Account status and Repayment Account status) at month end is greater than [**] dollars ($[**]), then the Servicing fee for loans in Repayment Account status shall be payable by the Owner on a pro-rated monthly basis and shall be equal to (i) for the first $[**] of the ending principal balance of the Student Loans, [**] basis points per annum based upon the ending principal balance of the Student Loans at each month end; and (ii) for the ending principal balance of the Student Loans in excess of $[**], [**] basis points per annum based upon the ending principal balance of the Student Loans at each month end.
For the first $[**]:
[**] x ending principal balance at month end divided by [**])
For amounts in excess of $[**]
([**] x ending principal balance at month end divided by [**])
(d) Loans in Repayment over 120 Months. Notwithstanding subsections (a), (b), and (c) above, the Servicing fee for loans in Repayment Account status shall be [**] basis points for all Student Loans that have been Serviced by Servicer for over 120 months that are not thirty (30) or more days delinquent.
(e) Delinquent Accounts. Notwithstanding subsections (a), (b), (c), and (d) above, the Servicing fee for loans in Repayment Account status shall be [**] basis points for all Student Loans thirty (30) days or more delinquent until the Student Loan is outsourced for collections, and for Student Loans outsourced for collections as of the end of the month, the Servicing fee for loans in Repayment Account status shall be [**] basis points.
([**] x ending principal balance of Student Loans 30 or more days delinquent divided by [**])
([**] x ending principal balance of Student Loans outsourced for collections divided by [**])
III. CONVERSION FEES
1. Interim Account—External
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a. |
Initial Exam: |
$[**] per loan |
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b. |
Serial Exam: |
$[**] per loan |
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c. |
Abbreviated Note Exam: |
$[**]per loan |
2. Interim Account—On System
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a. |
Full Note Exam: |
$[**] per loan |
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b. |
Waived Exam: |
[**] |
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3. Repayment Account: |
Quote |
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4. Reconversion Fee: |
$[**] per loan |
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5. Rehabilitation Reconversion Fee |
$[**] per loan |
IV. DUE DILIGENCE/PRE-CLAIMS/CLAIMS PROCESSING
1. Skip Trace
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a. |
Placement: |
[**] |
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b. |
Locate: |
$[**] per loan |
2. Late Fees: [**]% of all collected late fee revenue on delinquent accounts
3. Third Party Referral (referral to third party under contract with the Servicer for core/collection after successful location): $[**] per Borrower per bond issue
4. Claim Processing: The Owner shall pay a claim processing fee of $[**] for each defaulted Student Loan per claim package filed. Claim processing shall include, without limitation, presentation to Insurer of all documentation required under the Servicing Guidelines, in the form required thereunder. Servicer will provide DDB Certification and Closed School Certification at no charge.
V. CURE SERVICING—Owner-Caused Cures
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1. Monthly fee |
$[**] per account |
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2. Skip Tracing—Locate |
$[**] per account |
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3. Third Party Referral |
$[**] per account |
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4. Guaranty Reinstated/Default Claim Paid |
$[**] per account |
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5. Correction of Owner Error |
$[**] per error |
VI. MISCELLANEOUS FEES
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1. Deconversion to Owner |
$[**] per loan |
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2. Return of Records to Owner |
$[**] per loan |
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3. Early Termination |
$[**] per Account |
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4. Ad Hoc Projects/Reporting (fees to be pre-identified by the Servicer and billed as identified) |
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a. |
Computer Programmer |
$[**]/hour |
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b. |
Computer Analyst |
$[**]/hour |
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c. |
CPU Run Time |
$[**]/hour |
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d. |
Staff Services |
$[**]/hour |
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e. |
Legal Services |
$[**]/hour |
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f. |
GLB extract files |
[**] for no charge |
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$[**] for each in excess of [**] |
5. Securitization (Financing, Bond Issue)
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a. |
Set-up Fee |
$[**] per financing (includes [**] hours of legal services per financing) |
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b. |
Financing Legal Services |
$[**]/hour (in excess of [**] hours per financing) |
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c. |
Post Closing, Loan Transfer within a financing |
$[**] per Borrower per transfer |
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6. Mailings |
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a. |
GLB privacy notices |
$[**] per notice |
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b. |
IRS Forms 1098/1099 |
$[**] per notice |
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c. |
Other mailings or notices/ Special delivery notices |
Quote |
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7. Basic Monthly Reporting |
[**] | ||
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8. SAS 70 Audit |
[**] | ||
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9. Lender’s Audit Guide |
[**] | ||
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10. Borrower Incentive Programs |
Quote | ||
VII. ANNUAL ADJUSTMENT OF FEES
On or before the end of the ninth month after the Effective Date of this Agreement, and annually thereafter, Servicer may propose new fees to be effective upon the anniversary of the Effective Date. Servicer shall provide documentation to FMC to justify any increase in fees. The increased fee can be based on additional costs documented by Servicer to service the loans and/or equal to the percentage increase in the U. S. Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers, U. S. City Average (CPI/W) for the most recent twelve (12) month period available at the time of each proposed adjustment. Such increase shall be effective upon the anniversary of the Effective Date. Consent to increases to fees based on the documented costs of the Servicer will not be unreasonably withheld. Any annual adjustment of fees shall be agreed upon mutually by both parties.
PRIVATE STUDENT LOAN MONOGRAM PROGRAM AGREEMENT
BETWEEN
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY
AND
THE FIRST MARBLEHEAD CORPORATION
SYSTEM ACCESS SCHEDULE
All system access shall be limited to view only option.
1. Lender Participant and Program Administrator.
Servicer shall provide Program Administrator, upon approval by the Lender Participants, with web-based, view-only Account access, which shall include the ability to view loan servicing screens including but not limited to Borrower information, Account history and due diligence records.
Individual users shall obtain remote access within five (5) Business Days of receipt of notice and additional necessary information from Program Administrator, as applicable that such individual requires remote access.
2. FMC/FMDS/FMER/FMLOS USER ACCESS SECURITY REQUIREMENTS
The Servicer Relations group of Program Administrator will be responsible for notifying the Servicer to add and delete Program Administrator and FMER employees who need, or no longer need, access as appropriate. On a quarterly basis, Servicer will provide Program Administrator with a report of Program Administrator and FMER employees who have system access to Borrower information. Program Administrator shall be responsible for the accuracy of such reports and shall be liable for the inaccuracy thereof in accordance with Section 6 (Liability) of this Agreement.
PRIVATE STUDENT LOAN MONOGRAM PROGRAM AGREEMENT
BETWEEN
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE-AGENCY
AND
THE FIRST MARBLEHEAD CORPORATION
CUSTOMER SERVICE SCHEDULE
1. Call Monitoring.
Servicer shall monitor on a monthly basis a minimum of [**]% of the calls received per customer service representative for quality.
2. Customer Service Hours of Operation
The Servicer shall maintain minimum customer service hours of operation Monday through Friday. The Servicer and the Program Administrator shall agree on these minimum hours of operation. Program Administrator, at the direction of a Lender Participant, reserves the right to request an increase and/or decrease in these hours upon written notice to Servicer, and Servicer agrees to accommodate such requests to the extent feasible under the circumstances.
3. Collections Hours of Operation
Servicer shall maintain minimum hours of operations for collection activities. The Servicer and the Program Administrator shall agree on these minimum hours of operation. Program Administrator, at the direction of a Lender Participant, reserves the right to request an increase and/or decrease in these hours upon written notice to Servicer, and Servicer agrees to accommodate such requests to the extent feasible under the circumstances.
4. Borrower Satisfaction Surveys
The Servicer shall work with Program Administrator to develop telephonic borrower satisfaction surveys to measure the customer experience through various channels including mail, internet, and Voice Response Unit. If surveys demonstrate customer service issues that require remedial action, Servicer shall collaborate with Program Administrator to resolve such issues.
5. Borrower Correspondence/Complaints
All correspondence received by Servicer relating to individual Borrower Accounts shall be maintained by the Servicer and shall be made available to Program Administrator during Servicer’s normal business hours. Servicer shall be responsible for handling all customer service complaints. Copies of escalated customer complaints from Borrowers and Servicer’s response thereto are to be forwarded to Program Administrator on a weekly basis. Complaints with respect to Student Loans and/or Borrowers received from any regulatory body or federal or state agency shall be handled as exceptions and, if allowed, Service shall contact Program Administrator immediately.
PRIVATE STUDENT LOAN MONOGRAM PROGRAM AGREEMENT
BETWEEN
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE-AGENCY
AND
THE FIRST MARBLEHEAD CORPORATION
SERVICE LEVEL AGREEMENTS
Servicer agrees to adhere to the Service Level Agreement (SLA) outlined below.
The Servicer will provide Program Administrator with monthly reports setting forth Servicer’s performance relative to the below SLA for the month covered by the report, the month prior to the month covered by the report, and the Servicer’s year-to-date average performance level through the month covered by the report. These reports will be made available to Program Administrator no later than fifteen (15) Business Days following the last day of the month covered by the report.
I. Customer Service Standards:
Telephone and Internet Chat Standards:
· Average Speed of Answer: [**] seconds or less.
· Abandonment Percentage: Average not greater than [**]%.
· Call Blockage: [**]% or less.
· Call Quality Assessment: Average rating not less than [**]% - utilizing Servicer’s evaluation form as set forth and incorporated herein at Exhibit 1.
· Borrower Satisfaction: Average rating in annual survey not less than [**]%.
Correspondence Standards
· Mail sorted and distributed within: Servicer’s Service Objective: [**]% within one Business Day not to exceed two Business Days on average.
· General Borrower correspondence answered within [**] Business Days of receipt on average — Servicer’s Service Objective: [**] days. During peak processing months of January through March, August, and October, correspondence answered within [**] Business Days of receipt on average. (This standard shall not apply to any correspondence involving death, disability, or bankruptcy Accounts.)
· Borrower Email Correspondence: Answered within an average of [**] Business Days of receipt.
· School Correspondence: Answered within [**] Business Days of receipt on average — Servicer’s Service Objective: [**] days. During peak processing months of January through March, July, and September school correspondence answered within [**] Business Days of receipt on average.
· Clearinghouse Correspondence (Manual Processing Only): Answered within [**] Business
Days of receipt on average — Servicer’s Service Objective: [**] days. During peak processing months of January through March, June, and October through November Clearinghouse correspondence answered within [**] Business Days of receipt on average.
· Deferment Processing: Processed within [**] Business Days of receipt on average — Servicer’s Service Objective: [**] days. During peak processing months of February and August through November deferments processed within [**] Business Days of receipt on average.
· Forbearance Processing: Processed within [**] Business Days of receipt on average — Servicer’s Service Objective: [**] days. During peak processing months of January through March, August, November through December forbearances processed within [**] Business Days of receipt on average.
· Miscellaneous Account Reviews and adjustments completed within [**] Business Days of receipt on average — there are exceptions to this process.
· Non-Exception Loan Payments: Posted within an average of [**] Business Day of receipt — [**]% of the time.
· Exception Loan Payments: Processed/resolved within an average of [**] Business Days of receipt — [**]% of the time
III. Fraud Prevention
Fraud notification to Program Administrator within [**] Business Days of initial notification.
IV. System Requirements
· System Availability (scheduled CICS system up time): [**]% or better. This standard shall not include the measurement for web based applications, batch processes, or scheduled CICS down time including but not limited to Sunday maintenance.
· Screen Navigation - Servicer shall provide an average internal CICS response time of less than [**]. This measurement shall only be applicable to Servicer’s provision of screen navigation and shall not be impacted nor include measurement relative to users’ internet based access to the screens because AES/PHEAA has no ability to control response times for users’ ISP connections or internal network performance. Servicer shall report the internal average response time on a monthly basis for the CICSL0PA system including the availability percentage for that system for normal scheduled hours of usage.
· Servicer shall convert all FMC Administrator Student Loan origination data necessary for servicing hereunder onto its Servicing System within [**] days of receipt of complete Student Loan files containing critical and non-critical documentation from FMER.
Exhibit 1
[There is no Exhibit 1.]