**LOAN PURCHASE PROGRAMS ELECTRONIC ANNOUNCEMENT** \#**23**

Date: August 22, 2008

To: FFEL Program Community

From: Larry Warder, Acting Chief Operating Officer

Federal Student Aid

Subject: Document Submission Process for the Loan Purchase Commitment
Program

In an Electronic Announcement posted on July 25, 2008, we attached
copies of the Master Participation Agreement and the Master Loan Sales
Agreement (the Agreements). The Agreements, as appropriate, must be
executed by a FFEL lender who wishes to participate in one or both of
the Loan Purchase Programs that were announced in a *Federal Register*
Notice published on July 1, 2008 \[73 FR, No. 127, page 37422\]. In
addition to providing the details of each of the Loan Purchase Programs,
each Agreement describes the documents that a FFEL lender or holder must
submit if it wishes to participate in the programs. The Agreements also
include, as exhibits, forms for the contractual documents that must be
executed and submitted.

The attachment to this memorandum gives instructions on execution and
submission of the Master Loan Sale Agreement under the Loan Purchase
Commitment Program and the other documents used to sell loans to the
Department.

We have scheduled a Webinar for today, August 22, 2008, at 2:00 PM
Eastern Time, where we will review the provisions of the Master Loan
Sale Agreement and the document submission procedures for the Loan
Purchase Commitment Program

Thank you for your continued support of these FFEL Loan Purchase
Programs.

Attachment

**United States Department of Education**

**Federal Family Education Loan Program**

**Loan Purchase Program Under a Master Loan Sale Agreement**

**[Initial Document Submission Instructions]{.smallcaps}**

**[August 22, 2008]{.smallcaps}**

This document provides information and guidance to FFEL Program lenders
(including current FFEL loan holders) that wish to execute a Master Loan
Sale Agreement with the U.S. Department of Education (the Department)
for the purpose of selling to the Department eligible FFEL loans made
for the 2008-2009 academic year.

The procedures included below explain how a lender creates and executes
the initial documents needed to enter into a Master Loan Sale Agreement
with the Department as well as how to submit the required 45-Day Notice
of Intent to sell loans. In subsequent announcements, we will provide
information on how other documents and data sets will be submitted and
acknowledged.

**PRELIMINARY SUBMISSION**

**[Notice of Intent to Participate (Exhibit F of the Master Loan Sale
Agreement):]{.underline}**

As noted in earlier Electronic Announcements on the Loan Purchase
Programs, the first step that a FFEL Program lender or loan holder must
take if it wants to reserve its option to participate in either of the
Loan Purchase Programs is to submit to the Department a "Notice of
Intent to Participate". The format and wording for this Notice is
provided as Exhibit F to the Master Loan Sale Agreement (and as Exhibit
H to the Master Participation Agreement). As also noted in earlier
Electronic Announcements, while the submission of a Notice of Intent to
Participate does not bind the lender to sell loans (or participation
interests) to the Department, it does reserve those choices for both the
originating lender and for any subsequent holder. Therefore, the
submission of a Notice of Intent to Participate by an originating lender
is critical even if that lender will not be participating in the
programs. This is because the eligibility of a loan to be included in
the programs by a subsequent holder is determined by the date the
originating lender filed its Notice of Intent to Participate.

Document Submission for Loan Purchase Commitment Program

Page 2

The Notice of Intent to Participate must be submitted to the Department
by any FFEL Program lender or holder, including an entity participating
in the FFEL Program as a beneficial holder under an Eligible Lender
Trustee agreement, following the instructions provided on Exhibit F of
the Master Loan Sale Agreement. The form should be submitted as a PDF
attachment to an email sent to the Department at
<ffel.agreementprocess@ed.gov>[.]{.underline}

As a reminder, a Notice of Intent to Participate submitted by an
originating lender that was received by the Department on or before July
31, 2008 qualifies loans that were disbursed by that lender on or after
May 1, 2008 to be sold to the Department. A Notice of Intent to
Participate that was or is received after July 31, 2008 qualifies only
those loans that were first disbursed on or after the date of receipt of
the Notice by the Department.

Upon receipt and review of the Notice of Intent to Participate, the
Department will send a return e-mail message to the contact person
indicated on the form. This message will note the date the Notice was
received by the Department. That date will establish the timeline for
determining the eligibility of an otherwise eligible loan to be included
in the Loan Purchase Programs.

Of course, entities that have already submitted Notices of Intent to
Participate need not re-submit. For questions concerning the submission
and receipt of the e-mail please call (202) 377-4401.

**EXECUTING THE MASTER LOAN SALE AGREEMENT**

The documents discussed below (Cover Letter, Adoption Agreement,
Seller's Officer's Certificate and the Opinion of Counsel of the
Seller), along with additional information required as part of the
Seller's Officer's Certificate, must be submitted with original "pen and
ink" signatures. The documents must be submitted together in one packet
to the Department at the address(es) provided below.

Upon receipt and review of the information submitted in the packet, the
Department will send an e-mail message to the contact e-mail address
provided in the cover letter, indicating the date the packet was
received by the Department. The message will also provide information
regarding the actions the Seller must take while the Department reviews
the submission.

**Note that neither submission of a Notice of Intent to Participate nor
submission of the documents described below constitutes execution of the
Master Loan Sale Agreement. Formal notification of execution from the
Department will be provided upon the Department's review of submitted
documents.**

**[Cover Letter]{.underline}**

To ensure that the materials submitted to the Department for execution
of a Master Loan Sale Agreement are properly tracked, the Seller should
include in its submission a cover letter, printed on the Seller's
letterhead, which includes the following information:

Document Submission for Loan Purchase Commitment Program

Page 3

-   The name, Lender ID (LID), and address of the lender/holder that
    wishes to sell loans to the Department as the "Seller" (see the
    preamble to the Master Loan Sales Agreement for a definition of
    "Seller"). Note that a Seller can be the beneficial holder
    participating in the FFEL Program under an Eligible Lender Trustee
    (ELT) agreement.

-   The name, Lender ID (LID), and address of the Eligible Lender
    Trustee for a beneficial holder, if appropriate.

-   The Seller's contact person with name, address, phone number, e-mail
    address, and fax number.

> []{.mark}

**[Adoption Agreement]{.underline}**

> []{.mark}

A lender that wishes to sell loans to the Department under the Loan
Purchase Commitment Program must review the Master Loan Sale Agreement
(MLSA), agree to its terms, and execute the MLSA by completing and
submitting to the Department an "Adoption Agreement" (see Exhibit A to
the MLSA). An original copy of the Adoption Agreement must be completed,
dated, and signed, and submitted to the Department. The Adoption
Agreement must include an original "pen and ink" signature of an
authorized official of:

-   The lender/holder, who, upon execution of the Agreement, will be the
    Seller offering to sell Eligible Loans to the Department; and

-   The Eligible Lender Trustee if the Seller participates in the FFEL
    Program as a beneficial holder under an Eligible Lender Trustee
    (ELT) agreement.

Upon approval of the submission packet, the Department will return a
copy of the Adoption Agreement, with a signature of an authorized
Departmental official, to the Seller at the address provided above. This
will indicate that the Master Loan Sale Agreement has been executed
between the Department and the Seller (and the Eligible Lender Trustee,
if applicable).

**[Seller's Officer's Certificate (Exhibit C of the Master Loan Sale
Agreement)]{.underline}**

The Officer's Certificate provides specific legal assurances. The
signature blocks include a place not only for the Officer, but also for
the Secretary of the Seller's organization. Of course, each of the blank
spaces provided on the Seller's Officer's Certificate must be completed.

As noted on the Seller's Officer's Certificate, the following
attachments must be included in the submission packet:

-   Attachment I: A true and correct copy of either the Seller's
    Certificate of Incorporation and its by-laws, its certificate of
    limited partnership and limited partnership agreement, or its
    certificate of formation and limited liability company operating
    agreement, indicating that all are in full force and effect;

-   Attachment II: A true and correct copy of the resolutions duly
    adopted by the Board of Directors of the Seller, with respect to the
    authorization and approval of the sale of loans and indicating that
    said resolutions have not been amended, modified, annulled or
    revoked and are in full force and effect;

Document Submission for Loan Purchase Commitment Program

Page 4

-   Attachment III: a Certificate of Good Standing of the Seller.

**[Opinion of Counsel to the Seller (Exhibit D of the Master Loan Sale
Agreement)]{.underline}**

The Seller must provide an Opinion of Counsel that the Seller is duly
incorporated, has authority to perform its duties under the Agreement,
has duly executed the Agreement and authorized the sale of loans
pursuant to the Agreement, and that the Agreement constitutes a legally
binding obligation of the Seller to perform those duties.

**[Submission of Documents]{.underline}**

The documents discussed above, along with additional required
information, must be submitted together in one packet to the Department
at the address(es) provided below. Note that for government security
reasons, there is normally a delay in the delivery of mail sent via the
U.S. Postal Service to the Department. Therefore, if at all possible,
the packet should be sent by courier or express mail to:

United States Department of Education\
830 First Street, N.E.\
Room 111G3\
Washington, DC 20002\
Attention: FFEL Agreement Process Team

If the Seller uses the U.S. Postal Service, the packet should be
addressed to:

United States Department of Education\
400 Maryland Avenue, SW\
UCP, Room 111G3\
Washington, DC 20202-5402\
Attention: FFEL Agreement Process Team

Upon receipt and review of the information submitted in the packet, the
Department will send an e-mail message to the Seller's contact e-mail
address, as provided on the cover letter submitted by the Seller,
indicating the date the packet was received by the Department. The email
message will also provide information regarding the actions the Seller
must take while the Department reviews the submission.

**SALE OF LOANS TO** **DEPARTMENT OF EDUCATION**

**[45-Day Notice of Intent to Sell Loans]{.underline}**

Per the MLSA, the Seller shall notify the Department of the Seller's
intent to sell loans to the Department at least forty-five (45) calendar
days prior to the requested Purchase Date. The "[45-Day Notice and
Projected Loan Schedule
Summary](http://www.federalstudentaid.ed.gov/ffelp/library/45DAYNOTICE08222008-final.doc)"
should be completed and submitted as a PDF attachment to an e-mail sent
to the following e-mail address: <ED.servicer@ed.gov>, with a subject
line of "45-Day Notice."

Document Submission for Loan Purchase Commitment Program

Page 5

When completing the 45-Day Notice, the Seller will need to provide
Lender ID's (LID's) of all lenders who originated any loans that are
offered for sale to the Department. As noted above, the official
acceptance date of the originating Lender's Notice of Intent to
Participate determines the first disbursement date allowable for the
loans to be sold.

The Seller will receive an e-mail acknowledgement from the Department's
servicer with a request for the Seller to provide its current servicer
contact information in order to begin the loan transfer (loan
conversion) process.

The Seller (or the Seller's servicer) will coordinate with the
Department's servicer to perform intersystem testing of the conversion
transfer file. This process will apply to the Seller's initial sale
only. For all sales, the Department will establish a date, which will be
prior to the Purchase Date, when the Seller submits a conversion file to
the Department's servicer. The Seller will work with the Department's
servicer to handle any data file exceptions, including loan eligibility
issues.

Just prior to the Purchase Date, a pre-sale conversion file with totals
will be prepared by the Department's servicer and forwarded to the
Seller. The Seller will review the file and confirm the pre-sale totals.
The Seller will use these totals and related reports to complete the
Bill of Sale and associated Final Loan Schedule Summary of Loans Sold.

**[Bill of Sale (Exhibit B)]{.underline}**

Instructions for submitting the Bill of Sale and related purchase
documents will be provided in a future Electronic Announcement.