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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

 

| x      | Annual report pursuant to Section 13 or 15(d) of the                                Securities Exchange Act of 1934     |
|--------|-------------------------------------------------------------------------------------------------------------------------|
|   | for the fiscal year ended December 31,                                2007                                              |
|   | or                                                                                                                      |
| o      | Transition report pursuant to Section 13 or 15(d) of                                the Securities Exchange Act of 1934 |

 

Commission File Number:**333-136003-01**

**College Loan Corporation Trust II**(Exact name of registrant as specified in its                charter)

**College Loan LLC**

(Exact name of depositor as specified in its charter)

**College Loan Corporation**

(Exact name of sponsor as specified in its charter)

 

| **Delaware**(State or other jurisdiction of                                incorporationor organization) | **45-6110137**(I.R.S. Employer Identification No.) |
|----------------------------------------------------------------------------------------------------------|----------------------------------------------------|
|                                                                                                     |                                               |
| **14303 Gateway Place****Poway, California**                                                             | **92064**                                          |
|                                                                                                     |                                               |
| (Address of principal executive offices)                                                                 | (Zip Code)                                         |

 

| Registrant’s telephone number, including area                                code:   | **(888) 972-6311** |
|--------------------------------------------------------------------------------------------|--------------------|
|                                                                                       |               |
| Securities registered pursuant to Section 12(b) of                                the Act: | **None**           |
|                                                                                       |               |
| Securities registered pursuant to Section 12(g) of                                the Act: | **None**           |

 

Indicate by check mark if the registrant is a well-known seasoned                issuer, as defined in Rule 405 of the Securities Act.

|   | Yes | o | No | x |
|--------|-----|---|----|---|

 

Indicate by check mark if the registrant is not required to file                reports pursuant to Section 13 or Section 15(d) of the Act.
|   | Yes | o | No | x |
|--------|-----|---|----|---|

 
|   | Yes | x | No | o |
|--------|-----|---|----|---|

Indicate by check mark if disclosure of delinquent filers pursuant                to Item 405 of Regulation S-K is not contained herein, and will not be contained,                to the best of registrant’s knowledge, in definitive proxy or information                statements incorporated by reference in Part III of this Form 10-K or any amendment                to this Form 10-K. ____

**Not Applicable.**

Indicate by check mark whether the registrant is a large accelerated                filer, an accelerated filer, a non-accelerated filer or a smaller reporting                company. See the definitions of “ large accelerated filer,”                “accelerated filer” and “smaller reporting company” in Rule                12b-2 on the Exchange Act.

| Large Accelerated Filer | o | Accelerated Filer         | o |
|-------------------------|---|---------------------------|---|
| Non Accelerated Filer   | x | Smaller Reporting Company | o |

 

Indicate by check mark whether the registrant is a shell company (as                defined in Rule 12b-2 of the Exchange Act.):
|   | Yes | o | No | x |
|--------|-----|---|----|---|

 

**Not Applicable**

List hereunder the following documents if incorporated by reference                and the Part of the Form 10-K into which the document is incorporated: (1) Any                annual report to security holders; (2) Any proxy or information statement; and                (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities                Act of 1933. The listed documents should be clearly described for identification                purposes.

The section titled “College Loan Corporation Trust II”                in the Registrant’s prospectus supplement dated March 2, 2007 and the                sections titled “The Depositor” and “The Sponsor and the Issuer                Administrator” in the Registrant’s prospectus dated February 8, 2007,                each of which was filed with the Securities and Exchange Commission on March 5,                2007 pursuant to Rule 424(b), file 333-136003-01, are incorporated by reference                into the response to item 1119 of Regulation AB contained in this Annual Report on                Form 10-K.

 

Explanatory Note

This Annual Report on Form 10-K (the “Report”) is filed                with respect to College Loan Corporation Trust II. Certain information requested by                this Annual Report on Form 10-K is omitted pursuant to Regulation AB and General                Instruction J to Form 10-K.

 

| **PART I**   |
|--------------|
|         |
| **Item 1.**  | **Business.** |
|         |   |
|         | Omitted |
|         |   |
| **Item 1.A** | **Risk Factors.** |
|         |   |
|         | Omitted |
|         |   |
| **Item 2.**  | **Properties.** |
|         |   |
|         | Omitted. |
|         |   |
| **Item 3.**  | **Legal Proceedings.** |
|         |   |
|         | Omitted. |
|         |   |
| **Item 4.**  | **Submission of Matters to a Vote of Security                                Holders.** |
|         |   |
|         | Omitted. |
|         |   |
| **PART II**  |
|         |   |
| **Item 5.**  | **Market for Registrant’s Common Equity,                                Related Stockholder Matters and Issuer Purchases of Equity                                Securities.** |
|         |   |
|         | Omitted. |
|         |   |
| **Item 6.**  | **Selected Financial Data.** |
|         |   |
|         | Omitted. |
|         |   |
| **Item 7.**  | **Management’s Discussion and Analysis of                                Financial Condition and Results of Operation.** |
|         |   |
|         | Omitted. |
|         |   |
| **Item 7A.** | **Quantitative and Qualitative Disclosures about                                Market Risk.** |

 

|         | Omitted.                                                                                                                  |
|--------------|---------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                      |
| **Item 8.**  | **Financial Statements and Supplementary                                Data.**                                           |
|         |                                                                                                                      |
|         | Omitted.                                                                                                                  |
|         |                                                                                                                      |
| **Item 9.**  | **Changes in and Disagreements with Accountants on                                Accounting and Financial Disclosures.** |
|         |                                                                                                                      |
|         | Omitted.                                                                                                                  |
|         |                                                                                                                      |
| **Item 9A.** | **Controls and Procedures**                                                                                               |
|         |                                                                                                                      |
|         | Omitted.                                                                                                                  |
|         |                                                                                                                      |
| **Item 9B.** | **Other Information.**                                                                                                    |
|         |                                                                                                                      |
|         | None.                                                                                                                     |
|         |                                                                                                                      |
| **PART III** |
|         |                                                                                                                      |
| **Item 10.** | **Directors and Executive Officers of the                                Registrant.**                                    |
|         |                                                                                                                      |
|         | Omitted.                                                                                                                  |
|         |                                                                                                                      |
| **Item 11.** | **Executive Compensation.**                                                                                               |
|         |                                                                                                                      |
|         | Omitted.                                                                                                                  |

 

| **Item 12.** | **Security Ownership of Certain Beneficial Owners                                and Management.**                           |
|--------------|------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                         |
|         | Omitted.                                                                                                                     |
|         |                                                                                                                         |
| **Item 13.** | **Certain Relationships and Related Transactions,                                and Director Independence.**                |
|         |                                                                                                                         |
|         | Omitted.                                                                                                                     |
|         |                                                                                                                         |
| **Item 14**  | **Principal Accountant Fees and                                Services.**                                                   |
|         |                                                                                                                         |
|         | Omitted.                                                                                                                     |
|         |                                                                                                                         |
|         | **Part IV**                                                                                                                  |
|         |                                                                                                                         |
| **Item 15.** | **Exhibits, Financial Statement Schedules, and                                Reports on Form 8-K**                          |
|         |                                                                                                                         |
|         | (a)    List of Documents Filed                                as Part of thus Annual Report on Form 10-K |
|         | 1)       Not                                applicable                                    |
|         | 2)       Not                                applicable                                    |
|         | 3)       See item                                15(b) below                              |
|         | (b)   Exhibits required by Item 601                                of Regulation S-K                          |

 

 

| **EXHIBIT** | **DESCRIPTION**                                                                                                                                                                                                                                                              |
|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                         |
| 31.1        | Rule 13a-14(a)/15d-14a Certification. (Section 302                                Certification)                                                                                                                                                                             |
|        |                                                                                                                                                                                                                                                                         |
| 33.1        | Report on Assessment of Compliance with Servicing                                Criteria concerning servicing activities of ACS Education Services,                                Inc. for the year ended December 31, 2007.                                               |
|        |                                                                                                                                                                                                                                                                         |
| 33.2        | Report on assessment of Compliance with Servicing                                Criteria concerning servicing activities of CLC Servicing for the                                year ended December 31, 2007.                                                              |
|        |                                                                                                                                                                                                                                                                         |
| 33.3        | Report on assessment of Compliance with Servicing                                Criteria concerning servicing activities of Great Lakes Educational                                Loan Services, Inc. for the year ended December 31,                                2007. |
|        |                                                                                                                                                                                                                                                                         |
| 33.4        | Report on assessment of Compliance with Servicing                                Criteria concerning servicing activities of Deutsche Bank Trust                                Company Americas for the year ended December 31, 2007.                                       |
|        |                                                                                                                                                                                                                                                                         |
| 33.5        | Report on assessment of Compliance with Servicing                                Criteria concerning servicing activities of College Loan                                Corporation for the year ended December 31, 2007.                                                   |
|        |                                                                                                                                                                                                                                                                         |
| 34.1        | Independent Accountants’ Attestation Report                                concerning servicing activities of ACS Education Services, Inc. for                                the year ended December 31, 2007.                                                        |
|        |                                                                                                                                                                                                                                                                         |
| 34.2        | Independent Accountants’ Attestation Report                                concerning servicing activities of CLC Servicing for the year ended                                December 31, 2007.                                                                       |
|        |                                                                                                                                                                                                                                                                         |
| 34.3        | Independent Accountants’ Attestation Report                                concerning servicing activities of Great Lakes Educational Loan                                Services, Inc. for the year ended December 31, 2007.                                         |
|        |                                                                                                                                                                                                                                                                         |
| 34.4        | Independent Accountants’ Attestation Report                                concerning servicing activities of Deutsche Bank Trust Company                                Americas for the year ended December 31, 2007.                                                |
|        |                                                                                                                                                                                                                                                                         |
| 34.5        | Independent Accountants’ Attestation Report                                concerning servicing activities of College Loan Corporation for the                                year ended December 31, 2007.                                                            |
|        |                                                                                                                                                                                                                                                                         |
| 35.1        | Statement of Compliance of ACS Education Services,                                Inc. under the Federal FFEL Origination/Servicing Agreement for the                                year ended December 31, 2007.                                                           |
|        |                                                                                                                                                                                                                                                                         |
| 35.2        | Statement of Compliance of CLC Servicing under the                                Federal FFELP Origination and Servicing Agreement for the year                                ended December 31, 2007                                                                      |
|        |                                                                                                                                                                                                                                                                         |
| 35.3        | Statement of Compliance of College Loan Corporation                                under the Administration Agreement for the year ended December 31,                                2007                                                                                    |

 

 

***The following are additional disclosure items required by                Regulation AB.***

**Item 1112(b) Significant Obligor Financial                Information**

None.

**Items 1114(b)(2) and 1115(b). Significant Enhancement Provider                Information.**

The payment of principal and interest on all of the                registrant’s student loans is guaranteed by designated guarantee agencies and                reinsured by the U.S. Department of Education. As of December, 2007, 51.7%, 23.6%                and 13.3% of the registrant’s student loans (by dollar volume) were                guaranteed by Massachusetts Higher Education Assistance Corporation d/b/a American                Student Assistance, California Student Aid Commission and Great Lakes Higher                Education Guaranty Corporation, respectively. As of that date, no other guarantee                agency was guaranteeing 10% or more of the registrant’s student                loans.

**American Student Assistance**

Massachusetts Higher Education Assistance Corporation d/b/a American                Student Assistance (“ASA”), a not-for-profit corporation organized in                1956, will guarantee a portion of the Financed Student Loans. ASA is one of the                oldest and largest guaranty agencies in the United States, and is the designated                guarantor for the Commonwealth of Massachusetts and the District of Columbia. Since                1956, ASA has been a provider of higher education financing products and services                to students, parents, schools and lenders across the country, guaranteeing more                than $43 billion in loans. Originally created by the General Court of the                Commonwealth of Massachusetts as the Massachusetts Higher Education Assistance                Corporation, ASA currently acts on behalf of the U.S. Department of Education to                ensure that the public policy purposes and regulatory requirements of the FFEL                Program are met. ASA has its principal offices located at 100 Cambridge Street,                Boston, MA 02114.

*Guaranty Volume.*The following table                sets forth the original principal amount of FFELP Loans (excluding Consolidation                Loans) guaranteed by ASA in each of the last five ASA fiscal years:

 

| **ASA Fiscal                                Year****(Ending June                                30)** | **Net FFELP Loans Guaranteed by ASA****(Dollars in Millions)** |
|-------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|
|                                                                                                  |                                                           |
| 2003                                                                                                  | $                                                              |   914 |
| 2004                                                                                                  |                                                           | 1,270 |
| 2005                                                                                                  |                                                           | 1,746 |
| 2006                                                                                                  |                                                           | 1,788 |
| 2007                                                                                                  |                                                           | 2,367 |

 

Under the Higher Education Act, ASA and the U.S. Secretary of                Education as of January 1, 2001 entered into a voluntary flexible agreement                (“VFA”). Under the VFA, ASA returned its reserve funds that would                otherwise have made up its Federal Reserve Fund throughan                escrow account in the name of the Department of Education. In the event a loan                defaults, ASA receives funding from the Department of Education to act as a                disbursing agent. The guarantee is, therefore, no longer limited by the funds on                deposit in a federal reserve fund. Because ASA holds no federal reserve fund, the                concept of a Reserve Ratio is inapplicable. The VFA establishes a “fee for                service” model under which ASA is rewarded through the payment of a portfolio                maintenance fee for maintaining a healthy portfolio of loans in good standing. The                agency is further incented to keep the loans in good standing and to work with                borrowers to prevent default because the portfolio maintenance fee increases as                ASA’s trigger default rate improves over the national trigger default rate.                ASA’s efforts to prevent default are a part of its “Wellness”                program of outreach to borrowers from the inception of the loan to educate them on                their responsibilities and assist them in repayment.

The Department of Education notified the Guarantee Agency in a                letter dated October 2, 2007 that it was canceling its VFA effective January 1,                2008. Because the Guarantee Agency is attempting to renegotiate the VFA with the                Department of Education and because the Guarantee Agency would operate under the                traditional guarantee agency funding model should the cancellation stand, the                Guarantee Agency does not believe that the cancellation will materially adversely                affect its business.

The information in the following tables has been provided by ASA                from reports provided by or to the U.S. Department of Education. No representation                is made by ASA as to the accuracy or completeness of the information.

*Recovery Rates.*A Guarantee                Agency’s recovery rate, which provides a measure of the effectiveness of the                collection efforts against defaulting borrowers after the guarantee claim has been                satisfied, is determined by dividing the aggregate amount recovered from borrowers                by the aggregate amount of default claims paid by the Guarantee Agency. The table                below sets forth the recovery rates for ASA as taken from the Department of                Education Guarantee Agency Activity Report form 1130 or                form 2000:

 

| **Federal Fiscal Year****(****Ending September                                30****)** | **Cumulative****Recovery Rate** |
|-----------------------------------------------------------------------------------------|---------------------------------|
| 2003                                                                                    | 79.4                            | % |
| 2004                                                                                    | 83.5                            |   |
| 2005                                                                                    | 83.0                            |   |
| 2006                                                                                    | 83.6                            |   |
| 2007                                                                                    | 80.8                            |   |

 

*Claims Rate.*ASA’s claims rate                represents the percentage of loans in repayment at the beginning of a federal                fiscal year which default during the ensuing federal fiscal year net of                repurchases, refunds and rehabilitations. For the federal years 2002-2006,                ASA’s claims rate listed below have not exceeded 5%, and as a result, all                claims of ASA have been fully reimbursed at the maximum allowable level by the                Department of Education. See the description or summary of the FFEL Program herein                for more detailed information concerning the FFELProgram.                Nevertheless, there can be no assurance the Guarantee Agencies will continue to                receive full reimbursement for such claims. The following table sets forth the                claims rate of ASA for the last five federal fiscal years:

 

| **Federal Fiscal Year****(Ending September 30)** | **Claims Rate** |
|--------------------------------------------------|-----------------|
| 2003                                             | .9              | % |
| 2004                                             | .7              |   |
| 2005                                             | 1.0             |   |
| 2006                                             | 1.0             |   |
| 2007                                             | 1.1             |   |

 

*Net Loan Default Claims.*The following                table sets forth the dollar value of Default Claims paid net of repurchases,                refunds and rehabilitations for the last five years.

 

| **ASA Fiscal Year****(Ending June 30)** | **Default Claims****(Dollars in Millions)** |
|-----------------------------------------|---------------------------------------------|
| 2003                                    | $                                           |   | 80 |
| 2004                                    |                                        | 83 |
| 2005                                    | 1                                           | 68 |
| 2006                                    | 2                                           | 16 |
| 2007                                    | 3                                           | 20 |

 

*Default Recoveries.*The following table                sets forth the amount of recoveries returned to the U.S. Department of Education                for the last five years.

 

| **ASA Fiscal Year****(Ending June 30)** | **Default Recoveries****(Dollars in Millions)** |
|-----------------------------------------|-------------------------------------------------|
| 2003                                    | $                                               |   | 79 |
| 2004                                    |                                            | 82 |
| 2005                                    |                                            | 78 |
| 2006                                    |                                            | 97 |
| 2007                                    | 1                                               | 28 |

 

**California Student Aid Commission**

The California Student Aid Commission (“CSAC”) is the                designated state student loan guaranty agency for the State of California                (“State”), responsible for that State’s participation in the                FFELP pursuant to California Education Code Section 69760 et seq., and Section                428(c) of the Higher Education Act. CSAC’s role as a guaranty agency is to                provide a source of credit to assist students in meeting post-secondary education                costs while attending eligible institutions of their choice.

As authorized under California law, CSAC has established an                auxiliary organization in the form of a nonprofit public benefit corporation to                provide operational and administrative services related to CSAC’s                participation in the FFELP. The auxiliary organization, EDFUND, operates                CSAC’s federal student loan guaranty program pursuant to an operating                agreement with CSAC. CSAC, as the designated state guaranty agency, continues its                oversight or all revenues, expenses and assets related to its status.

CSAC began guaranteeing student loans on April 1, 1979, and as of                September 30, 2007, had cumulative principal guarantees outstanding of                approximately $29.7 billion.

As part of the FFELP, and pursuant to the 1998 Reauthorization                Amendments to the Higher Education Act, the state established the Federal Student                Loan Reserve Fund, referred to as CSAC’s Federal Fund, and the Student Loan                Operating Fund, referred to as CSAC’s Operating Fund. CSAC’s liability                pursuant to the FFELP, including for any loan guarantees, is limited solely to the                amounts contained in these two funds, and the State has not obligation to replenish                these funds if exhausted.

As of September 30, 2007, CSAC’s Federal Fund and Operating                Fund balances were as follows: CSAC’s Federal Fund had total assets of                $126,538,170, total liabilities of $50,117,449 and total fund equity of                $76,420,721; and CSAC’s Operating Fund had total assets of $67,901,237, total                liabilities of $36,379,875 and total fund equity of $31,521,362.

The 1998 Reauthorization Amendments require guaranty agencies to                return to the U.S. Department of Education $250 million in reserve funds from                fiscal years 2002 to 2007, with each agency’s share being based on a formula                prescribed in the 1998 Reauthorization Amendments. The U.S. Department of Education                advised CSAC that its share of this recall is $24,871,909. The first installment                payment of $8,456,449 was paid on August 26, 2002. The second installment of                $8,207,730 was paid on August 31, 2006 and the final installment of $8,207,730 was                paid on August 31, 2007. These payments are disclosed on the financial statements,                and have been recognized as liabilities.

***Guaranty Volume.***CSAC guaranteed                the following amounts for the last five (5) fiscal years ending September 30, as                follows:

 

| **Fiscal Year** | **FFELP Loan Volume****(Dollars in Millions)** |
|-----------------|------------------------------------------------|
| 2003            | 4,421                                          |
| 2004            | 5,712                                          |
| 2005            | 6,577                                          |
| 2006            | 6,878                                          |
| 2007            | 6,765                                          |

 

The information in the following tables has been provided by CSAC                from reports provided by or to the U.S. Department of Education. CSAC has not                verified, and makes no representation as to the accuracy or completeness of, the                information compiled by the Department of Education or as to any calculations other                than required by federal regulation.

 

***Reserve Ratio.***Calculated                pursuant to 34 C.F.R. 682.419,*et                seq*., CSAC’s reserve ratio (determined by dividing                its fund balance by the total amount of loans outstanding) for the last five (5)                fiscal years ending September 30, is as follows:

                 

| **Fiscal Year** | **Reserve Ratio** |
|-----------------|-------------------|
| 2003            | 0.25%             |
| 2004            | 0.25%             |
| 2005            | 0.25%             |
| 2006            | 0.25%             |
| 2007            | 0.26%             |

 

***Recovery Rate.***Calculated                pursuant to 34 C.F.R. 682.409,*et                seq*., CSAC’s recovery rate for each of the past                five (5) fiscal years ending September 30, is as follows:

                 

| **Fiscal Year** | **Recovery Rate** |
|-----------------|-------------------|
| 2003            | 27.23%            |
| 2004            | 27.03%            |
| 2005            | 31.12%            |
| 2006            | 21.73%            |
| 2007            | 19.85%            |

 

***Claims Rate.***Calculatedpursuantto 34 C.F.R. 682.404,*et                seq*., CSAC’s claims rate for each of the past five                (5) fiscal years ending September 30, is as follows:

                 

| **Fiscal Year** | **Claims Rate** |
|-----------------|-----------------|
| 2003            | 2.07%           |
| 2004            | 2.14%           |
| 2005            | 2.81%           |
| 2006            | 3.01%           |
| 2007            | 3.31%           |

 

***Uninsured Loan Loss Rate.***CSAC’s uninsured loan loss rate (determined by dividing annual                uninsured loans by annual net guarantees) for each of the past five (5) fiscal                years is as follows:

                 

| **Fiscal Year** | **Loss Rate** |
|-----------------|---------------|
| 2003            | 0.000%        |
| 2004            | 0.017%        |
| 2005            | 0.000%        |
| 2006            | 0.002%        |
| 2007            | 0.057%        |

 

 

**Great Lakes Higher Education Guaranty                Corporation**

Great Lakes Higher Education Guaranty Corporation                (“GLHEGC”) is a Wisconsin nonstock, nonprofit corporation the sole                member of which is Great Lakes Higher Education Corporation (“GLHEC”).                GLHEGC’s predecessor organization, GLHEC, was organized as a Wisconsin                nonstock, nonprofit corporation and began guaranteeing student loans under the                Higher Education Act in 1967. GLHEGC is the designated guarantee agency under the                Higher Education Act for Wisconsin, Minnesota, Ohio, Puerto Rico and the Virgin                Islands. On January 1, 2002, GLHEC (and GLHEGC directly and through its                support services agreement with GLHEC), outsourced certain aspects of its student                loan program guaranty support operations to GLELSI. GLHEGC continues as the                “guaranty agency” as defined in Section 435(j) of the Higher                Education Act and continues its default aversion, claim purchase and compliance,                collection support and federal reporting responsibilities as well as custody and                responsibility for all revenues, expenses and assets related to that status. GLHEGC                (through its support services agreement with GLHEC) also performs oversight of all                direct and outsourced student loan program operations. The primary operations                center for GLHEC and its affiliates (including GLHEGC and GLELSI) is in Madison,                Wisconsin, which includes the data processing center and operational staff offices                for both guaranty and servicing functions. GLHEC and affiliates also maintain                regional offices in Columbus, Ohio and St. Paul, Minnesota and customer support                staff located nationally. GLHEGC will provide a copy of GLHEC’s most recent                consolidated financial statements on receipt of a written request directed to                2401 International Lane, Madison, Wisconsin 53704, Attention: Chief Financial                Officer.

GLHEGC has entered into a Voluntary Flexible Agreement with the U.S.                Department of Education pursuant to the 1998 Reauthorization Amendments. Under                GLHEGC’s agreement, which commenced October 1, 2000 and is currently                effective through September 30, 2008, GLHEGC’s revenues are tied directly to                default aversion performance. Certain sources of GLHEGC’s Operating Fund                revenues are replaced by a single fee-for-service funding source tied directly to                the percentage of delinquent loans that do not default during the measurement                period. In lieu of statutory collection retention amounts, the U.S. Department of                Education reimburses GLHEGC only for its actual post-default collection related                expenses. This agreement also calls for GLHEGC to escrow the liquid assets of                GLHEGC’s Federal Fund for the benefit of the U.S. Department of Education.                GLHEGC may also engage in negotiations with lenders to define whether the lender or                GLHEGC will complete each of the due diligence requirements. Finally, this                agreement allows GLHEGC to pilot a new approach to the claims review process, under                which GLHEGC develops and implements with willing lenders and servicers a                post-claim random sampling process that replaces the current claim-by-claim                process.

The information in the following tables has been provided to the                Issuer from reports provided by or to the U.S. Department of Education and has not                been verified by the Issuer, GLHEGC or the initial purchasers. No representation is                made by the Issuer, GLHEGC or the initial purchasers as to the accuracy or                completeness of this information. Prospective investors may consult the United                States Department of Education Data Books and Web sitehttp://www.ed.gov/finaid/prof/resources/data/opeloanvol.htmlfor further information concerning GLHEGC or any other guarantee                agency.

***Guarantee Volume***. GLHEGC’s                guaranty volume for each of the last five federal fiscal years, including Stafford,                Unsubsidized Stafford, SLS, PLUS, Graduate PLUS and Consolidation loan volume, was                as follows:

 

| **Federal Fiscal Year** | **Guaranty Volume (Millions)** |
|-------------------------|--------------------------------|
|                    |                           |   |
|                    | 2002                           | 4,473 | .1 |
|                    | 2003                           | 8,721 | .3 |
|                    | 2004                           | 7,707 | .6 |
|                    | 2005                           | 9,686 | .3 |
|                    | 2006                           | 12,797 | .2 |
|                         |                                |  |  |  |

 

***Reserve Ratio***. Following are                GLHEGC’s reserve fund levels as calculated in accordance with 34 CFR                682.410(a)(10) for the last five federal fiscal years:

 

| **Federal Fiscal Year** | **Federal Guaranty Reserve Fund Level                                1/** |
|-------------------------|---------------------------------------------------------------------------|
|                    |                                                                      |
| 2003                    | 1.29                                                                      | % |
| 2004                    | 0.99                                                                      | % |
| 2005                    | 0.83                                                                      | % |
| 2006                    | 0.72                                                                      | % |
| 2007                    | 0.69                                                                      | % |

 

The                Department of Education’s website at http://www.fp.ed.gov/fp/attachments/activities_whatsnew/03040506ReserveRatioFinalPublicReport.xls has posted reserve ratios for GLHEGC for federal fiscal years 2003,                2004, 2005 and 2006 of 1.168%, .646%, .578% and .517% respectively. GLHEGC believes                the Department of Education has not calculated the reserve ratio in accordance with                the Act and the correct ratio should be 1.29%, .99%, .83% and .72%, respectively,                as shown above and as explained in the following footnote. On November 17, 2006,                the Department of Education advised GLHEGC that beginning in Federal Fiscal Year                2006 it will publish reserve ratios that include loan loss provision and deferred                revenues. GLHEGC believes this change should more closely approximate the statutory                calculation. According to the Department of Education, available cash reserves may                not always be an accurate barometer of a grantor’s financial                health.

 

| 1/ In accordance with Section 428(c)(9)                                of the Higher Education Act, does not include loans transferred                                from the former Higher Education Assistance Foundation, Northstar                                Guarantee Inc., Ohio Student Aid Commission or Puerto Rico Higher                                Education Assistance Corporation. (The minimum reserve fund ratio                                under the Higher Education Act is .25%) |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

***Claims Rate***. For the past five                federal fiscal years, GLHEGC’s claims rate has not exceeded 5%, and, as a                result, the highest allowable reinsurance has been paid on all GLHEGC’s                claims. The actual claims rates are as follows:

                 

| **Fiscal Year** | **Claims Rate** |
|-----------------|-----------------|
|            |            |   |
|            | 2003            | 1.27 | % |
|            | 2004            | .68 | % |
|            | 2005            | .51 | % |
|            | 2006            | .62 | % |
|            | 2007            | .77 | % |
|                 |                 |  |  |  |

 

As a result of various statutory and regulatory changes over the                past several years, historical rates may not be an accurate indicator of current                delinquency or default trends or future claims rates.

**Item 1117. Legal Proceedings**

The Registrant knows of no material pending legal                proceedings.

**Item 1119. Affiliates and Certain Relationships and Related                Transactions.**

Information related to affiliates of the Registrant and certain                relationships and related transactions is provided in the section titled                “College Loan Corporation Trust II” in the prospectus supplement dated                March 2, 2007 and the sections titled “The Depositor” and “The                Sponsor and the Issuer Administrator” in the prospectus dated February 8,                2007, each of which was filed with the Securities and Exchange Commission on March                5, 2007 pursuant to Rule 424(b), file 333-136003-01, and incorporated herein by                reference.

**Item 1122. Compliance with Applicable Servicing                Criteria**

A Managements Assessment of Compliance with Regulation AB Servicing                Criteria, along with a related accountant’s attestation report, for each of                ACS Education Services, Inc., CLC Servicing Great Lakes Educational Loan Services                Inc., Deutsche Bank Trust Company Americas and College Loan Corporation is included                as an exhibit to this report. Except as described by the following, there have been                no material instances of noncompliance with the servicing criteria for the period                of this report.

ACS Education Services, Inc. reported material noncompliance with                servicing criterion 1122(d)(2)(ii) and 1122(d)(4)(iv). Related to criterion                1122(d)(2)(ii), disbursements made via wire transfers on behalf of an obligor to                the lender were not made by authorized personnel. ACS Education Services, Inc. has                taken corrective action and now retains daily bank access user reports to provide                evidence of compliance with servicing criterion 1122(d)(2)(ii). Related to                criterion 1122(d)(4)(iv), certain payments on pool assets were posted to the                obligors records more than two business days after receipt. For certain pool                assets, the related transaction agreement states that payments are to be made                within a mutually acceptable schedule; the referenced schedule has not been                executed. ACSEducation Services, Inc. expects to execute a                mutually acceptable schedule with the lender that will specify payment posting and                effective date time frames when payments received do not allow for the systematic                posting within two days after receipt.

CLC Servicing reported material noncompliance with servicing                criterion 1122(d)(2)(i), 1122(d)(2)(vii) and 1122(d)(4)(vi). Related to criterion                1122(d)(2)(i), transfer of borrower payments to the appropriate custodial account                were not made within 2 business days of receipt of payment. Effective November 9,                2007 CLC Servicing changed their process and began wiring funds to the appropriate                custodial accounts within two business days of the payment posting date on the CLC                Servicing system. Related to criterion 1122(d)(2)(vii), bank account                reconciliations have reconciling items that are not cleared within 90 days. As of                December 31, 2007, bank account reconciling items are cleared within 90 days.                Related to criterion 1122(d)(4)(vi), between July and September 2007, the Student                Status Confirmation Report (SSCR) automation process was undergoing system                enhancements and SSCR reports with student status changes were not processed                timely. This resulted in some loans not entering repayment in a timely manner. The                backlog of SSCR processing was resolved in early September and SSCR processing has                remained current.

By the end of June 2008, CLC Servicing will have transferred all                pool assets and servicing activities to ACS Education Services, Inc. and exited the                business of servicing student loans. The transfer of pool assets and servicing                activities to ACS Education Services, Inc. will be done in accordance with the                transaction documents.

**Item 1123. Servicer Compliance Statement**

A Servicer Compliance Statement for each of ACS Education Services,                Inc., CLC Servicing, and College Loan Corporation is included as an exhibit to this                report. Exhibit 35.1 references ACS Education Services, Inc., exhibit 35.2                references CLC Servicing and exhibit 35.3 references College Loan                Corporation.

 

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the                Securities Exchange Act of 1934, the Registrant has duly caused this report to be                signed on its behalf by the undersigned, thereunto duly authorized:

 

| College Loan Corporation Trust II |
|-----------------------------------|
| By: College Loan LLC, Depositor   |
|                              |
|                              |
| By:                               | /s/ John Falb |
|                              | John Falb |
|                              | Chief Financial Officer |
|                              | College Loan LLC |

|   | Senior Officer In Charge of                                Securitization |
|--------|---------------------------------------------------------------------------|

                 

 

**INDEX TO EXHIBITS**

 

| **EXHIBIT** | **DESCRIPTION**                                                                                                                                                                                                                                                              |
|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                         |
| 31.1        | Rule 13a-14(a)/15d-14a Certification. (Section 302                                Certification)                                                                                                                                                                             |
|        |                                                                                                                                                                                                                                                                         |
| 33.1        | Report on Assessment of Compliance with Servicing                                Criteria concerning servicing activities of ACS Education Services,                                Inc. for the year ended December 31, 2007.                                               |
|        |                                                                                                                                                                                                                                                                         |
| 33.2        | Report on assessment of Compliance with Servicing                                Criteria concerning servicing activities of CLC Servicing for the                                year ended December 31, 2007.                                                              |
|        |                                                                                                                                                                                                                                                                         |
| 33.3        | Report on assessment of Compliance with Servicing                                Criteria concerning servicing activities of Great Lakes Educational                                Loan Services, Inc. for the year ended December 31,                                2007. |
|        |                                                                                                                                                                                                                                                                         |
| 33.4        | Report on assessment of Compliance with Servicing                                Criteria concerning servicing activities of Deutsche Bank Trust                                Company Americas for the year ended December 31, 2007                                        |
|        |                                                                                                                                                                                                                                                                         |
| 33.5        | Report on assessment of Compliance with Servicing                                Criteria concerning servicing activities of College Loan                                Corporation for the year ended December 31, 2007.                                                   |
|        |                                                                                                                                                                                                                                                                         |
| 34.1        | Independent Accountants’ Attestation Report                                concerning servicing activities of ACS Education Services, Inc. for                                the year ended December 31, 2007.                                                        |
|        |                                                                                                                                                                                                                                                                         |
| 34.2        | Independent Accountants’ Attestation Report                                concerning servicing activities of CLC Servicing for the year ended                                December 31, 2007.                                                                       |
|        |                                                                                                                                                                                                                                                                         |
| 34.3        | Independent Accountants’ Attestation Report                                concerning servicing activities of Great Lakes Educational Loan                                Services, Inc. for the year ended December 31, 2007.                                         |
|        |                                                                                                                                                                                                                                                                         |
| 34.4        | Independent Accountants’ Attestation Report                                concerning servicing activities of Deutsche Bank Trust Company                                Americas for the year ended December 31, 2007.                                                |
|        |                                                                                                                                                                                                                                                                         |
| 34.5        | Independent Accountants’ Attestation Report                                concerning servicing activities of College Loan Corporation for the                                year ended December 31, 2007.                                                            |
|        |                                                                                                                                                                                                                                                                         |
| 35.1        | Statement of Compliance of ACS Education Services,                                Inc. under the Federal FFEL Origination/Servicing Agreement for the                                year ended December 31, 2007.                                                           |

 

| 35.2   | Statement of Compliance of CLC Servicing under the                                Federal FFELP Origination and Servicing Agreement for the year                                ended December 31, 2007 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                    |
| 35.3   | Statement of Compliance for College Loan Corporation                                under the Administration Agreement for the year ended December 31,                                2007.             |