UHEAA Borrower Benefits Program Disclosure Statement
(Subject to change without notice. Terms and conditions apply.)
Last Updated August 29, 2008

Default Fee Benefit:

UHEAA's Secondary Market Loan Purchase Program (LPP) will pay the 1% guarantee fee to the Guarantor on behalf of the borrower for Federal Stafford loans.

Automatic Payment Benefit:

As long as LPP holds the loan, UHEAA will reduce the interest rate charged to borrowers on Federal Stafford and Federal Parent and Graduate/Professional PLUS loans as determined by the date of first disbursement:

• Loans first disbursed on or after July 1, 2008 by 0.25%.
• Loans first disbursed on or after January 1, 2008 by 0.50%.
• Loans first disbursed on or before December 31, 2007 by 1.25%.

As long as LPP holds the loan, UHEAA will reduce the interest rate charged to borrowers on Federal Consolidation loans as determined by the following:

• Federal Consolidation loan originations are indefinitely suspended effective September 1, 2008.
• Federal Consolidation loans disbursed on or after January 1, 2008 and before April 30, 2008 by UHEAA will reduce the interest rate by 0.25%.
• Federal Consolidation loans first disbursed on or after May 1, 2006 and before December 31, 2007, UHEAA will reduce the interest rate by 0.50%.
• Federal Consolidation loans disbursed on or before April 30, 2006 UHEAA will reduce the interest rate by 1.25%.

This benefit is active during any period in which the borrower makes payments automatically from a checking or savings account through UHEAA’s Automatic Payment Benefit program, subject to the following:

• In order to qualify for the Automatic Payment Benefit, all of a borrower's loans serviced by UHEAA must be set-up for automated payments.
• Loans that are in repayment status qualify for the Automatic Payment Benefit after the account is set-up for automatic payments from a checking or savings account. Loans in deferment, forbearance or grace status are not eligible for the Automatic Payment Benefit. An Automatic Payment Benefit application received for a loan in deferment, forbearance or grace status will be processed once the loan enters repayment.
• The Automatic Payment Benefit interest rate reduction remains in effect as long as the loan(s) are paid by automated payments.
• The Automatic Payment Benefit will be canceled if the loan has more than one returned transactionfor any reason (NSF, Account Closed, Incorrect T/R, etc.) within any 12-month period. In the case of a second returned transaction, the interest rate reduction is ended and the interest rate returns to the current statutory rate. The borrower may re-apply for the Automatic Payment Benefit after making on-time payments for 12 consecutive months by cash, check or money order. The borrower’s loan(s) will not become eligible for the Automatic Payment Benefit for a period of 12 months from the date of the occurrence of the 2nd returned transaction. Lump-sum payments will not accelerate the re-establishment of eligibility.
• Loans accrue interest at the federal statutory rate, not the reduced rate, during periods of deferment and forbearance. During periods of deferment, the U.S. Department of Education will pay the accrued interest on subsidized loans at the statutory rate.
• The automatic payment withdrawals and Automatic Payment Benefit automatically resume upon expiration of a deferment or forbearance.
  

Origination Fee Credit Benefit:

• For Federal Stafford loans guaranteed by UHEAA on or after May 1, 2000, UHEAA will credit to the borrower's principal loan balance, upon purchase of the loans by LPP, an amount equal to the Origination Fee originally deducted from the borrower's loan proceeds.
• Federal Parent and Graduate/Professional PLUS guaranteed by UHEAA on or after May 1, 2000 and on or before December 31, 2007, UHEAA will credit to the borrower's principal loan balance, upon purchase of the loans by LPP, an amount equal to the Origination Fee originally deducted from the borrower's loan proceeds.

Subject to the following:

• Federal Stafford orFederal Parent and Graduate/Professional PLUS loans purchased by LPP and then immediately paid by a Federal Consolidation loan are eligible for this credit. Federal Stafford or Federal Parent and Graduate/Professional PLUS loans paid by a Federal Consolidation loan prior to LPP purchasing the Federal Stafford or Federal Parent and Graduate/Professional PLUS loan are not eligible for this credit.
• The Origination Fee Credit Benefit is applied to the account balance within 30-60 days of loan purchase by LPP.
• The Origination Fee Credit Benefit can only be applied as a credit to the loan principal. The borrower may not receive a direct refund. In the case of a payment in full prior to receipt of the credit, the credit is posted to the principal loan balance and any overpaid amount is refunded to the borrower by check.

Timely Payment Origination Fee Credit Benefit:

For Federal Stafford or Federal PLUS loans guaranteed by UHEAA prior to May 1, 2000 and first disbursed on or after January 1, 1995, UHEAA will credit to the borrower’s principal balance an amount equal to the Origination Fees paid by the borrower in excess of $240 after the borrower pays the first 24 monthly payments on time, subject to the following:

• The Timely Payment Origination Fee Credit Benefit will apply as long as LPP continues to hold the loan.
• The borrower is allowed to make three late payments between 15 and 30 days after the due date without losing eligibility for the Timely Payment Origination Fee Credit Benefit.
• The borrower is immediately disqualified from the Timely Payment Origination Fee Credit Benefit if a payment is 31 days or more delinquent.
• The Timely Payment Origination Fee Credit Benefitis the net amount of origination fees charged to the borrower in excess of $240. To qualify for this benefit the total indebtedness of a borrower’s loans held by LPP must exceed $8,000.
• Periods of time when a loan is in deferment or forbearance are not used to calculate the 24 month time period.
• Lump-sum payments count as eligible monthly payments if the due date is advanced. If the borrower instructs UHEAA to post a lump sum payment as a principal reduction and advises UHEAA not to advance your due date, the lump sum amount will count as one monthly payment.

Timely Payment Benefit:

• Federal Stafford or Federal Parent and Graduate/Professional PLUS loans that first began repayment on or after January 1, 2008 and before April 30, 2008, UHEAA will reduce the outstanding balance by 2% if the borrower pays the first 48 monthly payments on time.
• Federal Stafford or Federal Parent and Graduate/Professional PLUS loans that first began repayment on or after January 1, 1993 and before December 31, 2007, UHEAA will reduce the interest rate 2% if the borrower pays the first 48 monthly payments on time.
• Federal Consolidation loans originated on or after May 1, 2006 and for for Federal Consolidation applications received prior to October 8, 2007, UHEAA will reduce the interest rate 1% if the borrower pays the first 36 monthly payments on time.
• Federal Consolidation loans originated on or after January 1, 1993 and before April 30, 2006, UHEAA will reduce the interest rate 1% if the borrower pays the first 48 monthly payments on time.

Eligibility for this interest rate discount is subject to the following additional terms and conditions:

• The interest rate reduction will apply as long as LPP continues to hold the loan.
• The borrower’s loan is immediately disqualified from the Timely Payment Benefit if a payment is made 15 days or more delinquent.
• The Timely Payment Benefit can be earned only during the first 48 months (or 36 months for a Federal Consolidation loan) of repayment.
• Periods of time when an account is in deferment or forbearance are not counted in the 48 or 36 month time period.
• Lump-sum payments count as eligible monthly payments if the due date is advanced. If the borrower instructs UHEAA to post a lump sum payment as a principal reduction and advises UHEAA not to advance the due date, the lump sum amount will count as one monthly payment. A borrower must make 36 or 48 timely payments on all open loans in order to qualify.  A borrower may not pay a single open loan or a subset of open loans ahead of other loans in order to accelerate eligibility.
• Federal Stafford or Federal PLUS loans entering repayment or Consolidation Loans originated prior to January 1, 1993 do not qualify for this benefit.
• If a borrower consolidates Federal Stafford or Federal Parent and Graduate/Professional PLUS loans held by LPP on which this benefit has been earned, the borrower must re-qualify for the Timely Payment Benefit.
• If a borrower consolidates Federal Stafford or Federal Parent and Graduate/Professional PLUS loans, the statutory rate, not the reduced rate, will be used to calculate the weighted average of the Federal Consolidation loan.
  
  

Federal PLUS Loan Interest Credit Benefit:

For Federal PLUS loans, held by LPP, with a first disbursement date on or after July 1, 1999 and before July 1, 2006, UHEAA applies a credit to your Federal PLUS loan principal balance equal to the amount of interest paid by you during the first 12 months of repayment, subject to the following:

• The PLUS Loan Interest Credit Benefit is calculated using the actual amount of interest paid on the account during the first 12 months of repayment. Capitalized interest does not count toward the credit.
• Periods of deferment or forbearance do not extend the 12 month repayment period.
• The Federal PLUS Loan Interest Credit Benefit is calculated and applied to the loan principal balance within 60 days after the end of the first 12 months of repayment.
• If a borrower pays a Federal PLUS loan in full during the first 12 months of repayment, the credit will be applied to the account and then refunded as an overpayment within 60 days of payoff. Overpayments are refunded to the borrower by check. If the loan is paid in full, the interest credit is equal to the actual amount of interest paid on the account, including accrued interest paid by consolidation.
• If the loan is paid in full by consolidation and the consolidation loan is held by LPP, the credit is applied to the consolidation loan.
• Lump sum payments cannot accelerate Federal PLUS Loan Interest Credit Benefit eligibility. The loan does not become eligible for this benefit until the first 12 months of repayment have elapsed.
• Loans that are rehabilitated and repurchased are not eligible for the Federal PLUS Loan Interest Credit Benefit.