Student loans[edit]
ABS collateralized by student loans (“SLABS”) comprise one of the four (along with home equity loans, auto loans and credit card receivables) core asset classes financed through asset-backed securitizations and are a benchmark subsector for most floating rate indices .[citation needed] Federal Family Education Loan Program (FFELP) loans are the most common form of student loans and are guaranteed by the U.S. Department of Education ("USDE") at rates ranging from 95%–98% (if the student loan is serviced by a servicer designated as an "exceptional performer" by the USDE the reimbursement rate was up to 100%).[citation needed] As a result, performance (other than high cohort default rates in the late 1980s) has historically been very good and investors rate of return has been excellent.[citation needed] The College Cost Reduction and Access Act became effective on October 1, 2007 and significantly changed the economics for FFELP loans; lender special allowance payments were reduced, the exceptional performer designation was revoked, lender insurance rates were reduced, and the lender paid origination fees were doubled.
Student loans[edit]ABS collateralized by student loans (“SLABS”) comprise one of the four (along with home equity loans, auto loans and credit card receivables) core asset classes financed through asset-backed securitizations and are a benchmark subsector for most floating rate indices .[citation needed] Federal Family Education Loan Program (FFELP) loans are the most common form of student loans and are guaranteed by the U.S. Department of Education ("USDE") at rates ranging from 95%–98% (if the student loan is serviced by a servicer designated as an "exceptional performer" by the USDE the reimbursement rate was up to 100%).[citation needed] As a result, performance (other than high cohort default rates in the late 1980s) has historically been very good and investors rate of return has been excellent.[citation needed] The College Cost Reduction and Access Act became effective on October 1, 2007 and significantly changed the economics for FFELP loans; lender special allowance payments were reduced, the exceptional performer designation was revoked, lender insurance rates were reduced, and the lender paid origination fees were doubled.
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