USA Funds Code of Business Conduct

To USA Funds’ Employees:

One of the hallmarks of United Student Aid Funds, Inc. and its affiliates ("USA Funds") is our commitment to our core values: the way we treat each other, our customers, our suppliers and the communities in which we work and live.

USA Funds®’ reputation and its success must be grounded in compliance with applicable laws and regulations, but our definition of success goes well beyond compliance, including issues of integrity and ethics, diversity and respect for others. In our work environment, we are challenged with situations that require us to balance decisions with our core values and standards.

This Code of Business Conduct summarizes USA Funds’ core values and describes the standards of business conduct expected of all of us at USA Funds.

It is the responsibility of all of us to maintain a work environment that fosters fairness, respect and integrity. Ultimately, our most valuable asset is USA Funds’ outstanding reputation as the nation’s largest guarantor, and it is up to all of us to protect it.

Carl C. Dalstrom
President and Chief Executive Officer

I. Introduction
USA Funds is committed to conducting business ethically, legally and with integrity. This Code of Business Conduct ("Code") sets forth USA Funds’ core values and many of the ethical principles and legal policies USA Funds has developed to assist us with our commitment. All employees are expected to read this Code and to apply these core values and principles in the performance of their job responsibilities. This Code is intended to be a guide containing the minimum requirements expected of USA Funds’ employees, but does not and could not address every possible situation. If you have questions regarding a specific situation, policy or legal obligation, please contact your management or the General Counsel.

All employees are expected to report what he/she believes to be illegal or unethical conduct.  Your first option is to report the illegal or unethical conduct to your management.  If you are uncomfortable doing so, contact either the Chief Executive Officer or the General Counsel.  If you are not comfortable contacting either the Chief Executive Officer or the General Counsel, you may contact the Chair of the Audit Committee of the Board of Trustees.   If you do not feel comfortable directly contacting any of the previously mentioned individuals, you may make use of a third-party ethics hotline service.  Under no circumstance will any employee be subject to any disciplinary or retaliatory action as a result of filing a reported violation in good faith.  The employee will remain anonymous to the fullest extent practicable.
 
II. Core Values
USA Funds’ policy is to be lawful, highly principled and socially responsible in all of its business practices. USA Funds expects its employees to learn and comply with company policies and laws applicable to their job responsibilities and to adhere to the guiding principles outlined in this Code.

Underlying USA Funds’ success in this endeavor is our fundamental core values we believe in and practice:

PEOPLE are the source of our success. We treat one another with respect, promote teamwork, and encourage personal freedom and growth. Leadership and excellence in performance are sought and rewarded.

CUSTOMERS are the reason we exist. They receive our strongest commitment to meet their needs.

OUR SERVICES reflect dedication to quality, innovation and value.

OUR CONDUCT demonstrates integrity and commitment to ethics, safety, health and our work environment.
 
III. USA Funds’ Responsibility to Employees
USA Funds is committed to provide a work environment that values diversity among its employees. All company policies and activities intend to create a respectful workplace in which every individual has the opportunity to contribute meaningfully and reach his or her highest potential.

USA Funds is committed to provide employment, compensation, training, promotions, upgrading, and other conditions of employment without regard to race, color, religion, sex, age, handicap, or national origin, and to take affirmative action, as appropriate, to ensure the meeting of these objectives, and to maintain safe and healthy working conditions. Further, no supervisor or manager may require, suggest, or infer that a subordinate act unethically. All levels of management are responsible for monitoring and complying with policies and procedures for handling employee complaints concerning harassment or other forms of unlawful discrimination. Abusive, harassing, threatening or offensive conduct or acts of violence are unacceptable, whether verbal, physical, or visual.

USA Funds is committed to maintain a safe workplace by following safety and health rules and practices. We are all responsible for immediately reporting accidents, injuries, and unsafe equipment, practices or conditions to management.
 
IV. USA Funds’ Responsibility to Customers
USA Funds is committed to providing our customers with value through quality products and services that meet or exceed requirements and specifications, delivered according to fair charges and agreed schedules. Fair prices will be established based on costs, the technology involved, the difficulty of overall contract performance, market conditions and other relevant factors. USA Funds will observe the laws, rules, and regulations that are applicable to the acquisition of goods and services by our customers.

USA Funds is committed to build long-term relationships with our customers by demonstrating honesty and integrity. USA Funds will obtain business legally and ethically.

USA Funds is committed to providing students and parent borrowers timely and effective education finance resources in an ethical and prudent manner.

USA Funds is committed to protect customer information that is sensitive, private or confidential just as carefully as our own.
 
V. USA Funds’ Responsibility to Suppliers/Business Partners
USA Funds is committed to being a good customer and will emphasize fair competition, a sense of responsibility, and long lasting relationships. Rates or fees paid to suppliers of products or services shall be reasonable in relation to the value, quality and service with respect to a product or work being performed.
 
VI.  USA Funds’ Responsibility to Competitors

USA Funds will compete vigorously, but fairly and ethically for business opportunities.

USA Funds is committed to comply with antirust laws. "Antitrust" is a blanket term used for the Clayton, Sherman, Robinson-Patman, and Federal Trade Commission Acts. The main objective of antitrust laws is to preserve competition and an open market. The United States antitrust laws prohibit agreements and activities that may have the effect of reducing competition without providing counterbalancing benefits to consumers. Agreements and activities, which are prohibited, include:

• Agreements with competitors to fix or control pricing;
• Agreements with competitors to allocate products, markets or territories;
• Agreements to boycott certain customers or suppliers;
• Agreements to refrain from or limit the manufacture, sale or production of any product; or
• Reciprocal purchase arrangements or tie-ins.

Accordingly, agreements with competitors regarding pricing, terms, or conditions of sale, or allocation of products, business markets, customers, or territories are prohibited. It is also against USA Funds’ policy to discuss or correspond directly or indirectly with any competitor regarding plans or contemplated actions of USA Funds on pricing, terms, or conditions of sales.

USA Funds is committed to never use any illegal or unethical method to gather competitive information. Stealing proprietary information without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited.
 
VII.  USA Funds’ Responsibility to Communities
USA Funds is committed to responsible corporate citizenship. We will conduct ourselves in an ethical manner in all aspects of our business. Employees of USA Funds are free and encouraged to support community and charity causes of their choice, as long as it is made clear that their views and actions are not those of USA Funds. Remember, your participation must be on an individual basis, on your own time, and at your own expense.

USA Funds is committed to the protection of the environment by minimizing the environmental impact of our operations and operating our business in ways that will foster a sustainable use of the world’s natural resources to the maximum extent reasonably possible. USA Funds will fully comply with all state and federal laws relating to the protection of the environment in the conduct of its business.
 
VIII. USA Funds’ Responsibility to Governments

USA Funds is committed to comply with all applicable laws and regulations.

No employee of USA Funds may make any political contribution for USA Funds or use USA Funds’ name, funds, property, equipment or services for support of political parties, initiatives, committees or candidates. This includes any contribution of value. Additionally, all government contacts shall be coordinated with the Government and Industry Relations Division. Examples of prohibited conduct would be using corporate clerical time to send invitations for a political fund-raising event, allowing any candidate to use any corporate facility, or loaning any corporate property to anyone for use in connection with a political campaign.

USA Funds will comply with anti-corruption laws. Employees of USA Funds will not directly or indirectly offer to make a corrupt payment to government officials, including employees of state-owned enterprises. USA Funds will comply with the Foreign Corrupt Practices Act which prohibits, for the purpose of obtaining or retaining business, the giving of money or things of value to any foreign official to influence any of his official acts or decisions or to induce him to use his influence to affect any act or decision of his government or one of its agencies. This Act further prohibits giving money or items of value to any person or firm where there is reason to believe that it will be passed on to a government official for this purpose. Any questions regarding the application of the Foreign Corrupt Practices Act and the providing of entertainment, meals, or other things of value to government officials must be coordinated through the General Counsel
 
IX.  Business Entertainment, Gifts, and Payments
The success of USA Funds and affiliated companies is based on the value provided to its customers through quality products and services delivered according to agreed schedules. USA Funds does not seek to gain any improper advantage through the use of entertainment, meals, other business courtesies or gifts. Accordingly, their use under circumstances that might infer that favorable treatment is being sought must be avoided. It is imperative that when we meet with customers, we exercise good judgment and moderation in providing business courtesies and offer them only when appropriate and in accordance with reasonable and lawful customs in the marketplace.

USA Funds specifically prohibits the offering, giving, or receiving of any form of bribe or kickback. Under most circumstances, these are criminal acts and can result in the criminal prosecution of the involved employee. Additionally, such acts are prohibited employee conduct and violators will be disciplined in accordance with the Employee Handbook.

Gifts/Entertainment Provided by USA Funds’ Employees

A. Government Personnel
Federal law makes it a felony to offer or give anything of value to a government official because of any official act performed or to be performed. In addition, most government agencies have strict standards that their employees must follow regarding the receipt of gifts, entertainment, meals, or other things of value.

USA Funds’ employees must respect the law and the policies of government agencies with which we do business. In those situations where an agency’s rules permit its employees to receive certain types of business entertainment, meals, or other things of value, these should not be extended unless it is understood by both parties that the entertainment is not being offered to influence any official act performed or to be performed by the employee or the agency. In any event, employees should not offer such entertainment if it could be misconstrued and thus embarrass the agency employee involved or USA Funds.

B. Non-government Personnel
From time to time, we may provide unsolicited entertainment, meals, and other business courtesies to non-government personnel, provided such occasions arise out of the ordinary course of business, involve reasonable, not lavish, expenditures, do not obligate the recipient in any manner, and take place in a setting reasonable and appropriate for the individuals involved and the business at hand.

Employees may give gifts to customers or potential customers where the presentation and acceptance of gifts is lawful and the normal business practice. All such gifts shall be of reasonable value and the presentation approved in advance by your superior. Such gifts must be presented in a manner that clearly identifies USA Funds and the occasion that warrants the presentation. In all cases where entertainment, meals, other business courtesies, or gifts are being provided, employees must ensure that such expenditures are in the proper course of business and cannot reasonably be construed as bribes or improper inducements.

Gifts/Entertainment Received by USA Funds’ Employees
USA Funds’ employees may accept entertainment, meals, and refreshments in connection with business relationships, provided each of the criteria under which we provide these to others are observed; namely, they are unsolicited, are provided infrequently, involve reasonable, not lavish, expenditures, do not create an obligation or expectation and take place in a setting reasonable and appropriate for the individuals involved and the business relationships.

Each of us must ensure that our acceptance of such meals, refreshments, or entertainment is proper and could not reasonably be construed as an attempt by the providing party to secure favorable treatment.

In addition, any employee, officer, director, trustee, or agent of USA Funds, his or her partner, or any member of his or her immediate family, is prohibited from soliciting or accepting gratuities, favors, or anything of monetary value from contractors or parties to agreements, except that nominal and unsolicited gratuities, favors or items may be accepted. In no case may a gratuity or favor exceed $25. Generally, gifts of more than nominal value should be tactfully discouraged.

If you are in doubt about the appropriateness of a gift or offer extended by someone wishing to do business with USA Funds, you should immediately consult with your management or the General Counsel.

These federal regulations may change or be amended from time to time. It is important that you consult with your supervisor or seek guidance from the Legal Division in the event that you have any questions or concerns as to compliance.
 
X.  Complete and Accurate Accounting Books and Records
USA Funds’ policy requires full compliance with the spirit and letter of the applicable laws and regulations that require that its books of account and records be accurately maintained and fully disclose the nature of transactions reflected in them. Accordingly, employees are reminded of the following record keeping requirements:

• All records, ranging from personal time sheets and expense accounts to corporate operating financial statements, must be kept in reasonable detail and accurately and fairly reflect the transactions and dispositions of USA Funds’ assets;
• All disbursements of funds and all receipts must be properly and promptly recorded;
• No undisclosed or unrecorded fund may be established for any purpose; and
• A system of internal accounting controls shall be maintained that is sufficient to provide reasonable assurances that transactions are executed in accordance with management’s authorization, are recorded in a manner that permits preparation of financial statements in conformity with generally accepted accounting principles and other applicable criteria, and are recorded so as to maintain accountability for USA Funds’ assets.

We should all be aware that penalties for violating the laws and regulations in this area can be severe for USA Funds and the employees involved.
 
XI.  Preservation of Assets
It is the responsibility of each of us to preserve, protect and secure the assets of USA Funds, including its property, supplies, consumables, equipment, technology, and proprietary information. No employee shall make improper use of USA Funds’ or customer resources or permit others to do so. The use of USA Funds’ materials, equipment and information for non-corporate purposes is permitted only with the approval of individuals having authority to permit such usage. For example, it is against corporate policy, not to mention copyright law and some license agreements, to which USA Funds has agreed, to copy software owned or licensed by USA Funds for personal use. In addition, failure to maintain control over our technology could result in irreparable harm to USA Funds. Accordingly, each of us is responsible for guarding USA Funds’ technology against unauthorized access or disclosure. This applies to proprietary data developed or purchased by USA Funds as well as to information entrusted to us by suppliers, borrowers, and clients. These restrictions apply irrespective of how the information exists, whether in written form, electronic form, or simply known to us.
 
XII.  Conflicts of Interest
Employees have an obligation to conduct business within guidelines that identify actual or potential conflicts of interest. A conflict of interest occurs when an employee is in a position to influence a decision that may result in personal gain for that employee, for a relative, or a personal friend as a result of USA Funds’ business dealings. For the purposes of this policy, a relative is any person who is related by blood or marriage.

Business dealings with outside firms should not result in unusual gains for employees. Unusual gain refers to bribes, product bonuses, special fringe benefits, unusual price breaks and other windfalls designed to ultimately benefit the employee. Promotional plans that could be interpreted to involve unusual gain require specific management approval.

No employee, officer, director or trustee of USA Funds may participate in the selection, award, or decision-making related to the administration of a contract with a vendor, or be in a position to benefit a vendor, through action or inaction, if that participation would create a conflict of interest. Such a conflict would arise if the employee, officer, director, or trustee, or any member of his or her immediate family, has a financial or ownership interest in the organization selected for an award or would benefit from the decision made in the administration of the contract or agreement. Employees must disclose personal or family ownership of a substantial financial interest (defined as greater than five percent (5%) ownership of the outstanding stock or the stock represents more than ten percent (10%) of your portfolio) in any competitor, supplier, or customer, whether or not such employee participates in the selection, award or decision making relating to such competitor, supplier, or customer. Because of the unique relationship with Sallie Mae, unless approved by the Chief Executive Officer, no employee, officer, director or trustee, or any member of his or her immediate family, may directly own individual shares of Sallie Mae stock. USA Funds may require completion of a conflict of interest questionnaire.

Each one of us as an employee is in a position of trust regarding USA Funds and its assets. Accordingly, we must be careful to avoid situations where our personal interests could conflict or appear to conflict with the interests of USA Funds. Where a conflict exists, it must be resolved to the satisfaction of USA Funds in order for the employer-employee relationship to continue.  Circumstances that could involve conflicts of interest that should be avoided include:

• Personal or family financial interests in a competitor, supplier, or customer;
• Employment by a competitor in any capacity;
• Placement of business in a firm owned or controlled by an employee or a family member; or
• Acting as a consultant to a customer or supplier.

Rules and regulations exist relating to employment of former government employees which would prohibit their employment or impose restrictions on the duties they may perform as employees of USA Funds. USA Funds and any such employee or potential employee must abide by the letter and spirit of these rules and regulations to avoid any possibility of illegality.

USA Funds must ensure sufficient separation of responsibility and authority between its lender claims processing as a guaranty agency and loan servicing activities, including independence in direct reporting requirements and such management and systems controls as may be necessary to demonstrate, in the independent audit required under 34 C.F.R. § 682.410(b)(1), that no claims receive favorable treatment.
 
XIII.  Compliance with Securities Laws
USA Funds and its affiliates are not public companies and do not have stock. Even though USA Funds and its affiliates are not publicly traded companies, it is still possible to violate securities laws. When an employee knows a material fact about another company, which was obtained in the performance of the employee's duties at USA Funds and has not been disclosed to the public, the employee must hold that information in the strictest confidence. Material information means facts that would be likely to influence a reasonable investor’s decision and the market price of the stock. The employee must refrain from buying or selling or influencing others to buy or sell the other company's stock until the information has been disclosed. To engage in a buy or sell transaction before the information is disclosed would be using what is known as "material inside information" and would be a violation of Federal and state statutes.
 
XIV.  Compliance and Discipline
We are resolved that the business of USA Funds will be conducted with integrity to serve the overall interests of our employees, customers, suppliers, and communities. Strict compliance with this Code by each of us is mandatory.

This Code is vital to USA Funds and is intended to be taken seriously by all employees. Accordingly, violations of the Code will not be tolerated and, violations will result in penalties ranging from warnings and reprimands to discharge as deemed appropriate. Willful disregard of criminal statutes underlying this Code may require USA Funds to refer such violation for criminal prosecution or civil action.
 
XV.  Additional Business Conduct and Ethics Material
This Code has been established to ensure that each USA Funds’ employee is familiar with the intent and policies of USA Funds toward business conduct and ethics. However, no code of business conduct and ethics, no matter how carefully set forth, can cover every situation in our daily business lives that may require an ethical decision. If you face a situation that you are unsure of, use your common sense and answer the following questions:

• Is the action legal? [Call one of the members of the legal staff if you are not certain.]
• How will it look in the newspaper?
• Would the action embarrass you or USA Funds if discussed among your professional peers?
• If you take the action, will you feel proud?

If you are still unsure, ask your management or contact the General Counsel.