USA Funds to Adjust Some Default-Claim Payments

USA Funds^® is adjusting payments for certain claims filed by lenders and lender-servicers classified by the U.S. Department of Education as exceptional performers. The adjustment applies to default claims meeting all of the following criteria:

• Initially filed by an exceptional-performer lender or lender-servicer prior to July 1, 2006.
• Returned to the lender or servicer.
• Refiled by the exceptional performer on or after July 1, 2006.
• Purchased by USA Funds.

Because of a calculating error, USA Funds owes an additional payment of 1 percent of the outstanding principal and interest on the affected claims. USA Funds will send the appropriate payments to the lenders and lender-servicers.

USA Funds’ guarantor-servicer has contacted the lenders and lender-servicers that filed claims on which the additional payment is owed. USA Funds encourages lenders and lender-servicers to ensure that no claims beyond those identified by its guarantor-servicer qualify for the additional payment. Lenders and servicers that discover further claims on which the additional 1 percent is owed should contact Karen Curtis by sending an e-mail or by calling (317) 578-6063 by Feb. 1, 2007, to request the payment.  

The Higher Education Reconciliation Act of 2005 reduced the insurance that a guarantor pays to an exceptional-performer lender or lender-servicer to 99 percent from 100 percent effective for claims submitted by the lender or lender-servicer on or after July 1, 2006.