Q A.12.15.11.doc

HCERA /SAFRA – Not-For-Profit (NFP) Servicer Program

Solicitation Number: NFP-RFP-2010

Questions and Answers, Posting #3

Dec. 15, 2011

ELIGIBILITY.

Question. What does the statutory requirement that “an affiliated entity must directly employ the majority of individuals who perform borrower-specific student loan servicing functions for the not-for-profit entity with which it is affiliated” mean? More specifically, how does this requirement effect the possible eligibility of an entity when borrower-specific student loan servicing functions for both the not-for-profit entity and the affiliate are performed by a third-party?

Answer. An affiliated entity must provide the Department with documentation that demonstrates that it does or will employ the majority of individuals who perform borrower-specific student loan servicing functions for the not-for-profit entity with which it is affiliated. Such documentation can include a certification from the chief executive of the not-for-profit, binding resolutions by the board of the not-for-profit, specific staffing plans, or other relevant information. The statute clearly states that an eligible affiliate must employ a majority of individuals who perform "borrower-specific student loan servicing functions". Accordingly, affiliated entities that do not directly employ the majority of individuals who perform borrower-specific student loan servicing functions for the 100,000 accounts awarded under the statute are not eligible and qualified not-for-profit entities. This applies in both individual and teaming arrangements.

Q&A_III_Final.NFP-RFP-2010