Educational Credit Management Corporation

Default aversion, claims and collection program:in ecmc's role as a federal student loan guarantor, we perform default prevention activities, reimburse lenders for default and other types of claims, and recover defaulted student loans. Default prevention program: ecmc has a robust default prevention program focused on educating and counseling delinquent borrowers on repayment strategies to find the one that best fits their situation so they can successfully repay their loan. Collection program: for those borrowers who face the unfortunate situation of student loan default, it is not only our fiduciary responsibility to the u.s. Treasury and the taxpayer to collect those loans, ecmc is also committed to helping the borrower recover from default. Congress has given us tools, such as the loan rehabilitation program where we establish an income-contingent repayment arrangement with the borrower. With successful completion of this program, the default status is removed from the borrower's record. Since inception, ecmc has returned $21.8 billion in student loan recoveries to the u.s. Treasury.as part of dcl gen-22-16, the u.s. Department of education (ed), established a transitional fee to be paid to guarantors from august 29, 2023 through the fresh start period, which ended on september 30, 2024. The transitional fee is paid to guarantors to help them initiate the repayment restart while supporting borrowers and assisting them as they navigate the fresh start period and all their options. Ecmc recorded $78 million for transitional fee revenue in 2024, all of which is fully received as of december 31, 2024.on october 8, 2024, a voluntary flexible agreement (vfa) was signed between ed and ecmc. This allows the secretary to waive most statutorily required collections activity and revenue. The vfa ecmc and ed mutually agreed upon is set for a two-year period beginning october 1, 2024, through september 30, 2026, unless terminated earlier as provided in the vfa. Ecmc recorded $17.4 million for special account maintenance fee (samf) revenue for the period from october 1, 2024, through december 31, 2024.

Loan guarantee program:ecmc is the designated guaranty agency for california, connecticut, illinois, louisiana, maine, missouri, north carolina, oregon, rhode island, south carolina, tennessee, utah and virginia under the federal family education loan program (ffelp). A guaranty agency under ffelp provides federal student loan guarantees and ongoing processing services to u.s. Department of education-approved ffelp lenders and postsecondary education students and their parents for loans extended under ffelp. Additional services provided by ecmc in fulfilling its role as a guaranty agency include but are not limited to: assisting borrowers and parents in preparing for college, financial literacy and money management education, education regarding the obligations associated with student loans, and education on how to avoid student loan default.on march 30, 2010, the health care and education affordability reconciliation act of 2010 was signed into law and amended the higher education act by terminating the authority to make or insure new loans under ffelp after june 30, 2010. As a result, ecmc ceased guaranteeing loans effective july 1, 2010. All existing ffelp loans will continue to be guaranteed and serviced as ffelp loans throughout their remaining life, which generally averages 5 years. As of december 31, 2024, the non-default guarantee portfolio consisted of $11.2 billion in original outstanding principal balance.on november 1, 2016, ecmc entered into a three-year agreement with the u.s. Department of education (ed), whereby ecmc will participate in ed's project success by providing services on behalf of ed to certain minority-serving institutions (institutions). The services that ecmc may provide to the institutions include institutional support services to benefit the institutions and services to assist the institution's students. All of the services provided must relate to federal student loans. The secretary has authorized ecmc to use the guarantor federal reserve fund to pay the cost of providing services under the project success program, not to exceed $20 million for the three-year agreement. The agreement has been extended through september 30, 2025. The guarantor federal reserve fund reimbursed ecmc for expenses incurred in the amount of $3.3 million for the year ended december 31, 2024.

Ecmc solutions program:the ecmc solutions program focuses on providing default prevention and financial literacy to student loan borrowers while they are still in school, in their grace period or in repayment to help them understand their repayment options before becoming delinquent or defaulting on their federally insured student loans. The program includes resources for postsecondary institutions to assist them in managing their cohort default rate. Services are offered to postsecondary institutions under a fee structure.

Third-party guarantor servicing:ecmc performs federal family education loan program (ffelp) loan portfolio servicing activities for other state and nonprofit guarantors of ffelp loans in return for a fee. Ffelp guarantor loan portfolio servicing activities are identical to those services that it performs on its own behalf and include loan conversion activities, default aversion, borrower updates, customer service, payment processing, due diligence procedures and claim processing.

Contributions made to ecmc group, inc.:ecmc group, inc. Is the parent of and a supporting organization to ecmc. Ecmc group, inc. Retains the following authority over ecmc:1. To authorize amendments to the articles of incorporation and bylaws.2. To approve the strategic and financial plans.3. To elect and/or approve the members of the board of directors.4. To oversee coordination of programs and services offered.5. To authorize formation, governance and dissolution.ecmc group, inc. Authorizes the distribution of funds from ecmc to ecmc group, inc. Section 422b of the higher education act of 1965, as amended, allows ecmc to invest funds at its discretion in accordance with prudent investor standards and to use funds for higher education-related activities. Ecmc distributes funds to ecmc group, inc. To invest and to distribute to ecmc foundation and ecmc education, inc. To use for higher education-related activities.