(a) Origination of Loans . Great Lakes agrees with Lender to provide the following origination and disbursement services as directed by the Lender and otherwise consistent with the requirements of the Act and all regulations issued by the U.S. Department of Education or by the guarantor to implement the Act and to coordinate processing as required to enable guarantee by Great Lakes Higher Education Guaranty Corporation ("GLHEGC").

          (1) Great Lakes agrees to coordinate with GLHEGC the processing of all properly completed Loan applications within one business day after receipt of all required information from the borrower, the school, and, for PLUS loans, the credit bureau. This standard shall be met if 90% of all Loans are processed within this one day period. Loan application forms shall identify the Lender and shall be sent to a separate post office box, as provided on the Loan application form.

          (2) If either the Loan application form or the promissory note are not properly completed, Great Lakes shall promptly notify the school or the borrower, whomever is appropriate, to resolve the deficiencies.

          (3) Great Lakes will perform a credit check to determine whether or not PLUS borrowers have adverse credit as required by the Act. If there is no indication of adverse credit, Great Lakes will document this finding and will submit the loan information to GLHEGC for guarantee processing.

          If adverse credit is indicated, Great Lakes will report this information to the Lender and will return the application to the Lender. It is the Lender's responsibility to provide the borrower with a credit denial letter and to meet all other legal or regulatory requirements with respect to such denied loans.

          (4) If the Loan application form and note are properly completed:

          (i) Great Lakes will coordinate GLHEGC's processing of the Loan for guarantee.

          (ii) Upon guarantee of the Loan, Great Lakes as Lender's agent shall prepare a disclosure statement in accordance with federal regulations and shall make the required disbursements of the Loan. These disbursement checks shall be drawn against a checking account maintained by Great Lakes. The Lender shall fund this account on a daily basis by an ACH transfer initiated by Great Lakes to cover all disbursements made that day. Great Lakes will pay all transaction costs associated with the account including the cost of standard checks and will receive all investment earnings on balances existing from time to time in the account. Great Lakes will reconcile the account and will confirm that all disbursements are included in the regular periodic reports provided to the Lender. Great Lakes will also manage the payment of guaranty fees on behalf of the Lender.

          (iii) Great Lakes shall mail the check and two copies of the disclosure statement to the school. One copy of the disclosure statement will be provided to the student along with the disbursement check, and the other copy will be retained by the school. For schools with whom the Lender has authorized Great Lakes to process Electronic Funds Transfers, Great Lakes agrees to perform those lender duties and responsibilities specified in the Common Manual.

          (iv) Great Lakes shall provide and/or coordinate the mailing of appropriate reports regarding Loans to the Lender, including guaranty activity reports, check registers, and disbursement reports.

          (b) Document Handling .

          (1) Great Lakes shall capture and retain a copy of each promissory note and each disclosure statement on its image system and shall store a backup image copy in a remote facility.

          (2) Great Lakes shall hold the original Loan documents, including the original promissory note, a copy of the Loan application and the disclosure statement for safekeeping. In addition, Great Lakes shall maintain proof of each disbursement for each loan.

          (a) Great Lakes as servicer of the Loans shall perform all of the Lender's obligations as holder of Loans as required by the Act and all regulations issued by the U.S. Department of Education or by the guarantor to implement the Act. Great Lakes shall have full power to sign and act on the Lender's behalf as the Lender's agent in all transactions with borrowers serviced hereunder. Lender does hereby authorize, constitute, and appoint Great Lakes on its behalf and as its attorney in fact, to endorse those promissory notes for which a claim has been filed with the guarantor. Great Lakes will carry out its responsibilities hereunder in a diligent and lawful manner.

          (b) Great Lakes shall complete all forms and reports required by the U.S. Department of Education and by Great Lakes Higher Education Guaranty Corporation.

          (c) Great Lakes shall prepare a "Lender's Request for Payment of Interest and Special Allowance" to be used by the Lender in billing the U.S. Department of Education (the "Department") for interest and the special allowance for all eligible loans on a quarterly basis. Great Lakes agrees to submit the billing to the Lender within 30 days following the last day of each quarter (March 31, June 30, September 30, December 31).

          Great Lakes shall accrue and capitalize interest on those Loans not eligible for interest subsidy.

          (d) Great Lakes shall verify the current status of all borrowers not less often than annually through direct contact with each borrower to ensure correct account information. Great Lakes shall also seek to verify the borrower's status by direct or indirect contact with educational institutions.

          (e) Great Lakes shall respond to all borrower inquiries in a prompt, courteous and thorough manner.

          (f) When a Loan becomes due for repayment, Great Lakes shall prepare a payment schedule and disclosure statement and mail it to the borrower for signature(s). Prior to the first payment due date, repayment coupons will be prepared and sent to the borrowers.

          (g) Great Lakes shall post to the borrower's account all payments of principal, interest and other charges. All collections made hereunder shall be remitted by an ACH transaction to the Lender no less often than three times per month, and no less often than once every 15 days.

          (h) Great Lakes shall provide reports to the Lender of all monetary transactions as well as periodic summary and account information as required in the "Lender Service Manual" including such items as:

          (1) Detailed periodic reports to support all cash transactions processed;

          (2) Monthly portfolio summary reports and supporting data listings;

          (3) A monthly listing of delinquent accounts; and

          (4) A quarterly report of billings to the U. S. Department of Education for interest and special allowances.

          (5) Monthly performance report including Great Lakes' standards and actual performance compared to standards.

          (i) Great Lakes shall automatically credit the Lender's account whenever a borrower overpays an account by less than $5.00, and the Lender, at its discretion, can reimburse the borrower. When the overpayment is more than $5.00, Great Lakes shall remit the overpayment directly to the borrower.

          When a borrower's balance owing is less than $10.00, Great Lakes may, at its discretion, write-off the balance.

          (j) Great Lakes shall handle all required borrower contact functions and shall meet all servicing "due diligence" requirements, as that term is used under the Act and implementing regulations. Such functions include, for example, skip tracing, contacting delinquent borrowers, handling borrower requests for extensions or deferments, and preparing and processing claims, including death, disability, default, closed school, false certification and bankruptcy claims.

          (k) Great Lakes agrees to prepare and submit all papers and documents necessary to strictly follow reimbursement procedures specified in the guarantor's Common Manual upon default of borrower and further agrees to promptly remit proceeds to Lender upon receipt from the guarantor.