As in any type of consumer lending, the primary risk to the lender is that a borrower fails to repay the loan obligations.

• The borrower may fail to repay the interest and principal on time, consistent with the loan terms.
• The borrower may default on the interest and principal obligations of the loan.

Fynanz recognizes the risk of borrower default and has taken actions to address this risk.

• Fynanz uses its proprietary credit scoring model to differentiate borrowers and place them into various FACS Grades dependent on the risk of expected default. Lenders can use this information when searching loan listings and assessing borrowers in order to make a lending decision.
• Fynanz Guarantee - Fynanz also provides either partial or full guarantees on the original loan amount. The guarantee percentage is dependent on the FACS Grade of a loan listing. See the Fynanz Loan Guarantees for further explanations.

Fynanz has created and implemented rigorous systems and processes to verify and protect the identity of its members. In the unlikely event a Fynanz member were to experience monetary loss due to identity theft through the Fynanz website, Fynanz will reimburse any and all losses incurred.

The federal and state governments directly or indirectly regulate many aspects of student loan lending. These regulations include bankruptcy, taxation, usury, disclosure, credit reporting, identity theft, licensing, privacy, fraud and abuse and other laws to protect borrowers. Such regulations have the potential to reduce or eliminate borrower's obligations to repay student loans.

If a borrower is unable to repay his or her loan in accordance with the terms of the loan due to death, total permanent disability, hardship or school closure, he or she (or their legal representative) may request that Fynanz forbear interest on, discharge or modify the terms of the loan. Fynanz in its capacity as servicer of the loan will evaluate these requests by examining customary evidence to determine the appropriate course of action on the lenders’ behalf, in accordance with customary industry practices.

Lenders permit Fynanz to act on their behalf and grant appropriate relief in response to a borrower's request. In the case of a partial or total discharge of the remaining loan balance, lenders will be entitled to payout from the Guarantee Fund within 30 days of Fynanz providing notice of such discharge.