January 20, 2010
Loans Sold to Department of Ed?
If you are one of the borrowers whose loan was transferred to the Department of Education, you may feel sold down the river right now. If its any consolation, UHEAAs feelings are like a mothers on the first day of kindergarten we hope the Department plays nicely with you. Now, put aside the creepy imagery of UHEAA being your mother for a moment.
We owe you an explanation.
Youve heard (and heard, and heard) about the tightening credit markets. Banks today are practically slot machines, dispensing cash only to a lucky few.
Just as the markets were crashing, Congress made it harder to service student loans. Many banks, including banks that put up the money for UHEAA loans, stopped making student loans altogether.
In todays economy, the only way UHEAA can find capital is to transfer loans to the U.S. Department of Education. What do we use this capital for?
Back to the creepy analogy. A mother sends her kids to school because she knows the importance of education. (And because she might go crazy if they stayed home all day, but thats another discussion altogether.)
Well, UHEAAs purpose is similar: Get Utah students to school. Everything else we do, including loan servicing, is secondary. Money from the transfer is used to make new student loans, an investment in Utahs future your future.Posted by: kpage