PHEAA Wins Approval to Begin Servicing U.S. Department of Education Loans
FFEL Program loans sold to USDE under ECASLA are first to be affected
Harrisburg, PA (September 8, 2009) - The Pennsylvania Higher Education Assistance Agency (PHEAA) today announced that, as part of the Federal Loan Servicing contract which the Agency was awarded in June 2009, it will begin servicing Federal Family Education Loans (FFEL) for the U.S. Department of Education (Department) in September.
On August 26, PHEAA was informed by the Department that it successfully completed the acceptance and validation process for the initial phase of the Title IV Servicing Management contract and had been approved by the federal government to begin servicing Title IV FFEL Program loans for the Department. PHEAA has dedicated staff and established a new business unit, FedLoan Servicing, to manage the Department's loan portfolio.
This initial phase of servicing involves FFEL Program loans which were sold to the Department under the Ensuring Continued Access to Student Loans Act (ECASLA). ECASLA gave the Department temporary authority to purchase FFEL loans from private lenders to ensure an uninterrupted flow of financing in order to continue making student loans during the financial market disruptions, which began in 2008.
“PHEAA’s reputation as a long-time leader in the financial aid industry was earned by taking exceptional care of our customers,” said Representative William Adolph, Chairman, PHEAA Board of Directors. “The Department of Education’s approval to begin servicing loans is a recognition of our industry-leading loan servicing system and the ability of PHEAA's loan servicing and information technology teams to meet the Department's requirements.”
PHEAA is the nation's largest, nonprofit student loan service provider and an industry leader in premier customer service and technology.
“PHEAA is the only nonprofit agency of the four organizations to win a Federal Loan Servicing contract,” noted Senator Sean Logan, Vice Chairman, PHEAA Board of Directors. “The approval is testament to the dedication of everyone at PHEAA working directly or indirectly on this project.”
PHEAA will continue working closely with students, families, schools and lending partners and will guarantee and service student loans for its existing customers.