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NASFAA
1101 Connecticut Avenue, NW, Suite 1100
Washington, DC 20036-4303

Phone: 202-785-0453
Fax: 202-785-1487
Web@NASFAA.org

[The following was provided by Mark Kantrowitz and expanded by NASFAA.]

Updated List Of Lenders Changing Loan Practices

In the wake of the subprime mortgage market turmoil and lender subsidy cuts by Congress, student loan providers are modifying their business practices to adapt to a changing market.

NASFAA has been closely monitoring student loan providers that are changing their practices and is updating a list (originally created by Mark Kantrowitz, publisher of finaid.org) of student loan providers that have temporarily suspended or permanently exited one or more student loan programs. The list also details education lenders that have had lay offs.

This list is a work in progress and NASFAA will continue to update it as we receive and verify information. If you have heard of lenders changing their practices and you don't see them on this list or see any inaccurate information on this list, please notify NASFAA by emailing web@nasfaa.org. We will keep the list as up to date and accurate as possible.

NOTE: Some of these lenders may have changed their lending practices for reasons unrelated to the subprime mortgage credit crisis or the cuts in FFELP lender subsidies.

LAST UPDATED MAY 5, 2008

Loan Program Suspensions

Lenders suspending FFELP Loans include: 49 total

  • Acapita
  • Academic Finance Corporation
  • Ardent Financial
  • ALL Student Loan (FFELP Loans outside California) (#43 originations)
  • American Education Services (AES)/PHEAA (#19 originations, #7 consolidations)
  • Bankers Trust
  • Boeing Credit Union
  • Brazos (#23 originations, #9 consolidations) (Temporary Suspension)
  • Capital One/Axiom
  • College Board (#25 originations)
  • College Loan Corporation (#8 originations, #6 consolidations)
  • Collegiate Solutions
  • Cornhusker Bank
  • CIT Group Inc
  • Educational Funding Services
  • Federal Student Loan Solutions
  • FinanSure (#24 consolidations)
  • First Niagara Bank
  • Goal Financial (#5 - consolidations)
  • Graduate Leverage
  • HSBC (#41 originations)
  • Independent Bankers Bank
  • K2 Student Loan Solutions
  • Kansas State Bank
  • Kentucky Higher Education Student Loan Corp./The Student Loan People (suspended loans to first-time borrowers)
  • Kleberg Bank
  • Loanster Financial Group LLC
  • M&T Bank (#40 orginations)
  • Massachusetts Educational Financing Authority (MEFA)
  • Michigan Higher Education Student Loan Authority (MHESLA) (temporary suspension)
  • National Education
  • National Student Loan Group
  • Northwest Savings Bank
  • NextStudent (#4 - consolidations)
  • NorthStar Education Finance Inc. (# 11 orignations)
  • Security Bank of Kansas City
  • Sovereign Bank
  • Spokane Teachers Credit Union
  • Student Capital Corp.
  • Student Loan Xpress
  • TCF Bank (#44 originations)
  • TD Banknorth
  • THE National Bank
  • TierOne Bank
  • Total Higher Education (T.H.E. Loan Program) (Temporary Suspension)
  • Twin Cities Federal Bank
  • Urban Ed Express
  • West Des Moines State Bank
  • Zions Bank (#61 orignations)

Lenders suspending or limiting only FFELP consolidation loans include: 12 total

  • Access Group
  • Citibank's Student Loan Corporation (SLC)
  • CollegeInvest (#48 consolidations)
  • GCO-ELF (#33 consolidations)
  • ISM Educ. Loans (Indiana) (#23 consolidations)
  • Iowa Student Loan (#26 consolidations)
  • MOHELA (Missouri) (#15 consolidations)
  • Montana Higher Education Student Assistance Corporation (MHESAC)
  • NELNET (#2 consolidations)
  • New Hampshire Higher Education Loan Corp. (NHHELCO)
  • NorthStar/T.H.E. (#21 consolidations)
  • Sallie Mae (limiting FFELP consolidation activity)

So, overall, the #2, #4, #5, #6, #7, #9, #15, #23, #24, #26, #33 (3/5 of top 10 or 26% of loan volume) consolidators have stopped making consolidation loans. That's 29% of national consolidation loan volume.

Lenders exiting or suspending private student loans include: 13 total

  • Bank of America
  • FinanSure
  • HELP Alternative Loans
  • Iowa Student Loan (#26 consolidations)
  • Kansas State Bank
  • Loan to Learn
  • MOHELA (Missouri)
  • Michigan Higher Education Student Loan Authority (MHESLA)
  • New Hampshire Higher Education Loan Corporation (NHHELCO)
  • Sallie Mae (Recourse Loans Only)
  • Student Loan Xpress
  • Urban Ed Express
  • Zions Bank

Loan Program Expansions

Lenders expanding their loan programs: 9 total

  • Citi Bank
  • Discover Student Loans
  • JP Morgan Chase
  • National City
  • OneSimpleLoan
  • PNC
  • Sallie Mae
  • Student Funding Group, LLC (StuFund)
  • Student Loan Network
  • U.S. Bank

Chronology of Lender Actions

LenderWhen?What?
Loan to Learn 1-AUG-07 Layoff many staff
College Board 22-AUG-07 Exits FFELP 10/15/07 due to NY SLATE
NELNET 6-SEP-07 Layoff 400/3,300 (12%)
GCO-ELF 25-SEP-07 Suspending consolidation loan acquisitions
PHEAA 28-SEP-07 Hiring freeze, attrition
Loan to Learn 30-SEP-07 No new private student loans
NextStudent 1-OCT-07 Suspending new Stafford/PLUS loans. Layoff 100/409 (24%).
SunTrust 3-OCT-07 Sells loan portfolio to Nelnet and closes Murfreesboro TN servicing center
First Niagara Bank 4-OCT-07 Exits student loans
RISLA 4-OCT-07 Ends NELNET partnership
US Education Finance Group ? Layoff 25/45 (56%)
FinanSure 26-OCT-07 Exit FFELP/Private, layoffs
Illinois SAC 7-NOV-07 Layoff 50/470 (11%) + 18 vacant (4%)
JP Morgan Chase 8-NOV-07 Hired 125 of Nelnet layoffs 12/1/07
College Loan Corporation 12-NOV-07 Layoff 340/700 (49%)
Federal Student Loan Solutions 17-NOV-07 fsls.net site no longer responding
Student Loan Xpress 30-NOV-07 Ended private student loan, continuing FFELP
Student Capital Corporation DEC-07 Dissolved brand, absorbed into College Loan Corporation
Sallie Mae 27-DEC-07 Halting FFELP spot market purchases
Goal Financial 31-DEC-07 Exits FFELP, layoff 134/300 (from Warn Act Notices, company web site)
National Education 9-JAN-08 Suspending FFELP 1/15/08, layoffs?
Sallie Mae 18-JAN-08 Layoff 350/11,000 (3%)
Sallie Mae 18-JAN-08 Sallie Mae ended recourse loans effective 3/1/08 at Corinthian, Career Education, ITT Educational Services Inc., DeVry, Education Management Corporation, Lincoln Educational Services.
NELNET 23-JAN-08 Layoff 300 (10%)
NELNET 23-JAN-08 Stops making new consolidation loans
Kentucky HEAA 25-JAN-08 Ending 3 loan forgiveness programs
College Loan Corporation 31-JAN-08 Suspending FFELP 3/1/08, layoff 260/360 (72%), no longer offering private loans at certain for-profit colleges
NextStudent 1-FEB-08 Suspending new FFELP consolidation loans (continuing private loans and private consolidation loans)
Collegiate Solutions 5-FEB-08 Exiting FFELP
First Marblehead 6-FEB-08 Layoff (estimate) more than 100 of 1,100, plus attrition and freezing. Company refused to confirm actual number.
Independent Bankers Bank 7-FEB-08 Exiting FFELP 2/15/08
Michigan Higher Ed SLA 12-FEB-08 Suspending MI-LOAN private student loan 2/15/08
ISM Educ. Loans (Indiana) 14-FEB-08 Suspending Consolidation Loans
American Educ. Svcs (AES) 15-FEB-08 Suspending FFELP effective 3/7/08
Capital One/Axiom 15-FEB-08 Exiting FFELP 4/1/08
MOHELA (Missouri) 15-FEB-08 Suspending consolidation loans, private loans.
Iowa Student Loan 18-FEB-08 Suspending FFELP loan acquisitions and FFELP consolidation loans 2/29/08.
NorthStar/T.H.E. 18-FEB-08 Suspending all loan discounts (including existing borrowers)
Sallie Mae 20-FEB-08 Ending serial (subsequent) private student loans at certain for-profit colleges, not just new borrowers.
PHEAA 26-FEB-08 Suspended FFELP loan originations and secondary market acquisitions effective 3/7/08. Affects 140,000 borrowers, $500M loan volume. Still guaranteeing and servicing loans.
HELP Alternative Loans 22-FEB-08 Discontinued private student loan program.
Brazos 25-FEB-08 Suspending in-house originations
CollegeInvest 1-MAR-08 Suspending consolidation loans
K2 Student Loan Solutions 3-MAR-08 Exiting FFELP (consolidator)
Brazos Higher Ed. Service Corp. 7-MAR-08 60% of work force (163 employees) laid off
Montana Higher Ed. Stu. Assistance Corp. 08-MAR-08 $155.9 million bond auction fails again
New Hampshire Higher Ed. Loan Corp. 11-MAR-08 Suspending private loans
Kansas State Bank 13-MAR-08 Suspending FFEL and private loans
Graduate Leverage 13-MAR-08 Temporarily suspending FFELP loans
Northeastern University 17-MAR-08 Northeastern University announced that it will be switching to the Direct Loan program because of concern about the credit crisis.
HSBC Bank 17-MAR-08 Exiting FFELP effective May 31, 2008.
M&T Bank 18-MAR-08 Suspending participation in FFELP effective April 1, 2008.
NorthStar/T.H.E. 19-MAR-08 Suspending consolidation loans
Sallie Mae 20-MAR-08 Sallie Mae reduces premiums paid to schools participating in its School-as-Lender program.
Brazos 24-MAR-08 Suspending all FFELP originations at four Brazos lenders (Brazos Student Lending, Academic Finance Corporation, Educational Funding Services, Inc. and Acapita) effective 3/27/2008. Still offering private student loans through afclending.com, studentloans.com and efsi.net.
Zions Bank 27-MAR-08 Suspending FFELP loans effective 3/31/08.
NorthStar 1-APR-08 Suspending FFELP loans effective 4/1/08.
Student Loan Xpress 3-APR-08 Suspending FFELP loans effective 4/3/08.
Access Group 11-APR-08 Suspending FFELP consolidation loans.
Massachusetts Educational Financing Authority (MEFA) 15-APR-08 Suspending FFELP loans effective 7/1/08.
Michigan Higher Education Student Loan Authority (MHESLA) 15-APR-08 Suspending FFELP loans effective 4/16/08.
Chase Education Finance 15-APR-08 discontinuing federal loans to students attending certain high-risk institutions.
Citibank's Student Loan Corporation (SLC) 15-APR-08 Suspending lending at certain schools and withdrawing from Federal Consolidation Loan market.
Bank of America 18-APR-08 Suspending private student loans.
Kentucky Higher Education Student Loan Corp./The Student Loan People 18-APR-08 Suspending loans to first-time borrowers.
Northwest Savings Bank 25-APR-08 Suspending FFELP loans to first-time borrowers.
Kleberg Bank 1-MAY-08 Suspending FFELP lending.

The Goal Financial layoff figures are based on the Warn Act Notices.

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