Missouri agency parts ways with federal student loan program
SPRINGFIELD, Mo. (KY3) - The Missouri Department of Higher Education is cutting ties with a federal student loan program after more than 40 years.
The department announced Friday that the Missouri Student Loan Program will exit the Federal Family Education Loan (FFEL) program. For the first time four-plus decades, the Missouri Student Loan Program will not be the state’s designated guaranty agency in the FFEL program.
The FFEL program stopped issuing new loans in 2010 as part of the Health Care and Education Reconciliation Act, according to the office of U.S. Department of Education.
According to the Missouri Department of Higher Education, the decision to part ways was made due to the ongoing pause on federal student loan payments and collections that began in 2020 in response to the COVID-19 pandemic.
Because of this decision, the United States Department of Education will select a successor guaranty agency to accept the transfer of Missouri’s portfolio of loans. Transitioning to a successor agency could take up to a year to complete.
“This decision was not made lightly, but after more than two years in a collections pause and the recent announcement of the Fresh Start program by the U.S. Department of Education, it is in the best interest of our program and our staff to exit the loan guaranty program,” said Nora Maxwell, Director of the Missouri Student Loan Program. “It has been our honor to serve the citizens of Missouri for the past 43 years.”
Over the years, assets from the Missouri Student Loan Program have been used to fund state student financial aid programs, default prevention activities, school and lender training, and financial awareness and outreach activities to high schools and colleges.
In particular, the program helped fund the FAMOUS System used to administer Missouri’s State Financial Aid programs, and outreach materials to help students and families plan and pay for college.
The Missouri Student Loan Program, an extension of the Missouri Department of Higher Education, had served as a student loan guaranty agency through the FFEL program since 1979.
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