INDIANAPOLIS, IN and MADISON, WI--(Marketwired - December 07, 2016) - USA Funds is transferring ownership of its education loan guarantor affiliates United Student Aid Funds, the nation's largest education loan guarantor, and Northwest Education Loan Association (NELA) to Great Lakes Higher Education Corporation effective Jan. 1, 2017. The change will benefit students, parents, and taxpayers nationwide.
United Student Aid Funds and NELA will continue to operate as individual guarantors under the new ownership, ensuring uninterrupted service to student loan borrowers. All of their current relationships and commitments to lenders, servicers, schools, and the U.S. Department of Education will remain unchanged.
The transaction contributes to a smooth wind-down of the Federal Family Education Loan Program (FFELP), at no cost to taxpayers. A federal law enacted in 2010 ended new loans under the FFELP in favor of student loans funded directly from the federal Treasury. Since then, the number of guarantors has decreased as agencies have merged and consolidated their shrinking portfolios.
The arrangement permits USA Funds, the current parent company of the two guarantors, to focus on advancing its nonprofit mission of enhancing preparation for, access to, and success in higher education by promoting Completion With a Purpose, enhancing student success in college and careers. USA Funds will receive annual mission-focused grants from Great Lakes to support these initiatives.
At Great Lakes, the addition of two new guarantor portfolios totaling approximately $50 billion will produce economies of scale that will generate the mission-focused grants furthering its own philanthropic mission as a nonprofit. Since 2006, Great Lakes has committed over $172 million in grant funding to promote higher education access and completion for students of color, low-income students, and first-generation students.
"We are proud of our service as a student loan guarantor during the past half century, supporting $250 billion in financing to help more than 22 million students and parents pay for a college education," said USA Funds President and CEO Bill Hansen. "But the dramatic changes sweeping the higher education landscape and the emerging needs of our nation's workforce and economy compel us to direct our full attention to helping more students succeed in postsecondary education and launch into rewarding careers and fulfilling lives."
"We're pleased to welcome United Student Aid Funds, NELA, and their many experienced employees to our affiliated group," said Richard D. George, President and CEO of Great Lakes. "Together, we'll guarantee that millions of borrowers receive the unwavering support they deserve, with helpful solutions any time they encounter difficulties. Our affiliation will also maximize the investment of taxpayers and lenders in the program, freeing more dollars for our respective charitable missions."
About Great Lakes: Dedicated to making college education a reality since 1967.
Knowing that education has the power to change lives for the better, Great Lakes Higher Education Corporation & Affiliates was established as a nonprofit group focused on a single objective: helping students nationwide prepare for and succeed in postsecondary education and student loan repayment. As a leading student loan guarantor and servicer, we have been selected by the U.S. Department of Education to provide assistance and repayment planning to more than 8 million borrowers-as well as assistance to colleges and lenders nationwide. Our group's earnings support one of the largest and most respected education philanthropy programs in the country. For additional information, visit home.mygreatlakes.org.
About USA Funds
USA Funds is a nonprofit organization that supports Completion With a Purpose, building a more purposeful path for America's students to and through college and on to rewarding careers and successful lives. USA Funds pursues its nonprofit mission through philanthropic activities and partnerships, policy research, and programs and services that enhance preparation for, access to and success in higher education. Learn more at www.usafunds.org.