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OSFA Information Memorandum No. FY08-08
Distributed via Campus Announcements and Financial Aid Web Page
Memorandum
| TO: |
University Students, Faculty, and Staff |
| FROM: |
Carlos Clark, Ph.D.
Assistant Provost for Student Financial Aid |
| DATE: |
March 10, 2008 |
| RE: |
Changes in the Student Loan Market will cause some PVAMU students to complete and e-sign new Master Promissory Notes with a different lender |
Introduction
The following lenders have notified us that they will no longer participate in the Federal Family Education Loan Program (FFELP):
- American Education Services (AES)/PHEAA
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- Brazos (in-house originations)
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- K2 Student Loan Solutions
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- Kansas State Bank of Manhattan
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- College Loan Corporation (CLC
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- Spokane Teachers Credit Union
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- Federal Student Loan Solutions
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- Student Capital Corporation
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*Nelnet services Comerica’s student loan portfolio. Hence, due to PVAMU’s high student loan default rate for three consecutive years, Nelnet will no longer originate and disburse loans for students attending PVAMU.
**Due to PVAMU’s high student loan default rate for three consecutive years, Nelnet will no longer originate and disburse loans for students attending PVAMU
What does this Mean to You (Students)?
When a student loan lender states that they will not participate in FFELP, generally this means that they will no longer originate and disburse Federal Stafford Loans (i.e. Subsidized, Unsubsidized, PLUS, and/or GRAD PLUS).
Thus, students that selected one of the aforementioned lenders will be required to select a different lender to finance their education.
Why?
Lenders are often funded by auctions of securities backed by student loans. Unfortunately, because of the subprime mortgage crisis, many companies are avoiding the perceived risk associated with student loans. Hence, these auctions have failed to attract investor interest.
In addition to the subprime crisis, student lenders are also facing fallout from legislation passed by Congress last fall that eliminated nearly $19 billion worth of federal subsidies to student lenders. The combination of these two developments has made for a challenging financial environment for student loan operators.
We assure you that we have a sufficient number of student loan lenders with sufficient capital, to ensure that your financing needs are met. However, you must act quickly and take the necessary steps to apply so that your funds will be readily available.
Important Notice to Students
If you utilized one of the aforementioned student loan providers during the 2007-2008 academic year - you MUST SELECT a different bank for the upcoming year.
In order to select a new lender, please use our Lender Comparison Gateway located at www.sallimae.com/pvamu. Once you have selected a lender, complete and e-sign the Master Promissory Note (MPN) so that your funds will not be late for the upcoming semester.
What do you do if you Don’t Know Who Your Lender is?
- Type in https://opennet.salliemae.com
- Under the “Borrower” section of the page, click on “I am a student or parent borrower”;
- Insert “Texas” in the “Select State” question;
- Scroll down to insert “Prairie View A&M University” in the “Select School” question;
- Type in your UserID and Password;
- If you have forgotten your password, you may obtain it by clicking on one of the following options: “Check to see if I have a user ID”; “Forgot user ID”; or “Forgot Password”;
- Once you have gained entry, take a look at your OpenNet record to determine your student lender.
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