Missouri agency splits from federal student loans 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 Missouri’s student loan program will be leaving the federal Family Education Loan (FFEL) program. For the first time in more than four decades, the Missouri Student Loans Program will not be the state-designated guarantor 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 the US Department of Education.
According to the Missouri Department of Higher Education, the decision to part ways was made due to the ongoing pause in federal student loan payments and collections that began in 2020 in response to the COVID-19 pandemic.
As a result of this decision, the United States Department of Education will select a successor guarantor agency to accept the transfer of the Missouri loan portfolio. The transition to a successor agency could take up to a year.
“This decision was not made lightly, but after more than two years of hiatus in collections and the recent announcement of the Fresh Start program by the U.S. Department of Education, it is in the interest of our program and our staff to come out of the loan guarantee program,” said Nora Maxwell, director of the Missouri Student Loans Program. “It has been our honor to serve the citizens of Missouri for the past 43 years.”
Over the years, Missouri Student Loan Program assets have been used to fund state student financial aid programs, default prevention activities, school and lender training, as well as financial outreach and awareness activities in high schools and colleges.
In particular, the program helped fund the FAMOUS system used to administer Missouri 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 the student loan guarantee agency through the FFEL program since 1979.
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