PHEAA Announces KeystoneBEST Student Loan Lenders for 2008-09 Academic Year
Lenders help ensure stability to Federal Family Education Loan Program
Harrisburg, PA (March 14, 2008) - The Pennsylvania Higher Education Assistance Agency (PHEAA) today announced its list of participating lenders in its low-cost KeystoneBEST Loan Program for the 2008-09 academic year. The announcement reinforces the availability and stability of the Federal Family Education Loan Program (FFELP) which has seen some FFELP lenders temporarily leave the program due to the downturn in the national credit markets.
The KeystoneBEST lender list includes local, regional and national financial organizations including PNC Bank, Chase, Bank of America, KeyBank, National City Bank, Wachovia Education Finance, Members 1st FCU, Citizens Bank, Edamerica, SunTrust Bank, Academic Finance Corporation (AFC)/Brazos, Adams County National Bank and Beneficial Bank. Additional lenders will be added to the PHEAA.org website as they sign on to the program.
"We have a long-standing, collaborative relationship with our Pennsylvania lending partners," said PHEAA Interim President & CEO, Jim Preston. "Pennsylvania students, families and postsecondary schools should never fear that there would be a void created by PHEAA temporarily suspending its role as lender; nor should they experience difficulty in securing FFELP funding for the 2008-09 academic year."
PHEAA will continue to offer the industry-leading programs and services, including its loan guaranty, servicing and State Grant activities, that Pennsylvania residents have come to rely on to pay for college.
PHEAA will be paying the 1% default fee on behalf of all KeystoneBEST lenders for both Stafford and PLUS loans. Some participating lenders will be paying the 1% Stafford loan origination fee on behalf of borrowers, resulting in a fee-free Stafford loan for academic year 2008-09.
For 2008-09, students attending schools using the more expensive Federal Direct Loan Program must pay an up-front charge of at least .5% with a conditional charge of up to 2%.
Preston went on to say, “We remain steadfast in our belief that the FFEL Program is the most viable and economically competitive program, offering borrowers more cost-saving benefits and market-driven choices than the Federal Direct Loan Program, through which each loan is issued by the Federal Treasury, becoming part of our national debt.”
PHEAA has also taken a national, proactive role in addressing the credit crunch affecting the American student loan industry. On February 21, PHEAA held a Student Loan Funding Summit with representatives from the state and federal government, education and financial aid arenas.
This group of industry leaders, including Members of the Pennsylvania Congressional delegation, is urging the U.S. Secretaries of Education and Treasury and the Chairman of the Federal Reserve Board to use all means and authorities available to them to provide short- and long-term assistance to assure the availability of low-cost student loans.
“Our state loan programs are Pennsylvania focused with lenders, postsecondary schools, and PHEAA working together to ensure the future success of our students and at the same time helping to build a strong economic future for the Commonwealth,” notes PHEAA Board Chairman, William F. Adolph, Jr.
PHEAA will continue working with lending partners to provide guaranty, origination, and life-of-loan servicing of FFELP loans and private alternative loans in Pennsylvania. In addition to administering state-funded programs like the Pennsylvania State Grant, PHEAA will continue to offer free training to Pennsylvania postsecondary financial aid professionals, the award-winning default prevention efforts realized with its YouCanDealWithIt.com campaigns and the career and college planning website, EducationPlanner.org.