Volatile Market Impacts NH Student Loan Agency

Concord, NH- The New Hampshire Higher Education Loan Corporation (NHHELCO), one of the NHHEAF Network Organizations and New Hampshire’s leading provider of student loan financing, has decided to suspend alternative student lending effective Tuesday, March 11, 2008.

NHHELCO has analyzed the cost of administering the alternative loan program in New Hampshire, and examined the quality and affordability of our current loan program offerings against various offerings and programs available in the student loan market today. According to Tori Berube, VP of Product Marketing, “The decision to suspend alternative loans is unfortunate, but NHHELCO is faced with the reality of having to focus its resources on the federal loan programs which provide critical access to a college education.” This announcement follows NHHELCO’s decision in January to suspend the Federal Consolidation loan program.

The turmoil in capital markets and the inability of loan agencies to securitize student loan debt or issue bonds has had major effects on liquidity across the student loan industry. The market turmoil is exacerbated by the substantial cuts to the federal-guaranteed student loan program by Congress since 2007. “Some people have expressed that students should not be concerned about accessing funds. Tell that to the 4,769 NH residents who borrowed from our alternative loan program last year,” said President & CEO René A Drouin. “Through the years, nonprofit student loan providers like NHHELCO have maintained responsible borrowing practices and an excellent borrower benefits program. Students may still have some options for financing, but financial aid delivery will be impacted and the lack of competition from agencies exiting the loan program will ultimately increase the cost and impact access for the students of New Hampshire.”

Like NHHELCO, many private and public loan agencies have suspended operation of one or more loan programs or left the student loan program entirely. Because of this, twenty-one members of Congress, including New Hampshire’s Paul Hodes, appealed to the Department of Education and the Treasury to infuse funds into the lending system. So, while the decision to curtail the alternative loan programs is essential at this time, the organization has confidence that when the market volatility subsides, NHHELCO will be there to continue a strong tradition of serving students with a full complement of loan programs and services.

The NHHEAF Network Organizations are comprised of four 501(c) (3) nonprofit organizations that provide students and families with the resources and funding to pursue higher education aspirations. Funds generated by the Organizations make their charitable mission possible as student loan earnings are reinvested in programs and services that benefit citizens of New Hampshire. For more information, visit www.nhheaf.org.