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Due to the ongoing impact of the capital market crisis, The Student Loan People must temporarily suspend all new loan activity. Please note: The Ensuring Continued Access to Student Loans Act (H.R. 5715) has passed both the House and Senate and President Bush is expected to sign the legislation into law soon. This Act is expected to provide lenders with opportunities for securing additional funds to make new loans. New information will be made available as the bill becomes law and appropriate administrative and regulatory processes are defined. The Student Loan People Financing Update – April 30, 2008 The Student Loan People recently announced that it must suspend making loans to first-time borrowers beginning May 1, 2008, due to the ongoing impact of the capital market crisis. Since the announcement, The Student Loan People have been closely monitoring the amount of loans guaranteed on a daily basis as well as the amount of revenue available to make loans. Based upon the latest projections, The Student Loan People must also temporarily suspend making loans to serial borrowers beginning May 1, 2008, until additional financing can be secured. The Student Loan People and the Kentucky Higher Education Assistance Authority (KHEAA) will continue working toward a solution on every available front, and especially at the Federal level, to ensure that every Kentucky student who needs a FFELP loan will have that option available to them. Recent actions in Washington lead us to be optimistic that a resolution is near that would enable The Student Loan People to continue to make loans. In addition to paying the 1 percent default fee beginning May 1, KHEAA will assist borrowers and schools in securing loans from other lenders for the summer session. To ensure that the processes of our school partners are not disrupted, we will provide additional guidance to financial aid offices and our staff as soon as possible. Your patience and support is appreciated as we work to ensure that higher education remains accessible to Kentuckians. Thank you. Edward J. Cunningham |
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