Student Loan - Loans and Debt Consolidation

CALIFORNIA STUDENT LOAN PROGRAM NOW IN THE HANDS OF A MINNESOTA FIRM EXAMINER COM

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Examiner.com

California student loan program now in the hands of a Minnesota firm

The U.S. Department of Education has chosen a Minnesota company, Education Credit Management Corporation, to take over and manage Californias federal student-loan portfolios by the end of October. That decision removes EdFund, the firm that has managed Californias federal loans, from the federal loan program and essentially removes California from the federal student-loan quaranty business. It hasnt been smooth sailing, as EdFund has had a strained relationship with its parent agency, the California Student Aid Commission CSAC. Some officials want to sell the agency -- but this is a move that is now blocked.

Earlier this year the federal government eliminated private banks from the federal student loan program, so students will repay their loans as EdFunds business shrinks. Without the private banks involvement by providing student-loans, agencies such as ECMC and EdFund will lose the steady flow of new student loans to guarantee, therefore shrinking the business.

Gov. Arnold Schwarzenegger and state lawmakers wanted tosell EdFund as a budget solution, but the state will not be able to do that. When the governor first suggested the selling idea, he felt EdFund could get as much as $1 billion, based on advice of investment bank...[more]