FOR IMMEDIATE RELEASE:
Jan. 21, 2003
CONTACT: Ward Mullens
REGENTS APPROVE PROCESS FOR EMU TO BECOME LENDER
YPSILANTI Eastern Michigan University will become the first four-year
public institution in the state to serve as a lender for graduate student loans
in action taken by the Board of Regents at its regular meeting Jan. 21.
This designation allows a post-secondary institution to act as a Federal Stafford Loan lender and, subsequently, generate additional revenue for the institution, said Pat Doyle, vice president for business and finance at EMU.
That revenue, about $500,000 annually after the third year, would go back into scholarship funds for EMU students, said Courtney McAnuff, vice president for enrollment services.
We know that paying for college in the current economy is not easy, so
this is another way we are trying help students, said McAnuff.
Under the school lender model the University would apply for and receive a lender number from the U.S. Department of Education. The University then secures a line of credit through a third party as a temporary financing vehicle for the origination and funding of the loans. All federal Stafford Student Loans made and serviced in accordance with federal regulations are fully guaranteed by the federal government.
EMU would enter into a an agreement with Sallie Mae, Inc. for four years for the origination, disbursement, servicing and subsequent purchase of the loans by Sallie Mae.
There would be no change in the process for the students and the institution
and the students gain from implementing this model, said McAnuff.