After more than 40 years as the state designated guaranty agency in the Federal Family Education Loan (FFEL) program, the Missouri Student Loan Program will exit the FFEL program. The Missouri Student Loan Program is located within the Missouri Department of Higher Education & Workforce Development (MDHEWD). The United States Department of Education (USDE) was notified earlier this month to ensure a smooth transition for partner lenders and servicers, as well as student borrowers.
The decision to exit was made due to the ongoing pause on federal student loan payments and collections that began in 2020 in response to the COVID-19 pandemic. The next step in the transition timeline is that USDE will select a successor guaranty agency to accept transfer of Missouri’s portfolio of loans. Transitioning to a successor agency could take up to a year to complete.
“This decision was not made lightly, but after more than two years in a collections pause and the recent announcement of the Fresh Start program by the U.S. Department of Education, it is in the best interest of our program and our staff to exit the loan guaranty program,” said Nora Maxwell, Director of the Missouri Student Loan Program. “It has been our honor to serve the citizens of Missouri for the past 43 years.”
Over the years, assets from the Missouri Student Loan Program have been used to fund state student financial aid programs, default prevention activities, school and lender training, and financial awareness and outreach activities to high schools and colleges. Specifically, the program helped fund the FAMOUS System used to administer Missouri’s State Financial Aid programs, and outreach materials to help students and families plan and pay for college.
The department has served as a student loan guaranty agency through the Federal Family Education Loan Program since 1979. Although the federal Health Care and Education Reconciliation Act eliminated the ability of the state to guarantee new student loans in 2010, the department continued to service the loans it guaranteed prior to that date.
About the Missouri Department of Higher Education & Workforce Development: The department works to empower Missourians with the skills and education needed for success. More information about MDHEWD can be found at https://dhewd.mo.gov or on Facebook and Twitter @MoDHEWD.