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The Vermont Student Assistance Corporation (VSAC) was established in 1965 as a public nonprofit agency designed to monitor the issue of federal education loans to Vermont students. But with the major reforms of the federal student loan program that was passed in 2009, joined in with the national health care reform bill, VSAC and agencies, as it were stripped of their ability to originate new federal education loans.
From 1 July 2010, all federal parent and student loans (http://www.nextstudent.com/student-loans/student-loans.asp) are now to borrowers directly by the U.S. Department of Education, and VSAC is now facing a staff reduction of nearly two thirds as it tries to find ways to survive in the era of the Federal Direct Student Loan Program.
The agency had found a lender in the Federal Family Education Loan Program (FFELP), which was discontinued as part of the federal student loan reform (http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloansupdate. jsp). As part of its lending functions under the FFEL program VSAC acted as both a lender and administrator of the federal college loans.
under the new world order, with FFELP dissolved VSAC can still manage (ie, Service & rdquo;) all student loans they had issued in the past, but the agency no longer able to new loans
proceeds from the repayment of the loans were used for new student loans and the current financial plan. educational support and student loan programs, allowing the agency a revenue decline of approximately 90 percent if the existing loans are repaid faces .
VSAC issues remain a small number of private student loans (http://www.nextstudent. com / personal loans / private loans.asp), non-federal loans by VSAC rather than by the Ministry of Education , but the agency is looking for a new role with the direct loan program.
VSAC recently presented a proposal to the Education Department for more than the current legal maximum of 100,000 federal education loans service. Under the proposal, the agency seeking permission to the student loans of all Vermont students and non-resident students enrolled at Vermont colleges and universities service. Under the new Direct Loan Program regulations only four bodies have so far been approved by the Department of Education allocated more than 100,000 federal student loans to pay off.
VSAC Even if the proposal is adopted, however, the yield of the maintenance of the federal direct loans would bring in only a fraction of the revenue for the agency once earned as a financier in the FFEL program.
VSAC also asking the Vermont legislature to help ensure its administrative costs by the agency to about 7 percent of the $ 21,000,000 state appropriation of need-based grants and scholarships for students (http://scholarships101 .com / scholarships) to divert to the society itself. VSAC also asks lawmakers to its private student loan borrowers to deduct up to $ 500 of interest on its private student loans from their state taxes.
The agency’s future role is unclear and likely to remain that way until at least April, while it waits for a test on the extended service of the federal college loans through the direct loan program. The legislature is probably a decision faster.
But even with its private student loan portfolio, a positive decision on student loan servicing Washington, and additional support from the Vermont legislature, VSAC will still have to reduce the budget by about 10 percent per year for the next three years to remain solvent.
The agency, which employs approximately 300 people, already cut about 60 positions through attrition. If the added student loan servicing not materialize and legislators do not agree with the agency administrative costs and financial aid counseling and support for outreach, the agency will likely reduce its staff by an additional 200 positions for the start of the next financial year.
student loans, private student loans, scholarships, Federal Family Education Loan Program
