President-elect Donald John Trump's administration is reported to focus further on the sector of education philanthropy and investing. Earlier this week, U.S. Aid Funds announced that it would be protecting its loan guarantee affiliates and that it would further support education philanthropy and investing sectors.
United States Aid Funds and the Northwest Education Loan Association, will be transferred to another organization, the Great Lakes Higher Education Corporation, effective Jan. 1. The two affiliates together guarantee a loan portfolio of about $50 billion.
According to Nerd Wallet, the government offers every student who can't afford their higher education the so-called "Federal Student Loans." These are loans that have fixed interest and are payable based on terms stipulated by the government through its agencies like the U.S. Aid Fund.
USA Funds is one of the country's largest guarantors of federal student loans when banks originated most such loans. USA Funds announced last Wednesday that it would transfer its guarantor operations to Great Lakes Higher Education Corporation.
USA funds also mention that it would focus fully on its newfound role as a funder of college completion-related initiatives. These activities not only involve education philanthropy but also investing sectors.
Great Lakes Education Corp. will take over management of the nearly $50 billion in federally guaranteed student loans that remained in USA Funds' portfolio since a 2010 law effectively ended the bank-based Federal Family Educational Loan Program. Great Lakes has absorbed the portfolios of several other loan guarantors who have sought to wind down their involvement in lending, The Chronicle Of Higher Education said.
As part of the new arrangement, Great Lakes Education Corporation will make grants to USA Funds to help support its advocacy work, which focuses on student completion, college values and other topics. Like other former guarantors, USA Funds has a sizable pot of money from borrower fees that it amassed during its time in the loan program, which consumer advocates have criticized.
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