Century Foundation Report Criticizes Student Loan Guaranty Agencies
When the federal government stopped guaranteeing new bank-based student loans on June 30, 2010, it left behind a dozen or so nonprofit intermediaries, known as guaranty agencies, that had played administrative roles approving bank loans, reviewing colleges’ eligibility, and rehabilitating defaulted loans. Legally structured as nonprofits, these agencies are, at least in theory, committed to the public interest.
But keeping them aligned with the needs of students and taxpayers has always been a challenge, and now that the Guaranteed Student Loan (GSL) program that they were designed to serve is in the rear-view mirror, what should happen with the endowments of more than $5 billion they have amassed...