PHEAA to suspend new loans
HARRISBURG - Pennsylvania's student-loan agency will temporarily stop making new loans through a federal program in response to a credit crunch that has created turmoil in the bond markets, the agency's acting chief executive said yesterday.
HARRISBURG - Pennsylvania's student-loan agency will temporarily stop making new loans through a federal program in response to a credit crunch that has created turmoil in the bond markets, the agency's acting chief executive said yesterday.
The Pennsylvania Higher Education Assistance Agency decided two weeks ago to suspend loans made outside the state through the Federal Family Education Loan Program.
The agency will soon send out notices to colleges and universities that it will suspend in-state loans effective March 7, acting president and chief executive officer James Preston told a state House committee.
The program provides federally subsidized low-cost loans to about 500,000 Pennsylvania students.
The agency will steer prospective borrowers to banks that are still participating in the $50 billion program, Preston said. It will continue to originate, guarantee and service loans, Preston said.
- AP