In order to maintain liquidity in the student loan lending industry, Congress passed the Ensuring Continued Access to Student Loans Act (ECASLA) in September of 2008. It gave the Department of Education the authority to purchase student loans, effectively acting as a secondary market for lenders.
The Department has created four separate loan purchase arrangements under ECASLA: a put option; a short-term put option; a financing arrangement; and an asset-backed commercial paper support program. A fine paper explaining these programs was was written by Jason Delisle of the New America Foundation (PDF).
The short-term put option applied only to academic loans made in the 2007-2008 academic year. The put option applied to loans made from the 2008-2009 and 2009-2010 academic years.
To date there have been $52 billion in student loans purchased by the Department through these two programs, with another $4.77 billion scheduled for purchase within 45 days of the last report. As Delisle notes, the $48.5 billion in loans purchased by the Department in 2008-2009 represented 2/3 of the $68.2 billion in federally guaranteed student loans made that year, with lending institutions serving primarily as “middle men.”
Aggregate Price of FFEL Loans Sold to Department of Education Through the LoanPurchase Commitment Program |
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| Lender | 2007-2008* As of 4/14/09** |
2008-2009*** as of 10/15/09**** |
2009-2010*** As of 2/23/10 ***** |
Total 2007-2010 |
| 1st Community Federal Credit Union | $6,473,208 | $6,473,208 | ||
| Access Group | $469,444,899 | $469,444,899 | ||
| ALL Student Loan Corp | $310,624,547 | $310,624,547 | ||
| Alva State Bank | $1,439,947 | $1,439,947 | ||
| Anchor Bank, FSB | $34,539,359 | $34,539,359 | ||
| Androscoggin Bank | $9,509,340 | $9,509,340 | ||
| Arkansas Student Loan Authority | $59,112,361 | $59,112,361 | ||
| Arvest Bank | $211,602,395 | $211,602,395 | ||
| Austin Bank | $27,981,969 | $27,981,969 | ||
| BancFirst | $122,887,058 | $122,887,058 | ||
| Bank of America Corp | $1,531,352,011 | $1,531,352,011 | ||
| Baptist Credit Union | $1,893,200 | $1,893,200 | ||
| BCM Federal Credit Union | $261,748 | $261,748 | ||
| Black Hills Federal Credit Union | $4,728,022 | $4,728,022 | ||
| Bremer Bank | $58,390,921 | $58,390,921 | ||
| Cadence Bank N.A. | $9,336,355 | $9,336,355 | ||
| Citizens Bank of Pennsylvania | $363,174,907 | $363,174,907 | ||
| Colonial Savings, F.A | $1,186,564 | $1,186,564 | ||
| CollegeInvest | $264,735,264 | $264,735,264 | ||
| Commerce Bank | $4,830,110 | $4,830,110 | ||
| Compass Bank | $191,506,019 | $191,506,019 | ||
| Coppermark Bank | $3,785,822 | $3,785,822 | ||
| Edamerica | $7,273,889 | $1,576,638,619 | $334,407,121 | $1,918,319,629 |
| Education Services Foundation | $1,287,359 | $1,287,359 | ||
| First Bank and Trust | $5,736,939 | $5,736,939 | ||
| First Community Credit Union | $1,722,584 | $1,722,584 | ||
| First Dakota National Bank | $3,427,460 | $3,427,460 | ||
| First National Bank of Central Texas | $11,947,846 | $11,947,846 | ||
| First National Bank and Trust Co. of McAlester | $1,289,640 | $1,289,640 | ||
| First Financial Bank, NA | $89,011,363 | $89,011,363 | ||
| First National Bank of Oklahoma | $5,929,631 | $5,929,631 | ||
| First National Bank of Texas | $57,014,134 | $51,573,055 | $108,587,189 | |
| First National Bank and Trust Co. of Weatherford | $4,342,776 | $4,342,776 | ||
| First National Bank of Wichita Falls | $6,643,430 | $6,643,430 | ||
| First National of Huntsville | $16,096,585 | $16,096,585 | ||
| First Premier Bank | $3,283,899 | $3,283,899 | ||
| First Security Bank | $33,359,799 | $33,359,799 | ||
| First Tennessee Bank National Association | $124,204,905 | $124,204,905 | ||
| First Texoma National Bank | $4,485,885 | $4,485,885 | ||
| Fort Hood National Bank | $1,376,843 | $1,376,843 | ||
| Fort Worth Community Credit Union | $867,789 | $867,789 | ||
| Georgia Student Finance Authority | $12,795,419 | $35,582,488 | $11,557,415 | $59,935,322 |
| Graduate Leverage | $30,642,195 | $30,642,195 | ||
| Herring Bank | $34,550,972 | $5,965,168 | $40,516,140 | |
| Higher ED Ln Auth of the State of Missouri (MOHELA) | $727,285,576 | $727,285,576 | ||
| Home Federal Bank | $5,080,532 | $5,080,532 | ||
| Illinois Student Assistance Commission | $83,280,910 | $83,280,910 | ||
| Iowa Student Loan Liquidity Corp | $137,521,680 | $137,521,680 | ||
| JPMorgan Chase Bank | $2,457,098,372 | $2,457,098,372 | ||
| KeyBank National Association | $495,174,332 | $495,174,332 | ||
| KYHESLC | $427,937,268 | $427,937,268 | ||
| Legend Bank, NA | $1,009,337 | $1,009,337 | ||
| Maine Education Services | $32,024,384 | $32,024,384 | ||
| Mississippi Higher Education Asst. Corp (MHEAC) | $248,571,012 | $852,160 | $249,423,172 | |
| Mobil Oil Federal Credit Union | $1,417,722 | $1,417,722 | ||
| National Education Financing II | $13,334,647 | $13,334,647 | ||
| National Education Loan Network (NELNET) | $996,155 | $2,265,464,257 | $2,266,460,412 | |
| New Hampshire Higher Education (NHHELCO) | $185,815,280 | $185,815,280 | ||
| North Texas Higher Education Authority | $13,076,173 | $13,076,173 | ||
| Northwest Savings Bank | $21,325,300 | $21,325,300 | ||
| Northstar Bank of Texas | $2,785,204 | $2,785,204 | ||
| Northstar Education Finance | $207,899,910 | $207,899,910 | ||
| Norway Savings Bank | $13,172,983 | $13,172,983 | ||
| Oklahoma City University | $3,314,370 | $3,314,370 | ||
| Oklahoma Student Loan Authority | $19,921,556 | $19,921,556 | ||
| Panhandle-Plains Student Finance Corp | $61,177,983 | $61,177,983 | ||
| Pinnacle Bank | $940,164 | $940,164 | ||
| Petit Jean State Bank | $529,925 | $529,925 | ||
| RBS Citizens, NA | $633,795,254 | $633,795,254 | ||
| Rhode Island Student Loan Authority | $96,643,438 | $96,643,438 | ||
| Simmons First National Bank | $77,790,870 | $77,790,870 | ||
| SLM (Sallie Mae) | $951,648,033 | $19,547,286,300 | $20,498,934,333 | |
| Smart Financial Credit Union | $17,988,734 | $17,988,734 | ||
| Southern Methodist University | $7,261,183 | $7,261,183 | ||
| Stillwater National Bank & Trust | $6,767,660 | $6,767,660 | ||
| Student Funding Group | $12,155,418 | $129,892,342 | $142,047,760 | |
| Student Lending Works | $26,637,435 | $26,637,435 | ||
| SunTrust Bank | $275,471,939 | $275,471,939 | ||
| Surety Loan Funding Company | $19,711,394 | $19,711,394 | ||
| Texas Bank | $10,190,351 | $10,190,351 | ||
| Texas Christian University | $5,709,846 | $5,709,846 | ||
| Texas First State Bank | $837,158 | $837,158 | ||
| Texas Tech Federal Credit Union | $23,255,531 | $22,691,792 | $45,947,323 | |
| Texas Trust Credit Union | $542,864 | $542,864 | ||
| Three Rivers Federal Credit Union | $6,078,048 | $5,537,163 | $11,615,211 | |
| The Student Loan Corporation (Citi) | $2,782,180,469 | $322,862,630 | $3,105,043,099 | |
| University Federal Credit Union | $105,469,938 | $105,469,938 | ||
| U. of Oklahoma Lew Wentz Foundation | $13,103,989 | $13,103,989 | ||
| University of Tulsa | $5,861,734 | $5,861,734 | ||
| US Bank | $1,637,072,267 | $1,637,072,267 | ||
| USC Credit Union | $128,522,721 | $128,522,721 | ||
| Utah Higher Education Assistance Authority | $442,272,896 | $442,272,896 | ||
| Wachovia Education Finance | $5,015,054,769 | $745,842,855 | $5,760,897,624 | |
| Wakefield Co-operative Bank | $2,098,834 | $2,098,834 | ||
| Wells Fargo Ed Financial Services | $4,372,067,657 | $1,037,845,397 | $5,409,913,054 | |
| Total | $997,945,088 | $48,538,600,137 | $2,540,422,115 | $52,076,967,340 |
* The 2007-2008 Loan Purchase program closed on February 25, 2009. Data reflected in this chart is considered final.
** Value is 97 percent of the total of the outstanding principal balance plus accrued but unpaid interest as of the purchase date.
*** Price equals the sum of the (1) outstanding principal balance; (2) accrued interest; (3) 1% Origination Fee originally paid to the Department by the lender; and (4) $75 per loan.
**** There are additional loans valued at $0 scheduled be sold to the Department under this program within 45 days.
***** There are additional loans valued at $4,769,087,682 scheduled be sold to the Department under this program within 45 days.