Second Chance For CUs At Student Loan Carve-Out

Credit Union Journal, The, April, 2008 by Ed Roberts, Washington Bureau Chief

Representatives from three of the biggest student lenders among credit unions are scheduled to meet with key lawmakers this week in an effort to claim a place in last year’s carve-out for non-profits from the major cuts in federal student loan subsidies.

The legislation, which cut both the yields and the subsidies for participants in the guaranteed loan program, provided an exemption–or carve-out–for non-profit lenders, like state agencies.

The credit union lobby’s efforts to be included in the carve-out was rejected by Congress.

But the climate has changed significantly since then, with dozens of lenders, including several non-profit state agencies, having either halted or reduced their participation in the program, known formally as the Federal Family...

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