The $24.8 billion State Employees’ Credit Union in Raleigh, N.C., announced it will purchase up to $25 million in federally guaranteed student loans from the North Carolina State Education Assistance Authority, which runs the SEAA Loan Rehabilitation Program.
The credit union’s purchase of the loans will benefit the program and allow the SEAA to pursue new programs to assist North Carolina students and their parents, SECU said.
“Through the purchase of these student loans, SECU is providing the capital to expand the rehabilitation program and thus help even more borrowers in North Carolina’s program earn a fresh start,” said Steve Brooks, executive director for SEAA. “We have partnered with the credit union on numerous programs and initiatives over the past 30 years to help make education affordable for students and their families and we are proud to have SECU join us in this effort.”
The SEAA Loan Rehabilitation Program gives student borrowers who defaulted on Federal Family Education Loans a chance to repay their loans and restore their credit histories.
Once they qualify, participants are eligible for new repayment terms, reinstatement of their state and federal financial aid, and removal of their defaulted loan statuses from their credit reports. Borrowers are required to make nine consecutive, voluntary student loan payments to participate in the program.
The program lets borrowers rehabilitate a student loan once. In the case of a re-default, the loan purchaser (in this case, SECU) is reimbursed an average of 97% of the outstanding loan principal and interest.
“Participating in this longstanding and successful program is an excellent investment in the students of our state who are taking the opportunity to repair their debt and improve their credit standings,” said Mike Lord, senior vice president of finance and accounting for SECU.
“Student loan participants benefit by putting themselves in a position to further their education, purchase a home or improve their lives through renewed credit standing,” Lord said.