Harrisburg, Pennsylvania-based Pennsylvania Higher Education Assistance Agency, a quasi-governmental agency that administers several state-level and national-level higher education student financial aid programs, has announced that it is not pursuing another extension of its original federal student loan servicing contract when it expires on December 14, 2021.
The refusal to seek a renewal of a government loan servicing contract will impact hundreds of servicing employees.
According to Pennsylvania Higher Education Assistance Agency president and CEO James Steeley, he advised federal officials that the company will not seek another extension to the 10-year student loan servicing contract that expired in 2019 and has been extended several times during the past two years.
“In the 12 years since PHEAA accepted the terms of its federal servicing contract, the federal loan programs as managed by the U.S. Department of Education have grown increasingly complex and challenging while the cost to service business increased dramatically. We still have other business lines that are robust and growing. It’s not a situation where PHEAA is going away nor is its revenue-generating ability. We’re just refocusing on our core public service mission for Pennsylvania.”
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