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Nonprofit & State-Based Education Loans
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Preserve & Expand Access to Low-Cost Nonprofit & State-Based Education Loans

EFC Members – while considered part of the private loan market – are distinct from traditional commercial financial institutions that make and service student loans. As state-based, nonprofit entities, EFC Members are driven by a public purpose mission to expand borrowers’ financial knowledge, prevent over borrowing, and promote positive repayment behavior.

EFC's Education Loan Advocacy Priorities

Preserve Tax-Exempt Bond Financing (Private Activity Bonds) for Student Loans
Expand Refinancing Authority of Nonprofit and State-Based Organizations
Amend the Preferred Lender List Statute
+ Update “Qualified Scholarship Funding Corporation” Rules

2017-2018 Nonprofit & State-Based Education Loan Handbook
Read the 2017-2018 Nonprofit & State-Based Education Loan Handbook here.

The organizations listed in this handbook represent 22 active nonprofit and state-based higher education finance organizations who offer low-cost education and refinancing loans; many of these organizations use or plan to use the proceeds of tax-exempt Qualified Student Loan Bonds to fund alternative education loan programs to help cover the cost of higher education — funding the gap between federal loans, grants, and scholarships and the total cost of attendance. The handbook also features one university that issues tax-exempt bonds to fund low-cost loans for its students.

During their 2016-17 fiscal year (for most, July 1 — June 30), these organizations made more than 84,000 loans to more than 75,000 borrowers, totaling $1.2 billion. Collectively, their outstanding portfolios include 1.1 million loans totaling $9.2 billion, representing more than 490,000 borrowers.  

Additionally, 13 nonprofit and state-based organizations offer education refinancing loans, making education debt more manageable for borrowers by providing a tool that consolidates high-interest rate education loans into a single loan. These organizations have helped borrowers reduce their overall debt burden and, in many cases, reduce their monthly payments by as much as $200 or $300 per month — saving anywhere from $3,000 to $5,000 over a ten-year repayment term.

A key feature of each education loan provided by EFC Members is that they offer a fixed interest rate option and a variable rate option. The fixed interest rates offered by these programs vary from 0% to 6.60% and, for many, is less than five percent, with origination fees for many as low as zero percent. The majority of these loan programs require a credit-worthy borrower or co-signer, resulting in extremely low default rates; some that are less than one percent. Many programs also include borrower benefits, including: interest rate reduction options for automatic payments, loan forgiveness for students who work in a critical field in the organization’s state, a death and disability forgiveness provision, income-base repayment program, and a co-signer release benefit.