Continuing its efforts to help North Carolina students, State Employees’ Credit Union (SECU) has agreed to purchase up to $25 million in federally insured student loans from the North Carolina State Education Assistance Authority (SEAA). Student participants in the SEAA Loan Rehabilitation Program have the opportunity to reestablish their credit standing, restore federal insurance on their loans and continue their education by successfully completing the Program. The purchase of these student loans by SECU also provides funds to the SEAA which can be used to assist other student loan borrowers and to develop more educational offerings to benefit North Carolina students and their parents.
The Loan Rehabilitation Program is authorized under federal law and was put in place to help student borrowers who defaulted on Federal Family Education Loans earn a second chance to repay the loans, repair their credit histories and improve their lives. The federal guarantee of the payment of principal and interest that existed at the time of the original participation in the federal student loan program follows the rehabilitated loan. The loan purchaser (SECU) will be reimbursed an average of 97% of the outstanding loan principal and interest if a re-default occurs. A loan can be rehabilitated once. Student loan borrowers must make 9 consecutive voluntary payments at an amount they can sustain into the future in order to qualify for participation in the Student Loan Rehabilitation Program. Upon qualifying, new repayment terms may be available, eligibility for federal and state financial aid is reinstated and the defaulted loan status is removed from the student loan borrower’s credit record.
Dr. Steve Brooks, Executive Director of the North Carolina State Education Assistance Authority states, “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. 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.”
Mike Lord, SECU SVP of Finance and Accounting, adds “Participating in this longstanding and successful program is an excellent investment in the students of our State who are taking the opportunities to repay their debt and repair their credit standings. Our investment benefits our members while providing additional resources to expand the Loan Rehabilitation Program and help more students. Student loan participants benefit by putting themselves in a position to further their education, purchase a home or improve their lives through their renewed credit standing. The partnership is a win for all involved, especially North Carolina students, and aligns very well with our ‘People Helping People’ philosophy.”