EdFund is the United States' second largest provider of student loan guarantee services under the
Federal Family Education Loan Program
The Federal Family Education Loan (FFEL) Program was a system of private student loans which were subsidized and guaranteed by the United States federal government. The program issued loans from 1965 until it was ended in 2010. Similar loans a ...
(FFELP). It is organized as a non-profit
public-benefit corporation. EdFund offers students and their families a wide range of information on the value of higher education, how to pursue it, how to pay for it, and debt management. In addition, EdFund supports schools with advanced loan processing solutions and default prevention techniques.
Operating as an auxiliary corporation of the California Student Aid Commission, EdFund processes more than $9.3 billion in
student loans in the United States
Student loans in the United States are a form of financial aid intended to help students access higher education. In 2018, 70 percent of higher education graduates had used loans to cover some or all of their expenses. With notable exceptio ...
annually (including Consolidation loans) and manages a portfolio of outstanding loans valued at $29 billion.
EdFund is headquartered in
Rancho Cordova, California
Rancho Cordova is a city in Sacramento County, California, United States which was incorporated in 2003. It is part of the Sacramento Metropolitan Area. The population was 64,776 at the 2010 census. In 2010 and 2019, Rancho Cordova was named ...
with regional offices located throughout the United States.
History
EdFund is a nonprofit corporation founded by the California Student Aid Commission on January 1, 1997.
EdFund was organized as a
501(c)(3) public benefit corporation pursuant to legislation authorizing the Commission to establish a nonprofit auxiliary to administer all activities associated with its participation in the federal student loan program.
Today, EdFund provides all operational and administrative services related to the Commission’s participation in the federal student loan program, and is a growing national provider of student financial aid services.
"On August 27, 2010, the U.S. Department of Education selected
Educational Credit Management Corporation
Educational Credit Management Corporation (ECMC) is a United States nonprofit corporation based in Minnesota. Since 1994, ECMC has operated in the areas of student loan bankruptcy management and loan collection. ECMC is one of a number of ''guara ...
(ECMC) to assume the guarantor responsibilities of CSAC effective November 1, 2010; consequently, all federal student loans guaranteed by CSAC and serviced through EdFund have been transferred to ECMC for ongoing servicing.
EdFund staff will continue to service the non-defaulted segment of the former CSAC portfolio per an agreement with ECMC. Also as part of this agreement, EdFund will provide ECMC with transition services, systems and web services
www.edfund.org
Governance
EdFund is governed by a board of directors that meets quarterly. The company also has regional offices located across the nation.
Criticism
EdFund has been criticized for its collection policies and punitive practices, as well as for the salaries paid to executive officers. A 2007 ''
San Francisco Chronicle
The ''San Francisco Chronicle'' is a newspaper serving primarily the San Francisco Bay Area of Northern California. It was founded in 1865 as ''The Daily Dramatic Chronicle'' by teenage brothers Charles de Young and Michael H. de Young. The ...
'' article describes how in certain circumstances, EdFund’s practices can take an original loan of $37,000 and drive the repayment cost well over $100,000. The article quotes Elena Ackel, a senior attorney at Legal Aid Foundation of Los Angeles, as describing EdFund as “an oppressive system.”
In 2006, a California state auditor strongly criticized EdFund, finding that the organization exercised lax oversight and made questionable spending decisions.
"State audit slams student loan agency", Oakland Tribune, April 22, 2006
/ref> The auditor found that EdFund spent thousands of dollars on entertainment, travel, and executive bonuses, at a time when the loan program faced an $8.3 million operating deficit. The California Student Aid Commission was cited for lax oversight of EdFund.
See also
*College tuition in the United States
College tuition in the United States is the cost of higher education collected by educational institutions in the United States, and paid by individuals. It does not include the tuition covered through general taxes or from other government funds ...
*Tertiary education
Tertiary education, also referred to as third-level, third-stage or post-secondary education, is the educational level following the completion of secondary education. The World Bank, for example, defines tertiary education as including univers ...
*Private university
Private universities and private colleges are institutions of higher education, not operated, owned, or institutionally funded by governments. They may (and often do) receive from governments tax breaks, public student loans, and grants. Dep ...
*Student debt
Student debt is a form of debt that is owed by an attending, formerly withdrawn, or graduated student to a lending institution, or to a financial institution.
The amount that is loaned, often referred to as a ''student loan'' or the debts may be ...
*Student loan
A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest r ...
*Student loans in the United States
Student loans in the United States are a form of financial aid intended to help students access higher education. In 2018, 70 percent of higher education graduates had used loans to cover some or all of their expenses. With notable exceptio ...
*Tuition payments
Tuition payments, usually known as tuition in American English and as tuition fees in Commonwealth English, are fees charged by education institutions for instruction or other services. Besides public spending (by governments and other public bo ...
*Tuition freeze
Tuition freeze is a government policy restricting the ability of administrators of post-secondary educational facilities (i.e. colleges and universities) to increase tuition fees for students. Although governments have various reasons for impleme ...
References
{{reflist, 2
Student loans in the United States
Educational organizations based in the United States
Education finance in the United States