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What is a guaranty agency?

April 26, 2017agency Guaranty

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What is a guaranty agency?

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A. The Missouri Department of Higher Education Student Loan Program is a guaranty agency that basically insures student loans for private lenders. On behalf of the U.S. Department of Education, the MDHE guarantees lenders that when they make a student loan they will receive payment on the loan, whether by the borrower, or claim payment by the MDHE. If a borrower dies, becomes totally and permanently disabled, files certain types of bankruptcy, defaults, etc. the MDHE will purchase the loan from the lender.