What is the Loan Purchase Commitment Program?
A1 Under the Loan Purchase Commitment Program, the Department purchases certain FFEL Program loans made for the 2008-2009 academic year. Under the provisions of the Master Loan Sales Agreement, the Department will purchase a loan at a price that is equal to the outstanding principal balance of the loan, plus the total accrued but unpaid interest owed on the loan by the borrower, plus a reimbursement of the one percent lender fee, plus $75 per loan. In general, a FFEL lender must provide the Department with a 45-day notice of its intent to sell eligible loans to the Department. During the 45-day period, the Department and its servicer works with the selling lender (or its servicer) to finalize the roster of loans to be purchased and the purchase price. Therefore, liquidity is provided to the FFEL lender specifically and to the FFEL Program generally.
Related Questions
- What are the responsibilities of a guaranty agency for loans sold under the Loan Purchase Commitment Program?
- Is there a minimum loan volume required for a lender to participate in the Loan Purchase Commitment Program?
- Are loans with a life-of-loan servicing contract eligible for the Loan Purchase Commitment Program?
