Bid Would Open Pennsylvania Student LoanMarket
HARRISBURG, Pa. - (10/10/05) -- A bill introduced in the statelegislature last week would create more competition in the studentloan market by requiring the state-run Pennsylvania HigherEducation Assistance Agency to make its information systemavailable to credit union and bank lenders. The bill, which grewout of last year's unsuccessful attempt by Sallie Mae to but thePHEAA for $1 billion, would also strip the state-run agency of itsrole as administrator of the state education grant program. Duringa hearing last week, a university administrator and a Sallie Maeofficial testified that colleges are leery of choosing lendersother than PHEAA because of fears it could lead them to lose stategrant money. The effort to open the information system of PHEAAwould also make it easier for other lenders to compete for studentloans, backers of the bill testified. The bill, however, wouldensure that PHEAA continues to administer the state's student loanprogram. PHEAA has the largest market share of student loans inPennsylvania and provides services to more than 170 creditunions.