Bank of North Dakota announces sale of federal student loans
BISMARCK – Bank of North Dakota (BND) announced the sale and transfer of the federal student loan portion of its student loan portfolio to North Texas Higher Education Authority (NTHEA). The transfer will be complete in the first quarter of 2018. BND continues to own, offer and service its state-sponsored student loans that are used during college and to refinance afterward.
The sale of the federal student loans portfolio allows BND to eliminate numerous regulatory burdens established by the U.S. Department of Education, increase its default prevention efforts and begin the process of updating servicing technology.
“This is a decision we knew we’d eventually need to make when the federal government decided to administer the federal student loan program in 2010,” stated BND president Eric Hardmeyer. “We held on to the portfolio longer than many federal loan servicers to give more people the opportunity to pay off their federal student loans.”
When the federal government recalled the federal student loan business in 2010, BND’s portfolio had $797 million in federal student loans for 57,000 borrowers. Today that portion of the portfolio has shrunk considerably to $255 million for 19,000 borrowers. During the same period, BND’s own state-sponsored student loan program has grown from $277 million to $1.1 billion. BND currently serves more than 80,000 student loan customers.
North Texas Higher Education Authority was selected after a bidding process and on-site visit from BND student loan staff members. Transferred loans will be serviced by the Higher Education Servicing Corporation, a private nonprofit organization founded in 1978, whose mission is to service and administer federal student loans for NTHEA.
“Bank of North Dakota remains highly committed to continuing its state-sponsored student loan program,” shared Hardmeyer. “Offering student loans is an essential activity that assists in fulfilling our mission to promote agriculture, commerce and industry in North Dakota.”
Qualified North Dakota residents who have federal student loans may apply to refinance their student loans with Bank of North Dakota. If a North Dakota borrower does not qualify on their own, they may select a co-signer who meets credit criteria.
Staff members who worked with servicing federal student loans will be assigned duties in the BND state-sponsored student loan area because of its increased volume.
All student loan borrowers impacted by the sale are being sent postal mail and email notifications this week. To find out how the sale may or may not affect them, borrowers may visit bnd.nd.gov/fsl. They may also call 1.800.472.2166 ext. 328.5660 to speak with a BND representative.
For more information, contact Janel Schmitz, Communications & Marketing Manager 701.328.5880