The Role of a Guarantor

Guaranty agencies, also referred to as guarantors, are federally funded, nonprofit or state agency entities that, in partnership with the U.S. Department of Education, administer the FFEL Program. Guarantors are integral and central to the postsecondary education community inclusive of borrowers, schools, lenders and secondary markets.

The Nation’s Largest Source of Financial Aid for Postsecondary Education

The FFEL Program was created in 1965 by President Lyndon Johnson to address the lack of availability of loans for students to attend college. It created a unique public-private partnership among the federal government, lenders and guaranty agencies.

Since its inception, the FFEL Program has made the dream of college a reality for more than 50 million students and their families. Today, it is the nation’s largest source of financial aid for postsecondary education.

Guarantors’ Customers and Stakeholders

• Students and their families: EdFund is a trusted source of information for students and their families on the value of higher education, how to pursue it, and how to pay for it.
• Schools (middle schools, high schools and postsecondary institutions), lenders and servicers: EdFund forms partnerships with schools, lenders and servicers to deliver educational information and repayment support to students and parents. From guidance about the complex array of options for financing a college education, to simplified and expedited funds delivery, to financial literacy and default prevention outreach, EdFund puts a premium on providing valuable service. EdFund also helps schools with their student financial aid responsibilities and assists them in protecting their federal financial aid program eligibility.
• The U.S. Department of Education and American taxpayer: EdFund serves as a steward of the federal fiscal interest by helping to maintain the integrity of the student aid program, by promoting access to higher education, and by helping borrowers successfully meet their financial obligations. At the end of the day, educated and productive citizens are less likely to become dependent upon the federal government for assistance.

EdFund’s Unique Role as an Open-Access Guarantor

EdFund is unique in that it promotes educational opportunity for all by serving as an open-access guarantor—meaning EdFund will never turn away an eligible borrower from an eligible institution.

At EdFund, we look at every borrower as someone who deserves the chance to get the education they’re seeking, regardless of their circumstances or the type of school they choose. We work hard to provide the tools and counseling so that our borrowers have a successful school and repayment experience.

EdFund’s Role in the Life Cycle of a Student Loan

EdFund conveys the federal guarantee that provides the financial backing needed for student loans under the FFEL Program. We are not a lender. The guarantee, however, is only one part of the services EdFund provides. The company offers a wide range of associated services including student outreach; information on planning and paying for college; financial and debt management information; counseling borrowers who have withdrawn early from school about their options for returning to school, including their student loan repayment obligation and options; counseling delinquent borrowers to help them resolve their delinquency and return to a successful repayment experience; training and customer service support for college financial aid offices; and collection efforts on defaulted loans.