Kentucky Student Loan Provider Is Out of Money

Student Loan Girl — Wed, 13 Aug 2008 21:08:00 GMT

The Kentucky Higher Education Assistance Authority, the state agency that provides college loans to students attending colleges and universities in Kentucky, will “effectively run out of money” Friday while it waits to receive a $50 million loan from the federal government on August 21, reports the Lexington Herald-Leader (“Student Loan Agency to Run Out of Money,” Aug. 13, 2008).

The one-week funding shortage may temporarily inconvenience KHEAA’s student loan borrowers, some of whom will not likely receive their student loans before classes begin as early as August 18 at some schools.

KHEAA, also known as The Student Loan People, has been in communication with the financial aid offices of affected universities, asking them to be patient until the $50 million “bridge loan” from the government arrives. With the loan, the KHEAA will issue $35 million in financial aid to 16,000 students, says James Ackinson, KHEAA’s executive vice president.

“The issue will not delay or prevent any of our students from beginning classes,” says Shelley Park, director of financial aid at Eastern Kentucky University, which begins classes August 25. Students who rely on their student loans to buy textbooks will get school-issued vouchers to cover the cost until they receive their KHEAA-issued student loans and can repay the school.

By Friday, when the KHEAA will temporarily run out of money, the state loan agency will have issued $40 million in loans to 18,000 students since July 1.

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Student Loan Blog : James Ackinson

Kentucky Student Loan Provider Is Out of Money