FinAid - Financial Aid Advice The SmartStudent Guide to Financial Aid
Site MapAbout FinAid
 
Loans
Scholarships
Saving for College
Military Aid
Other Types of Aid
Financial Aid Applications
Answering Your Questions
Calculators
Beyond Financial Aid




Advertisement


 
Secondary Markets

Advertisement

This section of FinAid provides information about secondary markets. Secondary markets ensure the liquidity of the Federal Family Education Loan Program (FFELP) by buying student loans from education lenders. This provides education lenders with fresh capital they can use to originate new student loans. As a result, secondary markets are among the largest holders of student loans.

Selling loans is a common practice among lenders, so the bank a borrower sends his or her payments to may change during the life of the loan. Typically a loan will be sold when it enters repayment. Many small banks effectively act as brokers for the secondary markets, contracting to sell their student loans when they enter repayment. The terms and conditions of a student loan do not change when it is sold to a secondary market.

Advertisement
Secondary markets often offer repayment incentives on the loans they hold. These incentives can include principal rebates and interest rate reductions for signing up for automatic direct debit of monthly loan payments and for making their first 12, 24, 36 or 48 consecutive monthly payments on-time.

Trade Associations for Secondary Markets

The Education Finance Council (EFC) is the national trade association for state student loan secondary markets.

National Secondary Markets

Sallie Mae is the largest secondary market for student loans. They also originate Stafford, PLUS, Consolidation and private education loans. The following companies are owned or affiliated with Sallie Mae: Academic Management Services (AMS), Education Debt Services Inc., Education First Marketing LLC, Education One Group Inc., General Revenue Corporation, Nellie Mae, Pioneer Credit Recovery Inc., HEMAR Insurance Corp. of America, SLM Financial Corporation, SLM Funding Corp., Southwest Student Services Corporation (SSSC), Student Assistance Corp., Student Loan Funding Resources LLC (SLF), TrueCareers Inc., Student Loan Finance Association (SLFA), Student Loan Marketing Association, Upromise, USA Group, Wired Scholar, Sallie Mae Education Trust, Sallie Mae Inc., and Sallie Mae Servicing LP. For more information, call 1-888-2-SALLIE (272-5543) or write to 11600 Sallie Mae Drive, Reston, VA 20193. For information about PLUS Loans call 1-800-891-1410. For information about Consolidation Loans call 1-800-448-3533. For information about the Signature Student Loans call 1-800-695-3317. Related web sites include: Parent Answer (PLUS Loans), College Answer (formerly Wired Scholar), Signature Student Loans, and OpenNet Laureate.

Brazos Higher Education Service Corporation. The Brazos Group includes a secondary market, in addition to a servicer, guarantor and lender. Brazos Group lenders include 1st Student Financial, Academic Finance Corporation (AFC), Educational Funding Services, Inc. (EFSI), and Acapita Student Finance Corporation. For more information, call 1-800-375-9208 or 1-800-453-0841, fax 1-888-367-9185, write to PO Box 14445, Austin, TX 78761 or PO Box 1308, Waco, TX 76703, or send email to brazos@bhesc.org.

Education Funding Resources, LLC is the secondary market subsidiary of Education Lending Group, Inc. For more information, call 1-858-617-6080, fax 1-858-617-6079, write to Education Lending Group, Inc., 12760 High Bluff Drive, Suite 210, San Diego, CA 92130-20180, or send email to info@edlending.com. Related web sites include Student Loan Xpress and Consolidation Assistance Program.

GCO Education Loan Funding Corporation (GCO-ELF) is a member of the Greystone family of companies, a private investment firm. They acquired the student loan assets and infrastructure of GMAC Education Loan Funding Corporation in September 2004. Their focus is on the acquisition and securitization of FFELP Stafford, PLUS and consolidation loan assets. They do not originate FFELP loans, but do offer their own private student loans under the Educated Borrower brand. For more information, call 1-800-334-4480.

National Education Loan Network (NELNET) is a national secondary market, lender and servicer. Their servicer subsidiaries include EFS, Inc., EFS Finance Company, National Higher Education Loan Program Inc., and UNIPAC Service Corporation. Other NELNET companies include Nelnet, Inc., National Education Loan Network, Inc., Nelnet Guarantee Services, Inc., Charter Account Systems, EDULINX Canada Corporation (sold May 2007 to Resolve), Firstmark Services LLC, Foresite Solutions Inc., 5280 Solutions Inc., infiNET Integrated Solutions, Inc., Nelnet Marketing Solutions, Inc., Shockley Financial Corp., American Card Services, Inc., Premiere Credit of North America LLC, Class Credit, Inc., CUNet, CollegeandUniversity.net, InTuition, Inc., Student Marketing Group (SMG), National Honor Roll, LLC, CollEDGE Loans and LoanSTAR Funding Group, GuaranTec LLP, FACTS Management Company, EMT Corporation, Idaho Financial Associates, Inc., Peterson's, MELMAC, Inc., National Higher Education Loan Program, Inc. Nelnet Mentor LLC, and SLAAA Acquisition Corporation. NELNET acquired the student loan portfolio of CHELA in 2005. NELNET previously acquired NEBHELP, the Nebraska secondary market, and MELMAC, the Maine secondary market. Lenders who sell their student loans to NELNET typically offer repayment incentives that include a 1% reduction in origination fee, a 3.33% reduction of the principal loan balance after making 30 consecutive on-time monthly payments, and a 0.25% interest rate reduction for automatic direct debit of monthly payments. For new loans, call 1-877-804-3603 or 1-886-866-7372 or send email to INETCS1@nelnet.net. For consolidation loans, call 1-866-4CONSOL (1-866-426-6765) or send email to nelnetconsolidations@nelnet.net. For customer service call 1-888-486-4722. For more information, call 1-402-458-2370, fax 1-402-458-2399, or write to 121 South 13th Street, Suite 400, Lincoln, NE 68508. Related web sites include SuperLoan, NELNET Academic Loan, NELNET Consolidation, and Nelnet Investors.

Regional Secondary Markets

Southwest Student Services Corporation (SSSC) is the designated state secondary market for Arizona and Florida. Its affiliates include the Arizona Educational Loan Marketing Corporation (AELMAC) and Florida Educational Loan Marketing Corporation (FELMAC). In addition to providing liquidity to education lenders in Florida and Arizona, they also offer Stafford, PLUS, Consolidation and private education loans. Lenders who sell their student loans to SSSC typically offer repayment incentives that include a 0% origination fee, a 0% default fee, and a 0.25% interest rate reduction for automatic direct debit of monthly payments. Their lender codes are 830630 (Arizona) and 831245 (Florida). SSSC was acquired by Sallie Mae in 2004. For more information in Florida, call 1-888-740-1074 or 1-305-740-0100, fax 1-305-740-0999, write to 11140 SW 88th Street, Suite 200, Miami, FL 33176, or send email to customerservice@sssc.com. For more information in Arizona, call 1-800-367-2369, fax 1-480-461-6589, write to PO Box 41150, Mesa, AZ 85274, or send email to customerservice@sssc.com.

State Secondary Markets

ALL Student Loan is California's largest nonprofit student loan lender. They offer Stafford, Parent PLUS and Grad PLUS loans. Benefits offered are a 0.25% interest rate reduction for auto-debit payments and 0% federal default fee at select guarantors. Their lender code is 833752 (California schools). For more information, call 1-888-271-9721, fax 1-888-271-7239, write to ALL Student Loan, 6701 Center Drive West, Suite 500, Los Angeles, CA 90045 or send email to info@allstudentloan.org. ALL Student Loan also operates a number of programs designed to increase college access and completion, including early awareness, financial aid literacy and default prevention.

Arkansas Student Loan Authority (ASLA) is the state secondary market for Arkansas. They offer Stafford, PLUS, Consolidation and private education loans. Their lender code is 826509. For more information, call 1-800-443-6030 or write to 101 East Capitol Avenue, Suite 401, Little Rock, AR 72201.

Chela Education Financing [alternate link], also known as Chela Financial Resources Inc. or the California Higher Education Loan Authority, is a state secondary market for California. They offer Stafford, PLUS, Consolidation and private education loans. Lenders who sell their student loans to Chela typically offer repayment incentives that include origination fee reductions of up to 3%, a 1.5% discount for borrowers with loan balances of $7,500 or more at repayment, and a 0.25% interest rate reduction for automatic direct debit of monthly payments. Customer Service can be reached at 1-866-35-CHELA (24352). For more information, call 1-866-34-CHELA (24352) or 1-415-283-2800, fax 1-888-54-CHELA (24352) or 1-415-283-2888, write to 388 Market Street, 12th Floor, San Francisco, CA 94111, or send email to information@chelafin.org.

College Invest, formerly known as Colorado Student Obligation Bond Authority (CSOBA), is a secondary market for Colorado. They are a division of the Colorado Department of Higher Education. They offer Stafford and PLUS education loans. Lenders who sell their loans to College Invest typically offer repayment incentives that include origination fee reductions of up to 3%, a 0.25% interest rate reduction for automatic direct debit of monthly payments, a 1% interest rate reduction after 24 months of on-time payments and an additional 1% interest rate reduction after the next 24 months of on-time payments. Their lender code is 827866AA. For more information, call 1-800-448-2424, fax 1-303-296-4811, write to 1560 Broadway, Suite 1700, Denver, CO 80202, or send email to info@collegeinvest.org.

Edfinancial Services, formerly known as Education Services of America, Inc. (EdAmerica) and as Educational Funding of the South Inc. (Edsouth), is a secondary market located in Tennessee. They were previously known as the Volunteer State Student Funding Corporation. They offer Stafford, PLUS, Consolidation and private education loans. Lenders who sell their student loans to EdSouth typically offer repayment incentives that include a 1% reduction in origination fees, and a 4% rebate after 33 months of on-time monthly payments with automatic (direct debit or online). Their lender code is 831453. For customer service, call 1-800-337-6884 or 1-865-342-5500 or send email to customerservice@edfinancial.com. For more information, call 1-800-337-1009, fax 1-877-337-8439 or 1-865-218-1013, or write to PO Box 31549, Knoxville, TN 37930-1549 or 123 Center Park Drive, Knoxville, TN 37922, or send email to info@edfinancial.com. Related web sites include EdFinancial Services, edsouth Secondary Market, and Edconsolidation Student Loan Consolidation.

Education Services Foundation (ESF) is a state secondary market for Mississippi. It incorporates the Mississippi Higher Education Assistance Corporation (MHEAC). They provide servicing for lenders who sell their loans to MHEAC at repayment. For more information, call 1-800-986-4322 or 1-601-321-5555, fax 1-601-321-5599, or write to 2600 Lakeland Terrace, Jackson, MS 39216 or PO Box 5008, Jackson, MS 39296-5008.

Finance Authority of Maine (FAME) is a secondary market and guarantee agency for student loans in Maine. For more information, call 1-800-228-3734 or 1-207-623-3263, fax 1-207-623-0095, TTY 1-207-626-2717, write to 5 Community Drive, PO Box 949, Augusta, ME 04332-0949, or send email to info@famemaine.com.

Illinois Designated Account Purchase Program (IDAPP) is the state secondary market for Illinois. IDAPP is also a loan originator and loan servicer. They are a division of the Illinois Student Assistance Commission. Lenders who sell their loans to IDAPP typically offer repayment incentives that include a 1% origination fee rebate at repayment, a 0.25% interest rate reduction for automatic direct debit of monthly payments, a 1% interest rate reduction after 24 months of on-time payments and an additional 1% interest rate reduction after the next 24 months of on-time payments. For more information, call 1-847-948-8620 or 1-800-961-IDAP (4327) for new loans or 1-800-366-5755 for consolidation loans or 1-800-366-5755 for customer service, fax 1-847-831-8625, write to PO Box 707, Deerfield, IL 60015 or send email to IDAPPCustomerService@isac.org.

Indiana Secondary Market for Education Loans, Inc. (ISM) is the state secondary market for Indiana. ISM offers federal Stafford, Parent PLUS and Graduate PLUS loans. ISM does not use automated telephone services during regular business hours, so most calls are answered by a customer service representative in typically less than 10 seconds. Stafford and PLUS borrowers can receive a 0.25% interest rate reduction benefit for automatic direct debit of monthly payments. For more information, call 1-888-ISM-2002 (1-888-476-2002) or 1-317-715-9000, fax 1-317-715-9001, write to 251 N. Illinois Street, Suite 400, Indianapolis, IN 46204, or send email to customersupport@ismloans.org.

Iowa Student Loan Liquidity Corporation (ISSLC) is the state secondary market for Iowa. They offer Stafford and private education loans through participating lenders. Lenders who sell their student loans to ISSLC typically offer repayment incentives that include 0% origination fees and a 2.5% interest rate reduction after 48 months of on-time payments. For more information, call 1-800-243-7552 or 1-515-243-5626, fax 1-515-243-5472, or write to Ashford I Bldg., 6805 Vista Drive, W. Des Moines, IA 50266-9307.

Kentucky Higher Education Student Loan Corporation, also known as The Student Loan People, is the state secondary market for Kentucky. They offer Stafford, PLUS, Consolidation and private education loans. Lenders who sell their student loans to the Student Loan People typically offer repayment incentives that include a 0% default fee and 0% origination fee. Their lender code is 826688. For more information, call 1-800-416-5176 or write to P.O. Box 24328, Louisville, KY 40224-0328. Related web sites include Kentucky Higher Education Assistance Authority.

LoanSTAR Funding Group Inc., formerly known as the Greater East Texas Servicing Corporation and the Greater East Texas Higher Education Authority, is a secondary market for Texas. For more information, call 1-800-829-4599, fax 1-979-776-8978, write to PO Box 4940, Bryan, TX 77805, or send email to custserv@loanstar.com. Related web sites include www.edcred.com and elite.loanstar.com.

Louisiana Education Loan Authority (LELA) is a state secondary market for Louisiana. LELA offers Stafford and PLUS education loans. Lenders who sell their education loans to LELA typically offer repayment incentives that include 0% origination fees, 0% default fees, a 0.25% interest rate reduction for automatic direct debit of monthly payments, and a 3% interest rate reduction after 36 months of on-time payments. For more information, call 1-800-228-4755 or 1-225-923-0020, fax 1-225-923-0021, write to 2237 South Acadian Thruway, Suite 650, Baton Rouge, LA 70808 or send email to info@lela.org. Related web sites include Louisiana Public Facilities Authority.

Michigan State Secondary Market (SSM), established 1990, is the state secondary market for Michigan. It operates as a program of the Michigan Higher Education Student Loan Authority (MHESLA). Lenders who sell their education loans to MHESLA typically offer repayment incentives that include 0% origination fees and a 0% interest rate after 36 months of on-time monthly payments. MHESLA also offers a private education loan called the MI-LOAN Program. For more information, call 1-888-MHESLA-1 (1-888-643-7521) or 1-517-373-3662, TDD 1-800-649-3777, write to Michigan Higher Education, Student Loan Authority, PO Box 30051, Lansing, MI 48909, or send email to mhesla@michigan.gov.

Missouri Higher Education Loan Authority (MOHELA) is the state secondary market for Missouri and neighboring states. They also offer Stafford, PLUS, Consolidation and private education loans. Lenders who sell their loans to MOHELA typically offer repayment incentives that include a 2.5% interest rate reduction for automatic direct debit of monthly payments. For more information, call 1-800-666-4352 or 1-636-532-0600, fax 1-888-387-3530 or 1-636-532-0610, or write to 633 Spirit Drive, Chesterfield, MO 63005-1243. Related web sites include Michigan Student Aid.

Montana Higher Education Student Assistance Corporation (MHESAC) is a secondary market for FFELP student loans made by Montana lenders and other participating lenders. MHESAC also offers Stafford and PLUS loans directly to Montanans. MHESAC's loans are serviced by Student Assistance Foundation of Montana (SAF). For more information, call 1-800-852-2761 x6657 or 1-406-495-7800, fax 1-406-495-7880, write to PO Box 5209, Helena MT 59604-5209, or send email to customerservice@safmt.org.

New Hampshire Higher Education Loan Corporation (NHHELCO) is a state secondary market for New Hampshire. They offer Stafford, PLUS, Consolidation and private education loans. For more information, call 1-800-525-2577 or 1-603-225-6612, fax 1-603-224-2581, write to 4 Barrell Court, PO Box 877, Concord, NH 03302-0877, or send email to info@gsmr.org. Related web sites include Granite State Management & Resources (GSM&R) and NHHEAF Network.

New Jersey Higher Education Student Assistance Authority (HESAA), established 1959, is the state secondary market and student loan guarantee agency for New Jersey. They offer Stafford, PLUS and Consolidation education loans, as well as the NJCLASS (New Jersey College Loans to Assist State Students) alternative education loan. HESAA typically waives the 1% guarantee fee for its borrowers. For more information, call 1-800-792-8670, write to PO Box 540, Trenton, NJ 08625.

North Texas Higher Education Authority (NTHEA) is a secondary market for Texas lending institutions. They offer Stafford and PLUS education loans through participating lenders and provide a 0.25% interest rate reduction for automatic direct debit of monthly payments as a repayment incentive. For more information, call 1-800-366-4372 or 1-817-265-9158 or write to 1250 East Copeland Road, Suite 200, Arlington, TX 76011-4921.

Oklahoma Student Loan Authority (OSLA) [alternate link] is a secondary market, loan servicer and education lender. They offer Stafford, PLUS, Consolidation and private education loans. Lenders who sell their student loans to OSLA typically offer repayment incentives that include a 1% rebate of loan principal after entering repayment and making the first three monthly payments on-time, a 1.5% interest rate reduction after making the first 12 monthly payments on-time, and a 0.33% interest rate reduction for automatic direct debit of monthly payments. For more information, call 1-800-456-6752 or 1-405-556-9200, fax 1-800-261-7529, TDD 1-405-556-9230, write to PO Box 18145, Oklahoma City, OK 73154-0145 or 525 Central Park Drive, Building I, Suite 600, Oklahoma City, OK 73105, or send email to info@osla.org or CustServ@osla.org. For help in Spanish, call 1-877-556-9275 or 1-405-556-9275.

Panhandle-Plains Higher Education Authority Inc. (PPHEA) is a secondary market for student loans in West Texas. Their affiliated servicer, the Panhandle-Plains Student Loan Center (PPSLC) services student loans owned by Central Texas Higher Education Authority and the North Texas Higher Education Authority in addition to loans held by PPHEA. For more information, call 1-800-736-5727 or 1-806-324-4100, fax 1-806-655-7765, or write to 1403 23rd Street, PO Box 839, Canyon TX 79015.

Pennsylvania Higher Education Assistance Agency (PHEAA) is the state secondary market and guarantor in Pennsylvania. For more information, call 1-800-343-1809 or 1-717-720-3100, or write to 1200 N 7th Street, Harrisburg PA 17102-1444.

Rhode Island Student Loan Authority (RISLA) is the state secondary market for Rhode Island. For more information, call 1-800-758-7562 or 1-401-468-1760, fax 1-401-468-1745, TDD 1-401-468-1750, write to 560 Jefferson Blvd., Suite 200, Warwick, RI 02886-1371, or send email to info@risla.com.

SMS Hawaii, the student loan secondary market for Hawaii, is an affiliate of USA Funds. Their lender code is 832776. For more information, call 1-888-272-5543 or 1-808-593-2262, fax 1-808-593-8268, or write to 1314 South King Street, Suite 861, Honolulu, HI 96814.

South Carolina Student Loan Corporation (SCSLC), also known as the South Carolina State Education Assistance Authority, is a secondary market and guarantor for student loans in South Carolina. SCSLC was established in 1974. They offer Stafford, PLUS, Consolidation and private education loans. For more information, call 1-800-347-2752.

South Texas Higher Education Authority Inc. (STHEA) is a state secondary market for South Texas. STHEA contracts with the Council for South Texas Economic Progress (COSTEP) to service their loans. For more information, call 1-800-949-6371 or 1-956-682-6371, fax 1-956-971-3319 or 1-956-971-3321, or write to 2540 W. Trenton Road, Edinburg, TX 78539.

Student Loan Finance Association (SLFA) is the designated secondary market for student loans in Washington state, and also operates as a secondary market in Oregon and Idaho. Sallie Mae acquired the secondary market and related businesses of SLFA in 2004. For more information, call 1-877-330-4455, write to 190 Queen Anne Avenue North, Suite 400, Seattle, WA 98109, or send email to info@slfaloan.com.

Student Loan Finance Corporation (SLFC), located in South Dakota, is a third party servicer for student loans. For more information, call 1-800-592-1270, fax 1-605-622-4464, write to 125 S First St, Aberdeen, SD 57401-4107, or send email to service@slfc.com. Related web sites include iHELP Loan.

Student Loan Funding [alternate link] is a secondary market for student loans in Ohio. They are a wholly-owned subsidiary of Sallie Mae. They offer Stafford, PLUS, Consolidation and private education loans. Their lender code is 831455. For more information, call 1-877-477-7537, fax 1-513-763-4340, or write to One West Fourth Street, Suite 1000, Cincinnati, OH 45202-3699.

Utah Higher Education Assistance Authority (UHEAA) is a student loan guarantor and secondary market for Utah. UHEAA is a subsidiary of the Utah State Board of Regents. Lenders who sell their loans to UHEAA typically offer repayment incentives that include a 0% default fee, a 0% origination fee, a 1.25% interest rate reduction for automatic direct debit of monthly payments, and a 2% interest rate reduction after 48 months of on-time payments. For more information, call 1-877-336-7378 or 1-801-321-7200, fax 1-801-321-7299, TDD 1-801-321-7130, write to Board of Regents Building, The Gateway, 60 South 400 West, Salt Lake City, UT 84101-1284, or send email to uheaa@utahsbr.edu.

Vermont Student Assistance Corporation (VSAC), established 1965, is a secondary market and guarantee agency for student loans in Vermont. For loan information, call 1-800-798-8722 or 1-802-655-4050. For more information, call 1-800-642-3177 or 1-802-655-9602, fax 1-802-654-3765, TDD 1-802-654-3766, write to PO Box 2000, Winooski VT 05404, or send email to info@vsac.org.

Wyoming Student Loan Corporation (WSLC) is a secondary market for Wyoming. For more information, call 1-800-999-6541 or 1-307-638-0800, fax 1-307-778-3870, or send email to info@wslc.com.

 

 
Home | Loans | Scholarships | Savings | Military Aid | Other Types of Aid | Financial Aid Applications
Answering Your Questions | Calculators | Beyond Financial Aid | Site Map | About FinAid®
Copyright © 2014 by FinAid Page, LLC. All rights reserved.
Mark Kantrowitz, Founder
www.FinAid.org