South Carolina Student Loan Corp., a state run non-profit student lender has run out of capital to make NEW private student loans. They will make good on all commitments that have been made for spring semester, however, will not be taking on any new applications. Other facts in the article include:
- Slightly more than half of $32.5 million in private loans to students at the state's two largest campuses, University of South Carolina and Clemson University, come from South Carolina Student Loan Corp.
- South Carolina Student Loan Corp. has $48 million in private student loans [SLA note: I assume this refers to originations] this year compared to more than $500 million in federal student loans.
- SCSLC will be continuing to make federal student loans, which as you can see from the previous point are 10X the volume of private loans.
In the College Board's 2008 Trends in Student Aid, state-sponsored non-federal loans (similar to those offered by SCSLC) constituted $1.5 billion of a total of $19.1 billion in non-federal loans for the 2007-2008 academic year. These programs have been plagued by difficulties in the capital markets. To my knowledge, only three state agencies have been able to raise capital for private loans since the beginning of the year.
- The Rhode Island Student Loan Authority (RISLA) raised $64 million in May of this year
- New Jersey raised $350 million in August of 2008
- MEFA raised $400 million in September of 2008
Update 1: AP article provided additional data on SC SLC:
- Made private loans of $70 million over each of the past two years
- Cannot sell bonds to finance the private loans due to economic crisis