Citibank and Edamerica Join List Not Participating in Parent PLUS Auction (Update)

Here is Citibank's notice that went out to schools yesterday:  Download Parent PLUS Loan Auction Letter from John Vidovich

Here are the reasons provided for Citibank's decision:

"The following factors weighed in our decision:

• Considering current market conditions and assuming no extension of the Ensuring Continued Access to Student Loans Act, originations during the second year of this program do not provide acceptable economics.

• Given that winning bidders would be announced at the end of April, an expedited implementation would be needed to support the July 1, 2009 start date. This increases the risk that parents may be unable to secure a Parent PLUS Loan in a timely manner.

• President Obama’s outline of the federal budget for the 2010 federal fiscal year includes a proposal to eliminate the FFEL Program by July 2010. The uncertainty surrounding the outcome of this proposal makes it difficult to commit to a two year auction program in good faith at this time. For more information on this topic, please go to faaonline.com."

Here is Edamerica's announcement which went out today (Wednesday). Their reasons for not participating:

"The main reason behind our no-bid decision is the well-being of our customers," says Tony Hollin, chairman and CEO. "We feel that the PLUS Auction will overly complicate the PLUS loan process and confuse parent borrowers. It will also force schools to change their regular loan process, creating needless chaos during the already hectic peak season."

Citibank and Edamerica join Sallie Mae, Nelnet and Chase in publicly announcing their intent not to participate.  April 1st is the deadline looming for lenders to send in prequalification materials to the Department of Education and April 15th is the scheduled date of the auction.  Anyone hear from Wells Fargo?