Granite State Management & Resources became the second federal student loan servicer in less than two weeks to announce that it will not be extending its contract with the Department of Education when it expires Dec. 31.
According to a release Tuesday by the New Hampshire Higher Education Association Foundation (NHHEAF) Network -- which operates its loan servicing under the Granite State name -- the company will not seek or accept renewal of its federal student loan servicing contract in order to "better fulfill its purpose of empowering students of all ages and backgrounds to discover and achieve their education and career goals."
"While supporting students and borrowers remains central to the NHHEAF Network’s mission, winding down its federal student loan servicing operations will provide the opportunity to deepen longstanding public service efforts in New Hampshire as well as enhance its nationwide education financing and borrower support through EDvestinU, its private student loan product," the release said.
Granite State handles about 1.3 million borrower accounts that will have to be transferred to a different loan servicer. Federal Student Aid chief operating officer Richard Cordray said in a statement that FSA will provide strong oversight and hold servicers accountable to ensure "borrowers are supported and not harmed during this transition."
The department will now have to reassign nearly 10 million borrowers to different servicers, with the Pennsylvania Higher Education Assistance Agency -- which operates FedLoan Servicing -- announcing earlier this month that it will also not extend its contract at the end of the year.