A significant number of workers at the state’s sole student loan corporation have been rendered jobless by 2010 federal rules that made the federal government the exclusive lender of federal loans.
“That is what has impacted us without a doubt,” says South Carolina Student Loan president, Chuck Sanders.
The corporation saw a series of layoff from August through December, 2016. Sanders will not confirm how many workers were laid off, but says staffing levels are at approximately 50, down from 240 in the mid-2000s.
Leaving positions unfilled once staffers leave represents most of the reduction, Sanders says.
The business still owns its loans, but in August transferred federal loans to Nebraska-based Nelnet for processing. Private loans were transferred to Firstmark Services, a division of Nelnet, in January.
Still offering private loans, South Carolina Student Loan has refocused its business on a program to prevent borrowers from defaulting. The program is administered through a $60 million fund overseen by the State Fiscal Accountability Authority, in line with a federal mandate that the funds be used solely for default prevention.
Student loan default rates declined from approximately 16 percent in 2014 to approximately 12 percent in 2016, according to Sanders.
A new loan program, targeted for the summer, is also underway. The corporation is planning a five-tiered loan program in which borrowers can obtain the best rates based on good credit, compared to the single rate currently offered.
The corporation has also expanded its services to cover follow-up calls, traditionally made by nurses or hospitals, to patients who have been discharged. These calls ensure patients have the post-hospital care resources they need. A representative may call a patient to make sure he has had his prescriptions filled, for example.
“We are out there helping people still,” Sanders says.
The aim of the corporation—helping students get the financial aid they need—is the same as it has always been, despite the student loan industry’s changing landscape.
The only change borrowers are seeing is who they’re making their checks out to, Sanders says.
*Disclosure: The author has several family members who were previously employed at the corporation. They were not sources for this story.