The Vermont Student Assistance Corporation (VSAC) was established in 1965 as a public nonprofit agency designed to oversee the issuing of federal education loans to Vermont students. But with the sweeping reforms to the federal student loan program that were passed in 2009, bundled in with the national health care reform bill, VSAC and agencies like it were stripped of their ability to originate new federal education loans.
As of July 1, 2010, all federal parent and student loans (
http://www.nextstudent.com/student-loans/student-loans.asp) are now provided to borrowers directly by the U.S. Department of Education, and VSAC is now facing a staff reduction of nearly two-thirds as it tries to find ways to survive in the age of the Federal Direct Student Loan Program.
The agency had been a lender in the Federal Family Education Loan Program (FFELP), which was discontinued as part of the federal student loan reforms (
http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloansupdate.jsp). As part of its lending functions under the FFEL program, VSAC acted as both a lender and servicer of federal college loans.
Under the new world order, with FFELP disbanded, VSAC can still manage (i.e.,