We will continue to process all private loans we have received as of today, and we’ll continue to process any federal loans we have received. However, we must cancel disbursements scheduled after July 31, 2009, and we cannot fund any federal loans with first disbursements on or after July 1, 2009. We will contact affected schools and borrowers to explain their options.

Unfortunately, NorthStar is unable to obtain the bridge financing needed to use the Department of Education’s Participation Program as we did this past year for federal loans. In addition, the capital markets remain stalled, so we are unable to get the funds needed to make T.H.E. private loans. We have not been able to find a lending partner willing to help us fund.

Of course, you may be wondering what this means for you and your student borrowers. All of our schools will be contacted directly by their T.H.E. account manager with detailed information about existing loans with future disbursements. We are fully committed to our existing customers and will continue to provide service through our usual toll-free numbers as well as through our online resources. And in spite of current challenges, we’ll continue to monitor our ability to access funding and look for new ways to offer our education loan financing expertise.

I’d like to thank all of you for allowing us to be of service the last 11 years. We at NorthStar are grateful for the hard work, knowledge and commitment of so many dedicated financial aid officers who helped us pursue our mission of lowering the cost of financing a higher education.

Taige Thornton
President, NorthStar Education Finance, Inc.