We expect that PHEAA will provide our customers with the same high-quality service that they currently receive.
NEW YORK & HARRISBURG, Pa.--(BUSINESS WIRE)--CIT Group Inc. (NYSE: CIT), a leading provider of financing to small businesses and middle market companies, today announced that it has completed and executed a service agreement with the Pennsylvania Higher Education Assistance Agency (PHEAA) to service $7.4 billion of the Company’s portfolio of government-guaranteed loans currently serviced by CIT.
“Our decision to outsource the servicing of our student loans reflects our ongoing efforts to improve operating efficiencies,” saidJohn A. Thain, Chairman and Chief Executive Officer. “We expect that PHEAA will provide our customers with the same high-quality service that they currently receive.”
Under the terms of the agreement, CIT will outsource all of its student loan servicing activities that are currently provided by its subsidiary Xpress Loan Servicing (XLS). PHEAA conducts its commercial student loan servicing activities as American Education Services (AES), which currently services approximately $1 billion of CIT’s student loan portfolio. The servicing of the additional $7.4 billion portfolio is expected to be transferred to AES between January and March 2011. As a result, CIT will close its XLS offices in Cleveland and Cincinnati, Ohio.
Moody’s Investors Service, Fitch Ratings and Standard & Poor’s have all confirmed their ratings on the related portfolio of student loan asset backed securities.
Located in Harrisburg, PA, PHEAA currently has more than $120 billion in assets under management across the U.S. It was one of four organizations awarded a servicing contract with the U.S. Department of Education to service all government originations under the new federal direct loan program. PHEAA conducts its student loan servicing activities for federally-owned assets as FedLoan Servicing. PHEAA, and its two servicing operations, is recognized as a long-term and top-tier servicer in the student loan servicing industry and maintains contracts with the U.S. Department of Education.
Borrowers with loans currently serviced by XLS will be notified by AES regarding the new servicing relationship. Borrowers can contact AES at 1-800-233-0557 with any questions or visit the AES Web site at http://www.aessuccess.org.
Individuals interested in receiving future updates on CIT via e-mail can register at http://newsalerts.cit.com.
Created in 1963 by the Pennsylvania General Assembly, PHEAA has evolved into one of the nation’s leading student aid organizations. Today, PHEAA is a national provider of student financial aid services, serving millions of students and thousands of schools through its loan guaranty, loan servicing, financial aid processing, outreach and other student aid programs. For more information, visit www.pheaa.org.
PHEAA conducts its student loan servicing activities nationally as American Education Services (AES) and FedLoan Servicing.
AES was created to guarantee and service a variety of Federal Family Education Loan Program (FFELP) and private (alternative) student loan products for lending partners throughout the nation. AES is a national leader in providing quality customer service to millions of student loan borrowers through its highly trained and experienced customer service representatives.www.aesSuccess.org
Founded in 1908, CIT (NYSE: CIT) is a bank holding company with more than $35 billion in finance and leasing assets. It provides financing and leasing capital to its more than one million small business and middle market clients and their customers across more than 30 industries. CIT maintains leadership positions in small business and middle market lending, factoring, retail finance, aerospace, equipment and rail leasing, and global vendor finance. www.cit.com