Federal Legislation Alters BND’s Role in Student Loans

BISMARCK, ND–March 30, 2010–Recent federal legislation signed into law today by President Obama eliminates the Federal Family Education Loan (FFEL) Program, which Bank of North Dakota (BND) has participated in since the program’s inception more than 40 years ago.

As of July 1, 2010, BND will no longer provide new Federal Stafford, PLUS, or Grad PLUS loans to borrowers. Borrowers needing this service must use the federal government’s Direct Loan Program through their school.

“Bank of North Dakota has enjoyed our long-standing business relationships with public and private colleges and universities, as well as high school counselors, parents and students across the state,” said Eric Hardmeyer, BND president. “We are proud of our unmatched customer service, as well as the numerous educational services and programs we’ve administered and sponsored. We hope to continue our role in these important services and will work with the Department of Education to determine other scenarios we may be a part of in the future.”

BND will still provide its Dakota Education Alternative Loan (DEAL), which is guaranteed by Student Loans of North Dakota (SLND). Since 1997, the state DEAL loan has provided additional financial support to students who are unable to obtain adequate funds through federal student aid programs. The DEAL consistently has been one of the best alternative loan options because of its terms and interest rate options (fixed or variable). BND also continues to pay the administrative fee associated with the DEAL for all North Dakota residents and for students attending school in-state.

“Between the DEAL program and servicing our current student loan portfolio of more than $1 billion, Bank of North Dakota is still here for North Dakotans pursuing their dreams of higher education,” said Julie Kubisiak, senior vice president and director of Student Loan Services. “We made the first federally insured student loan in the country in 1967 and we will continue to assist our current federal loan borrowers through the repayment process while their loans remain in our portfolio.”

Bank of North Dakota (BND) was established in 1919 and is the only state-owned bank in the United States. BND is overseen by the Industrial Commission of North Dakota, consisting of Gov. John Hoeven as chairman, Attorney General Wayne Stenehjem, and Agriculture Commissioner Doug Goehring.

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