OUT OF THE GAME

Student Loan Agency That Lied to Congress Backs Out of Federal Contract

The Pennsylvania Higher Education Assistance Agency said recent changes to the federal student loan program have caused company costs to increase.

A major student loan provider that’s been sued by multiple states and was caught lying to Congress has backed out of managing federal loans, telling the U.S. Department of Education to find someone else. The Pennsylvania Higher Education Assistance Agency told employees Thursday that it was ending its contract with the U.S. government once it expires on Dec. 14. Spokesman Keith New told PennLive the move was due to recent changes to the federal student loan program that have caused company costs to increase. The company had entered into a 10-year contract with the government in 2009 to collect and keeping track of students’ federal loan payments. The move will impact potentially hundreds of the agency’s 2,250 employees, including layoffs.