BISMARCK (AP) -- Federal legislation that cuts banks out of the government-backed student loan business will change the Bank of North Dakota's role with student loans but not eliminate it.
Starting July 1, the state-owned bank no longer will provide federally subsidized loans to borrowers as colleges and universities switch to the direct lending program.
However, the Education Department plans to award contracts to nonprofits in 2011 to provide service for some of the direct loans. Bank of North Dakota President Eric Hardmeyer says the bank plans to apply to be one of the contractors.
The bank also still will offer the Dakota Educational Alternative Loan program and will continue servicing its current student loan portfolio of more than $1 billion.
