Finance:PUT Loans

PUT Loans were created in order to ensure the availability of loan funds for U.S. borrowers, President Bush signed the Ensuring Continued Access to Student Loan Act of 2008 (ECASLA) into law on May 7, 2008. One of the programs created under this law enabled lenders to sell loans to the Department of Education (ED) so that the lender would have funds to provide loans to other borrowers.

Description

The sale of federal loans is very common, and by signing the Master Promissory Note (MPN), the borrower authorizes the potential sale of his or her loan to another entity. In this case, the loan was sold or “PUT,” as it is generally called, to ED.

If a borrower’s loan(s) are sold, the terms of the loan will remain the same, and the loan continues to be a part of the Federal Family Education Loan Program (FFELP).

Regarding loans that were PUT, the borrower should contact the Department of Education Student Loan Servicing Center. If the borrower has loans with other servicers, they must be contacted as well.

See also