A defunct lending organization’s loan portfolio continues to grow smaller, according to an audit released Thursday.
The Connecticut Student Loan Foundation, a nonprofit created by the state in the 1960s, had a loan portfolio of $427.8 million as of Sept. 2013, down nearly 14 percent from $495.8 million a year prior. CSLF has not made new loans since 2009, and has been run by a skeleton board of directors consisting of just three ex-officio members.
It assigned its servicing and guarantor activities to private entities in 2010.
A state law passed this summer rolled CSLF into the Connecticut Health and Educational Facilities Authority, which is charged with its governance.
CSLF’s current portfolio, down from $758 million in 2008, consists of loans from the Federal Family Educational Loan Program and its own Solutions Alternative lending program.
CSLF ran into financial trouble in 2009, when it disclosed its pension fund was underfunded. An audit released that year uncovered more than $25,000 in unnecessary or unreasonable expenses, including golf membership and tournament fees, club seats for UConn football games, limousine service, a retirement party for the financial aid director of a state university, and a holiday party for the board of directors, among others.
Former Gov. M. Jodi Rell replaced all six of her board appointees in the wake of the audit, but those replacements and other members resigned several months later, after an attempt to pass legislation protecting them from lawsuits failed.
Also impacting CSLF was federal legislation signed by President Obama in 2010 that eliminated fees the government paid to private banks to provide loans to students.
