Educational Credit Management to close Chesterfield office

Educational Credit Management Corp. plans to close its office in Chesterfield County and lay off all 60 employees, the nonprofit agency said yesterday.

They will lose their jobs Dec. 1.

Educational Credit Management has been insuring loans under the Federal Family Education Loan Program, as well as servicing other guarantors' loans when a borrower files for bankruptcy, but the federal government now is taking over insuring student loans, spokeswoman Marianna O'Brien said.

As a result, the insurer is consolidating operations at its St. Paul, Minn., headquarters. It is also shutting its other branch, in Oregon, where it employs 10.

"This is absolutely not a question of performance," O'Brien said. "We're grateful for what our people did for students and families in Virginia."

Although Washington will now insure student loans, Educational Credit Management is still responsible for loans it already guaranteed, as well as for its servicing business.

Educational Credit collected $295 million in fees, collections and other payments for its services in 2007, according to its latest tax filings.

It spent $260 million repaying lenders for loans on which borrowers defaulted, and an additional $24 million on its own loan-guarantee programs.

-- David Ress