The North Carolina State Education Assistance Authority (NCSEAA) sold $77 million in bonds to finance student loan initiatives.
The bonds mature between 2028 and 2043, yielding between 4.35% and 5.15%. They received a rating of A (sf) from S&P Global Ratings.
“The preliminary ratings reflect our view of the transaction’s credit support, payment structure, and reserve account, among other factors,” S&P analysts wrote.
The cost of college has climbed rapidly in recent decades, putting pressure on students to finance their education with loans. While many students turn to loan programs run by the federal government, these initiatives are not available to all students, and do not always cover the full cost of education. As a result many students turn to private loans originated under state authorities such as NCSEAA.
North Carolina’s public universities are among the most affordable in the United States. Public university tuition and fees averages $7,260 annually, putting North Carolina 45th in terms of cost, according to the Education Data Initiative. But that price tag is still more than seven times higher than tuition and fees thirty years ago, according to university records.
The NCSEAA is a political subdivision of the state of North Carolina. The bonds are limited obligations of the authority, backed by a pool of fixed-rate private student loans.
BofA Securities, Inc served as underwriter on the issuance, purchasing the bonds for $78 million. SL Capital Strategies LLC served as financial advisor.