Iowa Students and Parents to Save Millions on Loan Fees
Des Moines, IA., April 6, 2009 - Iowa College Student Aid Commission (Iowa College Aid) today announced that it will continue to pay the one-percent federal default fee on Stafford and PLUS loans it guarantees for the 2009-2010 award year. Since 1999, Iowa College Aid has waived the one-percent fee (formerly known as the guarantee fee) which has provided over $30 million in total cost savings to Iowa students and parents. The commitment by Iowa College Aid to continue to pay this fee through at least June 30, 2010 will provide Iowa students and parents with additional estimated savings of $7 million.
The rising cost of higher education, recent federal legislation, as well as the impact of the current credit crisis on student loan financing, has increased the anxiety felt by Iowa families struggling to pay college expenses. "We know that families are concerned about the state of the economy and its impact on their ability to pay for college. During this time we remain committed to making college affordable for Iowa students and families. We believe that paying the federal default fee is an important measure in assuring Iowans that low-cost student loan options remain available for Iowa families," said Karen Misjak, Executive Director of the Iowa College Student Aid Commission.
The Deficit Reduction Act of 2005 requires that all Stafford and PLUS loans guaranteed on or after July 1, 2006, be assessed a one-percent federal default fee. This fee deduction reduces the amount of loan funds that students receive to cover college costs. The default fee must be deducted from the borrower's loan proceeds at the time of disbursement or must be paid from other non-federal sources.
About the Iowa College Student Aid Commission
As the state's designated guaranty agency for the Family Federal Education Loan Program (FFELP), Iowa College Aid guarantees more than $696 million annually in student loans from private lenders to support over 77,000 Iowa students and parents. In addition, Iowa College Aid administers state scholarship, grant, and loan forgiveness programs totaling over $69.5 million, provides borrowers with assistance to avoid the serious consequences of default, conducts research and distributes higher education data, and offers Iowans assistance in obtaining student financial aid and college-related information. More information is available at www.IowaCollegeAid.gov.
Posted 04/08/09 to www.NASFAA.org. Posting of press releases is done as a service to Members and does not imply endorsement or support by NASFAA. NASFAA does not review this information for content or accuracy.
