Nation’s leading guarantor reports 17 percent increase in 2009 loan volume

INDIANAPOLIS -- USA Funds^®, the nation’s leading education loan guarantor, reports that it guaranteed more than $20 billion in federal education loans to help students and parents pay college expenses for the fiscal year ending Sept. 30. The figure represents a 17 percent increase in the dollar volume of loans guaranteed by USA Funds compared with the previous fiscal year.

Included in the total are more than $17.7 billion in Stafford loans for students and $2.3 billion in PLUS loans to graduate students and to parents of dependent undergraduate students.

USA Funds saw notable growth in its volume of two categories of student loans affected by recent legislative changes. The guarantor posted a 25 percent increase in the dollars of unsubsidized Stafford loans and a 24 percent increase in the dollar volume of PLUS loans to graduate students. The Ensuring Continued Access to Student Loans Act of 2008 and the Higher Education Reconciliation Act of 2005 increased unsubsidized Stafford loan limits and permitted graduate students to borrow PLUS loans.

“It appears from our loan volume that this legislation is having its intended effect of making available less-expensive federal loans, which offer greater repayment flexibility, to students who previously would have had to borrow private student loans,” said Carl C. Dalstrom, USA Funds president and CEO.

Although the availability of federal student loans helps millions of families finance higher education, USA Funds advises families to exhaust all other sources of financial aid before borrowing, to limit borrowing to education-related expenses, and to turn to private student loans only as a last resort. Through its financial literacy program for college students, USA Funds Life Skills^®; its suite of loan counseling programs, USA Funds Loan Counselor^®; and other debt management initiatives, USA Funds helps students minimize their education debt and equips them to manage and repay their student loans.

Headquartered in Indianapolis, USA Funds is a nonprofit corporation that works to enhance postsecondary education preparedness, access and success by providing and supporting financial and other valued services. For more information about USA Funds, visit www.usafunds.org.

Posted 10/13/09 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.