ISAC Eliminates Fee on Student Loans

SPRINGFIELD – The Illinois Student Assistance Commission (ISAC) recently approved the elimination of the guarantee fee on ISAC-guaranteed educational loans borrowed through the Federal Family Education Loan program.  The agency will waive the fee on loans disbursed on or after July 1, 2003 through June 30, 2004.  Eliminating the fee will reduce the cost of borrowing for students and parents.

By federal law, ISAC is authorized to collect a 1% fee on student loans for providing loan insurance.  The Commission has chosen to waive the fee for borrowers since 1999 to ensure that more loan proceeds are available to apply toward students’ educational expenses.

Approximately 180,000 borrowers will benefit from elimination of the fee, resulting in a savings of $7.5 million for Illinois students and parents. The earnings forfeited by the fee elimination are not necessary due to the current fiscal stability of the agency's student loan program, funded by the federal government.  Moneys earned from the guarantee fee could not be used to bolster declining state funds.

“We are pleased to pass on significant cost savings to the students and families we serve through our student loan programs.  Our ability to waive this fee is due largely in part to our borrowers’ solid commitment to repaying their loans,” explained Larry Matejka, ISAC’s Executive Director. 

About ISAC
The Illinois Student Assistance Commission is the State’s centralized provider of financial assistance aimed at helping students and families access postsecondary education and/or training. Each year, the Commission awards an estimated $400 million in scholarship and grant aid to nearly 185,000 qualified students, and also provides an additional $740 million to borrowers through its student loan programs. The agency offers credit-based alternative loans, a 529 prepaid tuition program known as College Illinois!, and a broad array of outreach and informational services to ensure that families have access to the information they need to pay for a college education. More information is available by calling toll-free 800.899.ISAC (4722) or visiting the agency’s Web site at www.collegezone.com.