ISAC Eliminates Fee on Student Loans

SPRINGFIELD – The Illinois Student Assistance Commission (ISAC) will again eliminate the guarantee fee on educational loans borrowed through the Federal Family Education Loan program and guaranteed by ISAC.  The agency will waive the fee on all loans disbursed on or after January 1, 2006 through December 31, 2006.  Eliminating the fee will reduce students’ cost of borrowing money to pay for a college education. 

By federal law, ISAC is authorized to collect a 1 percent fee on student loans to subsidize the agency’s provision of loan insurance for borrowers.  The Commission has chosen to waive this fee for borrowers since 1999 to ensure that more loan proceeds are available to apply towards students’ educational costs.

Approximately 225,000 borrowers will benefit from the elimination of the loan fee, resulting in a savings of $11.4 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. 

“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.

ISAC’s student loan programs support and pay for all the agency’s program administration and outreach activities focused on helping Illinois students and families gain access to a college education.  For more information, individuals should contact ISAC toll-free at 800-899-ISAC (4722) or visit the comprehensive college planning Web site, CollegeZone.com.  College Zone counselors and materials are available in Spanish.

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.