Nation’s leading guarantor records 33-percent increase in overall loan volume
USA Funds supports record $27.3 billion in education loans
INDIANAPOLIS — USA Funds®, the nation’s leading education-loan guarantor, guaranteed a record $27.3 billion in loans to help families pay higher-education expenses during the fiscal year ending Sept. 30, 2006. That figure represents a 33-percent increase in the dollars of Federal Stafford, PLUS and Consolidation loans guaranteed by USA Funds, compared with the previous fiscal year.
During fiscal 2006, the USA Funds guarantee supported nearly $12.6 billion in Federal Stafford loans to students and Federal PLUS loans to parents of undergraduate students and graduate and professional students, a 17.4-percent increase over its fiscal-2005 loan volume. In addition, USA Funds guaranteed $14.7 billion in Federal Consolidation loans to help education-loan borrowers manage their loan payments. USA Funds’ consolidation-loan volume increased by more than 50 percent over the previous year, as borrowers sought to avoid a July 1, 2006, interest-rate increase on their variable-rate loans by locking in the previous low education-loan interest rates through fixed-rate consolidation loans.
USA Funds attributed the growth in its Stafford- and PLUS-loan volume to the expanding array of premier products and services that it offers to assist postsecondary institutions. “Our multi-million-dollar investment in improving the loan-delivery process, our comprehensive package of default-prevention and debt-management tools, and our renowned training programs on financial-aid rules and tools are extremely attractive to campus administrators,” said Carl C. Dalstrom, USA Funds president and CEO.
Although pleased with USA Funds’ record contribution to financial access to higher education during 2006, Dalstrom expressed concern about growing education-loan-debt burdens. “USA Funds is addressing the issue of student-loan debt from two angles,” Dalstrom said. “First, we are continuing to expand and improve the robust package of debt-management services we offer to postsecondary institutions and to borrowers. Second, we are providing and supporting need-based scholarships and advocating a greater investment in need-based student financial aid by both government and private-sector organizations.”