WARWICK – The R.I. Higher Education Assistance Authority announced today that it will pay the Federal Default Fee on Stafford, Plus and Grad Plus student loans guaranteed and disbursed on or after July 1 of this year in cases where the lender does not pay the fee.
The agency estimated the savings to students could total as much as $4 million for the 2008-09 academic year.
“For 30 years, RIHEAA has been putting Rhode Island students first,” said Dr. Robert J. McKenna, chairman of the RIHEAA board. “This unanimous vote by the board to pay the default fee on student loans reinforces RIHEAA’s mission, to promote equality of opportunity for academically qualified students who would otherwise be restricted financially from participating in the educational program of their choice.”
The U.S. Higher Education Reconciliation Act of 2005 requires that a 1-percent “default fee” be assessed on all Stafford and Plus loans guaranteed on or after July 1, 2006. The fee must be deposited into the guaranty agency Federal Fund.
“With the rising cost of higher education coupled with other economic stresses of the day, Rhode Island families are more concerned than ever about their ability to pay for college,” said William H. Hurry, executive director of RIHEAA. “Paying the default fee for borrowers continues to demonstrate RIHEAA’s commitment to making college more affordable for Rhode Island students and families.”
The R.I. Higher Education Assistance Authority – the state’s designated guarantor for the Federal Family Education Loan Programs – has guaranteed more than $2 billion in student loans to more than 300,000 borrowers since 1977. The agency is also responsible for the administration of both the R.I. State Grant and Scholarship Program and the CollegeBoundfund, Rhode Island’s 529 College Savings Plan. To learn more, visit www.riheaa.org.
