The R.I. Higher Education Assistance Authority 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,” Dr. Robert J. McKenna, chairman of the RIHEAA board, said last week. “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, said in support of the board’s decision. •
