Loan Guarantee Fee Eliminated

To assure that your Common Manual remains current, please record this document on your LPM/LPB index, and retain it in Appendix E of your manual.

On Tuesday, April 27, 1999, the Louisiana Student Financial Assistance Commission (LASFAC) voted unanimously to eliminate the 1% fee currently levied on loans guaranteed by the state under the Federal Family Education Loan Program (FFELP), effective for loans guaranteed on or after May 5, 1999.

By this action, Louisiana joins the other primary guarantor of Federal Family Education Loans in Louisiana in eliminating the fee which is currently deducted from loan principal before being disbursed to students. Elimination of the fee means the amount disbursed to students will increase by 1%, providing them more funds to apply toward educational costs. It is estimated that elimination of the fee will save Louisiana student borrowers in excess of $2 million per year.

This action is yet another example of Louisiana’s intent to remain competitive in the guaranteed student loan program by providing ever-improving service to participating schools and unsurpassed benefits to participating borrowers. Use of Louisiana’s guarantee is encouraged because of the return benefit to students. Monies generated by LASFAC through the guarantee of loans will be used by the state to develop and support other student financial aid programs. Benefits to students will now be even greater with LASFAC’s elimination of the 1% guarantee fee.