Press Releases
American Education Services to Pay Default Fee on Student and Parent Loans
Will save borrowers more than $32 million during 2007-08
Harrisburg, PA (April 19, 2007) - American Education Services (AES) announced today that it will subsidize the federal government’s mandatory default fee, at least through June 30, 2008, on all Stafford, Parent PLUS and Graduate PLUS Loans on behalf of student and parent borrowers.
AES began waiving this fee, which was formerly known as the guaranty fee or insurance premium, in 1996 when it adopted its industry-leading Zero Guaranty Fee. This innovative program has saved student loan borrowers $230 million in up-front costs.
The Higher Education Reconciliation Act of 2005 requires all federal student loan guarantors to deposit one percent of the loan amount to cover potential costs associated with insuring federally guaranteed student loans. AES has consistently covered these costs on behalf of its student loan borrowers to help them afford a higher education while incurring less debt.
“Reducing the cost and increasing access to higher education is our primary objective,” explained Dick Willey, AES President and CEO. “By consistently waiving this default fee, that so many others charge, we’re making higher education an affordable option for everyone. Underwriting this charge puts more money in the hands of students just when they need it most.”
By subsidizing the federal default fee again for the 2007-2008 academic year, AES estimates it will save students in excess of $32 million that can immediately be used to help pay for their educational expenses.
Additional information on AES’ programs and services can be found at aesSuccess.org.