Word: usaf
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Despite a tiny staff, United Student Aid Funds (USAF) has been the largest private loan guaranteeing firm in the nation since its formation in 1961. When the government first hinted several years ago that it might shift the loan program to private firms, USAF lobbied hard and successfully to have the new program run through the states -- thus giving itself a chance to offer its services to any state that did not have a going loan guaranteeing service. In 30 states, it has managed to become the major administrator of GILP, using federal funds as collateral behind student loans...
...BARNEY OLDFIELD, USAF (RET.) Beverly Hills...
...USAF's idea was to create a reserve fund with which to guarantee student loans otherwise unbacked by collateral...
...Banks are willing to lend money to a student on the diminishing value of his secondhand car," says USAF President Allen D. Marshall, a former executive of General Electric and General Dynamics. "They should be more willing to lend it on the increasing value of his education." Under USAF's plan, a student may borrow up to $4,000 from any bank in the organization's expanding network. While regular bank loans can cost up to 8% in true interest, nonprofit, tax-exempt USAF can secure loans repayable at as little as 5% and in no case more...
Last week, as the school year got under way, USAF had endorsed some 1,800 loans, bringing its total to more than 20,000 and $10.6 million. To date, only 21 borrowers have defaulted-three because of death. USAF's network has expanded to include more than 530 colleges and 3,600 banks in 44 states. Assets, which are provided by grants from foundations, corporations, colleges and universities, now total $4,000,000, and USAF can bring forth $12.50 in bank loans for every $1 in its reserve...