University of Virginia Library

Education Office Announces
Out-Of-State Student Loan

By Dave Murphy

Out-of-state students in need of
money to pay for their educations
are now able to borrow money
from their schools under the
Guaranteed Student Loan Program.
The United States Office of
Education has announced that the
new legislation, which enables any
student to borrow from his school,
has gone into operation.

Before the amendments,
authorized by recent amendments
to the Higher Education Act of
1965, were enacted, loans to
non-resident students could not be
insured in most states. The new
amendments make it possible for
the federal government to insure
loans made by college and
vocational schools which are
eligible to give loans to a student
who does not have access to a state
or private non-profit loan insurance
program because of his residence.

Such organizations as
commercial lending institutions,
insurance companies, and pension
funds, many of which operate on
an interstate basis, are now eligible
to make federally insured loans to
students.

Yale Acts First

Dr. Preston Valien, acting
associate commissioner for higher
education in the United States
Office of Education, announced
that Yale University is the first
educational institution to activate a
program making it possible for
students to obtain a loan.

"This new phase of the program
should go far," Dr. Valien said,
"toward filling a serious gap in our
efforts to see that every student
who needs to borrow has access to
an insured loan to attend the school
that is best for him, regardless of
where he may live. We hope that
other institutions throughout the
country will follow Yale's example
so that many more students may
benefit from the program."

The Insured Loans Branch of
the Division of Student Financial
Aid administers the Guaranteed
Student Loan Program which has
loaned more than $1 billion to
students since the beginning of the
program. The Office of Education
expects that 750,000 loans totaling
more than $641 million will be
made during the current fiscal year,
which ends June 30, 1969.

Up To $1,500

The legislation allows students
to borrow up to $1,500 a year with
a maximum total of $7,500,
including loans for graduate school
study. The student will begin
repaying the loan after he has left
school, and may take from five to
ten years to repay. A deferment
will be granted if the student goes
into the military, Peace Corps, or
VISTA, or during periods of
full-time study.

The legislation also states that
the federal government will pay all
interest charges on behalf of a
student whose adjusted family
income is less than $15,000 a year,
while the student is in school and
during any deferment period, until
repayment begins.