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Alumni Resources

Helping Students Out of Debt

The Alumni Association teams up with UHEAA to offer low-cost student loans.

For several years, BYU has boasted one of the lowest student-loan default rates in the country, and the Alumni Association hopes to help keep that number low.

The BYU Alumni Association has entered into an agreement with the Utah Higher Education Assistance Authority (UHEAA), which offers low-cost student loans. Michael Busenbark, (BA’72) BYU Alumni Association executive director, believes the arrangement will offer BYU students and alumni the best opportunity to save money on student loans.

“We’re delighted with our partnership with BYU and are pleased to offer low-cost loans to BYU students and parents,” says David Feitz, UHEAA‘s associate executive director for policy and development.

UHEAA offers a series of borrower benefits that can save BYU students thousands of dollars:

Guarantee-Fee Benefit. UHEAA pays the borrower’s 1 percent guarantee fee for Stafford and PLUS (Parent) loans. For example, on a $10,000 loan, the borrower saves $100.

Automatic-Payment Benefit. For borrowers who have loan payments automatically deducted from their checking or savings account, UHEAA lowers the loan’s interest rate by 1.25 percent, which saves borrowers significant amounts in interest over the life of the loan.

Origination-Fee Credit Benefit. An origination fee of 3 percent is required for student loans, but when a borrower begins repaying a loan, UHEAA credits the borrower’s acount with the amount of the origination fee. For example, a borrower with a $5,000 loan receives a $150 credit when the loan enters repayment.

PLUS (Parent) Loan Interest Benefit. On PLUS (Parent) loans, UHEAA gives a credit equal to the amount of interest paid during the first 12 months of repayment. This results in an interest-free loan for parent borrowers during the first year.

Timely Payment Benefit. Borrowers who make on-time payments for four years receive an additional 2 percent interest-rate reduction for the remaining life of the loan.

UHEAA also offers a Web site,, to help students and their parents plan for college. Utah Mentor provides financial-aid information and offers a variety of useful college planning tools such as a scholarship search, practice tests for college entrance exams, and career planning tools.

“Careful advanced planning utilizing the free information available at could help students avoid or reduce the amount of debt needed for college,” says Feitz.