::Student loan guarantor


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A student loan guarantor is a guarantor who agrees to pay someone else’s student loan debt should he or she default on a loan.<ref>American Student Assistance Retrieved on June 8, 2010.</ref> In the case of student loans in the United States, the government guarantees the federal loans that students borrow. Federal student loans are a much lower risk when compared to other unsecured loans, partly because they are extended from a lending institution under the guarantee of the Federal government. Loan guarantors are state-run or private organizations in charge of administering the Federal Family Education Loan Program (FFELP), which subsidizes participating student lenders. Borrowers generally pay a 1% default fee that is collected after each disbursement to the guarantee agency in order to cover the costs of insuring the loan, though some agencies will waive this fee.<ref>The SmartStudent Guide to Financial Aid. Retrieved on October 3, 2008.</ref>

Student loan guarantor sections
Intro   Guarantors and credit    Multiple guarantors   See also   References   

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