In an online statement made April 14, the Georgetown University Alumni and Student Federal Credit Union announced a new addition to its assortment of financial offerings: the option to take out student loans beginning next semester.
GUASFCU is accepting applications from both undergraduates and graduate students for the loans, which have a variable interest rate starting at 3.23 percent and are capped at ,000 a year. (Xanax online)
In an email to the Voice, GUASFCU CEO Laura Krivacek (COL ‘15) and Chief Lending Officer Peter LiVolsi (COL ‘15) said the rate compares favorably to those of major competitors, such as PNC and Discover, whose bottom line variable rates for undergraduate loans are 3.46 percent and 3.25 percent, respectively. Variable interest rates increase every year according to a fixed algorithm.
A federal unsubsidized loan has a fixed interest rate of 3.86 percent as well as a 1.072 percent origination fee for processing the loan. Fixed interest rates, unlike variable rates, remain constant for the life of the loan.
It’s possible, however, that GUASFCU will change the variable interest rate to a flat rate that is not subject to rate increases.
“We’ll come out with news on that hopefully within the next month. It’ll be a little bit higher, but the rate will be fixed for the life of the loan,” said LiVolsi.
GUASFCU is able to manage the financial liability of offering student loans because cuStudentLoans, a credit union network GUASFCU is a part of, will absorb 90 percent of the loss taken if a student is unable to pay back loans.
According to Director of Media Relations Rachel Pugh, “Taking out a loan from GUASFCU or another provider will not affect the aid package provided by Georgetown to meet a student’s full financial need.”
According to LiVolsi, GUASFCU will attempt to lessen the expense of a Georgetown education by donating 5 percent of profits from student loan interest to a fund within the University.
