Contact: Sandy Connolly, Director of Communications, Office of Higher Education 651 259-3902
The Minnesota Office of Higher Education today completed the sale of $100 million in revenue bonds to provide additional funds for its student loan program. The bond sale, which includes $70 million in tax-exempt bonds and $30 million in taxable revenue bonds, will enable the agency to meet continuing strong demand for its Student Educational Loan Fund Program, known as the "SELF" program.
Loan disbursements from the SELF program have quadrupled since 1998, with $135 million in disbursements processed in fiscal year 2005. Funds generated by the bond sale will provide resources to enable the agency to meet the continuing strong demand for SELF Loans in the coming academic year.
"Minnesota created this program years ago to help students bridge the financial gap, many of whom have exhausted their other financial aid options," said Susan Heegaard, Director for the Office of Higher Education. "This bond sale will enable the agency to make about 30,000 additional loans to students initially, and as loans are repaid, the funds can be recycled for new loans."
The legislature created the SELF Loan Program in 1985 to provide students with long-term, low interest educational loans. The program is operated at no cost to the state. SELF Loans are funded entirely by revenue bonds, investment earnings and loans repaid by borrowers. Since the program's creation by the legislature in 1985, the agency has originated more than 320,000 loans. In fiscal year 2005, 36,000 loans were made.
Minnesota students attending eligible postsecondary institutions within or outside Minnesota and non-residents attending eligible postsecondary institutions in Minnesota may apply for SELF Loans. There are no minimum or maximum income thresholds and no application fees. The interest rate charged on loans is adjusted quarterly with a July 1, 2005 interest rate of 6.6 percent. The borrower pays interest quarterly while in school.
For information about the SELF Loan Program, contact the financial aid office at the college you attend or are considering attending, or contact the Minnesota Office of Higher Education at (800) 657-3866 or visit www.selfloan.org.
The bond sale is being underwritten by RBC Dain Rauscher Incorporated in Minneapolis, Minnesota. The bonds are rated AAA as the result of insurance from MBIA Insurance Corporation of Armonk, New York. The trustee is Wells Fargo Bank, National Association in Minneapolis, Minnesota.
The Minnesota Office of Higher Education is a cabinet-level state agency providing students with financial aid programs and information to help them gain access to postsecondary education. In addition to the SELF Loan Program, the agency administers a large need-based state grant program that supplements the Federal Pell Grant program. The agency also oversees tuition reciprocity programs, Minnesota's 529 college savings program, licensing and an early awareness outreach initiative for youth. The agency serves as the state's clearinghouse for data, research and analysis on postsecondary enrollment, financial aid, finance and trends.
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