A guarantee agency protects student loans against default. The lender collects a default fee (commonly 1 percent) from each loan it disburses and pays it to the designated guarantee agency to insure the loan. (Some guarantors may waive or reduce the fee, depending on their reserve fund.) If a borrower defaults, the guarantee agency reimburses the lender for the balance remaining on the loan.
No. If you are attending a school in New York State and meet the eligibility criteria for a Federal Stafford Loan or Federal PLUS Loan, you may go through HESC by borrowing from a HESC-registered lender.
HESC works with most major Federal Stafford Loan and Federal PLUS Loan lenders. You can go to the "Paying For College" area at www.hesc.com for a directory of all HESC-registered lenders (there are more than 100).
If you wish to borrow from a lender registered with HESC, you should complete the NYU certified loan application (called the Master Promissory Note, or simply the MPN) online on the HESC web site at www.hesc.com.
If you choose to borrow through another guarantee agency, please contact the Office of Financial Aid, identify the guarantor that you prefer, and we will provide you with further instructions.