Important Changes to the St. Olaf Educational Partnership (STEP) Loan July 2009
    
Due to tightening credit markets over the past 18 months, St. Olaf’s STEP Loan lender, Total Higher Education (T.H.E.), has recently withdrawn from the Federal Family Education Loan (FFEL) program. T.H.E. has informed St. Olaf that it will no longer offer new STEP loans and the way current STEP Loans are serviced will change.

Despite T.H.E.’s withdrawal from the program, St. Olaf remains committed to providing the level of financial assistance that we offered to families in their 2009-10 financial aid awards. To keep this commitment, we will offer a Federal Direct Parent (PLUS) Loan in place of the STEP, and we will administer the loan subsidy for both new and existing STEP Loans at our office rather than through T.H.E.   

The Financial Aid Office is currently revising the awards of STEP Loan borrowers to replace the STEP Loan with a Direct PLUS Loan.  We will also revise the awards as necessary to include a grant to represent the amount of the calculated interest subsidy for 2009-2010 new and existing loans. 
 
Although we are able to maintain subsidized parent loans with these modifications for 2009-10, we will not be able to offer any new subsidized parent loans for 2010-11.  We will, however, continue to provide subsidies for those loans issued prior to 2010-11.  The loan subsidies will again be included as a grant in eligible students’ financial aid awards in 2010-11.

If you were planning to borrow a STEP Loan as offered in 2009-2010, click here to read about how these changes will be implemented, and to learn about changes in the servicing of existing STEP Loans.

If you are not planning to borrow a STEP Loan in 2009-2010, but have existing STEP Loans, click here to learn about how the interest subsidy on your existing loans will be administered and to learn about possible changes in the servicing of your loans.