Experts at Iowa State don’t think the recent buyout of a major student loan lending company will have a large effect on students.

Recently, two private investment corporations bought out the student loan lending company Sallie Mae, or SLM Corp.

JPMorgan Chase & Co. and Bank of America joined the private investment funds, JC Flowers & Co. and Friedman Fleischer & Lowe, in the buyout. The two companies will invest $4.4 billion and will own 50.2 percent of SLM Cor, while JPMorgan Chase & Co. and Bank of America will own 24.9 percent, with an investment of $2.2 billion.

The buyout, however, will not affect Iowa State, said Roberta Johnson, director of student financial aid, because the university takes funds from the Federal Direct Loan Program.

“The sale of Sallie Mae has no impact on ISU students,” Johnson said.

She said although students may not be affected directly, academic institutions that utilize a variety of lenders might see differing loan processes change, but it all depends on the new lender’s policies.

Students who currently have loans from Sallie Mae may not have their loans bought out, but certain benefits and rewards – called back-end benefits – which Sallie Mae offered to loan buyers, may change, such as a lowered interest rate after graduation because of payments made on time. Individuals who make payments on time could see their interest rates go down 0.5 percent to a whole percent, she said.

Students will also not see a change in the interest rates they pay simply because the Federal government sets those rates, Johnson said.

Rates cannot exceed 6.8 percent and are reset every year on July 1.

“[ISU students] don’t have to worry about their loans being sold because the Federal Direct Loan Program comes directly from the government. The government doesn’t sell loans, and no one is going to buy out the government,” Johnson said. “Students will see no change, unless they are using a loan consolidation company outside of the Federal Direct Loan Program.”

Chad Olson, program coordinator of student financial aid, also said ISU student loan processes would not change.

“We take our funds from the United States Department of Education, so there will not be a change,” Olson said.

Because Iowa State doesn’t use a variety of lenders, there is no need for a financial aid advisory board.

However, private colleges, such as Drake and Simpson, use a variety of lenders, Johnson said.

Financial Aid Advisory Boards are simply made up of professionals from the college’s administration and individuals within the student community. The boards themselves act as a “feedback mechanism” that allows for “colleges to know what the students need,” Johnson said.

Drake, Simpson and the Iowa College Student Aid Commission were all unsure or unaware of how Sallie Mae loan processes might change.