The role and history of the United States Aid Funds, which guarantees student loans made by conventional lenders, and developments at the state and federal levels are addressed. United Student Aid Funds, which helped open private credit markets to student borrowers, operates in all 50 states and U.S. territories. The events and people that helped establish this agency, which processed its first loan in February 1961, are discussed. By 1964 United Student Aid Funds, with deposits from 600 colleges, and contracts to guarantee loans with 4,000 banks, was endorsing student notes at a rate of $10 million per year. In 1965, the organization supported legislation that would allow federal intervention only in those states where state or private organizations had failed to establish loan guarantee agencies. United Student Aid Funds opposed: (1) provision of the 1965 Higher Education Act for loans with subsidized interest and (2) 1967 amendments to the Act to provide 80 percent federal reinsurance (also known as coinsurance) of student loans. The organization has derived most of its operating income from donations and earnings on reserves, and implicit in its philosophy was the notion that only "needy" and "deserving" students should get loans. The issue of needs determination and the effects of the establishment of new state guarantee agencies in some states on the activation of Federally Insured Student Loan Programs in others are considered. Attention is also directed to the Guaranteed Opportunity Achievement Loan program; loans to students studying for the professions, including minority law students; and loan defaults. A paper on determining default rates by C. W. V. Meares, and financial statistics are appended. (SW)