DEARBORN, Mich. -- As Michigan's economy struggles to shift gears after hitting a massive speed bump created by a declining domestic auto industry, the state's credit unions are helping displaced workers train for new jobs.
Through the Career Transition Program, more than 30 Michigan credit unions now offer unsecured, below market education loans. The total committed is $40 million.
DFCU Financial, the state's largest credit union, is credited with originating the program. DFCU was founded to serve Ford Motor Company employees. Layoffs and early retirement buyouts at Ford, as well as at other domestic automakers, have hit both blue- and white-collar ranks.
"As soon as our management and board heard about the cutbacks that occurred early last fall, we felt we had to do something," said DFCU public relations director Kim Ward Gabbert.
The credit union has pledged $10 million to eligible members. The Michigan Department of Labor and Economic Growth has earmarked an additional $1.5 million to help CTP students buy textbooks and $200,000 for career counseling and placement. The Michigan Credit Union League has also stepped in to support the program.
A key part of CTP is there are no loan payments or interest for the first 24 months after a student receives the initial loan disbursement. A member borrowing the maximum $10,000 will save $950 compared to an unsubsidized Stafford loan for a 10-year term and as much as $5,100 compared to an unsecured loan.
Gabbert says the specific training members seek varies. Some are looking to update skills, others are pursuing a major career change.
Education and training at a qualified vocational or trade school, or an accredited college, is eligible. At DFCU, for example, an CTP applicant must have been a member for at least 12 months, maintain membership in good standing, and have a minimum two years prior full-time work experience.
All disbursements must be made within 24 months from the date of the first disbursement. That first payout requires a class schedule and tuition bill. Future disbursements also call for proof previous courses have been completed successfully. --email@example.com