NAPERVILLE, Ill. — Eight credit unions have made a financial commitment to bring more than $100 million in student loans to college students for the upcoming school year.
Credit unions are investing in securities issued by the Illinois Student Assistance Commission, according to the Illinois Credit Union League. Alliant CU, Baxter CU, CEFCU, Corporate America Family CU, Credit Union 1, I.H. Mississippi Valley CU, Motorola ECU and Scott CU have agreed to put up the funding.
The Stafford loans being offered through the partnership offer low interest rates, the league said. The involvement of Illinois credit unions began after other financial institutions that previously supported ISAC backed out, a trend felt by similar agencies across the country, the league said. Andrew Davis, ISAC executive director, contacted the league and an initial meeting was set to discuss the possibility of working together.
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After meeting with Davis, the league determined that investing in the bonds would be perm2issible under applicable provisions of the Illinois Credit Union Act, an opinion in which the Illinois Department of Financial and Professional Regulation concurred.
ICUL then met with several of its credit unions to determine their interest in investing in ISAC securities.
They in turn committed the $100.5 million.
"We are pleased to team up with ISAC and back their efforts to help students get a quality education," said Dan Plauda, president/CEO of the league. "Earning a college diploma is crucial, and on top of all of the other
pressures of attending college, students should not have to additionally worry about whether or not their loan will fall through."
Established in 1957 by the Illinois General Assembly via the Illinois State Scholarship Act, ISAC offers a range of scholarship and grant programs and manages College Illinois!, the state's Section 529 prepaid tuition program enacted into law in 1997. Each year, the agency annually awards in excess of $1 billion to over 250,000 qualified applicants, according to the league.
"When the global credit markets turned their backs on Illinois students, these eight credit unions stood tall," Davis said. "This deal is terrific news for Illinois students and their families, who have more important things to worry about as classes begin. They can rest assured that our commitment is to meet demand."
Students may inquire about federally guaranteed loans at their financial aid offices or at ISAC's lending arm, the Illinois Designated Account Purchase Program's Web site: http://www.idapp.com/borrowers/apply.htm. Financing for this agreement is subject to approval by the ISAC commissioners at their Sept. 19 board meeting and by the boards of directors of the credit unions at their respective meetings.
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