Madigan: ISAC sale in lawmakers’ hands

By Erin Lindsay

Illinois Attorney General Lisa Madigan said the fate of student loans and the Illinois Student Assistance Commission is still in the hands of legislators. Madigan issued this legal opinion Friday, after a recent plan put forth by Gov. Rod Blagojevich to sell ISAC’s $4 billion student loan portfolio to a private investor.

For unnerved students, ISAC Commissions Chairman Don McNeil said in a report that students should not fear for their college funding.

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“I think there’s confusion between the portfolio and the student loan program. The idea that if we sell the portfolio there is no program is not the case,” said McNeil in a Chicago Sun-Times” article Sunday.

Cara Smith, director of policy and press secretary for the office of the attorney general, said that opinions from the attorney general come from extensive analysis and background research. She said Madigan’s recent opinion makes two key points.

“First of all, it states that the portfolio cannot be sold in its entirety without further legislative approval,” Smith said. “This does not mean that parts of the portfolio cannot be sold. Secondly, the loans can be sold only if proceeds are used to further purposes of the loan program.”

Matt DeRosa, a student representative for the Illinois Board of Higher Education and a former Daily Illini columnist, said the Board supports the decisions of ISAC.

“The goal is to try and provide more loans for students in this state. There’s a lack of information and people have only heard that student loans will be sold,” DeRosa said.

Ashley Dearborn, a representative for ISAC, said that the word “sale” does not represent the goal of ISAC in its entirety, which is more like a restructuring of assets.

“There’s always a question of who will benefit and who will suffer. If the money will be put toward student funding, it’s a good thing,” Dearborn said. “If we sell the portfolio, we need to ask for more state funding to run the corporation.”

Both Dearborn and DeRosa said that profit from the potential sale was already laid out in the structure of the MAP and MAP Plus loans, which seek to aid middle and upper-class students.

Dearborn said this means that money allocated to funding the grants was contingent on the selling of the portfolio. She said most students have already been told that they will be receiving their $500 tuition tax credit promised by the grants, even though funding continues to be billed to ISAC, which has not yet reaped a profit from this potential sale.

The University’s Office of Student Financial Aid Web site states that they will be automatically awarding this grant to eligible students who have submitted a FAFSA as soon as the funding has been authorized by the state.

With an emphasis in educational funding on the pre-kindergarten through grade 12, Dearborn said there is a constant struggle and an ever-growing need for financial aid and loans in today’s world of secondary education. What remains a mystery to Dearborn is why college-age students do not take a more active role in their future.

“The sad thing is that college advocates aren’t as vocal as those for pre-K through 12,” Dearborn said. “The mentality is ‘I don’t have the money, so I don’t have to go.’ Once students have been given a good education early on, they have no money to continue.”

DeRosa said it is because of grant and loan programs in this state that students can go to college and that the potential sale of the portfolio may be necessary for this to continue.

“It is very difficult for students to take the burden of costs themselves. Without these programs, the state wouldn’t be able to be a part of higher education,” DeRosa said.

While no buyers are in sight for the purchase of ISAC’s student loan profile, research continues with the hope of boosting aid to students who deal with the costs of attending a college in Illinois.