UI excluded from low-interest loans for college students

By Meghan Graham

A new initiative allows Illinois college students to participate in low-interest loans. Students from the University, however, are excluded from this program.

On Sept. 7, Gov. Rod Blagojevich announced that a new financing partnership between two state agencies and eight credit unions will provide low-interest loans this semester. The University is not eligible because it already participates in the Federal Direct Loan program.

“This financial atmosphere we’re in is unprecedented; it’s unique to have this kind of a credit crisis,” said Claude Walker, director of state relations for the Illinois Student Assistance Commission. “We’re not sure that it’s going to end soon, and we have to keep our eyes on the prize. The cost of college has gone through the roof, so we’re trying to keep pace with that demand.”

Walker said that in this program, the first of its kind in the U.S., the credit unions are investing $100 million in securities issued by the commission. These investments will finance up to 20,000 Stafford loans of $5,000 or less. The average loan for a freshman involved in this program is about $3,800.

“We look at what’s happening in some of the other states, and we know there’s a need for this,” Walker said.

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Dan Mann, director of the Office of Student Financial Aid, said Illinois schools can either choose to participate in the Federal District Loan program through the federal government or the Federal Family Education Loan program through banks, credit unions or other participating lenders. He said students who attend schools that participate in the Federal Family Education Loan program will be able to participate in this program. Walker said that some of the most involved Illinois schools in this program include the University’s Springfield campus, Southern Illinois University Edwardsville and Western Illinois University.

Although students at the University cannot benefit from the newest program, Mann encourages students to take advantage of other state-sponsored financial aid.

“There are many state financial aid programs available to students from the state of Illinois, and our students received over $52 million from these programs last year,” Mann said.

James Pier, freshman in general studies, has seen the result of the Illinois financial aid programs firsthand.

“I wasn’t eligible for financial aid myself, but I know a lot of people who are, and I think (Illinois does) a pretty good job,” Pier said.

Walker warns that while financial aid can be greatly beneficial, students should be wary of being involved in loans and borrow as minimally as possible.

“We encourage students to think before they sign on the dotted line,” Walker said. “Make a loan be your last resort. That goes for all students, no matter what institution they’re in.”