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New ISAC loan program expanded to include more schools

Posted October 19, 2007 11:00 pm

Adriana Colindres

Seven Illinois colleges, including Western Illinois University, Millikin University and Peoria's Midstate College, are participating in a new loan program meant to give students the last financial boost they need to earn a bachelor's degree.

The Illinois Student Assistance Commission said in June it would launch the Capstone Loan program at certain "pilot" schools during the 2007-08 academic year. The pilot schools then were WIU, Midstate and the University of Illinois at Chicago.

Four other institutions since have been added to the pilot program: Millikin in Decatur, Loyola University Chicago, Saint Xavier University and North Central College.

As of Wednesday, 225 college seniors had applied for Capstone loans worth a combined $1.5 million, according to the Student Assistance Commission. The schools have certified 187 of the applications so far, and ISAC has disbursed $628,215 in loans for the fall semester.

The agency expects more students to apply for a Capstone loan for this semester and next semester, said executive director Andrew Davis.

The loan is meant to help students "who may have exhausted all the grants, loans and other financial aid options by the time they reach their senior year," Davis said. Without the money, those students might wind up quitting school just before earning a bachelor's degree, he said.

Such a scenario can be "pretty devastating" to students, said Janet Ozuna, director of finance at Midstate College.

Under the federal Stafford loan program, undergraduates can take out a maximum of $46,000 in loans, she said. Students who have reached their limit are pleased to learn about the existence of the Capstone program, which can help them make the final push toward graduation, Ozuna said.

"It addresses the problem of students who have hit an aggregate limit on the federal program and perhaps do not have the credit scores that would allow them to get loans through banks or what have you," she added.

Students taking out a Capstone loan will have up to 20 years to repay it.

Loan terms include an interest rate that starts at 8 percent but can be lowered for some students, including those in lower-paying jobs such as teaching.

Also, loan incentives will be offered to students who live and work in Illinois after they graduate.

"This is not a financial bonanza to ISAC," Davis said. "But I think it is a policy bonanza to the state."

More information is available at ISAC's toll-free telephone number, (800) 899-4722, or at the agency's Web site at www.collegezone.com.

Adriana Colindres can be reached at (217) 782-6292 or adriana.colindres@sj-r.com.

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