DEERFIELD, IL – College seniors at seven Illinois colleges are eligible to take advantage of an innovative new student loan program under a pilot program administered by the Illinois Student Assistance Commission (ISAC).
The College Illinois! Capstone Loan program is designed to “help college seniors cross the finish line” and keep Illinois students here in Illinois, according to ISAC officials. It includes a “salary-sensitive” interest rate component to help students who pursue crucial but lower-paying jobs (such as teachers or social workers), and students who plan to pursue careers in regions of the state with a lower cost of living and lower salary levels.
The College Illinois! Capstone Loan program is the first of its kind in the nation.
Seven Illinois schools were chosen to participate in the pilot phase: University of Illinois at Chicago, Western Illinois University (Macomb and Quad Cities), Loyola University Chicago, Saint Xavier University (Chicago and Orland Park), North Central College (Naperville), Millikin University (Decatur) and Midstate College (Peoria).
“The problem we wanted to address was that of students who may have exhausted all the grants, loans and other financial aid options by the time they reach their senior year,” said Andrew Davis, ISAC’s Executive Director. “To help college seniors in need of additional resources to complete the final portion of their academic program, we’ve created a low-interest loan program to ensure that all of the other aid or loans they received were not in vain.”
Although the College Illinois! Capstone Loan is brand new, it has already proven to be popular on campus, Davis noted. As of October 17, 225 college seniors applied for loans totaling $1.5 million. The schools have already certified 187 of those applications and ISAC has already disbursed $628,215 in loans for the fall semester.
“This loan is great!” said Matt Simpson of La Place, Illinois, a math major at Millikin University. “It allowed me to afford on-campus housing, which will help me more fully enjoy the Millikin experience.”
The loan’s interest rate starts at 8 percent, but there are unique interest rate reductions for students who obtain employment in Illinois or earn lower salaries. Here’s how the College Illinois! Capstone Loan works:
• Illinois residents attending Illinois schools who are within a year of graduation are eligible. They must be enrolled at least half-time (unless they are in the final term before graduation during which time enrollment can be less than half-time) and must have already exhausted their federal loan eligibility.
• The loan minimum is $1,000, and the maximum is the cost of attendance minus other gift aid and the base Stafford loan for seniors.
• The grace period is six months after the borrower graduates or is enrolled less than half-time; the repayment term is up to 20 years.
• The minimum payment is $50 per month.
• The interest rate is fixed at 8 percent, which begins to accrue upon disbursement.
The College Illinois! Capstone Loan offers unique borrower benefits:
• Regardless of income, a 1 percent interest rate reduction can be earned immediately for obtaining Illinois employment. This benefit can be earned once the borrower has graduated, entered repayment and begun paying state income taxes. Annual proof of Illinois employment is required.
• A rate reduction of 1 percent will be applied if your annual income is between $30,001 and $50,000. Annual proof of income is required.
• A rate reduction of 2 percent will be applied if your annual income is $30,000 or less. Annual proof of income is required.
• If you work full time and your annual income is $30,000 or less, the outstanding principal on your loan may be reduced by 2 percent upon the completion of each series of 12 consecutive, on-time payments.
“By offering interest rate reductions for borrowers who stay in Illinois, we curb ‘brain drain’ and keep our new college graduates closer to home,” Davis said. “And by knocking another point or two off for borrowers who are taking important but lower-paying jobs, we improve the quality of life for all Illinois residents.”
The new loan product has been enthusiastically received at the pilot schools. The Office of Financial Aid at the University of Illinois at Chicago sent e-mails to 2,200 potentially-eligible students, describing Capstone as “an innovative program…unlike any other in the nation.”
“We have so many students who must borrow to complete their college degrees but who are idealists in their vocation,” said UIC Chancellor Sylvia Manning. “That usually means a lower-paid occupation, and the Capstone program can make their dreams and future contributions to Illinois possible.”
More than 140 seniors at Saint Xavier University (10 percent of this year’s graduating class) applied for a Capstone loan during the first few weeks. “The Capstone Loan will be of great assistance to students going on to careers that will benefit our society in exceptional ways,” said Saint Xavier University President Judith A. Dwyer, Ph.D.
“Students pursuing a degree in Human Services or Early Childhood Education will find the ‘salary-sensitive’ feature of Capstone particularly helpful,” said Millikin University President Douglas E. Zemke.
“We are pleased to collaborate with ISAC on this creative new loan,” said Midstate College President R. Dale Bunch. “Capstone will be an excellent financial resource for Midstate seniors who otherwise may not have been able to complete their program.”
Students receiving the Capstone Loan are also singing its praises.
Chelsea Gunder of Justice, Illinois is an English Education major at Western Illinois who was among the first in the state to receive a Capstone Loan. “The Capstone Loan has made a huge difference with my finances,” Gunder said. “This loan has taken away the most stressful part of my last year in college, which is worrying about paying rent and other living expenses. I’m thankful Capstone was created and that I was eligible as a Western Illinois student.”
“The Capstone Loan program has allowed me to pursue my education at Saint Xavier University,” said Adeeb Odeh, a senior who majors in Psychology. “I am very grateful for the opportunity this program has afforded me.”
The program’s name - “Capstone” - is inspired by an ancient architectural term referring to the stone at the very top of an arch which locks the rest of the rocks together. The capstone is the final piece and gives strength to the entire structure. It is the apex or crowning achievement, a fitting description of what this loan can do for students as they near the completion of their undergraduate work.