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 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 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 in Macomb and the Quad Cities, Loyola University Chicago,
Saint Xavier University in Chicago and Orland Park, North Central
College in Naperville, Millikin University in Decatur, and Midstate
College in 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 loan program is brand-new, it has already proven to
be popular on campus, Davis noted. As of Oct. 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, 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 loan works:
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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.
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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.
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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.
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The minimum payment
is $50 per month.
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The interest rate
is fixed at 8 percent, which begins to accrue upon disbursement.
The College Illinois Capstone Loan offers unique borrower
benefits:
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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.
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A rate reduction of
1 percent will be applied if annual income is between $30,001
and $50,000. Annual proof of income is required.
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A rate reduction of
2 percent will be applied if annual income is $30,000 or less.
Annual proof of income is required.
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For borrowers who
work full time and have an annual income of $30,000 or less, the
outstanding principal on the loan may be reduced by 2 percent
upon the completion of each series of 12 consecutive on-time
payments.
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 "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 from Justice 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 Capstone name 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.
[Text from
Illinois Student Assistance
Commission file received from
the
Illinois Office of
Communication and Information]
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