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State to Offer Students a Financial Incentive on Loans

[Jul 17, 2007.]

 

A number of government entities these days are trying their best to make school financing a bit easier for college students. Yet, students and recent graduates continue to feel the financial pinch that comes from having to take out several loans to pay for their tuition, books, supplies, housing, and meal costs.

In fact, the student loan burden can almost be unbearable for borrowers, particularly those who enter low-income professions upon graduating from college. While college graduates may value the education they've received, they may be demoralized by their student loan debt.

In light of these facts, the state of Illinois has come up with an innovative reward program for college graduates who are faced with huge student loan debt. It's run by the Illinois Student Assistance Commission, and it's called College Illinois! Capstone Loan.

Here's how the program works: it reduces a student loan balance by two percent for students who earn less than $30,000 and who make their student loan payments on time twelve months in a row. The program offers both an incentive for students to pay their loan bills on time, as well as offering hope to students who are low wage-earners barely able to make ends meet.

This marks the first time the Illinois Commission has actually agreed to cut loan balances, so it represents a milestone in student loan history.

In addition, the Commission is providing lower interest rates to those college students who select to remain in Illinois after graduation and who have salaries of less than $50,000.

It's unclear, at this point, how successful the programs will be in helping students to avoid default. With college costs continuing to skyrocket, an increasing number of graduates are finding themselves in financial trouble. In fact, staggering student loan debt may be one of the reasons why college graduates choose to move back home to live with their parents.



Julie Ann Amos
July 17th 2007

Recent Student Loan News


  • Congress Poised to Tackle Student Loans
    The $85 billion-dollar student loan industry is now under Congressional scrutiny. Education committees in the Senate and House have O.K.'d legislation designed to overhaul the country's student loan program. The overhaul is designed to help increase financial aid to students and make it easier for recent college graduates to repay their loans. [July 15th 2007]

  • Student Loan Financial Group Announces Rate Increase
    Student Loan Financial Group says interest rates on variable-rate student loans will rise eight basis points to .08 percentage points on July 1 st. Therefore, student borrowers with older variable-rate loans are being encouraged to apply for loan consolidation by June 30 th to take advantage of the lower rate. [July 15th 2007]

  • Experts Offer Financial Help to College Students
    Now that summer's here, high school students may have some extra time on their hands. And financial experts note that this may be the perfect time for students thinking about college to plan out their financial strategies. [July 13th 2007]

  • Financially-Smart Strategies for Summer
    With the arrival of summer may come the temptation to go on a shopping spree—at your vacation destination, on the Internet, or at your local mall. However, financial experts recommend being financially smart this summer by following some tried-and-true credit management techniques. [July 11th 2007]

  • University Settles Student Loan Case
    Columbia University has agreed to a settlement in connection with its role in a nationwide student loan scandal. [June 29th 2007]

  • Student Loan Rates to Rise Only Slightly
    There's good news on the interest rate front for college students. The rates on the two major federal student loan programs will increase only slightly this year, making a college education a little more affordable. [June 16th 2007]

  • Student Loans Well Worth the Cost
    At a time when you may be feeling as if you need to take out a loan in order to pay the costs of your daily commute, you may be wondering whether it's worth it to go to the trouble and expense of taking out student loans. [June 14th 2007]

  • Student Loan Debt Crimps Graduates' Style
    While a college education is undoubtedly a wise investment in this competitive marketplace, a number of college graduates are finding that their student loan bills are crimping their style. [June 13th 2007]

  • Repayment Options Abound for Those Consolidating Student Loans This Year
    College graduates who choose to consolidate their student loans this year have a number of repayment options from which to choose. The sheer variety can be mind-boggling to the uninitiated. [June 11th 2007]


 

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