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Iowa CUs working on student loan contingency plan
DES MOINES, Iowa (3/26/08)--Iowa's credit unions are partnering with the Iowa Student Loan Liquidity Corp. (ISL) to create a contingency plan that would provide student loans even if the national credit crunch doesn't improve soon. Up to 20 companies throughout the nation that specialize in student loans have pulled out of the market because of the impact the subprime home mortgages had on other credit markets, including student loans. ISL had announced it would quit offering private student loans in April, which would affect the funding of 26,000 college students in Iowa, according to the Des Moines Register (March 13). According to the Iowa Credit Union League, credit unions will help to mitigate the impact of the potential shortage by holding federally guaranteed student loan assets on their books. ISL will continue to act as the origination and repayment servicer in a turnkey process for Iowa's credit unions. So far, about 10 credit unions are partnering with ISL. ISL is a private, nonprofit corporation whose mission since 1979 has been to help students and their parents obtain financing for post-secondary school education. The credit unions have made commitments to fund several million dollars in student loans from their portfolios and are committing to making and retaining ownership of future guaranteed student loans with the option to have ISL purchase these loans when funding becomes available, said the league. "We are very pleased that Iowa credit unions are stepping in to help us provide Iowa students with financial support," said Steve McCullough, president/CEO of ISL. Patrick Jury, league CEO, noted that Iowa's credit unions "are constantly working to serve Iowans, and we are pleased to be able to provide Iowa's students with the financial support they need to fulfill their dreams."


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