Faltering student loan industry hits home

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With the default rate steadily rising and a local student loan guarantor unable to secure a line of credit due to the soft economy, officials at the University of Chicago announced last week it ended its relationship with the Illinois Student Assistance C

“I am all set to attend the University of Chicago this fall, and now they decide to break away from the student loan commission,” said Richard Brown, 24, who will begin law school at the university this fall after earning a bachelor’s degree in English from Chicago State University. “They must think everyone who attends the university is rich and money is no object. That may be true for their white students, but for us Black folks, that certainly is not the case.” As a result, about 3,000 graduate students at the U of C must now seek a new guarantor for their loans if they plan to attend this fall. Students can seek guaranteed loans from the U.S. Department of Education, said Margaret Spelling, secretary for the Department of Education. However, Tamora Jones, a senior loan officer at Harris Bank in Chicago, said students probably wouldn’t get the same loan terms as they would if they were to go through ISAC. She added that with ISAC, students had no origination fees and a 2 percent interest rate reduction after the first 48 months of consecutive, on-time payments when they applied through the university. “Students will have to have better credit because students without good credit histories or no credit might have a problem accessing some private student loans,” Jones said. ______ Copyright 2008 Chicago Defender. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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