Rell Announces Student Loan Program With State Credit Unions

Governor M. Jodi Rell met this week with top officials from Connecticut’s credit unions to discuss the state’s economic situation and to propose a new partnership between the state and Connecticut’s credit unions that will provide new and current students with access to higher education through a new student loan program. The credit union officials pledged support of the governor’s concept and estimated that up to $17.5 million could be committed to the program.

The new student loan program would offer very low interest rates at no higher than 6 percent or 5.75 percent. Institutions offering 6 percent loans will be able to defer interest payments for one year; credit unions offering 5.75 percent loans would not defer interest payments. The governor said the Connecticut Health and Education Facilities Authority (CHEFA) would provide 20 percent loan guarantees on the loans.

“Household budgets are already strained by the effects of our struggling national economy,” Gov Rell said. “Many families have seen the funds they set aside for college evaporate — and they are now hard-pressed to come up with tuition for their children.

“These loans will be made to students who may not qualify for traditional loans or who may have already used up all their resources and are now having trouble paying for college costs,” the governor said. “This program will be another financial resource for our families and it will serve important needs that in many cases are currently unmet by existing loan programs.”

After the meeting, Gov Rell noted that Connecticut’s credit unions remain healthy in this economic environment. They are unique in the financial services industry and provide service to their members at the lowest possible cost. The credit unions have funds to lend and they are willing to target funds for higher education loans.

At the meeting, the credit unions agreed to provide low interest student loans to provide new and current students of all ages who live or go to school in Connecticut assistance with higher education costs. The funds will not be pooled and the individual credit unions will allocate their own funds. Credit unions must allocate a minimum of $100,000 of their funds to participate and the loan program will run for one-year with the possibility of extending that period, based on demand and available resources.

Participating credit unions can be found at www.culct.coop, www.culocator.com, and on Gov Rell’s website at www.ct.gov/governorrell.