Introduction to the Funding U Illinois No-cosigner Loan
The Illinois state treasurer’s office is launching a new private loan program for students attending Illinois colleges and universities. The Funding U Illinois No-cosigner Loan is open to Illinois residents attending public or private institutions. The fixed annual percentage rate ranges from 7.99% to 9.49%.
Key Features of the Loan Program
The loan does not take the student’s credit score — or lack thereof — into account. The idea is to give students who don’t have access to a co-signer and struggle with obtaining traditional college loans another option, Treasurer Michael Frerichs said. “I’m a firm believer that talent is spread out equally amongst different socioeconomic groups,” Frerichs said. “But, if you look at our universities, they’re overwhelmingly children of privilege, and we want to make sure that everyone has an opportunity to reach their greatest potential.”
Attractiveness to Students
Frerichs said it’s an attractive option for students who may have maxed out on their financial aid, grants and scholarship opportunities. The loan is part of the state treasurer’s Student Empowerment Fund. Launched in 2023, the fund makes investments with student loan providers that lend to Illinois residents, in an effort to provide loan options at lower rates than other private entities. The lenders then make interest payments to the state treasurer’s office that go back to providing more loans for Illinois students.
Benefits of the Program
“Those who can most benefit from the economic mobility that comes from completing a secondary degree, a post secondary degree or training, are exactly the young people that we should be investing in,” Funding U Founder and CEO Jeannie Tarkenton said. This program is designed to provide opportunities for students who may not have had access to them otherwise.
Comparison to Other Loan Options
Frerichs’ office also offers loans for families. The Illinois College Family Loan has interest rates that range from 3.45% to 6.77%, lower than the federal Direct PLUS Loan’s 9.08% fixed rate. Borrowers or their co-signers must have a credit score of at least 660. Chelley Jackson, the president-elect of the Illinois Association of Student Financial Aid Administrators, said a student could see an interest rate of anywhere between 3.35% and 17.99% for private loans, and that rate is based on creditworthiness or lack of a co-signer.
Importance of Having Options
“In the private student loan industry, there are various options available, each with different terms and conditions,” Jackson said. “The thing to note is that it is important for students to act in their best interest, and having more options available can be beneficial.” This is especially true for students who may not have the credit history or co-signer required for other loans.
Conclusion
The Funding U Illinois No-cosigner Loan provides a valuable option for Illinois students who are struggling to find financing for their education. By not requiring a co-signer or considering alternative credit history, this loan can help level the playing field and provide opportunities for students who may have been excluded from other loan programs.
FAQs
- What is the Funding U Illinois No-cosigner Loan?
The Funding U Illinois No-cosigner Loan is a private loan program for students attending Illinois colleges and universities that does not require a co-signer. - What are the interest rates for the Funding U Illinois No-cosigner Loan?
The fixed annual percentage rate ranges from 7.99% to 9.49%. - How does the Funding U Illinois No-cosigner Loan compare to other loan options?
The loan offers competitive interest rates and does not require a co-signer, making it an attractive option for students who may not have access to other forms of financing. - What is the Student Empowerment Fund?
The Student Empowerment Fund is an initiative launched by the state treasurer’s office to provide loan options at lower rates than other private entities by making investments with student loan providers that lend to Illinois residents. - Who is eligible for the Funding U Illinois No-cosigner Loan?
The loan is open to Illinois residents attending public or private institutions in the state.
