ILLINOIS (IRN) — The Illinois Treasurer’s office is closer to being able to refinance student loans thanks to a measure supporters called an investment in Illinois students.
Opponents said the measure puts public funds at risk.
The Illinois Student Loan Investment Act would allow the Illinois Treasurer’s office to refinance an Illinois resident’s college loans at low-interest rates in hopes that it would help them better afford their payments. If enacted, the office could loan up to 5 percent of the roughly $31 billion it manages, currently worth about $620 million. There would be an upfront cost of $150,000 for the state, but the interest on payments from students should then cover the administrative costs thereafter.
State Rep. Carol Ammons, D-Urbana, said the program will help students struggling with loan debt.
“They are investing as they are obligated to invest in all kinds of things,” she said, insisting that the interest rate would be set by the treasurer once the bill passes.
State Rep. Mark Batinick said the treasurer is putting public funds at risk by loaning it instead of investing it in things that typically produce better returns.
“The issue isn’t that we need to give students more loans,” he said. “The issue is that we have to provide a cheaper education for those people.”
Illinois spends more than all but two states on higher education, Batinick said.
Others said it would become a promotional tool for the Treasurer’s office.
The bill passed and now has until the end of the week to get through the state Senate. The House passed a similar version in March.