New Challenges, New Solutions
Helping Iowa Students and
Families in Changing Times
©2010 Iowa Student Loan Liquidity Corporation®
New Challenges
 Many changes to methods in recent years due to:
– New regulations
– Credit market disruptions
– Economic circumstances
©2010 Iowa Student Loan Liquidity Corporation®
Our Mission
 Remains steadfast
– To help Iowa students and families obtain the resources
necessary to succeed in postsecondary education
 More changes to come due to:
– New federal legislation
– Continuing market challenges
 Consistency in mission will help us overcome these
challenges
©2010 Iowa Student Loan Liquidity Corporation®
Federal Student Loan Changes
 Health Care and Education Affordability Reconciliation
Act of 2010
– Eliminates Federal Family Education Loan Program (FFELP)
– Mandates federal student loans be financed and disbursed by
government’s William D. Ford Federal Direct Loan Program
(Direct Loan)
– Prohibits lenders from financing federal student loans beginning
July 1, 2010
©2010 Iowa Student Loan Liquidity Corporation®
What’s Next
 Future role exists for:
– Iowa banks in supplemental private student loan programs
– Iowa Student Loan in federal student loans
©2010 Iowa Student Loan Liquidity Corporation®
Impact of Economy on
Iowa Students and Families
 Overall cost of higher education increases while Iowa
families’ budgets remain strained
 Lower appropriations raise tuition and fees at public
institutions
 Budget cuts reduce financial assistance (such as state
scholarships and grants)
More alternative funding options will be needed for
students and families to access college
©2010 Iowa Student Loan Liquidity Corporation®
Iowa Alliance Private
Student Loan ProgramSM
 19 Iowa-area banks pooled funds to provide private
loans this school year to more than 1,000 students,
many with no other funding options
 Seeking bank partners for two-year (2010 – 2012)
program
– Will offer no-cosigner loans to students who have exhausted all
state and federal financial aid options
 Interested in participating?
– Call Suzanne Lowman at (515) 273-7421
©2010 Iowa Student Loan Liquidity Corporation®
Iowa Alliance Private
Student Loan ProgramSM
 2010 – 2012 program details
– School-certified no-cosigner loans
– Borrower must be Iowa resident or attending eligible Iowa
college
– Prime-based interest rate (floor of 4.50%, add-on rate of 4.50%)
– 10% origination fee
– For minimal service fee, Iowa Student Loan provides
underwriting and full servicing of loans
©2010 Iowa Student Loan Liquidity Corporation®
Supplemental Private Student Loans
 Need exists for additional private student loan programs
 Iowa banks can assist students who need supplemental
funding to stay in college
 Iowa Student Loan can help Iowa banks create their own
private student loan program by:
– Providing expertise
– Providing administrative services
– Empowering banks to help Iowa families pay for college
©2010 Iowa Student Loan Liquidity Corporation®
Iowa Student Loan and
Federal Student Loans
 Reconciliation act recognized benefits of state-based
nonprofits like Iowa Student Loan
– Top-quality local customer service
– Value-added local programs
– Local jobs and economic activity
 Provisions allow state-based nonprofits opportunity to
service new federal Direct Loans
 Iowa Student Loan will work with U.S. Department of
Education to provide loan servicing
©2010 Iowa Student Loan Liquidity Corporation®
New Solutions
 Students and bank partners would benefit from Iowa
Student Loan providing service for both federal Direct
Loans and private student loans
– Students would correspond with only one organization to make
payments and call with questions
We hope to continue working with Iowa bank partners to
navigate these changes and help Iowa students and
families achieve their college goals
©2010 Iowa Student Loan Liquidity Corporation®
Questions?
©2010 Iowa Student Loan Liquidity Corporation®