State Provides Relief for Terrorist Attack Victims

SPRINGFIELD – To help victims of the recent terrorist attacks in New York and Washington, D.C., the Illinois Student Assistance Commission (ISAC) has been working diligently with its partners in the student loan community to provide financial relief to educational loan borrowers impacted by the attacks.

As partners in providing educational loans, ISAC acts as Illinois’ designated guarantor of federally authorized student loans, while private lenders provide the funding needed to make the loans. Following the terrorist attacks that occurred on September 11, ISAC immediately began working with its lending partners to identify and help borrowers who live or work in the New York City disaster assistance areas. Those areas include Brooklyn, the Bronx, Manhattan, Staten Island, and Queens. For borrowers living or working in these areas, mandatory administrative forbearances on their loans are available.

As authorized by the U.S. Department of Education, these forbearances will allow eligible borrowers to postpone or reduce the amount of their monthly student loan payments for at least five months, from September 11, 2001 through January 31, 2002. Borrowers identified as qualifying for these forbearances will be granted them automatically, without being required to request consideration or provide documentation.

Forbearances will also be granted to borrowers who live outside those disaster areas but who were affected by the September 11th attacks. Borrowers who feel that they qualify for consideration should contact their lenders directly.

In addition, based on guidance received from the Department of Education, ISAC has been working to identify delinquent borrowers by zip codes indicating they likely live or work in the New York disaster areas. A delinquent account is one on which a borrower has fallen far enough behind on his repayment obligations that ISAC, along with the lender, must take proactive steps to contact the borrower and provide debt management counseling, with the goal of preventing the borrower from defaulting.

Delinquent accounts identified as warranting special consideration as a result of the September 11 events were immediately assigned to a minimum work status, meaning that collection activities, such as phone calls or payment request letters, were halted. That suspension of activity will remain in place until the lender determines that debt management and default aversion efforts should resume.

"In reality, the small steps we’re taking to help victims of the terrorist attacks are insignificant, especially when you think of the unspeakable tragedies they’ve endured," observed Larry E. Matejka, ISAC’s Executive Director. "In a larger sense, though, ISAC would like to think of these small steps as part of a much larger, national effort aimed at demonstrating to the victims that this country is unified in the support, concern, admiration, and of course, sorrow we feel for the victims and their families."

ISAC acts as the State’s centralized provider of information and financial assistance aimed at helping students and families access postsecondary education and/or training. Each year, the Commission awards an estimated $400 million in scholarship and grant aid to nearly 185,000 qualified students, and also provides an additional $600 million to borrowers through its student loan programs. The agency offers credit-based alternative loans, a 529 prepaid tuition program known as College Illinois!, and a broad array of outreach and informational services to ensure that families have access to the information they need to pay for a college education. More information is available by calling toll-free 800-899-ISAC (4722) or visiting the agency’s Web site at www.collegezone.com.