Overview of ISAC's Restructuring and Efforts to Increase the Efficiency of the Agency

Today, the Illinois Student Assistance Commission (ISAC) began the process of reducing its workforce by 50 employees and eliminating 18 vacant positions to ensure a stable future for the agency in response to significant changes in the student loan industry.

“ISAC is operating in a new lending environment that is more competitive than when we had an open playing field 25 years ago.  These factors made it imperative for us to reduce our operating costs and continue our efforts to streamline the agency,” said ISAC Executive Director Andrew Davis.  “We have made a conscious choice to better serve Illinois students and exit the business of lending to non-Illinois students attending non-Illinois schools.  This strategy is allowing us to achieve greater efficiencies at the agency, while increasing our outreach and borrowing to Illinois students.”

Among the changes in the national student loan industry are: 

• The federal College Cost Reduction and Access Act of 2007 (CCRA) which resulted in reduced federal payments to ISAC and other guarantors of federal loans.  The annual loss in revenue to ISAC due to CCRA is projected to be $9 million.  
• The cost of borrowing has soared under the recent global meltdown in financial markets that led investors who had witnessed the subprime mortgage debacle to grow skeptical of other types of debt instruments.  This will cost the agency an additional $6 million annually in unexpected borrowing costs.

In response to these changes, ISAC refocused its efforts on providing services to Illinois students, instead of students throughout the nation.  ISAC paid down $3.3 billion in debt and has undertaken a methodical agency-wide evaluation of the functions performed. Today’s action is another step towards redefining and reinvigorating ISAC.
 
“Through this restructuring, we can focus our efforts on core operations that ISAC does so well: providing outreach and other services to Illinois students to ensure they have the financial tools they need to achieve a college education,” Davis said.