Iowa Bankers to the Rescue
 Steve McCullough, President and CEO
Iowa Student Loan
It’s hard to pick up a newspaper lately without reading about the expanding impact of the subprime mortgage crisis on other types of credit—most recently, student loans. Students and families in numerous parts of the country where cutbacks are already being announced are wondering how they will obtain needed education funding this fall.
In recent weeks, our analysis indicated Iowans, too, could face a potential shortage of student loans unless national markets turn around. Unlike other parts of the nation, however, Iowans are served by community-minded local financial institutions, most notably members of the Iowa Bankers Association, who have partnered with us to create a strong contingency plan to provide student loans even if national conditions do not improve soon.
This Iowans Helping Iowans plan asks our lender partners to mitigate the impact of this potential shortage in Iowa by holding federally guaranteed student loan assets on their books. ISL will continue to act as the origination and repayment servicer, making this a turnkey process for Iowa banks.
The response thus far has been tremendous. In less than two weeks more than sixty institutions have made commitments to fund more than $100 million in student loans from their portfolios. This is a good start on this initiative. Many thanks to John Sorensen and his team at the IBA for their leadership and to our many lender partners who have committed to making and retaining ownership of future guaranteed student loans with the option to have ISL purchase these loans when funding becomes available.
This is another example of Iowa banking institutions acting to help meet family and community needs despite slim margins on these loans. All Iowans can be thankful for the critical role that Iowa bankers will play during this crucial period. By acting now, Iowa bankers are investing in the future of our state. In the process they are building unprecedented goodwill and future business for their organizations.
There is however, much more to be done, and a need for funding for students much greater than the initial commitments to date. Your willingness to join this effort, and/or to expand your initial commitment will be welcome, and will help assure Iowans their needs can be met. Please call us at any time to get further information on the several ways you can participate in this critical effort to meet Iowans needs.
Bankers interested in participating in the Iowans Helping Iowans program should contact Carrie Voorhees, Lender Marketing Officer, at 800.243.7552, ext. 7416 or via e-mail at cvoorhees@studentloan.org.
Steve McCullough is president and CEO of Iowa Student Loan Liquidity Corporation (ISL). The mission of ISL, as the state’s designated secondary market for student loans, is to help students and parents obtain the financial resources necessary for higher education. It works with more than 275 Iowa lenders. Since its inception in 1981, the private nonprofit corporation has helped nearly 300,000 students. For more information, visit www.studentloan.org.
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