Illinois Administrative Code › Title 23 - EDUCATION AND CULTURAL RESOURCES › Part 2721 - ALTERNATIVE LOAN PROGRAM › Section 2721.30 - Program Procedures

Current through Register Vol. 48, No. 28, July 12, 2024
a) An
			 applicant may apply for an alternative loan by submitting an Application and
			 Promissory Note approved by ISAC.
b) The maximum loan amount may not exceed the
			 cost of education for that student at the institution, less any other student
			 financial assistance received by the student for that loan period.
c) The institution shall provide the lender
			 with a recommended loan amount for each loan. No alternative loan may exceed
			 the institution's recommended amount.
d) Institutions shall provide the lender with
			 the current enrollment status of students at that institution who have received
			 alternative loans.
e) Prior to
			 disbursement, the borrower, and co-signer if applicable, shall execute a
			 completed Application and Promissory Note for the loan.
f) The lender or holder shall retain a signed
			 original of the Application and Promissory Note until the debt is paid in
			 full.
g) Alternative loan proceeds
			 shall be transmitted directly to the institution on behalf of the student.
			 Disbursement may be in the form of an individual check, a master check or by
			 electronic funds transfer.
h) An
			 institution may require all individual loan checks to be made co-payable to the
			 borrower and the institution.
i)
			 The institution shall supply the lender with recommended disbursement date(s)
			 and amount(s) for each loan.
j)
			 Prior to initial disbursement of the loan, the lender shall provide the
			 borrower with a disclosure statement which itemizes the amount financed, the
			 interest rate and any corresponding fees.
k) The terms and conditions set forth in the
			 Application and Promissory Note and the disclosure statement will constitute
			 the entire agreement between the lender and the borrower.
l) The borrower(s) shall have the right to
			 prepay all or part of an alternative loan at any time without
			 penalty.
m) The lender or holder
			 shall notify the borrower of the date on which repayment begins, and such
			 notice shall be sent no later than 30 days before the first payment on the loan
			 is due from the borrower.
n) No
			 alternative loan shall be sold or transferred by a lender except to an
			 ISAC-approved lender or holder or to ISAC. Such sale shall not change the party
			 to whom payment is made on the loan.
o) The lender may charge the borrower an
			 insurance premium on each alternative loan and may deduct this amount from the
			 loan proceeds at the time of disbursement. The amount of the insurance premium
			 may vary according to the credit-worthiness of the borrower, and co-signer if
			 applicable, and will be disclosed in writing to the borrower prior to the
			 initial disbursement of loan proceeds.
p) The lender may charge the borrower a
			 repayment fee on each alternative loan. This fee may be assessed on the loan
			 balance according to the terms specified in the Application and Promissory
			 Note. The amount of the repayment fee will be added to the outstanding balance
			 of the loan.
q) The lender may
			 charge the borrower a late fee of up to 5% of the loan balance (principal plus
			 all capitalized interest and fees) if any part of an installment payment is not
			 received by the lender within 60 days after it becomes due. Additional late
			 charges of up to 5% of the loan balance may be charged for each additional 30
			 day period if the borrower fails to make any part of an installment
			 payment.