Bond Sale by College Loan Agency Exceptionally Successful, Making New Pool of Cash Available for Students Seeking Higher Education
Governor M. Jodi Rell today announced that as parents and their children continue to struggle to afford the dream of higher education, the state has a new pool of $27 million to loan through the Connecticut Higher Education Supplemental Loan Authority (CHESLA) at new, lower interest rates.
Governor Rell’s announcement comes two weeks before the start of classes at both the University of Connecticut and Connecticut State University.
“This economy is making it harder and harder for students – from almost any background – to get the education that is so necessary for success,” Governor Rell said. “But Connecticut is – once again – leading the nation in helping to make that goal a reality for more and more people. This new pool of money continues Connecticut’s proud tradition of helping to ‘finance the future’ of our young people, our work force and our economy.”
The recent sale tax-free bonds by CHESLA was a tremendous success, proving so popular that there were $52 million in retail orders for the $30 million in bonds available and resulting in a much lower interest rate than originally expected. Recently, CHESLA loans were available at 6.99 percent, well below the rates being offered by state-run higher education loan agencies in nearby states. The new pool of $27 million will be loaned at 6.8 percent – even further below the rates available in other states.
Massachusetts is making loans at 7.75 percent and Rhode Island is lending at 7.76 percent, while New Jersey is lending at 8.37 percent.
“The bottom line is that our state is making it much more affordable to get a college education,” Governor Rell said. “Equally important, our loan program is structured to give college students a much more flexible start: While they are in school, students need only make interest payments on their loans, and there is a six-month grace period after they graduate. Only then do they have to start making payments on both the principal and the interest on their loans.
“Through CHESLA we have loaned more than $295 million to more than 30,000 students since 1985,” the Governor said while announcing the new loan rates on the Quadrangle at Quinnipiac University in Hamden. “Those are impressive numbers for any lender – whatever they may be lending to do. But stop to consider that in the most real and important way possible, these loans have created – and will continue to create – the success stories we celebrate in every Connecticut community.
“These loans have launched new businesses, created new jobs, built homes and families and dreams and secured a quality of life in our state that is rightly considered one of our greatest attractions,” Governor Rell said. “And we have made these loans responsibly and carefully – meaning that the CHESLA default rate is just 2.32 percent, one of the lowest default rates in the nation for any private, fixed-rate loan program. Here again, Connecticut is leading the nation.”
CHESLA loans are available to any Connecticut resident planning to attend a non-profit public or private college or university anywhere in the United States. In addition, a student from anywhere in the United States can apply for a CHESLA loan to attend any non-profit public or private college or university in Connecticut. Applications are available on-line at www.chesla.org.