State of Connecticut Department of Banking

Department of Banking logo

Governor Rell: Credit Union Student Loans
Have Backing of Bonding Agency Under New Law
Governor’s Bill Designed to Help More Families
Pay for College During Down Economy

This news release was issued by the Governor's Office

July 23, 2009

Governor M. Jodi Rell today was joined by college students and representatives from several Connecticut credit unions at a bill-signing ceremony for legislation she developed to help secure low-interest college loans for students living in Connecticut or attending higher education schools in the state. 

“Fall tuition bills have already started arriving in mailboxes and that just adds to the economic pressure that families have been facing,” Governor Rell said during the ceremony at the Seasons Federal Credit Union in Middletown. “This new law provides another resource to help them meet those obligations and keep their children in college, and in some cases, defer payments for a year.” 

Governor Rell worked with the Credit Union League of Connecticut and its dozens of members in December 2008 to offer a low-interest student loan program. The new law requires the Connecticut Health and Education Facilities Authority (CHEFA) to set aside $3.5 million of its reserves to guarantee 20 percent of those student loans offered by participating credit unions. There are currently 24 credit unions around the state participating in the loan program. (See attached list below). 

CHEFA, a quasi-public agency, issues tax exempt bonds on behalf of nonprofit college and health care institutions to support construction of dormitories, clinics, laboratories, athletic facilities and other capital improvement projects. 

The credit union loans – offered at rates no higher 6 percent or 5.75 percent – are made to students who may not qualify for traditional loans or who may have already used up their resources. Institutions offering 6 percent loans will be able to defer interest payments for one year and credit unions offering 5.75 percent loans would not defer payments. 

“Higher education is the key to a diverse and well-trained workforce and paves the way for economic prosperity for our state,” Governor Rell said. “Connecticut credit unions are ready and willing to help and have the funds to lend. What this legislation does is give them a cushion.” 

The new law, Senate Bill 842, An Act Concerning A Student Loan Guarantee Program Reserve Fund is effective upon passage. 

Here is a list of participating credit unions with the town of their main office. Many of these credit unions are accessible though branches in other areas of the state.