By GRANT MORGAN
Capitol News Illinois
SPRINGFIELD – The Illinois treasurer’s office could soon be investing up to $600 million to help Illinois students pay off the costs of higher education under legislation passed by the House on Wednesday
The plan, known as the Student Investment Account Act, would allow the treasurer to invest up to 5 percent of the state’s overall investment portfolio in certain “education loan” products, such as income sharing agreements and low-interest loans for Illinois students.
Urbana Democratic Rep. Carol Ammons, who sponsored the bill in the House, said the program has a projected return rate of 3 percent. She did not entertain questions on the House floor about how the returns might be affected by the high rate of student loan defaults nationwide, a contentious rebuttal made by GOP opponents.
“So what we’re doing is we’re taking our state taxpayer resources and we’re putting it in potentially higher default rate instruments and calling it a good thing,” said GOP Rep. Jeff Keicher, of Sycamore.
Supporters of the measure countered that the purpose of the program is to bring down that default number in the first place by providing a state alternative to the “predatory” practices of loan companies looking to profit from the increasingly high costs of higher education.
“The default rate on student loans in this country is so high because there are so many predatory bad actors in the student loan industry,” said Democrat Will Guzzardi, of Chicago. “The whole purpose of this program is to create a student loan program that will have lower default rates because the terms will be more favorable to students.”
Ammons, the bill’s sponsor, said the treasurer’s office has bumped up its total investment earnings almost sevenfold since 2015, from $4 million a month to $27.4 million a month, which should allay fears that it cannot handle student loan investments.
Other opponents thought the whole approach was wrong.
“The issue isn’t to get students more loans,” said GOP Rep. Mark Batinick, of Plainfield. “The issue is that we have to provide a cheaper education for those people. … All this access to money for students hasn’t solved the problem, but it’s put students in a situation where they have more debt.”
Because the House previously added a short amendment clarifying definitions, the bill must go back to the Senate for approval of the amendment before heading to Gov. J.B. Pritzker’s desk to be signed into law. Senate Bill 1524 passed out of the House on a 72-to-44 vote.
Other bills passed by the House Wednesday included:
Senate Bill 1371, which allows schools to install “door security locking means” that can be remotely activated in emergency situations to prevent entrance through doors. It also provides that school district employees be trained in how to engage and release the system from both inside and outside the room that is locked. The bill passed on a 118-to-0 vote, but awaits the approval of an amendment by the Senate.
Senate Bill 1411, which mandates that Department of State Police implement a program that allows sexual assault victims to electronically track their case as it moves through the investigative process. The bill provides rules for what information must be made available to the victim at every step of the process, and also exempts the data from being retrieved through a public Freedom of Information Act request. Passed on a 118-to-0 vote, the bill is on its way to Gov. Pritzker.