AUGUSTA, Maine – State regulators last week issued a bulletin allowing state chartered credit unions and banks to make private student loans.
The change in state regulations, which was pushed by the Maine CU League, will allow Maine lenders to set payment schedules that are common to student loans. For example, under current rules a lender is unable to allow a deferral of payments for more than 12 months, therefore not allowing a student to defer payment of his or her loan while still in school.
“We could do student loans, there were just restrictions,” Jon Paradise, spokesman for the league, told The Credit Union Journal Friday.
Maine lenders are allowed to make federally guaranteed student loans under the current rule.
The new rule allows lenders to receive payments which vary in amount and also to delay repayment of principal and/or interest on loans to student borrowers while they are in school or at least on a half-time schedule. Once a student no longer is enrolled at least half-time, payments must begin within nine months.
