AUGUSTA, Maine. - State regulators issued a bulletin last week allowing state chartered credit unions and banks to make private student loans.
The change in state regulations, which were 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 their loans while still in school.
“We could do student loans, there were just restrictions,” Jon Paradise, spokesman for the league, told Credit Union Journal.
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 still in school on at least a half-time schedule. Once a student is no longer enrolled at least half-time, the terms of the student loan must provide for payments to begin within nine months after enrollment ends.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
