Illinois enacts legislation to finance earnings share agreements; distinguishes them from loans
Illinois’ Democratic legislature recently passed, and its own progressive Democratic Governor, J.B. Pritzker, recently finalized into legislation, the scholar Investment Account Act, which establishes students Investment Account to be maintained by the state’s Treasurer. Pursuant into the Act, the Treasurer can allocate as much as 5% associated with the state’s Investment Portfolio to that particular Account, a sum that will seem to be roughly $1.5 billion in line with the state’s 2018 report that is annual. The Account may then be utilised by the Treasurer for assorted tasks, including to “originate, guarantee, get, and solution education loans and enhance such arrangements between borrowers and eligible loan providers” and individually to “enter into earnings share agreements with individuals and enhance such arrangements between individuals and income that is eligible contract providers.”
Different terms that are key thought as follows:
- “Borrower” means “an Illinois resident pupil that has gotten an education loan or an Illinois resident moms and dad that has gotten or decided to spend an education loan, at the mercy of approval because of their state Treasurer.”
- “Education loan” means “a loan built to a borrower according to this Act to finance an Illinois resident student’s attendance at an organization of degree.”
- “Income share agreement” means “an agreement between a participant plus a qualified organization of advanced schooling or money share contract provider approved by their state Treasurer when the participant agrees to cover a portion of this participant’s future profits for a hard and fast duration in return for funds to cover their post-secondary training.”
- “Income share provider” means organization that is“an enables income share contract individuals to invest in their education in the shape of earnings share contract.”
- “Institution of advanced schooling” means “a post-secondary institution that is educational in Illinois and authorized by their state Treasurer.”
- “Participant” means “a resident student who comes into into money share contract for the intended purpose of funding the participant’s attendance at an organization of greater learning.”
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