State now offers no-interest loans to attend college
MONTGOMERY (AP) — Students interested in becoming teachers or nurses in Alabama now have a way to get interest-free loans for college.
So do Alabama National Guard members called to active duty since the terrorist attacks on Sept. 11, 2001.
The new interest-free student loans are available through the Alabama College Loan Program, a nonprofit student lender based in Montgomery.
Gov. Bob Riley said Monday he hopes the new state-sponsored program will address a shortage of teachers and nurses in some parts of the state and help with recruitment and retention in the National Guard.
William H. Wall, director of the loan program, said those who qualify will get their interest rebated and the amount will be deducted from their loans' principle once they have graduated and are working. Current interest rates on student loans under the program in Alabama range from 6.25 percent to 6.8 percent.
Under the Alabama College Loan Program's new policy, a student who gets a loan can turn it into an interest free loan by becoming a certified full-time teacher in K-12 schools in Alabama or a licensed nurse working full time in Alabama. For each 12 months the person works in Alabama, one year of interest on the student loan is forgiven.
The interest-free loans are also available to members of the Alabama Army and Air National Guard called to active duty on or after Sept. 11, 2001, and who served in good standing while activated. Guard members qualify for the loans while in the Guard and 30 years after leaving service. Spouses can qualify as long as they remain married to a Guard member, and so can Guard members' children up to age 24.
Wall said there are 150 lenders providing student loans in Alabama, but the Alabama College Loan Program is the first to offer interest-free loans for teachers, nurses and Guard members.
The loan program also makes loans to students interested in other career fields, but they do not become interest free, he said.
The Alabama Higher Education Loan Corp., headed by state Finance Director Jim Main, recently issued $100 million in tax-exempt bonds to provide student loans, including the new interest-free loans by the Alabama College Loan Program, the governor said Monday.
Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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