State pulls plug on MI-Loan program -- for now

(02/13/08)--From homes to higher education. The state of the economy has the state of Michigan pulling the plug -- for now -- on a popular student loan program.

Top leaders for the State Treasury Department say it's too tough to find the investors for the state's popular MI-Loan program.

There are 8,500 students and there is $68 million. The state of Michigan had a lot riding on its MI-Loan program.

But economic trouble now spells a change. The state pulled the plug, surprising many of those in financial aid.

"I've never heard of that happening," said Lori Vedder.

Here's how MI-Loan works: Let's say it's $20 for a year's tuition. If you're able to come up with $10 and the federal government offers you a $7 loan, the MI-Loan makes up the difference, in this case $3.

Take it away, and there's a gap to fill for thousands of students statewide.

Central Michigan University, Saginaw Valley State University and the University of Michigan-Flint only have a handful of students receiving MI-Loans.

At Kettering, it's 15 percent.

"We were disappointed. A lot of students use the MI-Loan," said Kettering's Barb Huffman.

"Immediately, I thought I was going to have to work on getting a new lender," said Andrew Dunn, a junior studying computer engineering. He's among those disappointed.

"I'm very busy. And I wish I wouldn't have to be doing something like that right now," he said.

For many, the search for a new lender means a new headache and a sign of a bigger problem both around the nation and here at home.

The state's deputy treasurer says the program could return if the turbulence subsides. It could be several months -- if at all -- in the near future.

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local, josh devine

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