The MIT Employees' Federal Credit Union is now offering a special low-rate loan to help qualifying members pay for courses before being reimbursed by any tuition assistance plan in which they're eligible to participate.
The loan was designed in observance of International Credit Union Day (October 15), when credit unions celebrate their industry's mission of supporting members' economic advancement and helping them improve their future.
Individuals may borrow up to $3,000 for six months at 6.5 percent through the Tuition Assistance Loan, and no payments will be required before the six-month term is completed. There have been many requests for the credit union to offer this product, according to Nancy Fales, the credit union's chief lending officer.
"Many people who participate in tuition assistance plans aren't reimbursed until they've completed their course and submitted their grade to their employer," she said. "Since most schools require payment at the beginning of a course, the prospective student needs to come up with the tuition cost out-of-pocket. We're trying to help make it possible for any member who wants to take a course to do so, and to avoid the high rates incurred by charging courses to credit cards or taking other types of loans."
The credit union requires official documentation that a prospective borrower is eligible for tuition reimbursement. However, tuition assistance loans are payable in full at the end of six months, regardless of whether the student actually receives reimbursement. Loan checks will be made payable to the educational institution rather than to the borrower.
The credit union is not affiliated with any employer's tuition assistance plan, but is simply trying to make it easier for members to participate in such plans.
To apply for a tuition assistance loan, people should visit the MIT Employees' Federal Credit Union in Rm E19-437 on the MIT campus or in Building A, Rm 100 at Lincoln Laboratory. Further information may be obtained at x3-0090.
A version of this article appeared in MIT Tech Talk on October 21, 1998.