3.5.2 - Default on Educational Loans

Last updated on March 30, 2023

POLICY:  In compliance with Public Act 85-827, Spoon River College employees may not be in default on an educational loan as a condition of employment.

SCOPE:

This policy applies to all Spoon River College employees.

DETAILS:

1. Per Public Act 85-827:
   1. Any employee of Spoon River College who is in default on the repayment of any educational loan for a period of 6 months or more and in the amount of $600 or more shall, as a condition of employment, make a satisfactory loan repayment arrangement with the maker or guarantor of the loan.
   2. As of the effective date (January 1, 1988) of this Act, any employment application forms used by Spoon River College shall include a statement to be signed by the applicant concerning whether the applicant is in default as provided in this Section.
   3. Any employee who is in default on an educational loan shall make satisfactory loan repayment arrangements with the maker or guarantor of the loan prior to the completion of the sixth month of employment or within six months from the effective date of this Act, whichever is later. Spoon River College shall confirm the establishment of a satisfactory repayment arrangement by obtaining a written certification from the maker or guarantor of the loan.  Spoon River College shall inform the employee of the opportunity to establish a repayment plan through payroll deductions in accordance with the State Salary and Annuity Withholding Act.
   4. Should an employee fail to establish a satisfactory repayment arrangement prior to the completion of the sixth month of employment, Spoon River College shall terminate the individual’s employment.
   5. The maker or guarantor of the loan shall determine what constitutes a satisfactory repayment arrangement; however, no maker or guarantor shall require an employee to pay more than 20% of his or her gross monthly income unless federal law requires a larger payment on the educational loan.
2. Additional Guidelines for Default on Educational Loans
   1. An employee who is beyond the sixth month of employment and is in default on an educational loan shall make satisfactory loan payments within six months of being in default. If the employee fails to make satisfactory repayment arrangements, Spoon River College shall terminate the individual’s employment.