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The Office of Illinois State Treasurer Michael W. Frerichs is committed to investing in Illinois students and professionals. In 2019, Treasurer Frerichs spearheaded the effort for his office to be authorized to create a new financial program to help Illinoisans cover the financial costs associated with their education. The Student Investment Account Act (110 ILCS 991)  permits the Office of the Illinois State Treasurer (“Treasurer”) to establish the Student Investment Account, which will invest up to five percent (5%) of the State Investment portfolio on a continuing and recurring basis, approximately $800 million as of January 2021, in affordable and responsible education loan products. These products may include loans to refinance existing student debt, tuition loans for current students, and other innovative financing products. 



The Student Investment Account Aims to Make Multiple Impacts in Illinois

Economic, Financial and Social Impact of Student Investment Account Aims

Why Invest in Student Loans?


For the 2018-2019 academic year, annual costs (adjusted to 2019 dollars) for tuition, fees, room, and board were estimated to be $20,600 at public four-year institutions and $47,000 at private four-year nonprofit institutions – far above annual federal loan limits. During those same years, the Federal Direct Subsidized and Direct Unsubsidized loan limits for undergraduates were $5,500 and $20,000, respectively.  Increasingly, private student loans fill the gaps that federal loans, grants, and scholarship aid fail to cover. Students can and have found themselves choosing between taking on expensive private debt or dropping out of school. The cost of higher education can cause graduates to delay home purchases, retirement savings, business ventures, and other major economic decisions.  


As college costs continue to rise, Treasurer Frerichs and his office are dedicated to making college more accessible by helping to eliminate expensive private student debt for Illinois residents because pursuing higher education remains a sustainable path to career success. 

Line Chart, Nationwide Growth in Student Debt

Illinois holds approximately $60 billion of the country’s student loan debt. Alleviating expensive debt burdens for Illinois borrowers will generate increased personal investment and fuel our state’s economic growth. Seventeen percent (17%) of Illinois residents – more than two (2) million people – carry student loan debt, the average value of which is $29,855.  Furthermore, traditionally underrepresented college students, such as low-income, first-generation, and African American students, are more likely to have higher than average balances, often under predatory or unfavorable private loan terms. 


By investing with long-term capital, the Treasurer aims to deliver education finance products at competitive rates that are advantageous to Illinois students and professionals. Alleviating inequalities in student lending is a critical step towards economic equity and prosperity.


The Student Investment Account aims to alleviate student debt burdens in Illinois and make it possible for more students to pursue higher education. It is an investment in Illinois’ future and part of a comprehensive approach at the Treasurer— which includes nationally-recognized college savings accounts —to improve access to higher education.

Student Debt in Illinois by the Numbers

Research and Strategic Planning


To prepare for the launch of the Student Investment Account, the Treasurer took a wide-ranging approach to ensure the student loan landscape was analyzed from multiple angles. To support this endeavor, the Treasurer formalized partnerships with the Milken Institute, the Student Borrower Protection Center (“SBPC”), SL Capital Strategies, and Hinshaw & Culbertson LLP; spoke to numerous stakeholders and Illinois constituents; hosted virtual information gathering panels; and issued several requests for information and services related to the Student Investment Account. 


Financial Innovations Lab


In June 2020, the Treasurer, in collaboration with the Milken Institute, hosted a virtual, five-part Financial Innovations Lab with regulatory experts, state agencies, and market participants. The discussions focused on consumer protections, alternative credit guidelines, and income-share agreements. 

The Milken Institute published their findings and recommendations in a report titled New Models for Funding Post-Secondary Education in Illinois. Acknowledging current market needs, the report also provided potential solutions and recommendations. 
Click here to read the report.

Comprehensive Stakeholder Engagement

Structure of the Student Investment Account

Projected Investment Breakdown

The Treasurer will establish a number of underlying objectives for the Student Investment Account – including creating and maintaining a diversified investment portfolio. While subject to change based on feedback and market conditions, the initial target portfolio construction is as follows:

Student Investment Account Sample Allocation Model

  • $80 million:  for the purchase of existing student loan debt which meets the criteria of the Student Investment Account Act and the Treasurer. These existing loans will provide immediate cash flow to the program and fund the set-up and operational costs of Student Investment Account products.

  • $540 million: to support refinancing student loans of Illinois graduates with consumer friendly, competitively priced products. The refinancing products may be a combination of traditional, credit-underwritten and non-credit-underwritten loans.

  • $180 million: to provide responsible private student loans to borrowers facing education financing gaps. The tuition loan products may be a combination of traditional, credit-underwritten loans and non-credit-underwritten loans.

    The $80 million, $540 million, and $180 million amounts are expected to be deployed over approximately five to seven years. Payments will fund new investments on a continuing and recurring basis in perpetuity. 

Strategic Program Determinations

In addition to the capital allocation targets above, the following strategic program determinations further define the scope and implementation concept for the program. Check back for updated strategic program determinations as they become available. 

Student Investment Account Program Structure


The Student Investment Account Act will not be a direct lending program. Instead, the Treasurer will make investments in existing firms and products that will lead to the creation of low-interest loans and other financing solutions. Throughout 2021, information regarding the programs and products developed under the Student Investment Account Act will be featured as they become available at

Implementation Timeline

Presently, the Treasurer is transitioning into the program implementation phase for the Student Investment Account. The timeline below, while subject to change, shows key implementation milestones for the next calendar year.

Student Loan Program Implementation Timeline

Partnerships to Date



The Milken Institute

Milken Institute Logo

The Milken Institute is a nonprofit, nonpartisan think tank that publishes research and hosts programming and conferences that apply innovative, market-based solutions to social issues. Through our partnership, they spearheaded the development of a comprehensive market study of the student loan market, issues, and possible solutions. In addition, they hosted a virtual Financial Innovations Lab on New Models for Funding Post-Secondary Education in Illinois.  The roundtable discussions explored the present challenges and potential viable solutions in the higher education lending market.


Student Borrower Protection Center

Student Borrower Protection Center Logo

The Student Borrower Protection Center (SBPC) is a nonprofit organization solely focused on alleviating the burden of student debt for millions of Americans. The SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students. As a partner with the Illinois State Treasurer, the SBPC provides insights on borrower-friendly program design, consumer protections, and current events that impact the student lending market.



S L Capital Strategies

S L Capital Strategies

S L Capital Strategies (SLCS) is an independent strategic and financial advisory services firm with expertise in student loans and municipal sectors. As the strategic investment advisors to the Student Investment Account, SLCS provides product and program design recommendations, financial modelling, and financial markets advisory services, amongst other functions.


Hinshaw & Culbertson, LLP

Hinshaw Logo

Hinshaw & Culbertson LLP (Hinshaw) is a national law firm with over 400 lawyers. Among their areas of expertise, Hinshaw focuses on consumer financial services for non-profit and for-profit clients. As advisors to the Student Investment Account, Hinshaw serves as expert outside legal counsel, providing recommendations on program design, risk management, and program oversight.



How Can Institutions and Organizations Participate?

Financial and other institutions including, but not limited to, investment banks, student loan service providers, financial technology companies, consumer advocates, and education success organizations interested in collaborating with the Treasurer should reach out to

All information regarding RFPs, RFIs, and invitations to bid for procurement opportunities are posted on the Treasurer’s Procurement page. To receive automatic email notifications when new procurement opportunities are issued, sign up for the procurement notification system.




  1. “Table 330.10. Average undergraduate tuition and fees and room and board rates charged for full-time students in degree-granting postsecondary institutions, by level and control of institution: Selected years, 1963-64 through 2018-19”, National Center for Education Statistics, last modified December 2019.
  2. “Subsidized and Unsubsidized Loans”, Federal Student Aid, Accessed 03/2021.
  3. “Federal Student Aid at a Glance”, Federal Student Aid, last modified Spring 2017.
  4. “Student Loan Debt by State”, Education Data, September 2020.
  5. “Report: Student loan debt delays homeownership by seven years”, Washington Post, October 19, 2017.
  6. “Insights into College Data”, College Insight, Accessed 03/2021.
  7. “Disparate Debts: How Student Loans Drive Racial Inequality Across American Cities”, Student Borrower Protection Center, June 2020.