As for the impact of this change, University of Anchorage Alaska financial assistance director Ted Malone estimated that "between 75 to 80-percent of students between 18 and 29 are likely not to have a 680 score." Those that don't achieve that score will need to find a co-signer that does.
As for the size of the alternative loan program, Alaska Student Loan Corporation indicated in the 2007-08 Annual Report (Download Alaska_08_Annual_Report), that their Alternative Loan originations totaled up to $46.3 Million (page 6).
In terms of cohort defaults on their private loan portfolio, here is what was reported in their 2007-08 report:
| Alternative Loan Programs | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 |
| Alaska Institutions | 5.3% | 5.6% | 6.3% | 6.1% | 5.1% | 4.9% | 8.4% |
| Out-of-State Institutions | 3.5% | 4.0% | 4.1% | 3.4% | 2.5% | 4.8% | 5.9% |
| Total Institutions - Spec. Alt. Loan Rate | 4.5% | 4.7% | 4.9% | 4.6% | 3.6% | 4.8% | 7.2% |
Alaska is not alone in requiring lenders to have minimum FICO scores; SLA research found the following states also had minimum FICO scores: Massachusetts (670-680), New Jersey (670), North Dakota (700) and Rhode Island (680). With the capital markets remaining skittish, it appears that this is a move that Alaska legislators felt they had to make in order to sell bonds to fund this alternative loan program.
Here is how the Alaska House Finance Committee Co-Chair summarized the need for the bill back in February:
Co-Chair Hawker said the information provided today points out a previous attitude of liberal underwriting for student loans. That, plus a national financial crisis, has led to a need for this bill. He summed up that the state must support stronger underwriting standards due to changes in international economics. The entire student loan program would end due to lack of access to capital.
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