Financial Loan Programs for People with Disabilities 

Background 

Under Title III of the Assistive Technology Act of 1998, P.L. No. 105-394 (AT Act), Congress established the Alternative Financing Program to provide a new funding source for assistive technology.  Through the program, the federal government provides grants to states to create financial loan programs, such as low cost loans, which allow individuals with disabilities to purchase assistive technology.

What is Assistive Technology?

Assistive technology can be as simple as a wheelchair ramp that provides access to a home, or it can be as elaborate as a computerized leg prosthesis that precisely produces the complex motion of a human leg. The many types of assistive technology (AT) now available in the United States offer individuals with disabilities independence and support in employment, education, health care, information technology and community living.  Because individuals with disabilities typically have high expenses connected with their disability, and high medical expenses, and often have low income levels, it is difficult for many to afford the AT that they need.

Loan Program Grants

Under Title III, Congress appropriated funds for three grant competitions to provide seed monies for these loan programs.  States interested in the grants were required to match federal dollars to create the loan programs.  The ration for match funds differed by grant year.  See Tables 1 and 2.

Table 1.  Loan Program Grant Competitions

Loan Program Activity

Data on loan activity is currently available for the first two years of operation.  The first year of operation ran from October 2000 to September 2001, the second year of operation ran from October 2001 to September 2002.  See tables 3 and 4 for details about applications, borrowers and equipment purchased. 

Table 2.  Loan Activity

*Number of loans closed = loans approved by bank/AFP and accepted by borrower.

Table 3.  Loan Highlights from 2002-2003

*Loans approved by bank/AFP and accepted by borrower.

Program Structure

Title III requires state programs to meet certain conditions to qualify for AFP funding. A state must enter into a contract to administer the AFP with a community-based organization that involves individuals with disabilities in decision-making at all organizational levels. The community-based organization then is required to enter into a contract with a lending institution or state financing agency. Each state must provide consumers with one or a combination of the following financing mechanisms: a low-interest loan fund; an interest buy-down program; a revolving loan fund; a loan guarantee or insurance program; a program operated by a partnership among private entities for the purchase, lease, or other acquisition of AT devices or AT services; or another mechanism that meets program requirements.  Many of the Title I programs administer and/or operate Title III loan programs.  There are currently three states that are operating financial loan programs for AT that are funded by sources other than AT Act funds.  These programs include Maine which has a $5 million program funded through a bond referendum; California and West Virginia loan programs are funded solely with state dollars.  It is not clear whether or not the California loan program, which had been operated by the Department of Vocational Rehabilitation, is still active.

Table 4.   States Operating Some Type of Alternative Financing Program

Dollar amounts represent total program (Federal award and state match).

Table 5. Comparison of Title I and Title III State Lead Agencies