The United States is in the midst of a full-blown student loan debt crisis. In fact, elevated interest rates have contributed to the highest level of collective student loan debt ever. But fortunately for residents of Fayette County, interest-free loans made possible by local oil production continues to ease the increasing financial burden of obtaining a higher education.

The Ella G. McKee Foundation has provided millions of dollars in no-interest student loans to qualifying Fayette County residents since 1971, including more than $3 million in loans to 400-plus residents since 2002. The primary source of funds for the McKee Foundation has been the royalty from mineral interests held by the McKee family in southeast Fayette County on the southern edge of the historic Louden oilfield.

First National Bank of Vandalia Trust & Branch Manager Jay Joliff doesn’t hesitate to acknowledge that the McKee Foundation has made a difference in Fayette County.

“For nearly 50 years, the Ella McKee Foundation has provided interest free student loans to around 1,000 Fayette County residents,” Joliff said. “There have been countless stories from people whose road to success began with the Ella McKee loan.”

Background

The McKee Foundation was established by longtime Fayette County resident Ellla McKee prior to her death in 1969. McKee chose to bequeath a large sum of money to the First National Bank of Vandalia to invest and reinvest the assets and disburse the income “solely for educational purposes and no other,” according to the Vandalia Leader-Union.

The primary source of the monies used to establish the McKee Foundation was the McKee family’s prolific 87-acre lease, located on the southern edge of the Loudon oilfield in southeastern Fayette County.

After the McKee family leased its mineral rights to Texaco in the late 1930s, the company brought in nine successful oil wells between 1939 and 1940. Those wells cumulatively produced 2.35 million barrels of oil through 1962, with many averaging more than 200 barrels per day at their peak, and McKee receiving 12.5 percent royalty from the production.

In 1963, Texaco consolidated 10 separate leases into the Louden South Unit, with McKee receiving just under 2.1 percent of the total unit royalty. Production from the Loudon South Unit peaked at 641 barrels per day in 1966 and has totaled more than 15 million barrels to date.

This production obviously generated a large sum of income for the McKee family, much of which was generously dedicated to helping less fortunate county residents achieve a better quality of life through higher education.

Why It Matters

The cost of obtaining a higher education have ballooned in recent years, prompting more and more college students to take out large loans to pay for their educations, many of which come along with high interest rates that leave them hopelessly in debt.

Outstanding student loan balances have exploded more than 500 percent over the past 15 years, and 44 million U.S. borrowers owe a total of $1.6 trillionin outstanding student loan debt. Illinoisans collectively owe $49 billion in student loan debt. Annual tuition at four-year, in-state public colleges averages more than $10,000, a total that doesn’t include room and board and other necessary expenses.

In Fayette County, these exploding costs are compounded by the fact that a large portion of the population lacks the level of income needed to pay for college. Fayette County’s poverty rate sits at 17.8 percent, more than five percentage points above the national average.

Fortunately, the Ella McKee Foundation — which was made possible by Fayette County oil production — provides a pathway for lower-income residents to pursue a higher education.

How to Apply

In order to qualify for a student loan through the Ella McKee Foundation, applicants must have been four-year residents of Fayette County prior to applying and must be without adequate funds or sources to meet the costs of securing a college, university, or other form of post-high school education. Click here for an application form and more details on the application process.

Loans are paid out on a monthly basis during the school year for a maximum of eight semesters. Though the McKee Foundation has long been established, these interest-free student loans continue to be underutilized.

“We encourage more students from Fayette County to contact us about how they might qualify for the foundation loan,” Joliff said.

IPRB is dedicated to sharing the story of the Illinois oil production industry’s positive economic impact. Some of the benefits – such as the jobs and revenue the industry continues to generate – are more obvious than others. The Ella McKee Foundation is just one of the many under-the-radar examples of how the Illinois oil industry benefits the communities in which it operates. IPRB looks forward to sharing similar stories in the coming months.

Note: The fourth paragraph of the “Background” section of this blog post was corrected on June 4 to accurately reflect the royalty percentage paid to McKee from the Loudon South Unit.