Alternative Financing Programs
(excerpted from the Federal Register, June 5, 2000, pages 35768-35770)

For the first time, NIDRR has funded six state assistive technology Alternative Financing Program (AFP), authorized under Title III of the Assistive Technology Act of 1998 (P.L. 105-394). The AFPs assist States to establish or maintain alternative financing projects to increase access to assistive technology (AT) for individuals with disabilities.

A pervasive barrier to accessing assistive technology is the absence of funding and information about funding opportunities for AT devices and services. The alternative financing programs will enable individuals with disabilities to access a funding alternative to public assistance programs. NIDRR, administrator of the program, has awarded $3.8 million available for fiscal year 2000 and the President has requested $15 million for fiscal year 2001.

Background
The AT Act promotes access to AT devices and services for individuals with disabilities. Under Title I of the AT Act, assistive technology programs were established in states and territories to assist identify and respond to the AT needs of individuals with disabilities. These state programs act as a catalyst for permanent systemic change and as leverage within States to make AT devices and services more readily available to individuals with disabilities. All of the 56 State grantees (50 States, District of Columbia, Puerto Rico, American Samoa, Virgin Islands, Northern Marianna, Guam) have demonstrated success in increasing availability of, funding for, access to and provision of, AT devices and services.

Title III of the AT Act expands funding sources for AT for individuals with disabilities. Currently, public AT purchasing systems include Medicaid, Medicare, special education and vocational rehabilitation. These public systems have, to varying degrees, acknowledged and met the AT needs of individuals with disabilities who qualify for the programs.

* The Rehabilitation Act of 1973, as amended, includes several provisions requiring inclusion of AT devices and services among the range of available services offered by the vocational rehabilitation system.
* The Individuals with Disabilities Education Act (IDEA) has included AT devices and services since 1990. IDEA requires school districts to take AT into account in their evaluations and planning for students with disabilities.
* Medicaid offers a viable though often unpredictable funding source.
For individuals who qualify, these public agencies are typically approached to fund AT devices and services.

In 1998, NIDRR sponsored hearings on issues affecting appropriate and timely access to AT devices and services. (NIDRR, Blueprint for the Millennium: An Analysis of Regional Hearings, 1998) At these hearings, financing of AT was cited as a persistent barrier. Testimony from consumers, families, and service providers identified the need for new funding strategies and models to expand funds for AT purchases. Public testimony also indicated that AT users want maximum autonomy in identifying their technology needs and the devices and services that will best meet these needs.

Moreover, testimony emphasized that separately, or in combination, the major service programs do not have sufficient resources to meet the growing demand for AT and that there also is a lack of private financial resources for the purchase of AT. As the number of individuals with disabilities increases and the elderly population expands, and as consumers and their families become increasingly aware of the role and benefits of AT, the demand for AT will increase; the result will continue to be a tremendous strain on public and private third party funding sources.

A significant recommendation of the hearings was that state AT programs continue to work with other entities such as consumer organizations, community-based groups, and private lending institutions to establish alternative financing projects for the purchase of AT devices and services. Alternative financing projects offer individuals with disabilities attractive options and can serve as financing alternatives for individuals with disabilities who do not qualify for public financing programs. Loan programs enhance access to AT devices and services in a way that underscores independence and inclusion.

Currently, 32 state AT programs operate alternative financing projects under Title I. The success of these Title I alternative financing projects has stimulated interest in creating opportunities for additional states to establish alternative financing projects and for existing projects to expand available resources. Individuals who apply for loans under the Title I programs obtain loans that range from $250 to $50,000. The estimated average loan is between $5,000 and $7,500. (Wallace, J., Assistive Technology Loan Financing: A Funding Alternative of Increasing Importance. Tech Express, 1998). States typically enter into an agreement with a private lending institution such as a bank or credit union and involve consumers in the selection and approval procedures.

Description of the Alternative Financing Program
The AFP creates a new Federal program to pay a share of the cost of establishment or expansion, and administration of, an alternative AT financing program. The program allows individuals with disabilities and their family members to purchase AT devices and services.

Each state must enter into a contract with a community-based organization, such as Centers for Independent Living, that has individuals with disabilities involved in decision making at all organizational levels, to administer the alternative-financing program. The federal program also requires that the community-based organization enter into a contract with a commercial lending institution or State financing agency.

Each state loan program must provide specific information about its program and applicants for the loans. It must indicate the ratio of funds provided by the state to funds provided by the federal government. It must describe the type of alternative financing mechanism used and the community-based organization with which the state entered into a contract.

In addition, it must collect information on each individual with a disability served by the project, such as the amount of assistance, type of AT device or AT service financed through the project, type of disability, age, gender, race, ethnicity, socioeconomic status, primary language, geographic location within the state, employment status, whether the consumer is part of an underrepresented population or rural population, and whether the consumer tried to secure financial support from other sources and, if so, a description of those sources.

The programs must provide one or a combination of the following financing mechanism: (1) A low-interest loan fund; (2) an interest buy-down program, (3) a revolving loan fund; (4) a loan guarantee or insurance program, (5) a program operated by a partnership among private entities for the purchase, lease, or other acquisition of AT devices or AT services; or (6) another mechanism that meets the requirements of this program.

Each state must provide matching funds so that the Federal share of the cost of the AFP is not more than 50 percent. Because the AT Act requires each state to receive a minimum award of $500,000, the state match must be at least $500,000; and the state must provide the non-federal share of the cost of the AFP in cash, from state, local, or private sources.