Richard Cornuelle, one of the founders of USA Funds^®, died April 26 in New York City. Cornuelle (pronounced “cornell”) was one of several business and civic leaders who established USA Funds in 1960 to help families finance rising college costs.

A tireless and articulate advocate for what he called “the independent sector,” Cornuelle believed that voluntary associations and nonprofit organizations could address difficult social issues more effectively and efficiently than either the government or profit-making entities could deal with them. An early test case of his philosophy was the issue of financial access to higher education.

Cornuelle saw an opportunity to tap millions of dollars through private lenders to help families finance a portion of their college costs on credit. Lenders, however, weren’t interested in making small loans on favorable terms to college students who failed to meet basic standards for creditworthiness, unless lenders were provided some guarantee that they would be made whole if the borrower failed to repay.

According to College on Credit: A History of USA Funds 1960-1980, a pamphlet from associates of John Burkhart, an Indianapolis business and civic leader and another of USA Funds’ founders, sparked Cornuelle’s interest in guaranteed student loans. The pamphlet outlined the need for student loans and listed several existing small student loan programs.

Cornuelle and the other founders of USA Funds thought more broadly than the state-specific guaranteed student loan programs then in existence. They envisioned a group of separate but united funds to support student loan programs in all 50 states. Their vision was captured in the name of the nonprofit student loan guarantor they eventually established — United Student Aid Funds.

In addition to providing the philosophical foundation for USA Funds, Cornuelle played a pivotal role in establishing the new organization and making it operational. His contributions included dozens of visits to lenders to solicit their participation in USA Funds’ guaranteed student loan program.

The groundwork laid by Cornuelle and others led to the first USA Funds-guaranteed student loan  in 1961, five years before the first federal guaranteed student loan was issued.

A 1961 letter to Cornuelle from former President Dwight Eisenhower noted “the splendid programs of the United Student Aid Funds, Inc.” Eisenhower would serve as USA Funds’ honorary chairman for the next six years.

In his best-known book, Reclaiming the American Dream, originally published in 1965, Cornuelle reports that, in its third year of operation, USA Funds already was working with 5,500 banks in 49 states and serving 685 colleges and 68,000 students.
 
Although USA Funds eventually grew to become the largest guarantor in the federal student loan program, the organization initially resisted federal involvement, for example, by refusing to accept federal reinsurance on loan defaults until 1977.

As USA Funds explores new ways to advance its mission of enhancing postsecondary education preparedness, access and success, its work will continue to be guided by Cornuelle’s notion that the independent sector can effectively address society’s toughest issues.