Massachusetts college students who have worked hard through high school and on their SATs and college essays just received another challenge: finding loan money. The Massachusetts Educational Financing Authority (MEFA), which has been providing student loans to Massachusetts residents for the past 26 years will not be lending any money to college students for the fall semester. This news comes well after college financial aid applications are due, and is leaving new and returning college students without private loans.
To give you an idea of the scope of the problem, last year, MEFA was the source of $510 million in loans to Massachusetts students attending college. MEFA provides private lending to Massachusetts residents attending colleges in-state and out-of-state.
“At this time we regret that MEFA has been unable to secure funding due to increasingly difficult capital markets conditions,” Tom Graf, Executive Director of MEFA wrote in the announcement.
Massachusetts Educational Financing Authority (MEFA), a non-profit organization, had been offering Massachusetts college students and parents which were both low and fixed. According to MEFA, they will are still trying to secure funding for spring semester loans.
What Massachusetts Students and Parents Can Do
This is a huge red flag that indicates our economy is continuing its downward spiral. The money these students were counting on was not free money or scholarship money. It was loans. Loans they have to pay back with interest. Now they can’t even do that. MEFA assures students that there is other money out there. But now that college students are about a month away from the beginning of school, and have their college bills in hand, where can they turn so late in the game?
1. Call the MEFA Hotline
MEFA has a toll-free number for Massachusetts college students and parents to call for information. The phone number is 800-809-0571.
2. Seek a Federally-Funded Loan
MEFA also recommends that students and/or their parents attempt to secure a federally-funded loan first.
3. Contact the School’s Financial Aid Office
The school’s financial aid office should also be able to provide information to Massachusetts college students and parents who are left without loans.
4. Ask for an Extension
Massachusetts college students and parents who were relying on a MEFA loan should call the bursar or payment office at the college and request an extension on the bill or ask for a payment plan Massachusetts colleges should be aware of the situation.
5. Contact American Student Assistance
The Loan Information Center at American Student Assistance (ASA) may be reached by calling 800.999.9080. According to the ASA, Federal Family Education Loans are still available to college students.
6. PLUS Loan
Parents of college students may also consider applying for a federal PLUS loan.
Beth Healy, “No funds to lend to 40,000 students,” http://www.boston.com/news/education/higher/articles/2008/07/29/no_funds_to_lend_to_40000_students/?page=2