Big bills on campus
The article originally appeared in The Boston Globe
Bad news for 40,000 families hit this week when the Massachusetts
Educational Financing Authority announced that it could not offer
private student loans this year because it had failed to secure
financing. Created by the state Legislature in 1982, MEFA provided more
than $500 million in loans last year.
It was another
tale of student loan woe sparked by the nation's troubled credit
markets. And it will take more government action to make sure college
students have the financing they need.
Losing MEFA hurts, says Adrienne Montgomery,
the financial aid director at Pine Manor College, where 20 percent of
students borrowed private loans from MEFA in the 2007-08 school year.
Montgomery says that families with poor credit histories who couldn't
get loans elsewhere could borrow from MEFA. And because MEFA works with
borrowers, its net default rate on $2.5 billion in loan originations is
less than 1 percent. The agency is still trying to raise money to offer
loans, possibly for this fall. But Pine Manor and other colleges are
directing families to other lenders.
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Sat, August 2, 2008