Students unsure whether they will receive student loans during the economic crisis saw a ray of light when Gov. Deval Patrick announced the infusion of millions of dollars into a state loan agency last week.
The Massachusetts Educational Financing Authority will offer students attending college in Massachusetts more than $300 million in fixed-interest loans for the upcoming academic year, Patrick announced April 1.
‘The first step toward future success starts with education and securing opportunities for tomorrow’s workforce,’ Patrick said in a press release. ‘Through our continued partnership with MEFA, we are making a college education affordable and accessible for more Massachusetts students, and that’s good news for all of us.’
MEFA, a nonprofit state agency that finances student loans through bond sales, struggled last summer to secure enough funding for loans. The agency’s priority during a tough economy is to make it easy for students to obtain loans, MEFA spokeswoman Jessica Belt said.
‘In the current challenging economy, many student loan lenders are no longer able to lend,’ Belt said. ‘Others use a tiered pricing structure, where interest rates depend on a borrower’s credit score, and only the most creditworthy borrowers receive.’
Boston University Executive Director of Financial Assistance Christine McGuire said the funding will increase the financing options available to BU families, but it will not affect how much financial aid is awarded by BU.
‘The choice to borrow a MEFA loan, or any other private, credit-based loan, generally happens after financial aid has been awarded,’ McGuire said. ‘These loans are used by a family to supplement the family’s contribution to the cost of education.’
College of Arts and Sciences sophomore Greg Meyer said even though he does not have any loans himself, he thinks Patrick’s announcement is ‘phenomenal.’ During the economic downturn, the more financing options, Meyer said, the better.
‘Hopefully, the economy will get better and offer a greater variety of student loans, but I don’t believe that is going to happen any time soon,’ Meyer said. ‘At least for now, it’s good to know that students have at least some options for loans.”
CAS senior Robert Jewell, who has federal loans, said he will now consider taking out a MEFA loan in the future for graduate school. But his happiness about MEFA’s funding is restrained by the fact that loans are not free money, he said.
‘I think it is great to have options,’ Jewell said. ‘I’m probably going to take some time off after graduating to work as an English teacher in Germany to work off my current loans before taking out any more loans.’
CAS junior Natalie Robinson said even though she does not have any student loans, she appreciates the MEFA option because of the difficulty in getting approved for private loans.
‘It is reassuring that at least MEFA’s loans are staying at a decent rate that is staying the same while the economy is in such a decline,’ Robinson said. ‘I may need to take out student loans for graduate school so I think this is pretty good news.’