Philosophy
This is quite sad news and indicative of an attitude regarding education and the terrible economic status of this country. The Boston Globe reported that "The Massachusetts Educational Financing Authority today said it will not be able to provide any student loans this fall, which could leave tens of thousands of families in the lurch just weeks before college classes begin." This posture will certainly have a trickle down effect everywhere. All ready some banks are ceasing educational loans. Where are the philanthropists?
The Massachusetts Educational Financing Authority today said it will not be able to provide any student loans this fall, which could leave tens of thousands of families in the lurch just weeks before college classes begin.
The nonprofit lending authority said it was unable to secure funding to provide private student loans. It is contacting more than 40,000 students and families to whom it has made loans in the past, to urge them to seek other options.
"As a result of our problems and the continued dislocation of the capital markets, we have been unable to raise funds for the coming academic year,'' said Thomas M. Graf, executive director of the group.
In April, the authority -- which is widely used by Bay State students -- announced that it would no longer extend federally backed loans, due to the credit crunch that has roiled the student loan market. But on June 25, the authority had said it expected to be able to offer private loans at fixed rates by the end of July. The group has now abandoned that hope, Graf said. MEFA made $510 million in student loans in the last school year.
For families and students with tuition bills due in August, Graf said, "Time is relatively short. Parents and families really need to satisfy their bills."
He said MEFA will have a hotline set up to offer advice and is encouraging families to seek federally backed loans first, then to shop for private loans, based in part on the recommendations made to them by colleges and universities.
The student loan market began running into trouble at the end of last year, following the subprime mortgage crisis. A kind of long-term debt many lenders had relied on to make loans, called auction-rate bonds, stopped trading on Wall Street entirely in February 2008, as investor demand dried up. It has been difficult for some authorities, like the Massachusetts Educational Financing Authority, to refinance their old auction-rate bonds.
Graf said the reversal of events on private loans occurred when the agency's bond insurer faced a possible downgrade in its credit rating, which, in turn, would have pushed up the cost of floating new debt. Problems with bond insurers have compounded the turmoil in the debt markets this year.
The group still hopes to acquire funding later this year and for spring 2009, Graf said. He noted that MEFA, which employs about 50 people, continues to run other educational programs, including the college savings plan it manages jointly with Fidelity Investments. Massachusetts families have nearly $3 billion in college savings in that program, Graf said. In addition, the lender has about $1.5 billion in past loans on its books which it continues to service.
About 50 nonprofits, banks, and government entities have stopped making some or all kinds of student loans this year.
- Itt Under Government Observation
"Inspecting a Student Loan Spigot" by Cretchen Morgenson January 18th, 2014 The New York Times A few days after Christmas, ITT Educational Services, one of the nation’s largest operators of for-profit technical schools, reported some unwelcome news....
- Perry Mason To The Rescue?...perkins Loan Recipients Are Defaulting
"Schools Suing Graduates for Defaulting on Loans" by Victor Luckerson February 8th, 2013 Time As more college graduates default on their student loans, some schools are taking drastic measures to ensure repayment. According to a recent Bloomberg report,...
- Student Loans And Our Friend The Lobbyists
Money, greed, power...invading the student loan issue again. "Lobbying Imperils Overhaul of Student Loans" by Eric Lichtblau Februaryv 5th, 2010 The New York Times Four months ago, it appeared all but certain that the White House and Democrats in Congress...
- Same Coat But A Different Color--student Loans
No wonder higher education loans are drifting from private to government sources--they don't want the risks of defaults; "Federal government takeover of college loan pool in works" by Mara Rose Williams October 31st, 2009 The Kansas City Star College...
- Higher Education--costly
The Boston Globe this morning reported that Massachusetts's schools of higher education have "...received nearly 15 percent more financial aid applications over the first half of 2008, compared to the same period last year...." This no doubt is indicative...
Philosophy
Student loans--going, going, gone!
This is quite sad news and indicative of an attitude regarding education and the terrible economic status of this country. The Boston Globe reported that "The Massachusetts Educational Financing Authority today said it will not be able to provide any student loans this fall, which could leave tens of thousands of families in the lurch just weeks before college classes begin." This posture will certainly have a trickle down effect everywhere. All ready some banks are ceasing educational loans. Where are the philanthropists?"Student lender won't have loan money this season"
by
Beth Healy
July 28th, 2008
Boston Globe
by
Beth Healy
July 28th, 2008
Boston Globe
The Massachusetts Educational Financing Authority today said it will not be able to provide any student loans this fall, which could leave tens of thousands of families in the lurch just weeks before college classes begin.
The nonprofit lending authority said it was unable to secure funding to provide private student loans. It is contacting more than 40,000 students and families to whom it has made loans in the past, to urge them to seek other options.
"As a result of our problems and the continued dislocation of the capital markets, we have been unable to raise funds for the coming academic year,'' said Thomas M. Graf, executive director of the group.
In April, the authority -- which is widely used by Bay State students -- announced that it would no longer extend federally backed loans, due to the credit crunch that has roiled the student loan market. But on June 25, the authority had said it expected to be able to offer private loans at fixed rates by the end of July. The group has now abandoned that hope, Graf said. MEFA made $510 million in student loans in the last school year.
For families and students with tuition bills due in August, Graf said, "Time is relatively short. Parents and families really need to satisfy their bills."
He said MEFA will have a hotline set up to offer advice and is encouraging families to seek federally backed loans first, then to shop for private loans, based in part on the recommendations made to them by colleges and universities.
The student loan market began running into trouble at the end of last year, following the subprime mortgage crisis. A kind of long-term debt many lenders had relied on to make loans, called auction-rate bonds, stopped trading on Wall Street entirely in February 2008, as investor demand dried up. It has been difficult for some authorities, like the Massachusetts Educational Financing Authority, to refinance their old auction-rate bonds.
Graf said the reversal of events on private loans occurred when the agency's bond insurer faced a possible downgrade in its credit rating, which, in turn, would have pushed up the cost of floating new debt. Problems with bond insurers have compounded the turmoil in the debt markets this year.
The group still hopes to acquire funding later this year and for spring 2009, Graf said. He noted that MEFA, which employs about 50 people, continues to run other educational programs, including the college savings plan it manages jointly with Fidelity Investments. Massachusetts families have nearly $3 billion in college savings in that program, Graf said. In addition, the lender has about $1.5 billion in past loans on its books which it continues to service.
About 50 nonprofits, banks, and government entities have stopped making some or all kinds of student loans this year.
- Itt Under Government Observation
"Inspecting a Student Loan Spigot" by Cretchen Morgenson January 18th, 2014 The New York Times A few days after Christmas, ITT Educational Services, one of the nation’s largest operators of for-profit technical schools, reported some unwelcome news....
- Perry Mason To The Rescue?...perkins Loan Recipients Are Defaulting
"Schools Suing Graduates for Defaulting on Loans" by Victor Luckerson February 8th, 2013 Time As more college graduates default on their student loans, some schools are taking drastic measures to ensure repayment. According to a recent Bloomberg report,...
- Student Loans And Our Friend The Lobbyists
Money, greed, power...invading the student loan issue again. "Lobbying Imperils Overhaul of Student Loans" by Eric Lichtblau Februaryv 5th, 2010 The New York Times Four months ago, it appeared all but certain that the White House and Democrats in Congress...
- Same Coat But A Different Color--student Loans
No wonder higher education loans are drifting from private to government sources--they don't want the risks of defaults; "Federal government takeover of college loan pool in works" by Mara Rose Williams October 31st, 2009 The Kansas City Star College...
- Higher Education--costly
The Boston Globe this morning reported that Massachusetts's schools of higher education have "...received nearly 15 percent more financial aid applications over the first half of 2008, compared to the same period last year...." This no doubt is indicative...