The financial aid office at Fitchburg State College has received dozens of calls every day since the Massachusetts Educational Financing Authority made its announcement.
FSC Dean of Enrollment Management, Pam McCafferty, said the MEFA announcement has left parents and students scrambling to find new loans in order to meet upcoming tuition due dates.
“The biggest problem, or the biggest impact this has had on our families is the confusion it's caused,” she told the Sentinel & Enterprise recently.
MEFA Executive Director Tom Graf released a statement explaining the nonprofit authority was unable to secure money in time for loans in the upcoming fall semester.
Graf advised students and families to work with college financial-aid officers and to exhaust all federal and state money they qualify for before seeking private loans.
McCafferty said MEFA had earlier announced it could face some financial trouble, so FSC's financial-aid office sent out mailings to students and parents to advise them to consider possible alternatives.
MEFA loans were popular among parents of FSC students, with about 56 percent of them using MEFA financing to pay for college costs, McCafferty said.
The school can help parents maximize what they get in federal money, such as the parent PLUS loan, which has a fixed interest rate of 7.9 percent, she said.
“The federal government has made some good changes in repayment policies,” she said. “The parent can actually now defer payment until after the student graduates.”
Antonucci called the MEFA failure “unacceptable,” saying it came at a time when families should be starting to get excited about going off to college.
“You don't put parents and students in that situation this late in the game,” he said. “It's not insurmountable, but it is a distraction. It just adds another obstacle.”
The news come at a terrible time for students and parents, but also highlights the growing struggle that many families have paying for higher education, and the consistently spiraling costs of private college and universities, throughout the state and nation.
Tom Gray, the senior vice president of lending at Workers' Credit Union, said the first thing parents and students should do if they have any confusion is call their financial-aid office at the college.
If they receive a private loan, they should check with the loan provider to make sure the loan package is still available, Gray said.
“Those people at the colleges, this is what they do,” he said. “They know what all the various options are. They'll get help. My guess is that I don't think anybody will not be going to college, but I think there will be a couple of gray hairs for parents that weren't there before.”
Workers' Credit Union has a new student loan program, Gray said, that lends money in the local credit union, but is managed by a national network of credit unions.
The Workers' loans repayment programs are similar to government-guaranteed loans - repayment can be started up to six months after the student leaves school and can be arranged over a 10-year period up to a 25-year period, Gray said.
There's absolutely no matter that the present statement from the Massachusetts Capital Expert so it wouldn't be capable pay money for student loans due to volatile economic segments delivered a shock trend using the arriving beginner inhabitants, and you can resentful college and you will condition officials
Patrick is suggesting using the state pension fund buy $50 million in MEFA debt while putting pressure on private institutions, such as Harvard University, to do the same.
While we acknowledge the plan is well-intentioned, we think the idea to borrow from the state pension fund to pay down MEFA's debt is misguided and potentially dangerous.
MEFA's failure also continues to highlight the broader issue of the soaring cost of higher education, particularly private schools and colleges.
More and more students and families would be wise to forego the escalating cost of private universities and go to state schools instead.