Essential Information for College Parents
College families scouring for loans
As bills come due, schools counsel calm; Funds still available - at...
Walt Minnick, a financial aid counselor at Salem State College, was swamped with calls yesterday after one major lending authority announced it would make no student loans this year. Walt Minnick, a financial aid counselor at Salem State College, was swamped with calls yesterday after one major lending authority announced it would make no student loans this year. (Essdras M Suarez/ Boston Globe)
With tuition bills looming, thousands of Massachusetts students and parents are scrambling to secure college loans amid deep turbulence in the nation's credit markets, but college and university officials are reassuring families they should be able to borrow the money they need.
Worried parents, facing payments that are due as soon as tomorrow, peppered financial aid offices across Massachusetts yesterday about the status of existing loans and the odds of obtaining new ones. In the latest in a series of wrenching changes to the student loan landscape, the Massachusetts Educational Financing Authority announced Monday it would not provide private loans for some 40,000 students this fall.
"A lot of phone calls," said Mary Benda, financial aid director at Salem State College. "A lot of questions and confusion, all day."
Given the timing of the authority's announcement, many colleges said they will be flexible about payment dates and late fees for parents who are pursuing other loans.
The uncertainty has compounded the concerns of many families over paying tuition costs in a slumping economy, and has complicated an already unwieldy financial aid system. Many parents had relied on private loans acquired through the nonprofit lending agency to supplement financial aid and federal student loans, but college officials said they are working closely with families to find alternative lenders.
College officials are quick to tell parents and students that government-backed programs, such as Stafford loans, remain widely available and that a wide range of options for additional private and federal loans remains, although probably at higher interest rates. Many schools are advising parents to replace private loans from MEFA with federal loans offered at a fixed 8.5 percent interest rate. Last year, MEFA offered loans at 6.39 percent interest.
"There are a lot of options for students and families," said Tony Erwin, director of financial aid services at Northeastern University. "But the terms aren't going to be as favorable. That's a result of the market shifting."
But some education officials said the timing of MEFA's withdrawal, just weeks before students return to campus, was bound to unsettle families.
"It's very discouraging to learn about this so late in the game," said Robert Antonucci, president of Fitchburg State College. "It creates an environment of panic, even though there are other options out there."
Numerous commercial lenders and state financing agencies stopped providing student loans this year because of a deepening credit shortage and reduced government subsidies that cut lenders' profits, loan specialists say.
MEFA announced this spring that it would not participate in the federal loan program, and had notified borrowers it was struggling to secure financing for private loans. With the start of the semester close at hand, the authority's decision Monday still caught many parents by surprise.
Walt Minnick, a financial aid counselor at Salem State College, was swamped with calls yesterday after one major lending authority announced it would make no student loans this year. Walt Minnick, a financial aid counselor at Salem State College, was swamped with calls yesterday after one major lending authority announced it would make no student loans this year. (Essdras M Suarez/ Boston Globe)
With tuition bills looming, thousands of Massachusetts students and parents are scrambling to secure college loans amid deep turbulence in the nation's credit markets, but college and university officials are reassuring families they should be able to borrow the money they need.
Worried parents, facing payments that are due as soon as tomorrow, peppered financial aid offices across Massachusetts yesterday about the status of existing loans and the odds of obtaining new ones. In the latest in a series of wrenching changes to the student loan landscape, the Massachusetts Educational Financing Authority announced Monday it would not provide private loans for some 40,000 students this fall.
"A lot of phone calls," said Mary Benda, financial aid director at Salem State College. "A lot of questions and confusion, all day."
Given the timing of the authority's announcement, many colleges said they will be flexible about payment dates and late fees for parents who are pursuing other loans.
The uncertainty has compounded the concerns of many families over paying tuition costs in a slumping economy, and has complicated an already unwieldy financial aid system. Many parents had relied on private loans acquired through the nonprofit lending agency to supplement financial aid and federal student loans, but college officials said they are working closely with families to find alternative lenders.
College officials are quick to tell parents and students that government-backed programs, such as Stafford loans, remain widely available and that a wide range of options for additional private and federal loans remains, although probably at higher interest rates. Many schools are advising parents to replace private loans from MEFA with federal loans offered at a fixed 8.5 percent interest rate. Last year, MEFA offered loans at 6.39 percent interest.
"There are a lot of options for students and families," said Tony Erwin, director of financial aid services at Northeastern University. "But the terms aren't going to be as favorable. That's a result of the market shifting."
But some education officials said the timing of MEFA's withdrawal, just weeks before students return to campus, was bound to unsettle families.
"It's very discouraging to learn about this so late in the game," said Robert Antonucci, president of Fitchburg State College. "It creates an environment of panic, even though there are other options out there."
Numerous commercial lenders and state financing agencies stopped providing student loans this year because of a deepening credit shortage and reduced government subsidies that cut lenders' profits, loan specialists say.
MEFA announced this spring that it would not participate in the federal loan program, and had notified borrowers it was struggling to secure financing for private loans. With the start of the semester close at hand, the authority's decision Monday still caught many parents by surprise.
Comment
About
© 2009 Created by Sarah Schupp on Ning. Create a Ning Network!
You need to be a member of universityparent to add comments!
Join this Ning Network