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MEFA Suspending Federally Guaranteed Student Loans

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Apr 15, 2008 8:33 pm US/Eastern

MEFA Suspending Federally Guaranteed Student Loans

BOSTON (AP) ― The Massachusetts Educational Financing Authority is suspending all federally guaranteed student loans effective July 1.

MEFA says the mortgage crisis and a series of federal changes have made it difficult for the nonprofit state organization to secure funds for its federal education loan programs.

The financing crisis has led more than 50 student lenders to stop making federally guaranteed student loans nationwide, either temporarily or permanently. Congress is being pressed to help the distressed market.

Executive Director Tom Graf says MEFA will not accept any new Federal Consolidation applications, urging parents and students to make alternative plans for the fall 2008 semester.

Graf says private lenders are expected to take up the federal loans, which accounted for 20 percent of loans worth $500 million provided to students in Massachusetts this year.

State agencies in Iowa, Michigan, Montana and Pennsylvania have suspended college loan programs.

To find out more about Federal Student Aid, follow this link.

(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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