Students loan program gets $300M boost

For the third time in less than a month, Gov. Deval Patrick has set aside funding for education, this time announcing that money will be available for college students to borrow beginning this fall.As part of his Massachusetts Recovery Plan to secure the state’s economic future, Patrick announced the availability of $300 million in low-cost, fixed-rate loans though the state to help families send their children to college this fall.The announcement comes just over a week after one of the nation’s largest private loan firms, Sallie Mae, announced it was restructuring its most popular loan, forcing students and families who borrow to begin making interest payments while they are still in school.”The first step toward future success starts with education and securing opportunities for tomorrow’s workforce,” Patrick said. “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.”Applications for the loans offered by the Massachusetts Educational Financing Authority (MEFA) are available beginning this month for the 2009-2010 academic year.The loans have a fixed interest rate as low as 7.75 percent, making them one of the more affordable options in a time when many families are struggling.MEFA loans also offer a predictable and stable monthly payment of $99.65 per $10,000 borrowed.The Patrick-Murray Administration also recently allocated $270 million in tax exempt bonds to MEFA to finance future education loans.”As we continue our work to ensure all students are prepared academically for the challenges of college, we must also maintain our efforts to ensure they are able financially to access higher education,” said Education Secretary Paul Reville. “Governor Patrick has worked tirelessly to protect financial aid for students in the state budget and now we are fortunate to have this level of support for our partners at MEFA.”The investment in MEFA is a far cry from this time last year, when the agency froze all new loans due to the struggling economy. As a result, local students attending state-funded schools like Salem State College and North Shore Community College had a tougher time securing financial aid.The news of the loan offering comes on the heels of several education investments the Governor announced last month as part of his Massachusetts Recovery Plan.Last week he announced that, with the help of federal education recovery funds, public colleges and universities in Massachusetts will receive an additional $162 million this year, preventing layoffs and program cuts and mitigating the need for schools to increase student fees to close budget gaps.Patrick also previously committed $168 million in federal education recovery funds for K-12 schools and $280 million in federal education recovery funds for special education and preschool grants, bringing just over $4 million in total funding to the city of Lynn for next year’s school department budget.”We at MEFA are grateful for the continued strong support of Governor Patrick,” said MEFA Executive Director Tom Graf. “In these uncertain economic times, students need all the help they can get in order to further their education and set themselves on a path for future success. These loans are an important tool for families as they seek to assist their children in meeting their educational goals.”