By Arielle Levin Becker
July 31, 2008
The Massachusetts student lending authority announced this week that it will stop issuing private student loans, a move that could affect Connecticut students who attend school in the Bay State and rely on the agency for loans.
But Connecticut officials say those students should be able to obtain other loans, in part because Connecticut's student lending agency remains in good shape.
The Connecticut Higher Education Supplemental Loan Authority, or CHESLA, offers state-backed loans to students from or attending school in Connecticut. It now has nearly $20 million to lend, and officials will begin working on a $45 million bond issue next month to replenish the lending pool, executive director Gloria Ragosta said Tuesday.
CHESLA has avoided the problems similar state student loan agencies have faced because it raises money by selling fixed-rate bonds, rather than the auction-rate securities that have caused trouble, Ragosta said.
Officials at the Massachusetts Educational Financing Authority, or MEFA, announced Monday that the agency was unable to secure funding to loan money for the coming school year. During the past academic year, MEFA loaned $510 million to students from or attending school in Massachusetts.
MEFA previously announced that it would stop providing federal student loans. Monday's announcement marked a withdrawal from the private student loan market.
MEFA officials are advising students to consider federal PLUS loans, which allow parents to borrow up to their students' cost of attendance.
Mark French, associate director of student financial aid for the Connecticut Department of Higher Education, advised students who still need to secure financing for college to speak with their school's financial aid office.
Higher education officials and families have been closely watching the student loan market as the nation's credit market has slumped.
Officials now say students who qualify should not have trouble obtaining federal loans. Some lenders have stopped offering federal loans, but many more remain.
Private loans may be more difficult to obtain. Some lenders have limited their programs because of difficulty raising money, and many others have raised the credit requirements for private loans.
Source :
http://www.courant.com/news/education/hc-ctloans0730.artjul30,0,2369892.story
