Think the credit crunch is over? Ask a college student.
Posted by: admin in mortgage industry
The Massachusetts Educational Financing Authority is unable to grant loans to college students this year as it is unable to secure financing due to the condition of the capital markets. More than 40,000 college students will be locked out of financing for their college education due to the beating taken on Wall Street.
This is where it gets really unfortunate folks. Taxpayers bear the burden of a Fannie and Freddie bail out while the companies can still pay out dividends, bear the burden of a Bear Stearns bail out, bail out irresponsible policy and practice and then be shut out of opportunity. Can you imagine explaining to the parents of those kids that your child won’t get an opportunity at college because of the mortgage mess and their taxes will go towards bailing out those very same people who took away that opportunity?
I think I am officially disgusted.
From the New York Times:
The self-financing state authority, known as MEFA, was unable to secure financing for the 40,000 students it services, said Tom Graf, the authority’s executive director, in a statement. The authority offers fixed-rate loans to students who live in Massachusetts or attend school there.
Mr. Graf said disruptions in the capital markets were why the financing authority could not obtain money.
“While we continue to pursue every possible option, raising the necessary funds to offer fixed-interest rate private education loans is taking longer than originally projected and has become even more challenging,” Mr. Graf said in the statement. “As soon MEFA has secured funding, we will make education loans available. At this time, however, it remains unclear when MEFA will be able to resume its lending activities.”
In April, the financing authority announced it would be unable to offer federal education loans because of the credit markets. In late June it said it would be able to offer private fixed-rate loans, but it now says that is no longer feasible.
“It’s really the capital markets. It’s a global situation,” said Jessica Belt, a MEFA spokeswoman. “We’re looking at other options. It’s uncharted territory for everyone, not just MEFA.”
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