“There’s been lots of desperation. I talk to about five parents a day about the MEFA problem,” she says. During the past week, she estimates that she’s counseled roughly 30 families. Fortunately, Wellesley students can take heart: the administration understands that many families were blind-sided by the MEFA news, and will work with them to make ends meet.
“We’re not holding parents accountable,” says Valdez. “We’re being more understanding about deadlines and we’re trying to help parents with the difference. We try to juggle their monthly payment plan. They can appeal for financial aid. It would be cruel not to understand.”
Valdez also cites the Federal PLUS loan as a popular alternative, though she points out that — with a two-percent difference in their interest rate (a MEFA loan hovered around six percent last year; the PLUS loan is 8.5 percent) — the difference is appreciable. “When you’re borrowing $100,000, the interest rates make a difference,” she says. “It’s a big deal because it’s taking away people’s comfort. This is making [America’s economic instability] more real. If it weren’t for Wellesley helping them, with this economy, they wouldn’t be able to come back to school.”
Jaime Gibson, 27, is facing just such a plight. The Babson College graduate student claims to have been caught unaware that his MEFA loan might not come through. “I first learned about what happened on the local news,” he says. “The part that upset me the most was the fact that I called Babson Financial Services back in June asking about the MEFA loan, and they told me that MEFA would come out with their rates mid July,” he says. “I called again in mid July and they told me that they would know by the end of July. And then I found out in the news that they weren’t going to be able to provide loans. I sat around and waited all summer for the loan, only to find out I would not be able to get it.”
Gibson is currently waiting to hear back about a loan from Citibank, but as he points out, “The MEFA loan was a fixed rate. These other loans are variable.” He hopes to be green-lighted this week; until then, his academic funding remains uncertain.
Yet MEFA’s Graf insists students should not despair. “We’re still trying to raise money for this year. Students and parents borrow all through fall and all through winter; a lot of families have a need. We’re hoping in the short-term, in the spring semester, we’ll come back,” he says. In the meantime? MEFA has set up a toll-free hotline for students and families: 800.809.0571. And remember: you’re not alone. Similar scenarios are playing out for state agencies in Iowa, Michigan, Montana, and Pennsylvania. Alternative funding is still available . . . at a price.
Deval to the rescue?
This past week, Governor Deval Patrick floated a proposal to channel both public and private funds into MEFA bonds. Potential sources for the rescue funding include state pension funds and private colleges. This move could resurrect the state-managed loan program. Though no specific plan or timetable had been settled at press time, investing in MEFA bonds, which go on sale later in August, could expand the options for students.
