As state officials wrangle over whether to offer a financial lifeline to a nonprofit agency that offers college loans to thousands of families, local schools are working to ease students' worries before classes begin.
"The biggest problem on campus is that students are confused," said Susan Lanzillo, director of Framingham State College's financial aid office.
Earlier this week, Gov. Deval Patrick proposed using $50 million from state pension funds, along with financial support from larger schools such as Harvard, Boston College, MIT and UMass, to buy bonds from the nonprofit Massachusetts Educational Financing Authority. Sales from those bonds would help MEFA provide tuition loans for college students.
Last month, the authority announced that unstable credit markets would prevent it from offering student loans for the coming school year. The agency, which provides loans to 40,000 families, plans to hold a bond sale within the next two weeks.
State Treasurer Timothy Cahill opposed the proposal, saying it would set a "bad precedent" to choose investments for social, rather than financial, reasons, the Associated Press reported.
He recommended the Legislature meet next week to approve a note of credit that guaranteed the state would repay about $450 million in bonds so MEFA would have the money it needs.
Smaller schools like Framingham State don't have the financial resources to buoy MEFA, but financial aid officials are working with students and their families to ensure they will have loans in place, said Lanzillo
"We can help students individually; we can't bail out MEFA," she said.
At Framingham State, students won't miss classes if there's a problem getting a loan, she said.
The financial aid office sent out e-mails alerting students about MEFA's troubles and explained that other loans are unaffected. About 70 percent of the college's students receive aid, she said.
"There would certainly be extensions given to anyone having trouble doing that," she said, and later noted, "Definitely, it would be fantastic if the governor could get MEFA back on board."
In Franklin, Dean College Communications Director Pat Samson said the school added a new staff member to its financial aid office in May to help handle loan concerns.
Part of that person's job was calling students and families to ensure they were signing up for loans and that they understood the process. About 90 percent of Dean's students get some form of financial aid, she said.
Dean financial aid workers also met individually with students during orientation sessions to check their loan progress, she said. Samson noted it can be daunting for families to expect their tuition loans to be in place and then lose one before school begins.
The extra work was worthwhile: About 57 percent of this year's students already have their loans in place, which is a 12 percent increase in the number of students from August 2007, she said.
John Hilliard can be reached at 508-626-4449 or John.Hilliard @cnc.com.
