July 29, 2008 MEFA will not offer student loans this fall Play video

(Jennifer Eagan, NECN: Worcester, MA) - On Monday more than 40,000 students are finding out they're losing a major loan option. MEFA, the Massachusetts Educational Financing Authority announced it won't be giving out any loans this fall.

Last year MEFA made more than a half a billion dollars in loans to Bay State students.

The state run lending authority is suffering from the same credit crunch that has affected the student loan market nationwide.

NECN's Jennifer Eagan has more.