CASTINE, Maine — More students are applying to Maine Maritime Academy despite the dwindling numbers of high school graduates.
But in these economic times, they may not be able to get the student loans they need to pay for college.
MMA, like many colleges and universities, has suffered a double blow to student aid, according to President Leonard Tyler. The school’s endowment — money invested primarily to fund student scholarships — has suffered in the worldwide financial crisis, which has reduced MMA’s earnings.
In addition, the funds available for student loans have been reduced, leaving students looking for ways to fund their education.
“We know that one of our main lenders, KeyBank, will no longer make loans to students,” Tyler told MMA trustees Friday during their regular meeting.
Bank officials have said the bank will honor loans that are outstanding, he said. But the decision not to make student loans will leave a $700,000 gap in funding for student loans, he said.
Jarred Sternbergh, a junior from Jonesboro who is the new student member on the board of trustees, said there have been discussions among students that they may not be able to afford to come back to classes. Although student funding is allotted annually, there has been some indication that the financing crunch could hit some students as early as next semester.
“I haven’t heard a lot of talk yet,” he said, “but I have heard of some students who didn’t come back this year because they couldn’t obtain a loan.”
In some cases, he said, it was because their parents’ credit was not good enough for them to be able to co-sign the loan.
At this point, Tyler said, most of what the administration and staff have heard has been anecdotal and they are not sure how big a problem this is or will become.
“If there are students in this position, we hope they will make themselves known to us, so we can try to help them,” he said. “This is something that is going to have to be addressed,” he said.
Student loans are administered and arranged on a federal level, but Tyler said the college might need to begin talking with local banks in order to be able to help students. That is a different funding path for the college, but Tyler stressed that MMA has some positive features that may make it attractive for banks to provide student loans. MMA students historically have had a very low default rate on student loans. That may make it easier for students to negotiate loans, he said.
Also, the college’s high placement rate offers lenders assurance that those student borrowers are very likely to have a job — and the ability to pay back their loans — once they graduate.
Meanwhile, applications to the college keep coming in. Applications for the 2009-10 academic year are 10 percent ahead of where they were last year at this time. While there is no guarantee that trend will continue, Tyler said, the staff was confident MMA will be able to maintain its goal of 800 undergraduate students on average for the coming year.
That high enrollment has caused some problems. Many of the students have enrolled in specific programs. There has been a large surge in the Small Vessels Operations program, according to John Barlow, MMA’s dean and vice president for academic affairs. Because many of the classes in that program are lab programs, and there is limited space on board the vessel used in those programs, many students are having difficulty completing the requirements for the program.
Barlow told trustees a special term in May was being considered that would offer a five-week intensive program for those students.