Boston (WBZ Newsroom)  -- Despite a rash of tough economic news, the states education loan financing agency says it's back in business and is offering students loans immediately at a 7.75 percent fixed rate. 

The Massachusetts Educational financing Authority is offering the loans to families of undergraduate and graduate students after raising $400 million through the sale of bonds.

WBZ Newsradio1030 first reported the announcement Tuesday afternoon.   WBZ's Lisa Meyer spoke with MEFA Director Thomas Graf.



In late July, MEFA had announced that it was unable to raise funds due to disruption in the capital markets tied to the subprime mortgage crisis. MEFA says it was among lenders nationwide that faced delays in announcing the availability of loans for the 2008-2009 academic year.

Authority director Thomas Graf credited strong support from Gov. Deval Patrick for helping to strengthen the authority's position in the capital markets. In a statement, Graf said the 7.75 percent rate is lower than that of alternative loans. Treasurer Tim Cahill in August proposed a plan to have the state back up the MEFA loans but later retreated from his plan, and questioned the need for the $400 million MEFA bond sale, after determining that many students had secured loans through alternative means.

Meeting with the regions governors in Maine, Gov. Deval Patrick, in a statement released by MEFA, said the announcement is very good news for Massachusetts students and families. I commend the staff at MEFA for their diligence in securing these lower-cost options, especially during challenging economic times.