The Mesa State College financial aid office will send letters to 500 to 600 students later this month, notifying them of changes to their Stafford loan packages after some of the school’s lenders modified or cut their programs in April.

None of the students has lost a loan that was promised during the spring semester, said Curt Martin, Mesa State’s director of financial aid, and funds remain available for needy students. The office spent the summer negotiating with other lenders to replace those who cut Mesa State. The most students will have to do is have their loans reprocessed if their loans will be handled by new lenders, Martin said.

“Some of the lenders that pulled out were not brick-and-mortar banks,” Martin said. “We have others secured to replace those that cut their programs and backup plans should those fall through.”

Martin said the effects of three bills passed by Congress in the past year regarding the Stafford loan program culminated in April. The Stafford program is a federal loan program that offers either subsidized, in which the government will pay the interest rate while the student is still in school, or nonsubsidized loans.

The first piece of legislation cut subsidies to lenders, Martin said, while the second helped lenders increase their liquid capital, and the third introduced a decreased interest rate of 0.5 percent every year until 2012 on loans and increased the loan limits by $2,000.

“April was looking pretty bleak. With the economic crunch, it just wasn’t profitable at all for lenders to do student loans,” Martin said. “The fed really stepped in to make it better, but it’s a temporary fix.”

That fix wasn’t enough for some lenders to stay with Mesa State, Martin said, but the school’s major lenders, CitiBank, US Bank, ASAP Union Bank and Wells Fargo, remained.

“We have really good relationships with our lenders and have never let those fly-by-night banks into our school,” Martin said.

“Sometimes, it’s nice to be the little college in western Colorado.”

The loan program was stabilized in time for the start of the new fiscal year July 1, Martin said, and the school will be re-examining what lenders will be in the program in October.

Even so, Martin said, the nation’s student lending is far from stable, and he predicts the system will be vastly different in two years.

“I’ve been doing financial aid for 25 years, and this is the biggest uncertainty I’ve seen,” Martin said. “No one can give me a straight answer about what will happen.”

By THE ASSOCIATED PRESS

WASHINGTON — The Federal Reserve and the Treasury announced steps Sunday to shore up mortgage giants Fannie Mae and Freddie Mac, whose shares have plunged as losses from their mortgage holdings threatened their financial survival.

The steps are also intended to send a signal to nervous investors worldwide that the government is prepared to take all necessary steps to prevent the credit market troubles that started last year from engulfing financial markets and further weakening the economy and housing markets.

The Fed said it granted the Federal Reserve Bank of New York authority to lend to the two companies “should such lending prove necessary.” They would pay 2.25 percent for any borrowed funds — the same rate given to commercial banks and Big Wall Street firms.

The Fed said this should help the companies’ ability to “promote the availability of home mortgage credit during a period of stress in financial markets.”

Secretary Henry Paulson said the Treasury is seeking expedited authority from Congress to expand its $2.25 billion line of credit to each company should they need to tap it.