Portland, ME -- The Maine Educational Loan Authority (MELA), sponsor of The Maine Loan and The Maine Medical Loan, has issued $210 million in tax-exempt student loan revenue and refunding bonds. The recent financing restructured $156.5 million of MELA's auction rate bonds into a fixed rate structure and provides funding for the origination of new student loans for the 2009-10 academic year and beyond.

"MELA and many other student loan lenders across the country have historically utilized auction rate securities for their financings. The auction rate securities market closed down due to the volatility in the capital markets as a result of spiraling defaults from sub-prime mortgages. The on-going turmoil and instability in the capital markets has had a significant impact on the student lending industry, causing many lenders to suspend their private student loan programs or exit the marketplace due to the inability to access capital. "MELA's bonds represent the first successful tax-exempt financing comprised solely of private student loans since the fall of 2008," said Shirley Erickson, MELA Executive Director. "The Authority is pleased to have accessed the capital markets in these difficult economic times, ensuring the continued fulfillment of its mission of providing a supplemental educational loan program for Maine students and families."

For the past several months, MELA has been working closely with a team of professionals with extensive experience in student loan financings. "MELA's loan programs have historically been funded with the proceeds from tax-exempt bonds, providing Maine students and their families with low cost alternative student loans. These are challenging times for students paying for college, and we are grateful that through a committed effort MELA is able to continue to provide alternative student loans for the foreseeable future," said Darren Hurlburt, President and CEO of Maine Education Services (MES), who manages MELA's administrative and marketing services.

The disruption in the capital markets and on-going global liquidity crisis resulted in several agencies offering student loan programs to seek increased state support through direct investments in their financings or refinancings as well as legislative support through moral obligation backing of their debt. Given the importance of additional credit enhancement in the current economic environment, MELA pursued and secured an increase in the State of Maine's moral obligation backing of the Authority's debt through recent legislation. "MELA is thankful to Governor John Baldacci, lead sponsor Senator Kevin Raye plus the nine cosponsors, and all legislators for their recognition of the vital role MELA's program plays in ensuring that Maine students and their families have the educational financing necessary to access higher education," stated Chris Bell, MELA Board Chair. "The State's increased support of MELA played a vital role in the success of the Authority's recent financing, and ensures the availability of an essential educational financing resource for Maine students."

A quasi-governmental agency created by the Legislature in 1988, MELA was established to assist students and their families achieve their higher education goals by providing an alternative student loan program. Alternative student loans exist to bridge the gap between the full cost of a higher education and traditional financial aid resources. All MELA loans are funded with the proceeds of tax-exempt bonds or obligations and no State monies are allocated to fund the program. Over the past two decades, MELA has disbursed student loans totaling over $239 million, providing thousands of Maine students with educational financing assistance. MELA's current annual student loan volume is in excess of $32 million.

For more information on MELA's scholarship program or The Maine Loan, please call toll-free 1-800-922-6352 or visit www.mela.net