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MEFA private student loans review

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Geared toward Massachusetts students and residents, you can apply with up to two coborrowers.

3.95% to 7.30%



Min. Credit Score


Product NameMEFA Undergraduate Loans
Minimum Loan Amount$2,000
APR3.95% to 7.30%
Interest Rate TypeFixed
Minimum Loan Term10 years
Maximum Loan Term15 years
Requirements670+ credit score, $2,100+ monthly income, enrolled at least half time at a degree-granting nonprofit school, maintain satisfactory academic progress, either be a MA resident, have a coborrower who lives in MA or go to college in MA
The Massachusetts Educational Financing Authority (MEFA) is a nonprofit state-chartered lender that offers student loans to individuals who are from Massachusetts or go to school in the state. It’s unique in that it allows you to bring on multiple coborrowers to strengthen your application. While its rates are competitive, it’s one of the few lenders that charge an origination fee on its student loans. And it has slightly less flexible repayment options than your average student loan provider.

First, am I eligible?

To be eligible for a MEFA undergraduate student loan, you must:

  • Be enrolled at least half time in an undergraduate program. Summer students can get away with being below half time as long as they enroll full time in the fall.
  • Attend an eligible degree-granting nonprofit institution. Generally, schools that offer federal aid are eligible for MEFA undergraduate loans.
  • Have some affiliation with Massachusetts. You or a coborrower must be a resident of Massachusetts or you need to attend college in Massachusetts.
  • Maintain satisfactory academic progress. Each school has its own standards for satisfactory academic progress, though most define it as a 2.0 GPA or a C average.

You or your primary coborrower must also meet MEFA’s credit requirements:

  • Credit score of 670 or higher. This is considered a good credit score. Only one of your coborrowers needs to meet this requirement.
  • Monthly income of at least $2,100. This monthly income requirement applies to your income before taxes.

How do MEFA student loans work?

MEFA is a direct nonprofit lender that offers private student loans to help cover your undergraduate education costs when federal loans fall short. Loans start at $2,000 for private school students and $1,500 for public school students.

Unlike most other private student loan providers, MEFA encourages students to apply with up to two coborrowers to help you meet the credit requirements and share the responsibility of paying back the loan. You can complete the application online in a few minutes with your coborrowers, though it can take a month or so before your school gets its funds.

How much do MEFA student loans cost?

The main cost to worry about with MEFA student loans is the APR, which includes interest and fees. MEFA only offers fixed-rate loans to undergraduate students, which come with a 4% origination fee if you apply with a coborrower or 7% if you apply on your own.

However, unlike most other lenders, MEFA can charge a lower rate while you’re in school, and raise it after graduation or if you leave school. On top of this, it offers a different range of rates for different repayment plans and terms. Here’s how it works:

Repayment plan and termInterest rateStarting APR range
10-year immediate repaymentFixed interest rates as low as 3.95%3.95% to 5.95%
15-year immediate repaymentFixed interest rates as low as 4.25%4.25% to 6.20%
15-year interest-only repaymentFixed interest rates as low as 5.45%5.45% to 7.30%
15-year deferred repaymentFixed interest rates as low as 5.75%5.49% to 7.09%
15-year deferred repayment with coborrower releaseFixed Interest rates as low as 5.95%5.67% to 7.26%

Does MEFA offer any discounts?

No. While it’s common for student loan providers to offer a rate discount for signing up for automatic repayments, MEFA doesn’t.

What are my repayment options?

MEFA offers four different repayment plans, depending on your needs:

  • Immediate. Available with terms of 10 to 15 years , this plan comes with full repayments that begin on the 28th of the month after your school receives its funds.
  • Interest-only. Start making repayments on interest on the 28th of the month after your school receives its funds. Full repayments begin once you leave school or drop below half time. Only available with a 15-year term.
  • Deferred. Hold off on repayments until six months after you leave school or drop below half time, with a maximum deferment period of five years. Only available with a 15-year term.
  • Deferred with coborrower release. This option works the same as deferred repayment, with the added benefit of applying to take your coborrowers off your loan after making 48 on-time repayments in a row. Only available with a 10-year term.

Does MEFA offer any deferment or forbearance options?

No, there aren’t any deferment or forbearance options after you start making your full repayments.

Top reasons to consider MEFA

MEFA’s undergraduate student loans offer several benefits, including:

  • Up to two coborrowers allowed. In fact, MEFA encourages both of your parents or two other creditworthy individuals to apply with you to help strengthen your application.
  • No prepayment penalty. This means you can pay off your loan early to save on interest — and take advantage of more flexible repayment plans.
  • Coborrower release. MEFA offers a repayment plan that allows you to take your coborrowers off your loan without having to refinance after 48 consecutive on-time repayments.

Why you might want to look elsewhere

Consider these potential drawbacks when deciding if a MEFA undergraduate student loan is right for you:

  • No deferment or forbearance. Once your full repayments start, MEFA doesn’t offer any deferment or forbearance options for borrowers who go back to school or hit a rough patch financially.
  • Only up to 15-year terms. While you can technically pay off your loan as quickly as you like since there’s no prepayment penalty, you’re out of luck if you’re looking for a 20-year term.
  • Must have ties to Massachusetts. MEFA isn’t for you if you don’t live, attend school or have a creditworthy coborrower who lives in Massachusetts.
  • Origination fee. MEFA is one of the few private student loan providers to charge an origination fee — most don’t charge any fees associated with applying or originating your loan.

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What do borrowers say about MEFA?

Borrowers don’t have much to say about the Massachusetts Educational Financing Authority online as of November 2018. This isn’t much of a surprise, given the limited pool of students it serves. The Better Business Bureau (BBB) gives MEFA an A+ rating based on factors like time in business and transparency, though it isn’t accredited. However, it only has a single one-star review on its BBB page and no page on Trustpilot.

Problems with MEFA’s former loan servicer

The one negative review might not actually have to do with MEFA as much as its former loan servicer Affiliated Computer Services (ACS). The one review was a complaint from a mother who’s daughter had borrowed from MEFA as an undergraduate and was struggling to pay off her loans while attending graduate school.

Go to other forums and you’ll find similar stories. In fact, CBS Boston even ran a news story about how ACS hadn’t properly applied repayments toward some borrowers’ loan principals or charged inconsistent repayments. Now, MEFA partners with American Education Services to handle loan repayments.

What to expect when signing up

You can apply for a MEFA undergraduate student loan online or over the phone by calling 800-266-0243. Follow these steps to get started online:

  1. Go to the MEFA website and click MEFA Loans in the main navigation bar.
  2. Scroll down and click Apply Now under the heading Undergraduate Loans.
  3. Review the list of required information before clicking Apply Online.
  4. Fill in the required fields with information about you and your coborrowers. Typically, this step takes around 10 minutes.
  5. Review your application before submitting it. You should find out if you’re eligible instantly and receive directions on how to proceed with the application.

After you finish the online application, MEFA typically asks borrowers and coborrowers to upload relevant documents, such as recent pay stubs. At this point, it reviews your application and gives you a choice between several different offers with different repayment plans.

Pick the offer that best suits your needs and sign your loan documents. MEFA will work with your school to disburse your funds by the beginning of the semester.

What else does MEFA offer to help pay for college?

MEFA is a nonprofit state-chartered organization that offers several other resources to help Massachusetts students and families pay for higher education, including:

  • U.Plan Prepaid Tuition Program. Families can start saving for up to 100% of their children’s future college expenses at today’s rates.
  • U.Fund College Investing Plan. Parents can also open an investment account managed by Fidelity to cover their children’s college expenses — similar to a retirement account.
  • College Planning Tool. An online tool that students and parents can use to figure out how much they’ll need to save for college, as well as find schools and scholarships.
  • Seminars and webinars. MEFA holds college-planning seminars both online and across campuses and workplaces around Massachusetts.
  • MEFA Pathway Your Plan for the Future. A college- and career-planning website for students, guidance counselors and parents to help students plan for a successful post-graduate future.

Bottom line

MEFA undergraduate student loans are geared toward students who live or go to school in Massachusetts and don’t have any more federal resources. Its rates are comparable to what you’d find with federal loans, sometimes even starting slightly lower. But its repayment plans aren’t nearly as flexible as what you might find with other student loan providers, making it less-than-ideal if you plan on getting another degree.

To find out how MEFA stacks up to other lenders out there, read our student loans guide.

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