The Massachusetts Educational Financing Authority (MEFA) offers one huge advantage to its clients: the organization is a state-chartered nonprofit organization. This makes it one of the most consumer-friendly options in the private student loan industry.
MEFA’s extensive lineup of undergraduate and graduate student loans and refinancing plans puts people before profits. The organization grants borrowers access to low rates and one of the industry’s strongest support systems.
There’s a lot to like about MEFA as a student loan provider, so let’s dig in and see exactly what the organization offers.
Background and Company Information
MEFA was created in 1982 by an act of the Massachusetts state legislature. The organization was established in response to ongoing calls from the state’s higher education institutions, which lobbied to expand the range of options available to borrowers who could not afford the rising costs of postsecondary schooling.
The organization’s original mission statement remains in effect today: MEFA strives to provide practical, low-cost financing solutions to students and families with higher education aspirations.
MEFA operates according to a highly ethical set of guiding principles that prioritize the long-term financial health of its borrowers. The organization also maintains in-house guidance programs, liaising with high schools and colleges to offer complete educational planning resources to students and their parents.
Undergraduate Student Loans
As of December 2020, MEFA offers undergraduate student loan programs with the following features:
- Fixed interest rates ranging from 3.75% to 5.75%
- 10-year and 15-year repayment terms
- Minimum loan amounts of $1,000 for public colleges and $2,000 for private colleges
- Maximum loan amounts cover the full cost of attendance, including tuition, books, and room and board (minus any financial aid the student receives)
In most cases, undergraduate borrowers need a parent, guardian, or other individual to act as cosigner. Additional eligibility standards are as follows:
- Borrowers must maintain at least half-time enrollment to qualify
- The school must hold recognized national or regional accreditation
- The student must maintain good academic standing as defined by the institution’s internal standards
- Borrowers must be U.S. citizens or documented permanent residents
- If you need to borrow money to finance multiple years of your education, you must reapply each year
Repayment terms include the following unique features:
- Principal-plus-interest payments become due on the 28th day of the calendar month that follows the final disbursement of loan proceeds
- Interest-only payments are available to borrowers seeking relief from high monthly amounts
- Payments may be deferred until six months after the student graduates, leaves school, or reduces their course load to less than half-time
- Cosigners can qualify for release from their obligations after 48 consecutive months of on-time payments
Credit inquiries into the backgrounds of the borrower and/or cosigner are required, but MEFA does not apply any extra or hidden fees, charges, or early repayment penalties to any of its loans.
Graduate Student Loans
The following terms apply to MEFA loans for graduate students as of December 2020:
- Interest-only and deferred repayment plans are available
- APRs from 4.25% to 5.50%
- Minimum loan amounts of $1,500 for public schools and $2,000 for private schools
- Maximum loan amounts can cover the full cost of attendance, minus any financial aid the borrower receives
Eligibility requirements mirror those that apply to undergraduate loans. The key difference is that all MEFA graduate student loans carry 15-year repayment terms. There is no 10-year term option as of December 2020.
Additional Borrower Resources
As a nonprofit organization, MEFA places a premium on the lifelong financial health of its borrowers. To that end, it supports one of the most complete collections of client resources of any lender operating in the private market.
The organization’s website offers:
- College planning guides
- Saving tips for students of all ages and at all stages of their educations
- College admissions support
- College saving and investing plans
- Prepaid tuition programs
- Extensive information about loans and loan types
- College cost calculators
- Student loan repayment calculators
MEFA also makes counselors and professionals readily available to assist prospective clients. You can contact the company by phone or email.
Pros and Cons
Here’s what reviewers and real borrowers particularly like about MEFA:
- There are no application fees, loan origination fees, or early payment fees
- MEFA supports many flexible repayment options
- Cosigners can be released after 48 months of on-time payments
- Borrowers can access up to the full cost of attendance through MEFA financing plans
- Its nonprofit structure inspires confidence and good faith
On the down side, MEFA has also attracted a few points of criticism:
- The organization does not offer variable-rate loans that allow borrowers to take full advantage of historically low interest rates
- Deferral periods default to maximums, which result in the accrual of more interest on the loan
MEFA is a nonprofit organization with an exemplary customer satisfaction record. Eligible borrowers in need of private loans can proceed with confidence, as MEFA delivers the market’s most competitive rates along with generous repayment terms and understanding, helpful service and advice.