MEFA : Get a Loan : MEFA Student Alternative Loan

Taking an active role in paying for your own education? Lots of students are these days. Be sure to do your research to get the loan that gives you the best options both in the short term and the long term.

The MEFA Student Alternative Loan allows you to be the primary borrower as an undergraduate student. If you apply with a co-borrower (a spouse, a parent, or any credit-worthy U.S. citizen or permanent resident) you'll be eligible for a lower origination fee.

MEFA benefits for the 2007-2008 academic year***

With the Deferment Option, you may defer your payments for up to four years while you're enrolled in your current college or university. Repayment begins six months after you graduate, leave the program, or reduce your hours to less than half time. Interest will accrue during the deferment period and will capitalize once repayment begins.
There's no application fee. The origination fee is only 3.00% when you apply with a co-borrower on the loan, 6.00% if you apply without a co-borrower.
There's no penalty for early repayment or prepayment.
Your interest payments may be tax deductible.

Rates and Terms for the 2007-2008 academic year***

Variable interest rate is based on the Prime Rate* + 0% (interest rate for the 2007-08 academic year) (APR 5.36%-5.95%).
You'll have a 20-year repayment period. The length of your deferral period, if you choose one, is added on to the 20 years.

Eligibility***

You (the student) must be enrolled at least half time in a degree-granting program at an eligible non-profit college or university
You must meet one of the following:
- You (student) or your co-borrower live in Massachusetts OR
- You must be attending a Massachusetts college or university.
You must maintain satisfactory academic progress as defined by your college or university.
You must demonstrate a willingness to pay credit obligations in a timely fashion.
To apply without a co-borrower
- You must have a verifiable income of at least $18,000 per year.
- Your income must support your potential borrowed amount (based on a debt-to-income ratio).
You may request a loan amount up to the total cost of attendance (including tuition, fees, room, board and miscellaneous expenses) minus other financial aid.
The minimum loan amount is $2,000 ($1,500 minimum at a public college or university).

2008-2009 academic year interest rates for MEFA Loans have not yet been determined.

"MEFA made everything so easy. I kept waiting for a problem but there were none."
— W.R. Clark, Pepperell, MA

*Prime rate is reset quarterly on the first day of January, April, July, and October throughout the life of the loan. The MEFA Student Alternative Loan interest rate will never exceed 12%.

** Annual Percentage Rate (APR) is based on a loan at Prime + 0% with an origination fee of 3.00% and a 54-month deferral period followed by a 180-month repayment term, assuming a constant Prime Rate at the current value.

***Current interest rate and terms for the 2007-2008 academic year.