After thirty years, MEFA is still doing
exactly what it was created to do – helping to make higher education more
accessible and affordable for Massachusetts students and families. Hundreds of
thousands of families have turned to MEFA for guidance on paying for college,
and many have borrowed a MEFA Massachusetts student loan with some of the lowest
fixed interest rates around. Be a wise borrower and do your homework by
following these 5 easy steps.
MEFA’s low-cost fixed interest rate student loans benefit
Massachusetts residents attending college in-state or out-of-state and for U.S.
students pursuing higher education in Massachusetts. Our expanded Massachusetts
loan programs and repayment options let you choose a loan that
meets your needs.
Choice of repayment options — immediate,
interest-only, or deferred.
Fixed interest rates on all MEFA
student loans provide stable and predictable
tiered pricing: all qualified MEFA borrowers receive the same low fixed
interest rates for the applicable student loan program.
strategy features a lower interest rate while the student is in
school, keeping the monthly payment amount low during the college years.
Massachusetts Student Loans
loans with fixed interest rates as low as
5.99% (APR1 7.26%-8.55%). Learn more about MEFA Undergraduate Loans.
Student Deferred Loan features a unique low fixed interest rate
of 8.09% (APR1 7.95%-8.68%), deferred repayment, and a
co-borrower release option after 48 on-time payments. Learn
more about the Student
Graduate loans with fixed interest rates as low
as 7.09% (APR1 8.27%-8.55%). Learn more about MEFA Graduate Loan.
Most people use
a combination of past income (savings), present income and future income (loans)
to pay their college costs. Consider all your options before borrowing loans that
you’ll have to repay with interest.
& Current Income
The major advantage of using
savings—including the funds you would withdraw from a college savings plan—is
that it doesn’t require you to incur additional debt. The same is true for using
your current income, if you have excess cash available after covering your costs
offer interest-free monthly payment plans that allow you to split your bill into
smaller, more manageable payments over 5–10 months. This is an excellent option
if you don’t have the resources to pay your bill as a lump sum. Plans don’t
charge interest but may require a minimal enrollment fee. Contact the college
bursar’s office for more information.
If you decide to
borrow to cover part of your education expenses, educate yourself first. Your
credit score is an important factor in your applications for most loans. It’s
important to know your credit score so that, if necessary, you can take measures
to improve it before applying for PLUS, MEFA or other credit-based college
student loans. Also, remember to maximize federal student loans before you take
out private loans.
The following are some important concepts to understand
when evaluating college loans:
Fixed vs. Variable Interest Rate: Fixed
interest rate student loans have a constant interest rate and a payment amount
that never changes. In variable interest rate loans, the interest rate (and your
payments) may go up or down over time. Variable interest rate loans will likely
increase as interest rates begin to rise in the economy.
Rate (APR): The APR reflects the total cost of borrowing money over the
life of the loan, considering not only the interest rate but also the effect of
other fees on the total cost of repaying the amount financed.
Deferred Repayment: The interest rate of your loan may vary depending
on whether you repay the loan immediately or wait until after graduation to
Pricing: Tiered pricing means that interest rates depend on your
credit. The advertised lowest interest rate may only be available to those with
exceptional credit, and higher rates and fees may apply to those with fair to
average credit ratings.
Fee: Lenders often charge an administrative fee as a percentage of the
loan amount. Sometimes the origination fee is added to the amount you borrow and
other times it is subtracted from your loan amount.
Download our PDF for more tips
on education loans.
Download our PDF for the Education Loan Comparison
government offers tax credits – like the American Opportunity Credit and the
Lifetime Learning Tax Credit – and tax deductions to ease the burden of college
costs. These tax advantages are based on your Adjusted Gross Income and other
qualifying criteria. We encourage you to consult an expert tax advisor to
discuss how the regulations apply to your particular situation, and to verify
whether you may combine credits or deductions within the same tax
more from the IRS
The American Opportunity Credit covers
four years of post-secondary education. You may claim the credit for books,
supplies and equipment needed for a course of study, as well as tuition and
fees. A family may claim up to $2,500 per tax year for each eligible
Learning Tax Credit
The Lifetime Learning Tax Credit
provides tax benefits for college juniors and seniors, graduate students, and
others pursuing lifelong learning to upgrade their skills. Up to $2,000 can be
deducted per tax year.
Loan Interest Deduction
You may deduct up to $2,500 per
year of your loan interest and fees. This deduction is available for all
Tuition and Fees
You may also claim a tax deduction for qualified
higher education expenses, including tuition, fees, room and board, books, and
Even though your
student loans may be deferred until after you graduate, the choices you make
while you’re a student can impact your options after graduation. Keeping debt
down and maintaining good credit are two good strategies toward successfully
managing your finances.
Learn more: College Student Budgets and Repaying Student
1The Annual Percentage Rate (APR)
reflects both the accruing interest and the effect of borrowing the origination
fee and paying the expected monthly payment over the term of the loan. APR
varies with length of deferral, length of the Anticipated In-School Period, and
the presence of a co-borrower.
2We strongly recommend that you consult
an expert tax advisor to discuss how the regulations apply to your particular
situation, or that you review the tax laws and applicable regulations to
determine whether the interest paid on your educational loan is deductible. MEFA
cannot ensure that interest paid on individual loan(s) will be
reserves the right to modify or terminate benefits, products, services and terms
in its sole discretion and without prior notice. MEFA education loan
availability is subject to MEFA’s acceptance of a completed loan applications,
including credit approval and fund availability for the applicable loan category
at the proposed disbursement time.