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
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
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
Current MEFA Massachusetts Student Loans
Undergraduate loans with
fixed interest rates as low as 5.49% (APR1
6.60%-6.94%). Learn more about MEFA Undergraduate
Student Deferred Loan features a unique low fixed interest
rate of 7.89% (APR1 7.78%-8.48%), 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 6.84% (APR1 7.99%-8.26%). Learn more about MEFA Graduate
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.
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 of living.
colleges 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
Percentage 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
Immediate or Deferred Repayment: The
interest rate of your loan may vary depending on whether you repay the loan
immediately or wait until after graduation to start repaying.
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.
our PDF for more tips on education loans.
our PDF for the Education Loan Comparison Worksheet.
The federal 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
and Fees Deduction
You may also claim a tax deduction for
qualified higher education expenses, including tuition, fees, room and board,
books, and equipment.
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 Loans
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
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.