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Paying for College

Answers to Recent MEFA Loan Questions

Learn if MEFA Loans require means testing, if co-borrowers roll off after a certain point, if you can borrow MEFA Loans without borrowing Federal Direct Student Loans, if there' s maximum amount you can borrow, and what to do if you are not sure how much you need to borrow.
Father and daughter using computer to learn about MEFA Loans

If you're a student or parent who is considering borrowing a MEFA Loan to help pay the balance due at your college, you obviously want to know the interest rate, repayment term, and monthly payment you'll be making on your loan should you choose to borrow. You can find all of that information on our website here. But some of the other common questions we receive about MEFA Loans may be on your mind too. We've answered a few below.

Is there means testing for MEFA Loans?

No, there is no requirement to demonstrate financial need to qualify for a MEFA Loan like there is for financial aid. MEFA Loan approval is based on a few factors. First, in order to be eligible to apply, the student needs to be attending a degree-granting program at least half time at an eligible non-profit college. Second, all parties on the loan need to be either a U.S. citizen or permanent resident. Finally, if all of the pre-requisites to apply are met, approval is based on demonstrating sufficient income and credit. Out of all applicants and co-applicants on the loan, we will take the highest credit score on the application as the one on which we will base our decision.

Do co-borrowers roll off after a certain point during repayment?

Not necessarily. Of MEFA's five loan options, there is one that carries a co-borrower release option. On that loan, after the first 48 consecutive monthly payments are made on time, the co-borrower can apply to be removed from the loan. If the student borrower can meet credit and income standards, the co-borrower will be removed. If not, and always on all other MEFA Loans, the co-borrower(s) remains on the loan until it is paid in full.

Can you borrow MEFA Loans without borrowing Federal Direct Student Loans?

Yes you can, though we recommend that if you are going to borrow loans for college at all, you always start by using your Federal Direct Student Loans first. These loans are typically the only loans that students can borrow in their own name without a co-borrower, and have benefits like forgiveness and deferment options, as well as the ability to base the monthly payment on the graduate's monthly income. These options aren't available on other types of loans, including MEFA Loans. Please don't confuse Federal Direct Student Loans with the Federal PLUS Loan, which is a parent loan from the federal government that does not carry all of the same features. Any federal loan requires you to have filed a FAFSA in order to be eligible. You do not need to file a FAFSA to apply for a MEFA Loan.

What if I need to pay the college soon but I don't know yet exactly how much I need to borrow?

When applying for a loan, you need to request an amount to borrow. If you don't know exactly how much you need, you can always contact the financial aid office to ask. If you can't get an exact figure, you can probably get a ballpark estimate. Once you have that amount, you can apply, and we recommend you apply for the maximum amount you think you may need. If you find out you need less, you can simply contact us and have us lower the amount. If you end up needing more than the amount you apply for, you will need to submit a second loan application.

Is there a maximum amount that I can borrow from MEFA?

We don't place an exact dollar limit on how much you can borrow, either in a given year or in total over many years. However, in an academic year, you may only borrow an amount up to the total cost of attendance at the college minus any financial aid you received. Of course, you should only borrow what you need, and most people don't borrow the maximum amount for which they are eligible. You will request the amount you feel you need, and we will send that information to the college. The college will have the final say on how much you are able to borrow. Once that amount is confirmed, we will send the loan funds to the college.

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