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Paying for College

The Lowdown on Paying Back your Education Loans

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Interest rates, and monthly payments, and due dates! Oh, my! Sometimes it’s easy to feel like you’re “not in Kansas anymore” with all of the terminology and complexity that seems to be packaged with your education loans – not to mention the gravity of how education loans can impact your financial future! So what do you need to know when you start paying back the money you borrowed?



Whether you have borrowed a federal loan, MEFA loan, or loan from another source, the simple steps and tips below will be valuable as you begin to repay your education debt.

STEP One: Pay your bills on time!
Paying your bills on schedule, as well as lowering your overall debt and establishing a long-standing history of loan repayment, will allow you to build a solid foundation of credit worthiness. And your credit worthiness can greatly impact your financial options and opportunities. But if you miss your payment due dates, and miss them frequently, you will accrue much more debt over time. More money owed is more money to pay back!

STEP Two: Know what company is “servicing” your loan.
Your loan servicer is the company that will work with you during the repayment of your loan. They generally serve as the primary contact and will handle billing and repayment of the loan as well as any questions during this period. MEFA’s servicer is ACS Servicing and can be reached by phone at 877-469-7259.

STEP Three: If offered, sign up for e-billing, email payment reminders, and automatic debit.
Signing up for monthly electronic payment transfers to pay back your loan allows you to be at ease by ensuring the payments will be made automatically. No need to write and send checks by mail anymore. The transaction will be something you can count on, and you’ll know that your loan is on track for repayment. MEFA offers electronic payments and email payment reminders, and encourages borrowers to take advantage of these services by registering on ACS’s website. You can call ACS Servicing with questions at 877-469-7259.

STEP FOUR: Be an informed borrower: Know the impacts of deferment, capitalized interest, and more.
Sometimes putting off your payments may seem like the right solution – for now. But be informed. Being a wise borrower and understanding the terms of your loan and the impact they may have is important; here is a breakdown of some key terms for you to know as you pay back the money you owe:

  • Principal: the original loan amount you borrowed.

  • Interest Rate: the interest percentage paid to the lender for the use of money borrowed.

  • Capitalized Interest: the interest charged to the combined sum of your principal loan amount and any interest that has already been added to that amount. When capitalized interest is charged, your overall debt will grow exponentially. Interest on top of interest can quickly rise to a much larger outstanding balance than you are anticipating!

  • Deferred Loan: a loan with payments due after a student has graduated from school. These loans are a great resource for students planning to delay repayment until after graduation – and after acquiring a job!

  • Grace Period: the period, typically six months, immediately after a student separates from his or her school or program. Only deferred loans offer a grace period. During this time payments are not due, but interest will often continue to accrue.


Some quick tips to keep you on the right track:

If you have a MEFA loan, keep your son or daughter’s graduation date and in-school status up to date with ACS Servicing. If there is a transfer to another school, be sure to inform ACS of the program change to avoid exhausting the maximum allowable grace period outlined in your MEFA loan agreement. Call ACS Servicing to communicate this update at 877-469-7259.

Be sure to keep your addresses and contact information updated!
Similar to keeping your graduation date and in-school status current, be sure to also update your contact information. As long as you keep your information up to date, you will receive important information about your loan and when your payments are due.

Any questions on your loan repayment?  Contact your loan servicer for assistance.

If you follow these steps and tips, then repaying your loans will be easier than tapping ruby slippers together!





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