MEFA News Paying for College

MEFA Offers Strategies to Minimize Borrowing on Student Loans

MEFA advises using college savings, taking advantage of an interest-free monthly payment plan, and working part time to minimize borrowing for college.

BOSTON, July 25, 2023 – With the fall semester fast approaching, a new class of students is considering how to finance the college bill. The choices made today will impact the personal finances of college students and parents for years to come.

That's why MEFA is urging students and parents to adopt a strategy of minimizing borrowing and fully understanding the long-term obligation of student loans. As the Commonwealth's authority on planning, saving, and paying for college, MEFA offers a wealth of free guidance for students and families at, including how to limit borrowing and understand the total cost of borrowing.

"The national debate on forgiving federal student loans has started a thoughtful conversation among new borrowers about how to achieve the college dream while minimizing indebtedness. A college degree remains a solid investment for many career choices, and MEFA is here as a public resource to help families. Together, we can reduce borrowing, carefully consider financing options, and place students on a course toward career and financial success," said Thomas Graf, Executive Director of MEFA.

MEFA provides free access to college-planning experts and resources for students and parents. Two popular online tools at are the informative Comparing College Loan Options video and the Student Loan Payment Calculator.

To minimize borrowing, MEFA's experts advise families to:

  1. Use college savings and other assets to pay for as much of the college bill as possible. This reduces the overall cost of college by eliminating interest payments that would accrue on a college loan.
  2. Ask the college about a monthly payment plan that allows all or a portion of the semester's bill to be paid with interest-free, monthly installments during the academic year.
  3. Plan to work a part-time job while enrolled to pay for daily living and travel expenses out of pocket rather than borrowing.

For many families, some borrowing is necessary to close the gap between available assets and the total bill. In this case, MEFA advises students and parents to complete the FAFSA® (Free Application for Federal Student Aid) and receive the maximum amount available in Federal Direct Student Loans. These types of loans typically offer  favorable terms and conditions, including a guaranteed fixed interest rate, an option to be consolidated, and multiple repayment options.

If additional funds are needed, students and parents can turn to private loans. When considering private loans, MEFA's experts advise:

  1. Know the total cost of the loan. Lenders offer a range of interest rates, and only borrowers with excellent credit histories are awarded the lowest rates. The repayment option selected will also impact the interest rate. For example, delaying repayment until after graduation typically increases the interest rate. The loan's interest rate can significantly affect the loan's total cost. MEFA's Student Loan Payment Calculator shows how the different options impact the total cost of the loan.
  2. With private loans, credit scores matter. Unlike the Federal Direct Student Loans, most education loans require the borrower to have good credit. Undergraduate students will need a creditworthy co-borrower on the loan, and most will allow more than one co-borrower to increase the chances of approval and a lower rate. Remember, every co-borrower has equal responsibility for repaying the loan.
  3. Compare loans carefully. Every private lender is required to provide an Application and Solicitation Disclosure that details the cost of the loan, including fees. They should be available on a lender's website. View MEFA's webinar, Comparing College Loan Options, for a primer on reading and understanding these disclosures. The Undergraduate Application and Solicitation Disclosure for the MEFA Loan shows fixed interest rates for the 2023-24 academic year between 5.35% and 7.95% APR*, with no application fee, no origination fee, no late charges, and no returned check charge. It includes examples of loan costs for various repayment options, including 10- or 15-year loans, immediate repayment, interest-only repayment while enrolled, and deferred repayment.  MEFA undergraduate, graduate, and refinancing loans are available to qualifying borrowers nationwide.

MEFA's college planning experts are available to help students and families via phone at (800) 449-6332 or via email at

Visit for all of MEFA's expert college planning guidance including free live and previously recorded webinars, helpful videos, the MEFA Podcast series, and the MEFA blog with articles covering a full range of college planning topics.

*The Annual Percentage Rate (APR) is designed to help consumers understand the relative cost of a loan and reflects the loan's interest rate, timing of payments, and fees. MEFA's lowest rates are only available to the most creditworthy applicants.

About MEFA

MEFA's mission, since its founding in 1982, has been to help students and families access and afford higher education and reach financial goals through education programs, tax-advantaged savings plans, fixed-rate loans, and expert guidance. All of MEFA's work aligns with the ever-present goal to support the independence, growth, and success of students and families. Visit to learn more or follow MEFA on Twitter @mefatweets, Facebook at mefaMA, LinkedIn, and Instagram. MEFA is a state authority in the Commonwealth of Massachusetts that serves students and families nationwide.  MEFA is not reliant on state or federal appropriations.

Lisa Rooney
(617) 224-4838