[00:00:00] Good evening, and thank you for joining us this evening for our webinar, Borrowing for Graduate Education. My name is Shaun Morrissey. I am the Director of College Relations at MEFA. I’ve been at MEFA for almost four years. Before that, I was in the financial aid field for about 30 years. So hopefully I have some good experience to, um, share with you this evening

So just a little bit about what we’ll be talking about tonight. We’ll discuss a little bit about MEFA, some of the recent federal loan changes, um, a private loan overview. We’ll talk about some loan terminology. Then we’ll go over some wise borrowing tips, including minimizing debt, borrowing federal direct loans first, understanding how education loans work, understanding credit, and then we’ll talk s- about some of the new MEFA graduate loan programs that we have available[00:01:00]

So first of all, um, let’s talk a little bit about MEFA. MEFA was actually created by a group of colleges in Massachusetts petitioned the state legislature in 1982 to create, um, an entity to provide low-cost loans to families in Massachusetts. Um, it was a situation very similar to today where federal loan borrowing was limited, um, and there were caps on the amount that families could borrow through federal loan programs.

So Massachusetts schools were looking for another source for families to have to borrow to help pay for college, and that’s how MEFA was created. Since then, we’ve expanded to offer savings programs for Massachusetts families, including the UFund and UPlan, and we do offer a lot of free guidance and support for families to help plan and [00:02:00] pay for college, such as webinars like these.

We have our, um, website, which has a lot of calculators, articles, videos, um, and we also have a lot of other options for families looking for information on paying and saving for college. We have a 1-800 number, and we do offer one-on-one meetings as well So just a little bit, um, about The webinar for today, um, the chat is disabled.

Um, we do have the Q&A function enabled to ask questions. However, I’ll ask that you could hold all of the questions till the end, and then I’ll try to answer all of those, um, at that time. We are recording this webinar, and we’ll be sending out a copy of the recording and all of the slides to everyone within the next couple of days as well.

If you do want [00:03:00] to, um, have closed captioning, you can enable that as well So let’s talk about some of the changes to federal graduate borrowing. So, um, the big change for new borrowers is starting July 1st of 2026. If you are a new graduate student, um, there is no longer a Grad PLUS Loan available for new students.

However, if you are already in a graduate program, um, and you are continuing in that same program, um, at the same school, and you borrowed a federal loan during that program, you are eligible to continue, um, to borrow under the Grad PLUS Loan until you are, um, completed the program or three years, whichever is higher– whichever is lower, I’m sorry.

[00:04:00] So if you, um, have been in the program for two years already and it’s a three-year program, you’ll have one more year of borrowing available to you under those legacy provisions. Um, so again, you have to be enrolled in the same program at the same institution, and you have to have borrowed a federal loan, so a Federal Direct Unsubsidized Loan or a Graduate PLUS Loan in that same program before July first in order to qualify for those legacy provisions and qualify for Grad PLUS.

Otherwise, on July first, um, 2026, there is no longer a Grad PLUS Loan available to students So for graduate students, you can still borrow, um, federal loans through the Federal Unsubsidized Direct Loan Program. If you are considered a regular graduate student, the loan limit is, um, remaining at [00:05:00] $20,500 per year.

If you are considered a professional student, you can borrow up to $50,000 per year in the Unsubsidized Direct Loan Program, um, starting July 1st, 2026. And the professional programs include pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology, and clinical psychology Um, however, if you were a professional student, um, and before July 1st, 2026, and you remain in that same program, um, at the same school and have borrowed before July 1st, 2026, meaning that you qualify for those legacy provisions that I was talking about that allow you to borrow the Grad PLUS until you, um, complete that program or three years, whichever is lesser, [00:06:00] um, you can only borrow at the old limits of $20,500 in that professional program unless you are in a program, um, for example, a medic- medical program that allowed certain health profession students to borrow up to $47,167, you can still borrow at that legacy limit.

So you are, um, if you do qualify for those legacy provisions, you are only able to borrow at those legacy limits until, um, you meet that three-year or the, um, total length of the program minus what you are already enrolled in There’s also a new aggregate limit to direct loans of $200,000 that excludes undergr- undergraduate borrowing, so you can only borrow $200,000 in federal loans, um, for graduate [00:07:00] programs.

And there is a lifetime limit for direct loans, which includes undergraduate borrowing and Grad PLUS of $257,500

There’s also one more change to, um, all borrowing for federal loans is where the annual loan limit is now reduced for less than full-time enrollment. So if you are enrolled less than full-time, what happens is your loans are prorated based on the number of hours that you are enrolled. So the formula is the number of credit hours you’re enrolled for the academic year, um, divided by the number of credit hours considered full-time for the academic year for the program of study.

Um, and that would become a percentage, and that would be what, um, your loans are reduced by. So for example, if a program is considered twenty hours for full-time for the academic [00:08:00] year and you’re enrolled in ten credits, um, for the academic year, you would be only eligible for fifty percent of the annual loan limit.

So if you are in– uh, considered a graduate student, that would mean you’d only be able to borrow ten thousand two hundred and fifty dollars for the year rather than the twenty thousand five hundred. If you’re a professional student, you’d only be able to borrow twenty-five thousand a year instead of the fifty thousand under those new rules

There are also new repayment options for borrowers starting July 1st. So if you do, um, borrow a new direct federal direct loan, um, after July 1st of 2026, there will only be two repayment options available to you, and this is for all students, even if you qualify for, um, those legacy provisions for the loans.

Once you borrow after July 1st, 2026, these are the only plans that will be [00:09:00] available to you. The Tiered Standard program, which has fixed monthly payments, um, and repayment term lengths will range from 10 to 25 years depending on the amount you borrow, and the Repayment Assistance program, which is an income-based repayment program, and your monthly payments under that are based on your income, and there’s loan forgiveness available after 30 years of repayment, and that is a qualifying plan for Public Service Loan Forgiveness, and we’ll talk about what Public Service Loan Forgiveness is in just a moment So that new tiered standard plan, so if you borrow less than $25,000, um, in direct loans, you would have 10 years to repay that loan.

Um, for 25,000 to 49,999, you’d have 15 years to repay those loans. For 50,000 to 900– to 99,999, you’d have 20 years to [00:10:00] repay that. And if you borrow $100,000 or more, you’d have 25 years to repay that loan. How the repayment assistance program works as a percentage is it’s based on a percentage of your AGI. Um, so the previous, um, income-based repayment programs were based on something called discretionary income, but the new repayment assistance program is based on your AGI.

So if your AGI is 20– under 10,000, um, you would have to pay $10 a month on that program. Between, um, 10,000 and 20,000, it’s 1% of your AGI. Between 20,000 and 30,000, it’s 2% of your AGI. Between 30,000 and 40,000, it’s 3% of your AGI. Between 40,000 and 50, it’s 4%, so on, um, up to 100,000 and one or more, it’s 10% of your [00:11:00] AGI Um, the repayment assistance program does give you forgiveness after thirty years.

So if you’re making those payments based on your income, and there’s any balance left on that after thirty years, then that amount would be forgiven. If you are, um, working towards public service loan forgiveness, and public service loan forgiveness means that you are working in public service while you’re making payments, um, for ten years, and you’ve completed ten years of repayment and ten years of service, then that loan would be forgiven after ten years of making those payments.

There’s always a ten dollar monthly payment under some of the older income-based repayment programs. That payment could be zero. Now there is a ten dollar minimum monthly payment. Um, if you do have dependents, your payment amount is reduced by fifty dollars by each dependent that you have. And if your monthly payment is less [00:12:00] than the interest that accrues on that loan, then the remaining interest is, um, not charged on that loan.

So you won’t have interest being accruing on that if your payments are less than what your interest is that are– that is accruing. Also, if your payment does not reduce the principal by at least fifty dollars, a subsidy is applied to reduce the principal by at least fifty dollars. So those two last features are, are really helpful, um, so that if your payments are not reducing the principal, um, or paying off the interest, you’re not going to see your debt growing on these plans as it could have on under some of the income-based repayment programs in the past.

Um, your principal will be reduced and interest will not accrue more than what, um, your payment is So we’ve talked about the changes to the federal loans, so let’s talk a little [00:13:00] bit about the private loan programs and how those work

So, um, what you wanna do when you’re determining if you want to borrow through a private loan, what you wanna look at is determine the amount that you need to borrow based on your college bill. So you wanna take a look at your college bill, deduct any financial aid that you may be receiving, and see what the amount is that you’re going to borrow.

If you are living, um, off campus and need some funding to help with, um, food and living expenses, you can borrow through a private loan to help with that as well. What will happen is the loan proceeds are sent to the school, and then after the school receives that, they will apply that to the bill, and then any, um, excess funds will be released to you to use towards your living expenses [00:14:00] So after you decide how much you need to borrow, you will need to select your lender, um, and you can explore the college lender lists, use loan comparison tools, um, recommendations from different trusted sources.

MEFA is a private lender, so you could use MEFA as your lo- your lender. Um, but you can look on your college website. They will often have a list of lenders that they recommend. Um, they may have a preferred lender list. They may use a loan comparison tool like ELMSelect or Fast Choice. Um, you do not have to use the lenders that your school is listing.

You can use any lender that you choose, but that is a good starting point for you, um, to look at what some of the options are out there. You also want to decide who will be borrowing. Um, if you do have great credit and you do have, um, some income, you may be able to borrow without a [00:15:00] cosigner, but a lot of borrowers do need a co-borrower.

And so if you do need a co-borrower, you’ll want to reach out and see, um, who that might be that will be willing to cosign on that lo- on that loan for you. Um, most private loan applications are an online process. You’ll go to the website of the lender that you’re choosing, and you will complete that application online.

Um, once you complete that application and it’s approved, it will be sent… the information will be sent to your college for them to certify the loan amount. Um, what that means is they take a look at what, um, the cost of education is at the school. Um, they’ll provide that information to the lender. They’ll include in there, um, living expenses if you are living off campus, um, and they will certify that you are eligible to borrow that loan amount.

They will also determine when that loan is disbursed to the school, um, and interest starts [00:16:00] accruing on that loan once the loan is disbursed to the school. And usually disbursements start a week or so af- week or two after classes start. Um, so it’s usually not sent in when the bill is due, but the school will know that you’re receiving the loan and will, um, credit you for that payment until they receive the loan funds, um, when they request those.

So let’s talk about some loan terminology, um, just so that you are familiar with all the terms that are used when you are looking and comparing loans, um, for private loans. So there are two types of, um, interest rates in percentages that are available for loans. There are fixed and variable rates. So the fixed rate loans, the loan rate will not change over the life of the loan.

Um, so your monthly payment will remain the same for the life of the loan. With a variable interest loan, that monthly payment will adjust based [00:17:00] on the market. So when there’s a variable interest rate, they will tell you what market that rate is tied to and how often that could change. So the interest rate could go up or down based on market fluctuations.

Um, so you wanna take a look at those, see what the, what the terms are. For variable rate interest loans, you’ll want to take a look at what the cap is on that loan to see what the maximum amount is that that loan could go up to. Um, and be aware of that when you’re… if you are choosing a variable rate loan as to what that cap may be.

Um, and most of the time, interest rates are tied to the strength of your credit, so the higher your credit score, the lower your interest rate is, and the repayment option that you choose. So the shorter the repayment option, also the lower the interest rate is. Longer, um, repayment options and deferring payments while you’re in school often, [00:18:00] um, can mean a little bit higher interest rates.

So those are the two ways that your interest rate is, um, determined So the annual percentage rate, which is the APR, is the annual cost of the loan, and that includes fees. So the APR may look a little bit different than the interest rate that’s advertised on the loan because, um, if there are fees on that loan, that could mean a higher in– APR than what the interest rate is.

That’s expressed as a percentage, and that’s a quick way to compare loans, um, that may have some fees included in there to see, um, if those fees mean that you’re paying a much higher interest rate over the life of the loan or, um, you can just compare apples to apples that way. You also wanna look at the repayment term, um, see what the length of the repayment term is.

Some loan offer five-year, seven-year, ten-year, fifteen-year, [00:19:00] twenty-year repayments. You wanna look at what those are. Um, and those have a direct impact on the total cost of the loan. Certainly, the longer that you’re repaying a loan, um, the more that you’re going to pay in interest. So the total cost is going to be higher on a longer term loan.

However, if you’re paying over twenty years, um, your monthly payments are going to be lower than if you’re paying that over seven years. So you have to, um, look at what you– your goals are, what your ability is to pay now, um, and see if you just need a lower payment, a longer term may be, um, better for you.

If you’re looking to pay the lowest amount that you can over the life of the loan, a shorter, um, repayment period may be better for you. Um, for most student loans, you can make early payments at any time without penalty, so you can help and do extra payments if you have additional funds available to help pay down that loan and pay less over the life of the loan by [00:20:00] reducing your interest costs by paying that off early if you want to do that.

But most lenders offer different repayment terms to choose from, and you wanna check what those are. They may offer also some options while you’re in school, um, to make that a little bit easier for you, where you can defer payments while you’re in school, meaning that you don’t have to make any payments while you’re in school, or you could have the option where you have interest-only payments while you’re in school, um, so that you may have a little bit lower payment while you’re in school.

And then once you graduate, um, you can have higher payments where you’re paying interest and principal. So you wanna look at what all those options are. Usually, um, you are shown all of those options, shown what the monthly payment looks like and how much you pay over the life of the loan to help you make those decisions before locking into one of those repayment plans.

Um, once you are– do apply for the loan and have been approved by that, [00:21:00] you will be shown an application and solicitation disclosure which provides all the details about the loan. That includes an estimated total loan cost, um, and it’s required for all private lenders such as MEFA or other lenders as well.

You can also look at the application and solicitation disclosure before you apply. You can look at that on the websites in loan comparison tools and you can see– And the things you wanna look at are what are the interest rates, what are the fees, what will the total cost of the loan be? Um, this is going to show you a couple of sample, um, loan disclosures.

So you wanna look here. The first one you see is a MEFA graduate loan disclosure, and the second one is from an-another lender. And on these loan disclosures, what is displayed is the highest possible interest rate that they have on their loans. So for MEFA, for their [00:22:00] graduate loans, um, the highest interest rate is nine point nine five percent.

So you’ll see here if you defer payments, um, during that– for that MEFA loan and you receive the highest possible interest rate for MEFA, um, if you borrow ten thousand dollars, and this is for a twenty-year loan, at the end of twenty years you will have paid thirty-four thousand nine hundred and eighteen dollars for that loan.

Um, for lender B, which their interest rates go up to sixteen point four nine percent, if you borrow that same ten thousand dollars, pay– make their monthly payments at sixteen point four nine percent for twenty years, you would pay fifty-five thousand four hundred and seventeen dollars, um, over the life of the loan for deferred payment.

Um, so you see that if you borrow through the MEFA loan, you could save potentially, um, twenty thousand dollars over the life of the loan for deferred repayment [00:23:00] Um, here’s another fixed rate example of a disclosure. This is not a MEFA disclosure, but you’ll see that for this lender, the interest rates fall between 4.75% and 16.53%.

Um, for most borrowers, you f- will fall somewhere in the middle of those interest rate pro- um, ranges. So, um, but when you do apply for the loan, you’ll be shown what your exact interest rate is, and MEFA is going to be debuting a new rate quote experience where you can apply for a loan and see what your exact rate is going to be without having a hard hit to your credit.

Um, so it’s just a soft hit. You can shop around from several lenders, see what their, um, what your interest rate will be with each lender before making a decision. So, um, it’s best to look and see what your [00:24:00] actual rate is rather than, um, just assuming what the rate will be, um, based on the range. But you do wanna pay close attention to what the range is and see what that potentially could be.

Um, you’ll also see on here there are different loan fees listed on here. Again, this is not a MEFA disclosure, but you’ll see there are some different fees on here. There’s a 5%, um, late fee. There’s a return check fee. There’s, um, other fees listed on there. For MEFA loans, there are no fees on, on our loans currently.

Um, you’ll also show here again what the total paid over the life of the loan is based on the different options that you choose. So for interest only payments while you’re in school, fixed payments, um, while… or deferred repayment Now we’ll look at [00:25:00] a variable rate example. And what’s important to see here is they’re going to show you a range of interest rates, and this is your starting interest rate will be between 4.64 and 16.11 on this variable rate interest.

But, um, be aware that 16.11 is not the cap on the loan. That’s just currently what, um, the ranges are for the loan. You’ll look under this other box and it will show you that the cap on the loan is actually 17.95%. So if in the future interest rates do go up, it could go up to as high as 17.95%. It also shows you that this rate is based on the secured overnight financing rate, um, which is rounded up.

It tells you how they determine what that variable rate is. Again, this rate is for another lender. This is not for a MEFA loan. MEFA does not offer variable rate loans. [00:26:00] We only have fixed rate loans. Um, again, you’ll see their loan fees listed on here. Um, for this particular loan, there are no loan fees as well.

But you’ll also see all the different other information about the loan, so it’s good to look at these disclosures to find out all the information that may not be out there in their marketing information. Um, this has all the fine print

So what is a co-borrower? Um, if you don’t qualify for a loan on your own and you need a co-borrower or cosigner, the co-borrower is who signs the loan agreement along with you. Um, they have equal responsibility to the loan, um, so they have to make payments. If you’re not making the payments, they are, um, responsible to make those payments.

Um, information is sent to a credit bureau based to both the co-borrower and the student borrower based on if payments are on time. So if [00:27:00] payments are not made on time for that loan, it’s reported for both the student borrower and the co-borrower on there. Um, if you do add a co-borrower, and you can add more than one co-borrower, that may increase your chances for approval.

It may al- also get you a lower interest rate. For MEFA loans, we look at the credit rating of the co-borrower with the highest credit rating when we are determining what the interest rate is. Um, and those with good credit may get a more favorable interest rate. And some loans do have co-borrow- co-borrower release options, which means that after making a certain number of payments, um, you can release the co-borrower and the loan will then be only in the student’s name.

However, if there’s not a co-borrower release option, you do have the option to refinance that loan in the future and get that only in your name. So once you [00:28:00] refinance that loan, it becomes a new loan only in your name, and that can release the co-borrower as well So let’s talk about some tips for borrowing wisely.

First of all, you want to s- always try to minimize your borrowing. Um, try to use savings, present income if you can, to reduce the amount that you borrow. So in this case, um, you may have a balance due to the school of $20,000, um, and you may have some savings. Um, if you have $1,000 in savings, you can put that towards the college bill.

A lot of, um, schools do offer a payment plan as well, which means that instead of paying per semester, you can break that down into monthly payments by en- rolling in that, um, payment plan. In this case, you may make $500 payments a month for 10 months, so that can reduce the bill by another $5,000, and then you only have to borrow $14,000 [00:29:00] rather than $20,000, and then you’re not paying as much interest over the life of the loan.

So as much as you can, um, reduce the amount that you borrow, that’s always going to help you out. Um, we do have another webinar called Financial Aid Office and Paying the College Bill, which talks a lot more about minimizing borrowing. Um, and we do have a recorded version of that as well. You can use this QR code, and again, we’ll be sending out copies of these slides for you, and it will have the link in there as well You also, um, may be eligible for the Federal Direct Student Loan Program.

In order to borrow through that program, you must first file the FAFSA. For the Federal Direct Student Loan Program, that’s not a credit-based program, so you do not have… It doesn’t look at your credit rating. You just have to make sure that you haven’t, um, defaulted on a prior federal loan in order to [00:30:00] qualify for that.

So there’s no credit check. The student is the only borrower on that. It does not, um, need a co-borrower on that. Again, for graduate students, you can borrow up to twenty thousand five hundred a year under the Federal Direct Loan Program. For professional students, which I talked about who those were earlier in this session, you can borrow up to fifty thousand dollars a year under that program.

Um, interest does accrue immediately upon disbursement for that loan. It is not a subsidized loan. It’s considered an unsubsidized loan. There is a fee on that loan of one point o five per… seven percent, um, and that’s deducted from the loan proceeds. So for example, if you borrow twenty thousand five hundred a year, um, there’s three hundred and twenty-one dollars and eighty-five in fees, so your school actually receives twenty thousand one hundred and seventy-eight dollars and fifteen cents for that twenty thousand five hundred that you borrow.

You will have to fill out a Master Promissory Note [00:31:00] and, um, complete entrance counseling at studentaid.gov, which is the same place that you fill out the FAFSA. So when you f– you have to fill out the FAFSA, do the Master Promissory Note in entrance counseling at studentaid.gov in order to receive those loans.

Uh, again, we talked earlier about, um, if you are e-enrolled less than full-time, then those loan limits are prorated based on your enrollment. You do not have to make payments while you’re in school, and there are those different repayment options that we talked about earlier. Um, the standard repayment, which is tiered, and the repayment assistance program to choose from once you do graduate So let’s talk a little bit about building credit since, um, if you are borrowing through a private loan, you will have to have, um, established credit in order to do that.

How can you start building your credit in [00:32:00] order to do that? So there are different types of credit that they are looked at when the credit bureau is looking at what your credit score is and how that is, um, reflected on your credit score, and those are revolving credit, charge cards, service credit, and installment credit.

So for revolving credit, that’s like a credit card where you’re given, um, a limit that you can borrow up to, and as you make payments on that, that credit becomes available to you again. Um, charge cards are a little different. This is usually a card that you can only use at one particular place, um, and they can give you a line of credit for that as well.

Um, but unlike a credit card, you can only use those on, at certain places, and you may be given, um, a limit on that as well. Service credit is for things like, um, a [00:33:00] cell phone or electricity where you, um, might be billed for that, um, monthly, um, as you are using something. So that’s service credit. And then installment credit is something like a car loan or a mortgage where you have an asset that you’re borrowing, and you’re making monthly payments towards that, but there is usually an asset, uh, involved with that.

Installment credit is considered the most stable type of credit, so that’s looked at the most favorably by credit bureaus, um, because there is an asset that’s involved with that. Um, things like credit cards are looked at, um, as not as favorably when they’re looking at, um, how to calculate your credit score.

For service credit, most of the time that is not included in your credit score. However, there are [00:34:00] services like Experian where you can log into Experian and opt to have your service credit added into, um- your credit score. And so if you do know that you have a cell phone or an electricity bill that you’re making monthly payments on and you’re never missing the payments, you may wanna add your service credit to, um, your credit rating by going on logging into Experian and, um, asking to add that service credit in there.

That can help boost your credit rating if you are making, um, steady monthly payments on that. Um, but be careful when you’re doing that, ’cause if you do end up missing a payment on that, that would then be reported to the credit bureau. Whereas if you didn’t list that on there, if you miss payments on something like a cell phone or an electric bill, that’s not gonna be reported to credit So your credit history basically is a [00:35:00] record of how you’ve managed your repayment on the debt, such as credit cards, on loans.

Um, it’s going to look at how many credit cards you have, how many loans you have, if you pay your bills on time. The most important part of your credit score is if you’re making those monthly payments on time So make sure when you are borrowing money or putting things on a credit card, that you’re making those minimum monthly payments at least so that that will help your, your credit rating Credit reports are generated.

There are three major credit bureaus, Experian, Equifax, TransUnion. They all collect information from your creditors. Um, it also collects information about your name, current and old addresses, and your employer’s information. And, um, you can look at a credit report every year. You go to annualcreditreport.com.

It’s [00:36:00] going to show all of your information about what you have borrowed, what you have out there for, um, credit cards, what you have out there for loans, um, if you’ve made your payments on time. You’ll want to check that information on annualcreditreport.com to make sure there are no errors on there, all the information on there is actually about things that you’ve borrowed or credit cards that you have.

If you do see errors, um, there will be information on that credit report as to how you can– who to contact in order to try to get that, um, information corrected for you. Um, for each of the different credit bureaus, Experian, Equifax, TransUnion, they may be calculating your credit rating, your credit score a little bit differently.

So you may, um, have a credit card that shows what your credit score is. Um, that may be [00:37:00] just one version of your credit score. So your credit score from Experian, for example, your credit score from Equifax or TransUnion may be a little bit different from each of those. So just be aware that, um, there may be some variance between those and how they calculate that credit score.

So let’s make the– break, break it down. What is the credit score? That’s just a three-digit number that relates to how likely you are to repay the debt, um, when you are applying for things like a mortgage, um, a private student loan, a car loan. They’re going to look at what your credit score is, and again, the higher your credit score, usually the lower the interest rate is.

Um, but again, there are multiple credit agencies, and within those credit agencies, they have multiple scores. For example, FICO has at least seven different scores. One of them is used by mortgage companies. One of them may be used by, um, other different types of credit card companies. One of them could be [00:38:00] used by, um, car loans.

But there are very different scores within that, and they may vary a little bit differently based on those different types of scores. But how is that score determined? So thirty percent of that score is based on the amount that you owe. So usually what they’re looking at is, um, when you have a credit card, for example, um, say you have a two thousand dollar limit and you’ve borrowed a thousand dollars on that credit card.

You’ve used fifty percent of the credit that’s available to you. So that’s what they’re looking at when they’re looking at the amount owed. Um, for payment history, thirty-five percent of your FICO score is based on payment history. So making those on-time payments is really important because that’s the highest percentage on, um, your credit score.

Ten percent is new credit, meaning that, like, every time you open up a new credit card, take out a new car loan, a new [00:39:00] mortgage, that’s going to show as new credit on your FICO score, and that might temporarily bring down your FICO score if you have a lot of new credit. Um, it’s also going to look at the length of your credit history.

So the longer the length of your credit history, um, the better that looks on your FICO score. So if you have a credit card that you’ve had for five, ten, fifteen years, the longer that credit history is, the better that looks on your FICO score. Um, and ten percent is going to look at that credit mix, meaning, um, is that credit cards?

Are there car loans, mortgages on there? Um, again, mortgages and car loans are looked at more favorably in that credit re– credit mix than credit cards. So you wanna, um, see what you can do about that mix as well. So let’s take a look at why credit matters. So you look here between 300 and 550 is considered poor [00:40:00] credit.

That means your mortgage rates are going to be much higher, your auto loan rates are gonna be much higher, your insurance rates, credit card rates are gonna be higher, and in some cases, you may not qualify to get a mortgage, auto loan, um, or a student loan if you do have poor credit. Um, subprime credit, again, those interest rates are higher.

Again, you may not qualify for some loans. Um, between 620 and 680, it’s considered acceptable credits. You’ll see those interest rates are starting to drop there. Um, between 680 and 740 is considered good credit. Again, those interest rates are getting better. Um, between 740 and 850 is excellent credit, um, and those interest rates are going to be the best interest rates that you can get, and also you have the best, um- Chances of getting approved for any type of loan once you do have excellent credit.[00:41:00]

So you wanna take a look. Sometimes your credit card will give you what your credit score is, and that’s a good tool to use to base on what your credit score looks like. Again, it might not, might not be exactly what the credit score is that is looked at by, um, the company that you’re applying for a loan with.

Um, but that should give you a good gauge of what your credit score is. And the better your credit, the usually the better the interest rate is. So ways to pil- to build your credit, um, if you do have student loans already, making sure you pay those student loans on time. Um, your parents could help by making you an authorized user on your parents– on their card.

Um, a great trick with that is we were talking about how the length of credit, um, counts on your credit score. So if you’re an authorized user on a parent’s card, and your parent has had that card out for [00:42:00] twenty or thirty years, potentially, um, you could have that length of credit that’s longer than the time you’ve been alive if you’re an authorized user on a parent’s card.

So that’s a great way to start building credit quickly. Um, you can open a student or secured credit card. Sometimes they offer those with just low amounts that you’re authorized to use. But as long as you’re making those on-time payments on those, that’s a good way to help, um, build credit. You could take out a credit builder loan.

Um, if you have no other options to help build your credit, that may be a way to help do that. And again, you could add those utility and, um, cell phone bills to your credit report by logging into, say, experian.com and opting to add those in. But again, only add those in if you are making monthly payments on time for those, and you know [00:43:00] that will help your credit.

If you had struggled with making those payments on time, that may not be a good time to add those onto your credit report because then those will reflect on your credit report So now we’ve talked about, um, different options for borrowing, how to build credit. I want to talk about, um, some new graduate loan programs that MEFA has available for students for this year, um, starting on July 1st.

Going forward, these are the different programs that we have. So we have a graduate loan program, which includes master’s, PhD, doctorate students, for MBAs, um, graduate degrees in education, social work, engineering, psychology, um, all those different graduate programs you can use our graduate loan program.

If you are in dental school, we have a special loan for dental students. If you are in health professions, meaning nursing, nurse practitioner, physician’s assistants, physical therapy, pharmacy, occupational therapy, we do have a [00:44:00] health professions loan available. Um, there’s a law loan available for students in law school, and we have a medical, um, loan available for medical students, and veterinary students can also use our medical loan So what are the highlights of these loans?

They all offer no aggregate or annual loan limits, so you can borrow up to the full cost of education minus your financial aid. There are competitive fixed interest rates, no application or origination fees on those. Um, we do extend eligibility to all credit-qualifying students in all accredited programs without regard to program of study.

And I talked a little bit earlier about we’ll have a new rate pro experience that is going to be available where you can check what your, um, interest rate will be without having a hard credit pull on your loan. Um, just a soft credit pull so that won’t affect your credit, and you can see what your interest rate will be, [00:45:00] and that should be available early next month.

And you also, if you are in, um, medical law or dental programs, you have the opportunity to extend, um, your post-school period of interest only or deferment payments while you are in either residency or clerkship or fellowship, um, after school. So let’s take a look at what that means for each of these different loan programs.

For all of our loans, there’s the fixed interest rate of seven point one five to nine point nine five percent. However, um, if you look at the APRs, those are six point eight four to nine point nine three percent. Um, since there are no fees on our loans and we do offer, um, those post-school deferment periods or interest only periods, the APRs are actually lower than the advertised rates on our loans.

Um, so for all of our loans, they’re deferred [00:46:00] for forty-eight months while the student is in school if you’re in school up to forty-eight months, and we do offer, um, fifteen or twenty-year options for the dental program, fifteen-year options for health professions, fifteen years for law, fifteen years for masters or doctorate, and for medical and veterinary, there’s fifteen or twenty years.

You can also choose to have, uh, make interest-only payments while you are in school or defer payments while you’re in school. There are no immediate repayment options for our graduate loans. However, you can always make voluntary, um, payments at any time without penalty. So after you leave school, in dental school you’ll have, um, twelve months of either deferred Payments or interest-only payments while you were in residency for health professions, there’s six months.

For law, there’s 12 months for clerkship after you graduate. For master’s or [00:47:00] doctorate, it’s six months. And for medical and veterinary, you have 36 months of either interest-only or deferred payments while you’re in residency. Um, but you do have the ability to apply for an extension on that each year if you are in a residency or fellowship program up until you complete that residency if that goes beyond three years.

And that’s the same for dental and for law if that should go for longer than one year So if you have any, um, questions and want to connect with MEFA, um, here are some of the options to connect with us on social media. Um, and if you have questions, I will take those now if you want to type those in the Q&A, and I will answer those for you.

And we will also be sending out a copy of these slides in the presentation, and, um, you should get that [00:48:00] within the next couple of days And I’ll just wait a few minutes if people are, um, typing in questions, and I’ll answer those for you[00:49:00]

So, so it says for those who have poor credit or those who have outstanding debts outside the realm of student loans, are there particular methods or tools you recommend for lowering prospective APR percentages? Um, so if you don’t have time to build your credit before you’re applying for that, the best way to get lower, um, APRs is to apply with a cosigner, um, to find a cosigner that does have a good credit score.

Um, see if they’re willing to sign on that loan for you. Um, and then you can either do co-borrower release if that’s an option for the loan, or you can refinance that loan to get the co-borrower off the loan once you do have, um, better credit score later on, um, after making a few years of payments

It says, “Can you apply for a MEFA grad loan for film and video if you are studying for a [00:50:00] master’s program?” Um, so if you are in a, um, in a master’s program for film and video, you can apply for a MEFA loan for that. So you do have to be in a, matriculated in a program in order to qualify for a MEFA loan.

So it can’t be a certificate program, but, um, as long as it’s a degree program, then you can apply for a MEFA graduate loan, and you would go with the master’s or doctorate loan for a video and film master’s degree

We have a question, if you’re already in debt, um, refinancing program like MMI, that will be affect prospective loan borrowing. So, um, for some lenders may look at your debt-to-income ratio when they are determining if you qualify for a loan, meaning [00:51:00] they’ll take a look at how much you’ve borrowed in the past, um, and look at your current income to see what that will be, um, when they’re determining if you’re eligible to borrow for additional loans.

For a MEFA graduate loan, we do not look at debt-to-income ratio. We’re only looking at your credit score and that you have a minimum income of at least $32,150, I believe. It’s the poverty, national poverty level for a family of four is the minimum income requirement. So we’re not looking at how much you’ve borrowed in the past.

Um, however, how much you borrow in the past does, um, affect your credit rating, so we are looking at credit score when we are looking at, um, your qualification for a loan. But some other lenders may look at debt-to-income ratio as well

Are there any [00:52:00] other questions?

If not, I’ll end the, um, webinar. If you do have other questions, you can, um, call the MEFA 800 number or, um, reach out to MEFA and we can answer those questions for you. Um, thank you for attending tonight, and we’ll be sending out the copies of the video and the slides to you shortly. Thank you