Intro

Created by the Massachusetts state legislature in 1982, MEFA (Massachusetts Educational Financing Authority), offers student loan refinancing to residents of all 50 states.As part of its mandate, MEFA offers low interest rates, with the catch being that it has tight eligibility requirements. In addition to student loan refinancing, MEFA offers new student loans and two savings plans – one nationwide and the other exclusive to Massachusetts residents.

MEFA at a Glance

Loan types: Refinance federal, private and PLUS loans

APRs: Starting from 3.05% (fixed rate only)

Repayment terms: 7-15 years

Refi amount: From $10,000 up to full balance of existing loans

Origination fees: No

Refinance Rates and Fees

MEFA only offers fixed rates, with no variable-rate option. Borrowers pay 3.05% to 5.55% APR, and typically end up paying less than the rates charged by other lenders. This is both good news and bad news. If you qualify, then you’re guaranteed a competitive rate. However, it does mean you need great credit to get approved for a loan.

Repayment Options

Borrowers have three repayment term options: 7 years, 10 years, or 15 years.

Unfortunately, MEFA doesn’t appear to offer much in the way of forbearance or deferment options.

Discounts and Rewards

MEFA offers two tax-advantaged savings plans that are suitable for starting a new graduate degree, one for Massachusetts residents and the other nationwide. U.Plan Prepaid Tuition (Massachusetts only) is a prepaid tuition program that offers tax advantages and lets you save for an undergraduate or graduate degree while locking in today’s rates. U.Fund College Investing Plan (nationwide) is a 529 college savings plan offering flexibility and tax advantages.

Application Process

It takes around 10-15 minutes to submit an application for conditional approval if you apply alone, and longer if you have a cosigner. After you have received a conditional approval and submitted all of your requested financial documents, the final review of your application should be completed within 10-14 days. Once the loan is approved and you have e-signed your loan documents, the loan will disburse within the next 5 days.

You may refinance student loans that:

• Are federal or private education loans, including Federal Direct Undergraduate and Graduate Loans, Stafford Loans, PLUS Loans, and Graduate PLUS Loans.
• Are in repayment and current at the time of your refinance application.
• Are not in a grace period, deferment, or forbearance.
• Were used to fund the cost of attendance at an eligible, not-for-profit, degree-granting college or university (as defined by MEFA).
• Have been repaid on time in each of the previous 12 months.

To qualify for a refinancing loan, you must:

• Be a citizen or permanent resident of the United States.
• Be a borrower on all loans being refinanced.
• Have an established credit history.
• Have made 12 on-time payments in the previous 12 months on all loans being refinanced.
• Have no history of default on an education loan and no delinquencies on education debt in the past 12 months.
• Have no history of bankruptcy or foreclosure in the past 60 months.
• Have education debt to be refinanced that was used to fund the cost of attendance at an eligible, not-for-profit, degree-granting college or university (as defined by MEFA).

Cosigner Options

MEFA recommends bringing along a co-signer (which it actually refers to as a “co-borrower”) to help meet the credit requirements. MEFA doesn’t offer a cosigner release option, which means that the cosigner must stay on until the end of the repayment term.

Contact MEFA

As the Massachusetts authority on educational financing, MEFA offers guidance and support to students in Massachusetts and other states. To speak to a MEFA expert about loans or other forms of student financial assistance, call Monday to Friday, 8am-8 pm ET, or email at anytime. They have a 'Contact Us' with updated contact info.

Summary

Although it caters mainly to Massachusetts students, MEFA makes competitive student loan refinancing available to borrowers across the country. It isn’t easy to qualify. However, if you have strong credit (or can bring a cosigner with strong credit), then the fixed-rate APRs you’ll find at MEFA are as good as those you’ll find virtually anywhere else.