When it comes to student loans, compare the options and use them

Boston, July 13 Feb. 20, 2022 (GLOBE NEWSWIRE) — With interest rates rising, students and families are advised to be smart consumers and compare college loan terms and conditions before settling on one, MEFA says, Massachusetts Education Funding Authority. To help students and families navigate the confusing world of college loans, MEFA provides free online resources, webinars presented by experts, and free personal appointments with members of its college planning team.

Before taking out a loan, MEFA advises that the first stop for students and families is the MEFA Compare college loan options Web page. Here, they’ll find reliable, unbiased advice on cutting back on borrowing, how to borrow wisely, and where to start when looking for college loans (answer: federal direct student loans). They can also watch a webinar with college loan experts and book a one-on-one appointment with a member of the MEFA College planning team for personal advice.

“Massachusetts is proud to be a world leader in higher education, however, the cost of a college education remains a barrier for many families and students,” Governor Charlie Baker said. “Our administration is grateful to MEFA for its continued commitment to ensuring Commonwealth students have access to quality, affordable college education, and for supporting families through the financial process.”

During the current loan season, MEFA is urging students and families to compare loans. The MEFA urges families to focus on:

  • Reduce the overall cost of borrowing. Use college savings and other assets to pay for your education. Additionally, families should ask the college if they have an interest-free monthly payment plan that can split payments over the semester and reduce borrowing.
  • Maximize direct federal student loans. Work with the college’s financial aid office to submit the FAFSA and receive the maximum amount available in direct federal student loans. These types of loans offer a guaranteed fixed interest rate, can be consolidated, and have multiple repayment options and specific benefits not available with private student loans.

Once families have exhausted the options above, if there is still a gap to be filled, MEFA recommends families compare private student loan options using these tips:

  • Understanding Variables vs. Fixed rate loans. Variable rate loans may seem more attractive because they offer a lower interest rate, but this rate will change over time. This can lead to higher and unpredictable loan repayments. A fixed rate loan has the same interest rate for the entire term of the loan, so the borrower always knows the amount of the monthly payment.
  • Read the fine print. All private loans are not created equal. When considering which lender to borrow from, be sure to read the fine print for additional fees, which can increase the annual percentage rate (APR) and increase the overall cost of borrowing. Look for a lender who is transparent about their programs, who will help you choose the right loan product for the borrower’s financial situation, and who will provide helpful answers.
  • Understand the cost of borrowing. Ask any potential private lender about the interest rate the borrower qualifies for, the monthly payment amount and the total cost of the loan. And remember, borrowers expecting to borrow again for future academic years should expect cumulative costs to increase significantly.

“At MEFA, we focus our programs on planning, saving, and paying for college education, so we are a valuable resource for families seeking higher education and Massachusetts colleges and universities that attract students from all the countries. We offer the MEFA loan as a competitive option for families, but encourage them to do their homework and make the right financial decision for the student and the family,” said MEFA Executive Director Thomas Graf.


MEFA recently released MEFA loan rates for the 2022-2023 academic year. The MEFA loan offers fixed interest rates ranging from 4.89% to 6.99% APR. MEFA loans have no origination fees, no application fees and no prepayment penalties.

MEFA loans are available to eligible borrowers nationwide who can choose from several repayment options and benefit from fixed interest rates that result in predictable and regular monthly payments over the life of the loan. The MEFA loan interest rate depends on a few key things, including the repayment option chosen and the borrower’s credit profile. The lowest rates are only available to the most creditworthy applicants.

MEFA’s college planning experts are available to help students and families by calling (800) 449-6332 or emailing [email protected]

Visit mefa.org for full access to expert college planning advice from MEFA, including free webinars, educational emails, and a series of popular podcasts, all created with the goal of supporting families throughout busy years of academic planning.

About MEFA

MEFA is a not-for-profit state authority, independent of state or federal appropriations, established under the General Laws of Massachusetts, Chapter 15C. MEFA’s mission, since its founding in 1982, has been to help Massachusetts students and families access higher education and achieve their financial goals through education programs, tax savings plans advantageous, low-cost loans and expert advice. All of MEFA’s work aligns with the ever-present goal of supporting the independence, growth, and success of Massachusetts students and families. Visit mefa.org to learn more or follow MEFA on Facebook, instagram, LinkedIn, Twitter and Youtube.


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