The Massachusetts Educational Finance Authority, better known as MEFA, was created by the Massachusetts legislature over 30 years ago with the goal of providing access to higher education in the State of Massachusetts. While people without ties to Massachusetts cannot get in-school student loans from MEFA, MEFA will refinance student debt for students from across the country.
MEFA student loan refinance does come with a few major limitations, but for many borrowers, it can be a great option.
Due to limited repayment options and slightly higher than average interest rates, MEFA checks in towards the bottom of our Student Loan Refinance Lender Rankings.
MEFA Refinance Basics
| MEFA Overview | |
|---|---|
| Loan Terms | 7, 10, and 15 Years |
| Variable Rate Loans | 6.20 - 8.50% |
| Fixed Rate Loans | 6.20 - 8.50% |
| Minimum Refinance Amount | $10,000 |
| New Borrower Bonus | $200 |
MEFA requires applicants to have a 670 or greater FICO score and to be earning at least $2,000 per month. They also require borrowers to have been in repayment on their current loans for at least 12 months.
Like most other refinance companies, there are no origination fees with MEFA, nor are there any prepayment fees. MEFA does allow co-signers, but there is no co-signer release program, so any co-signer will be on the loan for the life of the loan.
MEFA also makes it very clear that they refinance student loans, but that they do not consolidate student loans. The service MEFA provides is that they will pay off existing student loans with both private lenders and the federal government. In return, the borrower repays MEFA according to the terms of the new loan that was used to pay off the other debts.
MEFA Limitations: Repayment Options and Co-signer Limits
The biggest limitation on the MEFA refinance loans is that there is only a 7, 10 or 15-year repayment plan.
For some borrowers, this length is a sweet spot, but for many, it presents an issue. If you are looking for a 5 years loan with the lowest interest rates possible, MEFA will not be a good option. Similarly, if you are looking to stretch out payments over the longest length possible, many other student loan refinancing companies offer 20-year loans. However, if a 15-year loan is what you are looking for, MEFA could be a good deal.
Even the MEFA’s lowest advertised rates do appear to be higher than most other lenders, if you compare MEFA rates to the 15-year loan rates of the competition, MEFA falls right in line with most other lenders.
Another significant limitation with MEFA is the lack of a co-signer release program. Generally speaking, we are very skeptical of co-signer release programs because lenders have no incentive to approve borrower applications, but eliminating the possibility means that if you get a great interest rate, your cosigner will have the loan show up on their credit report for the next 15 years. This is a major commitment.
MEFA Advantages: Transparent Consumer Education and Great Rates for Certain Loans
If you spend some time on MEFA’s site, you will see they are one of the better lenders when it comes to helping make sure borrowers make a smart decision when it comes to refinancing federal student loans.
As we note in all of our student loan refinancing reviews, borrowers are giving up a lot of federal perks if they refinance their federal loans with another lender. This gives them much more credibility in our view.
Additionally, the interest rates offered for 15-year loans are quite competitive with other big-name lenders. This repayment length only appeals to a certain subset of borrowers, but for those looking for a 15-year loan, MEFA can be a good option.
Bottom Line: Limited Options but Quality Options
MEFA is not a big-name lender and they have a much smaller advertising budget than companies like SoFi.
They also offer a much smaller selection of available loans. However, if you happen to meet the MEFA requirements and are looking for a 15-year loan, MEFA can be a great option and should definitely be on the list of companies to apply to and check your rate.
Due to the significant limitations with MEFA loans, they currently rank towards the bottom of our student loan refinancee rankings. However, if we were to rank companies according to who had the best 15-year loan, MEFA would likely be several spots higher on the list.
Applying to MEFA
We suggest borrowers who are considering MEFA to apply through the Credible platform. The Credible application checks rates with up to six different lenders, including MEFA, which reduces the amount of effort required to shop around. Borrowers who refinance through this route also get a $200 bonus.
