MEFA (which stands for the Massachusetts Educational Financing Authority) helps Massachusetts families plan and save for education expenses, but also offers student loan refinancing to borrowers across the country.  Unlike some refinancing lenders who focus on the benefit of saving money over the life of the loan, MEFA emphasizes that their borrowers see lower monthly payments when they refinance. The average MEFA borrower pays $191 less per month than before they refinanced.

According to MEFA’s CFO, this opens up financial opportunities for borrowers who would be otherwise unable to, for example, purchase a new car or take out a mortgage.

Also, MEFA’s eligibility requirements for student loan refinancing do not include having completed a degree, so borrowers who have put school on hold and are repaying their loans may be able to refinance into lower rates with MEFA — or at the very least, into a longer loan term and therefore lower monthly payments.

Like most lenders, MEFA allows borrowers to apply with a cosigner, which can help the applicant qualify for a loan or even secure a lower interest rate. Unlike many lenders, however, MEFA does not offer cosigner release, which is typically an option after a number of on-time payments have been made. This means that MEFA cosigners will be legally tied to the loan until it is fully repaid.

Borrowers who refinance with MEFA will also be unable to choose between different loan terms, since MEFA offers just one 15-year option. However, borrowers can choose between a fixed and variable rate, and may repay their loan faster without any penalties. That said, as longer terms tend to go hand-in-hand with higher rates, those planning to repay their student loans faster may lose money to interest payments by selecting a 15-year term.

MEFA does not offer deferment or forbearance, which may cause problems for borrowers who find themselves in a tough financial spot. While other lenders may offer these options to those who qualify, MEFA borrowers who cannot make their monthly loan payments risk going into loan default — a mark that shows up on credit reports.

Unlike most lenders, MEFA has no maximum loan balance. Many will cap the amount they lend at $250,000 or $300,000, but MEFA will refinance the total loan balance for eligible borrowers. While there is no cap on the amount you can borrow, MEFA requires that there be a minimum of $10,000 outstanding on your current student loans.