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Massachusetts is home to some of the best colleges in the United States. With so many top schools, it should come as no surprise that attending school in the Bay State is a dream for many.
If you’re hoping to go to school in Massachusetts, you’ll have to figure out how to pay for it. Often, this means taking out student loans. If you want to go that route, you can consider these Massachusetts student loans.
Massachusetts student loans
Residents and out-of-state students in Massachusetts have many local options for financing. Some of these options include:
- Loans through the Massachusetts Educational Financing Authority (MEFA): This organization offers loans to undergraduates and graduates. You can visit the MEFA website to learn about current loan rates and to complete an application. Interest rates are fixed. Loans are available to Massachusetts residents attending schools nationwide, as well as to students attending colleges in Massachusetts. To borrow, students must be enrolled at least half time and make satisfactory academic progress as defined by their school.
- School-specific loans: Colleges and universities in Massachusetts may run their own loan programs. For example, the Harvard Loan Program is available to attendees regardless of whether they qualify for federal aid. But they must demonstrate financial need. Loans offered by this program come with fixed rates.
The best way to find out about your loan options is to talk with your school’s financial aid office. It’ll have detailed information about Massachusetts student loans so that you can determine whether you qualify and for what terms.
Federal student loans
Federal student loans may be your best option for borrowing for school. For one, they come with borrower protections, including options to pause payments through deferment and forbearance. You could also cap monthly payments through income-driven repayment plans or work toward loan forgiveness.
Federal loan options include:
- Direct Subsidized Loans: These loans are need-based and available to undergrads. Rates are fixed. There’s an origination fee of 1.066% for loans distributed on or after Oct. 1, 2017, and before Oct. 1, 2018. The government pays interest for students enrolled at least half time, in their grace period, or whose loans are in deferment. Credit isn’t a factor in qualifying.
- Direct Unsubsidized Loans: These loans are available to undergrads and grad students. Rates are also fixed. While undergrads pay the same rates as for Direct Subsidized Loans, rates for grad students are higher. The origination fee is the same as for Direct Subsidized Loans. The government doesn’t subsidize interest, so it accrues while in school or while loans are deferred. Your credit isn’t a factor when you apply.
- PLUS Loans: Graduate students and parents are eligible for PLUS Loans. But you can’t qualify with adverse credit. Both the interest rate and origination fee are higher than for other Direct Loans. Interest isn’t subsidized, but you can borrow up to your full cost of attendance.
Sometimes, federal student loans aren’t a better deal than private ones. That’s because private loans may have lower interest rates and no origination fees. It’s important to shop carefully if you decide to take out student debt.
The Department of Education provides information on the most recent interest rates for federal loans. Students can apply for federal student aid by completing the Free Application for Federal Student Aid, also known as FAFSA.
Private student loans for colleges in Massachusetts
Many students get private student loans, typically after exhausting their federal loan options. Private loans are available from online lenders, credit unions, and local and national banks. You can borrow up to your cost of attendance, minus other aid received.
Private loans have fewer borrower protections than federal loans. For example, you don’t have options for Public Service Loan Forgiveness or an Income-Based Repayment Plan, and interest is never subsidized. But many private lenders allow you to defer payments while in school and pause them through forbearance.
Private loans may have fixed or variable rates, and many lenders don’t charge origination fees. You should shop for the best private student loan lenders to see which loan makes sense for you. Compare interest rates, repayment terms, origination costs, and requirements.
You’ll need good credit to qualify. Many students don’t qualify on their own and need a cosigner to become eligible. Cosigners are responsible for repayment if the primary borrower doesn’t pay.
Student loan refinancing options in Massachusetts
If you have student loans, you may one day want to refinance. Through refinancing, you can get a lower interest rate, more favorable repayment terms, and consolidate student loans.
The federal government doesn’t offer any options to refinance student loans, but you can consolidate federal debt through a Direct Consolidation Loan. Doing so won’t lower your interest rate, but it does group existing federal student debt into one big loan. Your new rate will be the weighted average of rates on the loans you’ve consolidated, rounded up to the nearest one-eighth of a percent.
The MEFA offers refinancing for both government and private loans for undergrad or grad programs. Its loans come with fixed or variable rates and either a 10-year or 15-year repayment term. You can find current rates on the MEFA’s website. It claims students lower their rate by an average 2.12%. You must have an established credit history, though a cosigner can help you qualify. There are no application and origination fees or prepayment penalties.
You can also learn how to refinance student loans with a private lender. Be sure to shop around for the best terms. You’ll need good credit or a cosigner to qualify.
By choosing the right Massachusetts loans to pay for school or refinance existing debt, you can make sure your education is as affordable as possible. Don’t borrow more than you need, and remember to first exhaust all your options for free money for school, such as grants and scholarships.
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