MEFA Student Loan Refinance Review

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MEFA may be a good option for nongraduates who attended public or nonprofit private schools. MEFA is a nonprofit direct lender that works solely with education financing and charges no hidden fees.

Skip to: Rates & Fees | Eligibility Requirements | Repayment Options | Consumer Reviews & Complaints | FAQ

MEFA Refinance Rates & Fees

The Massachusetts Educational Financing Authority (MEFA) offers fixed loan rates for student and parent refinance loans.

Additional information about MEFA refinance rates:

• Checking your rate with MEFA will not affect your credit score. They will conduct a soft, not hard, credit inquiry (learn the difference).
• MEFA does not offer a discount for setting up auto-pay.

MEFA refinance rates recent history:

Over a two-year period (2022-2024), MEFA increased its lowest and highest available student refinance APRs 103%.

In 2023, MEFA raised its lowest available fixed rate for new loans by 21.1% (from 4.75% APR). Meanwhile, its highest fixed rate went up 18.9% (from 7.15% APR).

In 2022, MEFA raised its lowest and highest fixed rates 90.0% and 25.4%, respectively.

Additional Fees

Beyond interest rates, there are a number of fees a refinance lender may charge up-front or during the loan servicing period. Below is a list of fees that MEFA does or does not charge.

1. Application fee – fee to apply for rates & approval.
2. Loan origination fee – fee to create the new loan.
3. Disbursement fee – fee for distributing funds to lenders to pay off loans that have been refinanced.
4. Prepayment penalty – fee for making extra payments to reduce a refinance loan balance or pay it off early.
5. Late payment fee – fee for making a late payment.
6. Returned payment fee – fee for failed payments due to insufficient funds, also known as a “bounced check”.
7. Collection fee – fee for collection activity on a defaulted debt; MEFA promises to “charge only those collection fees that are reasonable in relation to the cost of collecting the debt”.^[1]

Current Promotions & Offers

MEFA is typical of many nonprofit lenders in that it does not offer special promotions or discounts.

MEFA Refinance Eligibility Requirements

To qualify for refinancing with MEFA, loans must be actively in repayment and must have been repaid on time in each of the previous 12 months. Additionally, all borrowers must meet the criteria below.

• Citizenship Requirement: U.S. citizenship or permanent residence.
• Income Requirement: none specified.
• Credit Score Requirement: borrowers must have an established credit history; 670 is the minimum for what MEFA’s website calls a “good” credit score.
• Graduation Requirement: no graduation requirement.
• Location Requirement: none specified.

Additional restrictions apply for certain individuals and loans.

• Loans must have been used to attend an eligible, not-for-profit, degree-granting university as defined by MEFA.
• Loans may not be in a grace period, deferment, or forbearance.
• Borrowers must have no history of default on an education loan.
• No history of default on education loans.
• No delinquencies on education debt in the past 12 months.
• No history of bankruptcy or foreclosure in the past 60 months (5 years).
• Six (6) on-time payments for the last six (6) months on all loans to be refinanced.

MEFA Student Loan Repayment Options

Lenders vary greatly on the benefits and options provided to borrowers during the loan servicing period. Additionally, benefits may only be available on a case-by-case basis. MEFA does not offer any specific relief options.

Deferment & Forbearance

In the event that borrowers have difficulty making payments, MEFA appears to direct them to the company’s loan servicer, American Education Services (AES). AES may offer relief under certain conditions.

Additional Options

MEFA may offer some opportunities to modify a refinance loan contract.

• Co-signer release is not available for MEFA refinance loans.
• Death / disability discharge is available in the unfortunate circumstance that a borrower passes away or suffers total permanent disability.

MEFA Reviews, Complaints & Lawsuits

Beyond our own findings, our team also collected the most genuinely insightful customer experiences we could find, including any instances of legal action against the company in which the details became public.

MEFA Online Reviews

Few MEFA customer reviews are readily available on public forums. We have included this material for its value as uncensored and unsolicited user experience. Note that these reviews are unverified, may include inaccuracies, and may provide outdated information (about rates, bonus offers, etc.).

“Some info: I have 3 private loans from [a major lender] now totaling ~38k, interest rates are 10-12%, monthly payment slowly creeps up but around $585/mo. I did not graduate, but have paid every principal payment on-time since my grace period ended in Feb 2021. I have worked as a server since leaving college, now in casual fine dining making at least 50k/year and upwards of 55/60k. I claim and pay taxes on all my tips, and am paid weekly. I have a 728 FICO score, and my mom as a co-signer who is a pediatrician making 150k/year.

I started the process of refinancing my private loans in July, in hopes of a lower interest rate and monthly payment since I have to start paying my federal loans come October. Got on credible, went with MEFA offering 6.25%, $327/mo for 15 years. Applied in JULY with an expiration of September 3rd. Every week for 3 months I would upload the documentation they requested.

After two months I called and asked how long I should expect it to take, and was told that because I am a tipped employee, it takes longer to verify my income. So I kept going and the application ended up expiring while they were processing the latest request from my co-signer. I’ve spent the last two weeks trying to appeal and reopen my application, always get told to wait 48 hours for someone to contact me, never hear back.

Where do I go from here? I could reapply with MEFA but don’t necessarily want to to go through that process again only to be rejected. But I wonder if I’m going to face similar problems wherever I go due to being a tipped employee. Am I a bad candidate for refinancing?”
– mirandathebird on reddit, 9/21/2023

“I just refinanced my [private loans] using MEFA last week. They will be serviced by AES Success. My [credit score] was 702 and I got 5.2% fixed rate (down from 12% variable from [another well-known lender], ugh). Maybe you’ll get a better rate now that it came down? [A large national bank] was my original PL service, and my variable rate was low, I think around 4%. When it was sold to Navient after 5 yrs, they jacked it up every month for 2 years.” – Countrygrlinthecity on reddit, 3/18/2020

“I originally refinanced my loans about a year and a half ago and got a 4.37% fixed rate (with autopay) from LendKey. I’ve paid ~$18.5k in principal and ~$4k in interest since then, bringing my current balance to ~$56k. I decided to take a stab at refinancing again, and found MEFA via credible.

I was quoted a pre-qualification rate of 3.7% fixed for a 7 year term. I went through the actual application process and that’s the exact rate that I ended up getting. 10/10 recommend refinancing again if you have paid down a decent amount of principal or if you haven’t done it in awhile.” – eyelashchantel on reddit, 12/3/2019

More (unfiltered) customer reviews of MEFA are available at TrustPilot.com (4.6 of 5 rating).

MEFA Consumer Complaints

As consumer finance companies, student loan refinancing lenders fall under the jurisdiction of the Consumer Financial Protection Bureau (CFPB). As part of its mission, this federal agency allows consumers to log official complaints. These complaints are publicly available on the CFPB official website.

Since March 7, 2012, the CFPB has logged 162 complaints about Massachusetts Education Financing Authority (MEFA) at a rate of one (1) complaint every 27 ½ days; that is more than twice the average daily complaint rate among reviewed lenders. Among 60 complaints that include narrative details, at least 17 (22.4%) specifically reference refinance.

In 2023, MEFA received 5 consumer complaints, which is equivalent to:

• 65% of the average annual complaint rate.
• one (1) complaint for every $24.6 million in operating revenue.
• one (1) complaint for every 11 employees.

The allegations made in these complaints are unverified, are not necessarily representative of all consumers’ experiences with MEFA, and may contain outdated information (about rates, bonus offers, etc.). Note that a lender with a large customer base is likely also to have a higher number of complaints when compared with smaller lenders.

Below we’ve included three (3) of the most recent complaints (as of this writing) in which the consumer consented to share their details.

Complaint 7549811
9/15/2023
Illinois

“I have been paying on a student loan for my son and co-signed by my husband. Somehow, my name was attached without my signature but I’ve been paying it anyway. I missed one payment 3 years ago and have never been late since. Today I received an alert from XXXX and XXXX that the lender marked my account as not being paid and that I’m unreachable. The last payment was XX/XX/XXXX and it appears as paid on the loan online account. Again, my name is no place on this loan and I probably shouldn’t have been paying it, but I did because my husband ‘s name is on it. However, it does appears on my credit report, and monthly statements showing payments are sent to me and my son. The loan was taken out XXXX for my son who attended XXXX XXXX XXXX XXXX XXXX XXXX. The private lender is XXXX. There are other loans from this same lender where my name is also not attached to, but only this one appears on my credit report. I was making payments in good faith, only to be met with unfair and unscrupulous practices, such as reporting missing or late payments when that isn’t the case.”

Complaint 6301782
12/9/2022
New York

“I refinanced my private student loan with MEFA. Previously the loan was serviced by XXXX XXXX. The new MEFA loan is services by XXXX XXXX. It took longer than anticipated for MEFA to satisfy the previous balance, therefore I made an additional payment of {$540.00} with the prior servicer ( XXXX XXXX ). The loan was paid by MEFA around the end of XXXX. I called MEFA and asked when the first payment would be due, I was incorrectly told XX/XX/XXXX, the month after the payment. I was also told to contact the new servicer XXXX with any additional questions.I then called XXXX to confirm where the excess would be sent. XXXX XXXXXXXX stated that it goes to whoever made the last payment, which in this case would be MEFA. In early XXXX I contacted XXXX but they did not have my loan on file yet. I was able to set up an online account with them on XX/XX/22. This is when I found out the first payment was due XX/XX/22. I contacted XXXX via phone to find out why the payment was earlier than anticipated, and what the disposition of the extra {$540.00} payment would be. The XXXX representative stated it was due XX/XX/22 because the payoff was mad in XXXX. The representative also stated that the {$540.00} would be applied to the current bill, and any excess would go towards the principle. About a week later I called XXXX again because I was concerned with the overpayment check arriving before XX/XX/22. The second XXXX rep told me, via phone, that when the check is received it would be applied as stated above, but if I was concerned with it arriving late I can just make an additional payment. I stated that I did not want to pay twice, to which the rep-stated, any extra payment would just go to principal. Today I reviewed my XXXX account and it is listing the {$540.00} was applied to principle only and not to the XXXX amount due of {$520.00}. It also stated that my account is now 11 days past due. I then live chatted with a rep who stated, for the first time, that lender payments can only be applied to principal. This is not listed anywhere on the website or in the MEFA loan agreement. Then the rep tried to say since the payment was made to the previous servicer before the loan was dispersed, it has to be applied to the principal. Which is also not stated anywhere on XXXX XXXX website or the loan documents.”

Complaint 5879984
8/15/2022
Texas

“My son and I applied for a refinance loan with MEFA. There was no assistance to understand their review. We submitted all of the documents required over a period of 60DAYS! We would receive a notice to submit another document, and we would submit it twice or three times after being asked to submit the same documents. No one could explain why we kept getting asked to resubmit what we had already submitted. We called the answering clerks at MEFA ( who never have any authority ) who could only say that the documents were submitted but waiting on the ” review ”. No one with management authority would come to the phone. We spent considerable time getting things to MEFA as requested and there was no supervisor to provide us any insight to why MEFA was having difficulty with the documents. Both my son and my credit scores are above 700 and we both make very comfortable wages. It is disgraceful the amount of time we spent on this 60 DAYS! and finally called to ask what was going on with the loan. Lady said it was rejected. No one even called or emailed any decision or explanation. AVOID THIS REFINANCE COMPANY OR YOU WILL WAIST CONSIDERABLE PERSONAL TIME!”

For a full list of complaints made against MEFA in the CFPB’s Consumer Complaint Database, click here.

MEFA Lawsuits

While MEFA hasn’t faced any recent litigation, the organization has been the plaintiff in several collections lawsuits starting in 2019. Many of these suits were, in effect, “inactive” until recently due to the current moratorium on federal student loan debt collection.^[2]

Frequently Asked Questions

These are the most common questions consumers have about student loan refinancing with MEFA.

• Is MEFA good for refinancing student loans?
  MEFA may be a good option for nongraduates who attended public and/or nonprofit private schools and have an established credit history.

• Does MEFA have a minimum credit score requirement to refinance student loans?
  While MEFA does not explicitly specify a minimum credit score, its website refers to 670 as a “good” score.

• Are MEFA loans federal?
  MEFA loans are not federal. MEFA has no affiliation with the federal government or the U.S. Department of Education.

• Does MEFA charge a prepayment penalty?
  There are no penalties for early payments or repaying a loan in full before its term is over.

• Does checking your rates with MEFA hurt your credit score?
  For their prequalification process, MEFA performs a soft credit check, which will not hurt your credit score. If you proceed with an application, however, MEFA will perform a hard credit check which may affect your credit score.

• Does MEFA charge a late fee?
  There are no penalties for late payments or returned payments.

• Is MEFA a bank?
  MEFA is not a bank nor is it affiliated with any bank. MEFA is a lender that deals solely in education loans.

• Can I refinance a MEFA loan?
  You can refinance a MEFA student loan or a student loan from another private lender. There is no limit to the number of times a borrower may refinance with MEFA. Note, however, that every new line of credit requires a hard credit check that may affect your FICO score.

• Can I refinance just some of my loans with MEFA?
  Yes, you can refinance some, all, or just one of your qualifying student loans with MEFA. You may choose to refinance your private loans only or refinance private and federal loans together.

• Can I refinance loans that have already been refinanced?
  Yes, you can refinance loans as many times as you want with MEFA. Note that each time you refinance, you will have to submit a new application; every application requires a hard credit check that may affect your credit score.

• Can my spouse and I refinance our loans together with MEFA?
  MEFA does not combine spouses’ student loan debts for refinancing unless the spouse is a co-signer on the original loan..

• How long does it take to refinance with MEFA?
  The entire process from prequalification until the day the first payment is due takes between 6 and 10 weeks. Conditional approval takes 10 to 15 minutes if you apply without a co-signer or co-borrower. Final review takes 10 to 14 days. Once you have accepted the loan terms and provided your e-signature, fund will be disbursed within the next 5 business days.

• Who services MEFA refinance loans?
  American Education Services (AES) services all MEFA loans.

• Does MEFA offer a grace period?
  MEFA refinance loans do not include a grace period.

• Does MEFA offer deferment or forbearance?
  MEFA does not specify any circumstances (such as economic hardship or a return to school) that allow deferment or forbearance; MEFA’s loan services (AES) may offer these repayment options.

• What happens if I file for bankruptcy?
  According to MEFA, “filing for bankruptcy does not necessarily discharge refinance loans.”

• Does MEFA partner with any major student refinance lender marketplaces?
  MEFA partners with Credible as part of its multilender marketplace. INvestEd also advertises MEFA as a featured lender.

Compare Student Loan Refinance Reviews

Sources

1. MEFA, Guiding Principles
2. Law Office of Adam S. Minsky, Who is MEFA – Massachusetts Educational Financing Authority
3. MEFA, Student Loan Refinancing