Through the application of these guiding principles, borrowers are able to expect a high level of accountability from MEFA, including timely and accurate responses to inquiries and complaints.
Advisory & Outreach Programs
MEFA makes affordable education loans and serves as a trusted guide, walking families through the maze of higher education options and offering free advisory services. To this end, we follow these policies:
- Offer and/or partner with organizations that offer FAFSA completion assistance and information on financial aid options and processes, including assistance with understanding financial aid offers.
- Provide financial literacy education, which may include information about projected salaries and return on investment for specific degree programs.
- Assist borrowers and their families with managing the repayment of any loans taken out through MEFA; this assistance is provided within the context of all education debt held by the borrower and their family.
- Provide and/or partner with organizations that provide services and specific outreach programs for underserved populations.
Encourage Smart & Responsible Borrowing
MEFA encourages families to make the best possible decisions for their individual circumstances. To this end, we follow these policies:
- Encourage students to exhaust their Federal Direct Subsidized Loans and Federal Direct Unsubsidized Loans, grant aid, and family resources before taking out any other type of loan.
- For new loans, require that schools certify the enrollment, cost of education, and financial aid of each borrower in order to avoid unintentional over-borrowing. School certification acts as a check that the loan is being used for an educational purpose and that the amount borrowed is in line with the college's costs and the borrower's needs.
- Advise students and families to borrow only the amount they need. Selecting and paying for college is a family decision and, as such, the student and family need to understand the total cost of the college selected. Family members borrowing on behalf of a student or cosigning a student loan should be counseled to understand their rights and responsibilities in regard to repaying education loan debt.
Affordable Student Loan Terms & Repayment Options
MEFA offers affordable education loans with transparent terms. We provide the in-depth counseling that borrowers need in order to understand and manage their loan responsibilities. We also guide borrowers through all repayment options available to them, with special attention paid to working with borrowers who experience economic hardship. To this end, we follow these policies:
- Offer a fixed rate option, with low or no origination fee.
- Prominently disclose the annual percentage rate, financing costs, total cost of the loan, and other terms and benefits to the borrower prior to loan origination.
- Offer one or more flexible repayment options to meet the needs of families' varying financial situations. This may include deferment, temporary reduced payment plans, in-school interest-only payments, immediate repayment, refinancing options, varying repayment term options, and no pre-payment penalties.
- Proactively communicate with borrowers and co-borrowers to inform them of their rights, responsibilities, and repayment options.
- Implement a process for advising borrowers who are attending a school that closes. Our current policy allows students up to 12 months to enroll in a new school to maintain continuous deferment. Explore partnership opportunities to assist borrowers in paying down their education loan debt.
Help for Borrowers in Distress
MEFA works closely with borrowers experiencing personal hardship or financial difficulties to offer guidance and assistance. To this end, we follow these policies:
- Whenever possible, work with individual borrowers who have defaulted on their loans to temporarily modify their repayment plan so the borrower stays on track with their repayment.
- Whenever possible, work with individual borrowers who are experiencing financial hardship to temporarily modify their repayment plan so the borrower stays on track with their repayment.
- Borrowers that have a medically determinable physical or mental impairment or are a veteran with a service-connected condition may qualify for a discharge based on a Total and Permanent Disability (TPD). Any MEFA Loan borrower may apply for TPD. Loans may be eligible for discharge only when the student co-borrower meets the definition of TPD. If a non-student co-borrower meets the definition of TPD, that person may be removed from the loan, but the loan will not be discharged. Any remaining borrowers will be responsible for repayment.
- MEFA Loans may be discharged if the student co-borrower passes away. If a non-student co-borrower passes away, that person will be removed from the loan, but the loan will not be discharged. Any remaining borrowers will be responsible for repayment.
- Adhere to our long-standing practice of not accelerating or placing a good-standing loan in auto default due to bankruptcy filing or borrower death.
- Proactively reach out to borrowers who are behind on payments and make every reasonable effort within existing laws and regulations to contact them and offer assistance before utilizing collection activities.
- Though we reserve the right to charge collection fees, adhere to our long-standing practice of not charging collection fees in the event that collection activities are employed.
- Respond promptly to assist borrowers impacted by natural disasters.
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