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MEFA – This loan is sponsored by the state financing officers in Massachusetts and the Connecticut universities. You can borrow for both instate and out-of-state.

Let us take a look at the criteria-

  • If, an out-of-state student, attends a participating school that offers loan within the state – then he/she is offered loans at a rate lower than the federal loan options.
  • The other types of loans include borrowing from banks or private lenders. The rates can start very low; however, the rise in interest rates may make the borrowing very costly. One cannot convert the loans into equities – like it is done in the case of housing loans.

NOTE- alternative loans from banks or private lenders, come with variable interest and carry a certain amount of risk.

Independent undergraduate students have distinct advantages, as they are allowed to borrow an additional sum of $4,000 every year (for the first two years). Their borrowing increases for the third year, and they are allowed to borrow an addition $5,000/year. This can be possible through Stafford loan programs.

However, a dependent student cannot take the PLUS loans – it is only meant for parents who have independent children.

Previously we mentioned about the undergraduates, but you must be thinking-what about the graduates?

  1. The graduate students can take unsubsidized loans up to $20,500 per annum.
  2. The best feature of unsubsidized loans is they are not variable, and they will continue to remain fixed. In comparison to the undergrads – The graduates are charged at a higher rate of interest. The rate of fixed interest is 6.21% (against loans in 2014-2015).
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