The New Mexico Educational Assistance Foundation (NMEAF) is a non-profit organization that provides low-interest, fixed-rate loans to New Mexican residents and people attending college in the state. The New Mexico legislature established the organization in 1981, and since that time it has issued $2.9 billion in loans to 340,000 borrowers.
Along with providing private student loans, it also acts as a servicer for various loan programs. In addition, it partners with New Mexico’s colleges and universities for various programs and offers community outreach.
The organization offers each of its programs and services with one goal in mind. It wants to make college more affordable for the people of New Mexico as well as those who attend college in the state. See if it manages to meet this goal by taking a closer look at the programs and services it offers.
NMEAF's Private Student Loans
NMEAF’s private student loans pay for up to 100 percent of school-certified undergraduate or graduate school costs. The interest rates on these fixed-rate loans currently range from 5.48 to 6.98 percent.
NMEAF reduces the interest rate by 0.25 percent after the borrower makes 24 consecutive payments on time. The organization reduces the interest rate by another 0.25 percent upon graduation. In addition, students can reduce the interest rate by 0.25 percent by signing up for automatic payments.
The interest rate is determined based on the repayment plan the student selects.
The organization offers three repayment options. The immediate repayment option comes with the lowest interest rate. Students make monthly repayments of both the principal and interest beginning 45 days after the loan disbursement.
The interest-only repayment option comes with a 6.23 percent interest rate. Students only pay the loan interest while they are enrolled in school. These payments also start 45 days after disbursement, and full payments begin 45 days upon graduation or leaving school. Students also have to make full payments if they drop below half-time enrollment.
The deferred repayment option comes with the highest interest rate. Payments begin 45 days after graduation or leaving school. Students also have to begin making payments if they drop below half-time enrollment.
Loan Amount and Fees
Students who apply for loans receive an amount based on what is certified by the school. However, there are other limits to the loans as well. The minimum yearly amount is $2,000, while the maximum yearly amount is $20,000. The total maximum for students is $100,000.
Regardless of the amount the student takes out, the loan doesn’t include an origination or disbursement fee. There also aren’t any early repayment penalties.
Students should check the eligibility requirements before applying for a loan with NMEAF. Students must be U.S. citizens and either residents of New Mexico or attending a school in the state. In addition, students must be enrolled at the college or university at least half-time to be approved for a loan.
Credit is also very important when applying for one of these loans. Students who wish to apply without a cosigner need to have a credit score of at least 680 and an annual income of at least $30,000. Those who do not meet those requirements need to have a cosigner who does.
Cosigning on one of these loans is unique. Cosigners are typically responsible for the entire life of the loan, but that is not the case with NMEAF private loans. Cosigners can request to be released from the loan after the student makes 24 consecutive on-time payments as long as the student has a qualifying credit score. If released, the cosigner will no longer be responsible for the loan.
NMEAF is most known for its private student loan, but that is just one of its products. The organization is also a loan servicer for the federal Perkins loan program. It collects payments online, through the mail, and in person for the loan.
NMEAF is also part of the FAFSA and College Application Completion Collaborative (FCACC). This program helps New Mexican high school counselors assist students and families with the FAFSA and college application process.
While it helps students of all income levels and situations, it mainly focuses on low-income and first-generation students. These students typically need extra help when getting ready for college.
It also offers exit loan counseling services for students upon graduation. These services help students better understand their loan obligations after they graduate. They learn about interest rates, repayment plans, and more through this service. The information helps them repay their loans in a timely fashion.
NMEAF also offers “College Days” and “College Nights” in New Mexico’s high schools. These programs educate students about higher education.
In addition, the organization offers peak season call center services, campus-based loan program servicing, tuition finance plan administration and billing, and various commercial insurance premium financing.
Finally, it offers debt collection services by Sage Resolutions. This is a unique program that combines third-party debt collection and financial literacy education.
Getting Started with NMEAF
Choosing the right loan option is a big choice for students in New Mexico. Whether that student is a first-generation college student from a low-income family or someone who simply doesn’t want to take on a great deal of debt, the decision shouldn’t be taken lightly. It follows students well into the future, so everything needs to be considered.
Many New Mexican students find that NMEAF is the best option for them. The fixed-rate loans are more affordable than many private loans, and the interest rate reduction options make them even more attractive. Plus these loans don’t have the high fees that many private loans have.
Those who want to take part in this loan program must begin by filling out the FAFSA. Then they need to determine how much their education will cost and apply for the loan.After NMEAF gets confirmation from the college during the approval process the student will receive the money as long as he or she meets the other requirements. At that point the student can move forward with his or her education.