What is an Alternative Loan vs. a Federal Loan?

An alternative (also referred to as Private) student loan is designed primarily to help students and their families pay for educational expenses that exceed other available financial aid resources such as scholarships, grants, and the Federal Loan Programs (Stafford loan for students and PLUS loan for parents). In addition, an alternative student loan is a key resource for those students and their families who do not typically qualify for many financial aid programs, but who are without adequate cash reserves to pay for a college education. Alternative student loans exist to bridge the gap between the full cost of a higher education and traditional financial aid resources.

Alternative student loans should only be considered after all other low-cost, traditional financial aid resources have been fully utilized. Please keep in mind the following:

• The Federal government does not back these loans
• Borrowers and/or co-borrowers must be creditworthy
• Lenders may require that the borrower and/or co-borrowers be United States citizens or have permanent resident status
• Various origination fees, interest rates, repayment terms, aggregate borrowing limits, and other restrictions may apply
• Federal education loan programs generally have lower interest rates and more flexible repayment terms
• Many lenders do not cap the interest rate when a variable interest rate is offered.

How can I apply for The Maine Loan^® or The Maine Medical Loan^SM?

• Learn more and complete the application online. Individual downloads of the application are available on the description pages for each loan.
• You may also contact a Student Loan Specialist at 1-800-922-6352.
• Mail or fax your application to the address below:
  MELA c/o MES
  131 Presumpscot Street
  Portland, ME 04103
  1-800-922-6352
  207-791-3616 – fax

Do I need to have a co-signer for The Maine Loan or The Maine Medical Loan?

Credit worthy students may apply without a cosigner. Credit worthy students must have a minimum of two years credit history, a minimum of three trade lines, and meet the required minimum income and credit score.

What is an application reference ID and how can I get one?

The application reference ID is a website participant number used to link a cosigner to a student's application.

The student must first sign in as the "borrower" and complete their section. They will indicate the name of their cosigner along with their email address. The cosigner will then get an email, instantly, inviting them back to the site with their application reference ID. If there are two cosigners, each will get their own ID and each cosigner needs to create their own account. The reason for this is if borrowers use E-signature, there needs to be a unique PIN number assigned to each party on the note.

Do I only apply for The Maine Loan or The Maine Medical Loan when I first begin college or medical school or do I need to reapply every year?

You must reapply every year to take into account new educational costs for the current academic school year.

How do I determine the loan amount for The Maine Loan or The Maine Medical Loan application?

Loan amounts are based on a maximum of one year’s educational costs. Calculations are based on full cost of education for any given academic year minus any other financial aid received as determined by the financial aid office.

What do I do if my school is not listed on the MELA application website?

If your school is not listed, please call us at 1-800-922-6352. Our Student Loan Specialists would be happy to check for eligibility.

I am a student and do not work, can I still apply for The Maine Loan?

Yes, you may apply for The Maine Loan with cosigners. When completing the student borrower section you may list, “student” or “other” in lieu of an employer name. If you reside with family or on campus most of the year you may list your mortgage holder as “none” and the monthly payment/rent amount as “zero (0)”.

I go to school in another state, am I eligible for The Maine Loan or The Maine Medical Loan?

The Maine Loan and The Maine Medical Loan are available to out-of-state residents attending approved schools in Maine or Maine residents attending approved schools in the U.S. or Canada.

What is the deadline for applying for The Maine Loan or The Maine Medical Loan?

MELA does not have an application deadline for The Maine Loan or The Maine Medical Loan. We encourage you to apply anytime after June 1st for the upcoming academic school year to ensure all steps have been processed before it’s time to head off to college. It is also beneficial to apply for the entire year rather than one semester at a time. This will reduce your monthly loan payment upon completion of your education.

How do I change the disbursement date of a loan?

Your Financial Aid Officer selects the dates of disbursement. Adjustments can be made to these dates, but only at the request of a Financial Aid Representative.

If I was denied The Maine Loan or The Maine Medical Loan, can I appeal the loan decision if I have extenuating circumstances?

Yes. If you feel there may be extenuating circumstances or credit report errors, and would like to appeal this loan decision, please send a cover letter to MELA explaining the issue and documentation showing it was resolved. The cosigners will also need to provide a copy of their most recent federal tax return along with income verification. Income verification may include a recent payroll stub showing year-to-date earnings, a pension statement, social security statement or retirement benefits statement.

I elected for deferment of principal and interest (loan applications received prior to July 28, 2008) but have received a billing statement from my servicer, why?

Borrowers who elect, and are eligible for full deferment of principal and interest, will still receive an optional interest only statement from their servicer. The interest accrual is reported so borrowers have the option to pay any amount, or the entire amount accrued anytime during their deferment period. If you choose not to pay, the interest will just continue to accrue and be included in the next monthly statement. There will be no derogatory action taken. MELA recommends you pay as much of this interest before the loan enters repayment for an overall lower repayment cost.

Note: For Maine Loan applications received on or after July 28, 2008, interest payments are required. You should expect to receive a billing statement from Firstmark Services monthly for interest that has accrued on your disbursed loan.

How do I defer my loans if I am still in school or residency?

To defer your student loans you must be enrolled at least halftime at a MELA approved school. You may submit a letter of enrollment to Firstmark Services from the school’s registrar stating your current dates of enrollment and new estimated graduation date. Please note deferment options vary, depending on your loan type and the date of your loan. For information specific to your loans, please contact our Student Loan Specialists at 1-800-922-6352 to discuss deferment options available.

If you are in a medical residency and would like to defer The Maine Medical Loan, you will need to submit a letter of request from the hospital residency coordinator stating your dates of employment and expected date of completion. Medical residency deferment is available for up to four years of residency on The Maine Medical Loan.