What is an Alternative Loan?

The Maine Educational Loan Authority (MELA) is a quasi-governmental agency that was created and established by Maine legislation in April of 1988 (20-A M.R.S.A., Section 11414).    MELA functions as an administratively independent authority within the current organizational structure of State government, and receives no appropriation from the Legislature for its operation.  MELA is governed by a seven-member board appointed by the Governor and confirmed by the Legislature, except for the State Treasurer who serves as an ex-officio member. Under the broad guidance of the MELA Board members, a full-time Executive Director organizes and coordinates the activities of the Authority.

MELA was established to assist students and their families in achieving their higher education goals by providing a supplemental or alternative student loan program. MELA’s alternative student loan programs consists of The Maine Loan^® , The Maine Medical Loan^sm, and the MELA Private Consolidation Loan^sm. 

The Maine Loan allows borrowers to borrow up to the full cost of an undergraduate or graduate education less other financial aid.  This loan is available to Maine residents attending approved schools in the United States and Canada, and out-of-state students attending approved schools in Maine.

The Maine Medical Loan allows borrowers to borrow up to the full cost of a medical degree less other financial aid.  This loan is available to Maine residents attending approved medical schools in the United States and Canada, and out-of-state students attending the University of New England College of Osteopathic Medicine, Maine’s only medical school.

The MELA Private Consolidation Loan allows borrowers with qualifying alternative education loans to consolidate these loans. This loan is available to Maine residents, existing MELA borrowers, and students who attended approved Maine higher educational institutions.

The Maine Loan, The Maine Medical Loan, and the MELA Private Consolidation Loan are available to students and parents or other co-borrowers based on the creditworthiness of the applicants.


MELA contracts with Maine Education Services (MES) for personnel, administrative, and marketing services. MES, an independent, private non-profit corporation located in Portland, Maine, provides opportunities and resources for people to achieve higher education. MELA also contracts with the Pennsylvania Higher Education Assistance Agency (PHEAA) for the servicing of loans derived prior to 1996. PHEAA, an agency of the Commonwealth of Pennsylvania, located in Harrisburg, manages state grant, guaranty, servicing, and financial aid processing systems. In addition, MELA subcontracts with Firstmark Services, LLC for servicing of MELA loans derived since 1996. Firstmark, a wholly-owned subsidiary of Nelnet, is located in Woodbury, Minnesota and specializes in the servicing of alternative loans.

All MELA loans are funded with the proceeds of tax-exempt bonds, and no State monies are allocated to fund the program.  MELA’s alternative student loan program has been an important safety net for many students and their families in meeting the full cost of higher education.  MELA continues to meet the needs of Maine residents in assisting them in making higher education more accessible and affordable. Since is creation, MELA has disbursed alternative student loans totaling over $161.8 million.