An alternative 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.
• Borrower and/or co-signer must be creditworthy.
• Lenders may require that the borrower and/or co-signer be a U.S. citizen 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.

Private alternative student loans are offered by such organizations as banks, credit unions, private foundations, and state agencies. These loans are used to help families pay their share of college expenses if they are unable to do so from savings, current income, or other means.

All federal loans are part of the William D. Ford Federal Direct Loan (DL) Program and are funded by the federal government. You are required to complete the FAFSA to qualify for federal student financial aid. The FAFSA determines your financial need. Federal student loans should be used first before applying for private alternative loans.

The Maine Loan is developed for Maine residents attending approved schools in the U.S. or Canada or a New England (New Hampshire, Vermont, Massachusetts, Connecticut, or Rhode Island) resident attending an approved school at least half-time in Maine.

Yes, you may apply for the Maine Loan with a co-signer. 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).

This FAME loan is funded with the proceeds of tax-exempt bonds or private financing, and no state monies are allocated to fund the program. The fixed interest rates are determined when FAME issues new tax-exempt bonds or secures private financing and are based on the cost of funds plus an administrative spread. The administrative spread covers such expenses as bond insurance premiums, bond trustee fees, loan servicing expenses, loan defaults, and other operating costs.

Interest rates tied to Prime are variable and can change as frequently as every 30 to 90 days. When the Prime Rate is raised, the interest rate of a variable student loan rate subsequently rises. FAME’s fixed interest rates are determined when the Authority issues new tax-exempt bonds and are not tied to the Prime rates. The interest rate on a FAME loan is fixed and remains constant throughout the life of the loan.

In addition to your credit score, many lenders will look at your ability to repay debt. This is most commonly done using a debt-to-income ratio often abbreviated as DTI. DTI is the percentage of a consumer’s gross income that goes toward paying all recurring debt payments, including rent, mortgage, credit card payments, car loan payments, student loan payments, and legal judgments (such as child support or alimony, if disclosed).

If your debt-to-income ratio (DTI) is more than 50 percent, you probably have too much debt. That means you’re spending at least half your monthly income on debt. Ideally you want to have a DTI ratio that’s less than 36 percent. That means you have a manageable debt load and money left over after making all your monthly debt payments.

• Pay off credit cards and outstanding loan balances.
• Increase income. It is important to be sure you are including all sources of income on your application, including any rental, interest, or dividend income. (Alimony, child support, or separate maintenance income need not be revealed if you do not wish to have it considered as a basis for repaying the loan.)

Maine Loan applications for 2024-2025 academic year are available online.

To complete your loan application, you will need the following information for all parties on the loan.

• Social security number
• Date of birth
• Phone number
• Email address
• Current and prior addresses
• Monthly income
• Housing costs
• Employment information

The online application takes less than 30 minutes to complete and approval is determined at that time.

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

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

If your school is not listed, please call us at 1-800-228-3734. Our Education Team would be happy to check for eligibility.

FAME does not have an application deadline for the Maine Loan. To ensure all steps have been processed before it’s time to head off to college, we encourage you to apply anytime after mid-June or when the new application for the upcoming academic school year becomes available. It is also beneficial to apply for the entire year rather than one semester at a time.

Creditworthy students may apply without a co-signer. Creditworthy students must have a minimum of two years of credit history, a minimum of three trade lines, and meet the required minimum income and credit score.

Private and alternative student loans are credit-based and will be impacted by a credit freeze. You will need to remove the freeze to allow lenders to check your credit history.

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 FAME explaining the issue and documentation showing it was resolved. The co-signer 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.

Your financial aid office selects the dates of disbursement. Adjustments can be made to these dates, but only at the request of a financial aid representative.

Interest on a Maine Loan is only charged on what was dispersed and not the loan total.

The Maine Loan Repayment Calculator will help you estimate what your monthly payments will be and how much the loan will cost you depending on what repayment option you choose.

Based on a $10,000 loan with a fixed annual percentage rate (APR) of 7.24% with interest-only payments,* you would save $3,691.31. This calculation is based on 48 months of in-school enrollment, a 6-month grace period, and a repayment term of 180 months. Use the Maine Loan Repayment Calculator to help you estimate what your monthly payments will be and how much the loan will cost you depending on what repayment option you choose.

*Savings calculation assumes a fixed APR of 7.50% with “Deferred Repayment” as the comparison.

The most important first step is to contact FAME’s customer service at 1-800-228-3734 or email Education@FAMEmaine.com and explain your specific circumstances. Customer service will then be able to provide you with options for your specific circumstances.

Disbursed loans are serviced by Nelnet Servicing LLC d/b/a Firstmark Services www.firstmarkservices.com. Phone: 1-888-538-7378.

To defer your student loans, you must be enrolled at least half time at a FAME-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 Education Team at 1-800-228-3734, option 3, to discuss deferment options available.

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. FAME recommends you pay as much of this interest as you can before the loan enters repayment for an overall lower repayment cost.

Note: For Maine Loan applications received on or after July 28, 2008 and after July 1, 2014 for borrowers selecting the interest-only repayment option, 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.

The Free Application for Federal Student Aid (FAFSA) is the first step in the financial aid application process. It is used to determine federal student financial aid, such as Pell Grants, federal student loans, and work-study. Go to FAME’s FAFSA section to learn more. Apply online by going to studentaid.gov.

FICO^® scores are the credit scores most lenders use to determine your credit rating. You have three FICO^® scores, one for each of the three credit bureaus: Experian, TransUnion, and Equifax. A FICO^® score can range from 300 to 850, with 850 being the highest score available. The higher your credit score, the more likely you are to be approved for credit or offered favorable terms. Before making a loan, a bank or financial institution will attempt to determine your “creditworthiness.” Creditworthiness is the likelihood that you’ll pay back the money you borrowed in a timely and responsible manner. To help financial institutions determine your creditworthiness, they will access your credit report. For more information, visit www.annualcreditreport.com.