Maine Loan: Maine's Alternative Student Loan

2022-2023 Rates as Low as 2.79% APR

Powered by FAME, the Maine Loan is the smart way to bridge the gap when awards, scholarships, grants, and financial aid don’t meet the costs of higher education.

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New applicants will be directed to a private loan counseling module before you can apply. Use the Repeat Applicant button to reapply, add a co-borrower, or check the application status of an application you already started, and skip the instructional information and video.

As a state-based agency, FAME has no up-front/guarantee fees and offers competitive fixed interest rates to help you fund your higher education at an affordable price. You can also:

Not all applicants will be eligible. Some applicants will require a co-borrower. Learn more in the Eligibility for Maine Loan section on this page.

Maine Loan Features

The Maine LoanTM is available to eligible undergraduate and graduate students to borrow funds up to the full cost of education less other financial aid. It exists to bridge the gap between the full cost of college and traditional financial aid resources.

This alternative student loan offers three fixed interest rates depending on the repayment option selected.

  • A fixed interest rate of 2.79%,1 3.79%,2 and 4.79%,3 depending on the repayment option selected. Use this Maine Loan Repayment Calculator to help you choose the repayment option.
  • New annual percentage rates (APR) for academic year 2022-2023 will be the same as 2021-2022: 2.79%1 for immediate repay, 3.79%2 for interest-only repay, and 4.61%3 for full deferment repay options.
  • Approved borrowers receive the same fixed interest rate for the repayment option selected, regardless of credit history or if there are co-borrowers.
  • There is no (0%) guarantee fee.
  • 0.25% interest rate reduction with automatic debit payments.4
  • A low minimum loan amount of $1,000.
  • No annual or aggregate borrowing limits.
  • Six (6) month grace period.
  • No application fee.
  • No prepayment penalty.
  • Three (3) disbursements per academic year.
  • A range of repayment terms up to fifteen (15) years, depending on the repayment option selected.
  • High-quality, personalized customer service based in Maine.

If you are finding that the Federal Student Loan Program is not meeting your full needs, the Maine LoanTM may be the perfect loan for you. Borrow as little as $1,000 or borrow up to the full cost of your education (less any other financial aid), as determined by your school.

Eligibility for Maine Loan

The Maine LoanTM is available to undergraduate and graduate students. To be eligible for the Maine LoanTM, the borrower must meet the following requirements:

  • Student must be a Maine resident attending an approved school at least half time in the United States or Canada, or an out-of-state student attending an approved school at least half time in Maine.
  • At least one of the borrowers must be a U.S. citizen or permanent resident.
  • All borrowers must have a valid U.S. social security number.
  • Student and co-borrower(s), if applicable, must demonstrate a sound credit history and ability to repay the debt and meet FAME’s credit underwriting standards, including:
    • A debt-to-income ratio not to exceed 50%
    • A minimum annual income is required:
      • At least $20,000 for student borrower alone
      • At least $20,000 for one co-borrower (student income not considered)
      • At least $20,000 combined for two co-borrowers (student income not considered)
    • Creditworthiness as determined by a review of a credit report obtained from a nationally recognized credit bureau.

For students with limited or no credit history, income, and/or employment, it may be necessary to apply with one or more creditworthy co-borrowers.

NOTE: Following approval of the loan application, the student’s college or university financial aid office must certify the student’s enrollment status and cost of education prior to disbursement of funds. Upon the school’s request, the funds will be sent directly to the student’s school.

Maine Loan Repayment Terms

The Maine Loan offers a range of repayment terms:

Immediate RepaymentInterest-Only PaymentsDeferment of Principal and Interest
Payments
Fixed interest Rate
(with auto-pay)4
2.54%
(2.79%1 without auto-pay)
3.54%
(3.79%2 without auto-pay)
4.54%
(4.79%3 without auto-pay)
APR
(with auto-pay)4
2.54%
(2.79% without auto-pay)
3.54%
(3.79% without auto-pay)
4.46%
(4.61% without auto-pay)
Repayment Term120 months180 months180 months

Borrowers can choose from three different repayment options:

  • Immediate Repayment – Begin regular payments of principal and interest within 51 days of disbursement.
  • Interest-Only Repayment – Defer principal payments while enrolled at least half time. Interest-only payments are required.
  • Deferred Repayment – Defer principal and interest payments while enrolled in a degree-granting school at least half time. Unpaid interest will be capitalized when the loan enters repayment.

Beginning regular payments of principal and interest immediately will save a substantial amount of interest over the life of the loan.

Maine Loan FAQs

About

How does the Maine Loan compare to the Federal PLUS Loan?

Key Differences between the Maine Loan and the Federal PLUS Loan.

Cost Comparison of the Maine Loan versus the Federal PLUS Loan.

What are the hours of FAME’s customer service?

FAME customer service representatives are available Monday through Friday, 8:00 a.m. to 4:30 p.m. (EST) at 1-800-228-3734 and via email at Education@FAMEmaine.com.

In addition, Firstmark Services, LLC provides loan servicing for the Maine Loan and the Maine Medical Loan and their customer service representatives are available from 8:00 a.m. to 8:00 p.m. (EST) Monday through Friday at 1-888-538-7378. In addition, borrowers have 24/7 access to their account information via Firstmark’s website, www.firstmarkservices.com.

Where is FAME located?

FAME is located at 5 Community Drive, Augusta, ME 04332.

What is an alternative student loan?

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.
  • Borrowers and/or co-borrowers must be creditworthy.
  • Lenders may require that the borrower and/or co-borrower(s) be U.S. 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.
What’s the difference between private alternative student loans and federal student loans?

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.

Eligibility

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 Maine residents attending approved schools in the U.S. or Canada or to out-of-state residents attending approved schools in Maine.

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 co-borrowers. 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).

Interest Rates

How is the Maine Loan or the Maine Medical Loan interest rate determined?

Both of these FAME loans are 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.

What is the difference between a variable-interest-rate loan tied to Prime or LIBOR vs. fixed interest rates?

Interest rates tied to Prime or LIBOR 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 or LIBOR rates. The interest rate on a FAME loan is fixed and remains constant throughout the life of the loan.

Debt-to-Income

What does debt-to-income ratio (DTI) mean?

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).

What is a high debt-to-income ratio?

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.

How can I reduce my debt-to-income ratio?
  • 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.)

Applying

How can I apply for the Maine Loan?

Learn more and complete the application online, or download the application below:

Mail your application to:

FAME
P.O. Box 949
Augusta, ME 04332
800-228-3734 – phone
207-626-2717 – TTY

You may also contact a student loan specialist at 1-800-228-3734.

What information will I need to complete my loan application?

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

  • Social security number
  • Date of birth
  • Phone number
  • Email address
  • Current and prior addresses
  • Monthly income
  • Housing costs
  • Employment information
What is the estimated time it takes from date of online loan application to approval of the loan?

The online application takes approximately 40 to 60 minutes to complete and approval is determined at that time for the Maine Loan and the Maine Medical Loan.

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 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 the 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 FAME application website?

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

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

FAME does not have an application deadline for the Maine Loan or the Maine Medical 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. This will reduce your monthly loan payment upon completion of your education.

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 co-borrower 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 co-borrower along with their email address. The co-borrower will then get an email, instantly, inviting them back to the site with their application reference ID. If there are two co-borrowers, each will get their own ID and each co-borrower 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 need to have a co-borrower for FAME education loans?

Creditworthy students may apply without a co-borrower. 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.

If my parents or I have placed a credit freeze on our credit reports, will it impact my ability to apply for student loans?

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.

Appeals

If I was denied a FAME 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 FAME explaining the issue and documentation showing it was resolved. The co-borrower(s) 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.

Disbursement

How do I change the disbursement date of a loan?

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.

Payments

What will my monthly payment for Maine Loan be, and how much will I have to pay for the amount I borrow?

The Federal Student Aid Loan Simulator 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.

How much do I save over the life of the loan by making interest payments?

Based on a $10,000 loan with a fixed annual percentage rate (APR) of 3.79% with interest-only payments,* you would save $2,231.82. 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 Federal Student Aid Loan Simulator 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 4.61% with “Deferred Repayment” as the comparison.

What process do I need to follow if I am having difficulty making my loan payments?

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.

Deferment

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 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 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.

I elected for deferment of principal and interest (loan applications received prior to July 28, 2008 or after July 1, 2014) 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. 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.

Terminology

What is the FAFSA?

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 FAFSA.gov.

What is a FICO® credit score?

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.

What is Opportunity Maine?

Opportunity Maine was created by a bipartisan, grassroots coalition with the goal of promoting the economic security of our state through sustainable enhancement of the education and skills of its workforce. The initiative, enacted in 2007, focused specifically on the rising cost of higher education and the rapidly growing burden of student debt. Through their efforts, the Educational Opportunity Tax Credit (EOTC) program was enacted.

One of the boldest college affordability programs in the nation, the EOTC can provide significant tax benefits. Individuals who earned an associate degree from a Maine college or university may qualify for over $800 in yearly state income tax credits and over $4,500 for a bachelor’s degree.

The program also includes a business-level component, allowing companies that pay their employees’ student loans as an employee benefit to claim credit for those payments on their business taxes. This provides an attractive employee and business benefit, which may spur more organizations to support their employees in pursuing higher education.

For complete details and eligibility requirements, visit www.opportunitymaine.org.

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1 The APR is 2.79%. The APR, or Annual Percentage Rate, is the effective interest rate when all interest charges are included. This APR is based on a fixed interest rate of 2.79%, a loan amount of $10,000, a repayment term of 120 months, and assuming immediate principal and interest payments. Terms are as of June 2021.
2 The APR is 3.79%. The APR, or Annual Percentage Rate, is the effective interest rate when all interest charges are included. This APR is based on a fixed interest rate of 3.79%, a loan amount of $10,000, a repayment term of 180 months, and assuming interest-only payments for 4 1/2 years. Terms are as of June 2021.
3 The APR is 4.61%. The APR, or Annual Percentage Rate, is the effective interest rate when all interest charges are included. This APR is based on a fixed interest rate of 4.79%, a loan amount of $10,000, a repayment term of 180 months, and assuming deferment of principal and interest payments for 4 1/2 years. Terms are as of June 2021.
4 An interest rate reduction of 0.25% is available to borrowers. To qualify, borrowers need to arrange with the loan servicer to have their payments automatically withdrawn from a checking or savings account. This interest rate reduction will remain on the account unless the loans are in a status which does not require payments, or automatic deduction is revoked by the borrower or suspended by the loan servicer according to the insufficient funds policy in effect when the agreement is signed. Upon request, FAME will provide a projection of the percentage of borrowers who are likely to benefit from this interest rate reduction.