Updated
Nov 14, 2022 More than 70,000 students attend college in New Mexico at a variety of educational institutions, including the University of New Mexico and New Mexico State University. Many students who attend these colleges end up needing to borrow money to attend school.
Fortunately, there are ample resources available to fund your education, including federal or private student loans. The New Mexico Educational Assistance Foundation also exists to help you compare and secure funding.
This guide will show you where to find New Mexico student loans, so you can get the money you need to pay for school.
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New Mexico Student Loans
New Mexico students have a number of options available for obtaining funds to cover the costs of going to college. But they’re not all created equal. Keep reading to learn which loans to apply for first.
Federal Student Loans
Anyone looking for affordable college funding should begin by exploring options for federal student aid from the U.S. Department of Education. Federal student loans provide many benefits compared to private loans, including:
- Low, fixed rates. Interest rates are the same for every borrower whose loans are disbursed within a set period.
- Repayment flexibility. Loan payments can be paused through deferment or forbearance and borrowers can choose from several repayment plans.
- Loan forgiveness options. You can qualify for student loan forgiveness if you work for eligible employers and participate in an income-driven plan for long enough.
You will need to complete the Free Application for Federal Student Aid to become eligible for any federal student loans. The FAFSA is available online and is quick to complete. However, if you are a dependent undergraduate student, you must provide information about your parent’s finances as well as your own.
Federal Loan Types
There are many different types of federal direct loans that students in New Mexico could potentially obtain:
- Direct Subsidized Loans: Undergraduates can obtain these need-based loans. Credit doesn’t matter when qualifying, and interest is paid by the government while you are in school, during your post-graduation deferment, and if you qualify for deferment at other times.
- Direct Unsubsidized Loans: Undergraduates and grad students could receive Direct Unsubsidized Loans. Credit does not matter when qualifying and you don’t have to prove you have financial need. There is no subsidization of interest by the government.
- PLUS Loans: Parents can obtain PLUS Loans if they have a child earning an undergrad degree. Graduate students can also obtain PLUS Loans. Credit does matter, as you cannot qualify with an adverse credit history—but credit doesn’t determine your interest rate.
Federal Loan Repayment Options
Federal student loan repayment plans are one of the best features of federal loans. These plans include:
- Standard Repayment: This involves making fixed monthly payments for 10-years
- Pay As You Earn (PAYE): Your payment is set at 10% of discretionary income but can’t ever exceed what you’d pay under the Standard Repayment plan.
- Revised Pay As You Earn (REPAYE): Your payment is set at 10% of discretionary income and you pay loans for a maximum of 20 years if all loans were for undergrad or 25 years if some loans were for grad school or obtained to earn a professional degree.
- Income-Based Repayment (IBR): Your payment is set at 10% of discretionary income if you became a new borrower after July 1, 2014 or 15% if you borrowed before this date. Your payment can’t exceed the payment under the Standard Repayment Plan. If you’re a new borrower, your maximum repayment period is 20 years. If you’re not a new borrower after July 1, 2014, then your maximum repayment period is 25 years.
- Income-Contingent Repayment (ICR): Your payment is the lesser of 20% of discretionary income or the amount you’d pay on a fixed repayment plan that keeps your payment the same over 12 years, adjusted for income. You pay loans under this plan for a maximum of 25 years
Private Student Loans
After you have taken out the maximum amount of federal student loans available to you, it may be necessary to take out private student loans if you still need more money for school.
When applying for a private loan, credit is an important factor. If you cannot qualify for private loans on your own—and many students can’t—then you should consider applying with a cosigner.
New Mexico Educational Assistance Foundation
Rates (APR)
4.85% – 6.35%
Loan Amounts
$2,000 – $20,000
Repayment Terms
Not disclosed
The New Mexico Educational Assistance Foundation (NMEAF) is a 501(c)(3) organization, otherwise known as a nonprofit organization. The New Mexico state legislature founded the organization in Albuquerque in 1981 with the goal of helping to make higher education affordable in the state.
- Rate type: Fixed
- Rate reduction: Up to 0.75%. There is a 0.25% discount for making 24 on-time payments, a 0.25% discount after graduation, and a 0.25% for automatic payments
- Fees: No origination or disbursement fees
- Cosigner release: After 24 on-time payments and a proven credit check
- In-school repayment: Immediate, interest-only, or deferred repayment
- Grace period: Not disclosed
Not everyone is eligible for student loans through the New Mexico Educational Assistance Foundation. Here are some of the key criteria you must meet in order to be eligible to obtain these loans:
- You must be a U.S. citizen
- You must be enrolled at least half the time in a qualifying educational program
- You must be a New Mexico resident or attending a college or university in New Mexico
- You (or your cosigner) must have an average credit score of at least 680
- You (or your cosigner) must have an annual income of at least $30,000
College Ave
Rates (APR)
1.49% – 12.99%
Loan Amounts
$1,000 – 100% of school-certified cost of attendance
Repayment Terms
5, 8, 10, or 15 years
College Ave offers student loans for undergraduates, graduates, and parents.
- Variables rates: 1.49% – 11.98%
- Fixed rates: 4.39% – 12.99%
- Rate reduction: 0.25% automatic payment discount
- Fees: Late payment fee of 5% of the unpaid amount or $25, whichever is less
- Cosigner release: After 24 on-time payments
- In-school repayment: Full principal & interest, interest-only, flat $25, or deferred payment
- Grace period: 6 months, but can apply for up to 6 more months
Earnest
Rates (APR)
2.74% – 12.78%
Loan Amounts
$1,000 – 100% of school-certified cost of attendance
Repayment Terms
5, 7, 10, 12, or 15 years
Earnest offers student loans for undergraduate and graduate students. Borrowers can check their eligibility in 2 minutes, with no commitment or effect on your credit. Once repayment has started, you can skip one payment per year.
- Variables rates: 2.74% – 11.44%
- Fixed rates: 4.39% – 12.78%
- Rate reduction: 0.25% automatic payment discount
- Fees: None
- Cosigner release: Not available unless you refinance with the company
- In-school repayment: Principal & interest, interest-only, fixed $25, or deferred payment
- Grace period: 9 months
Citizens Bank
Rates (APR)
1.54% – 12.04%
Loan Amounts
$1,000 – $150,000
Repayment Terms
5, 10, or 15 years
Citizens Bank is a national bank with physical branches. Student loans are available for undergraduates, graduates, and parents. Those approved for a loan can receive multi-year approval which allows borrowers to secure money for school, from orientation to graduation without the need to apply again.
- Variables rates: 1.54% – 9.65%
- Fixed rates: 4.72% – 12.04%
- Rate reduction: 0.25% automatic payment discount and 0.25% loyalty discount
- Fees: Late payment fee of 5% of the unpaid amount
- Cosigner release: After 36 on-time payments
- In-school repayment: Principal & interest, interest-only, or deferred payment
- Grace period: 6 months
If you want to compare other options, check out our guide to the best private student loans or learn more about state student loans.
Grants and Scholarships for New Mexico Students
It is also possible to obtain grants or scholarships to help you pay for school. These sources of funding don’t have to be repaid, so you should try to qualify for as many as possible before taking out any loans.
The NMEAF is a great resource for finding scholarships, but you should also check with your school’s financial aid office as well as with national and local organizations and businesses, churches, and community groups. Two of the many scholarship options available include:
- The New Mexico Legislative Lottery Scholarship: New Mexico residents who enroll at a full-time public post-secondary educational institutions may be eligible for this scholarship.
- The New Mexico Scholars Scholarship: Students may be eligible if they are New Mexico residents who graduated in the top 5% of their class or earned at least a 25 on the ACT or 1140 on the SAT.
It is a good idea to begin your search for scholarships as soon as possible because funding can run out, and you don’t want to miss any application deadlines for scholarships that could help you to cut the costs of going to school in New Mexico.