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Student Loans

State Student Loans

Updated Jun 02, 2022   |   3 mins read

State student loans are offered by non-profits and state-based agencies. Since they aren’t offered through the Department of Education, they are categorized as private student loans — which would explain why the term “state student loans” isn’t used more often.

As a private student loan, most borrowers will not be able to take advantage of federal benefits like forgiveness opportunities, income-driven repayment plans, and subsidized loans. So, make sure to consider all free aid and federal student loans before taking out a state student loan.

If you’ve already considered your other forms of aid, the lenders below can be a good starting point in your search for affordable financing. Remember, most state-based lenders will only lend to residents of the state or students attending a school within the state — though some do lend across multiple states.

Some state student loan lenders

The table below includes several state-based lenders offering student loans for attending school or refinancing existing loans.

LenderRates (APR)Based out of
MEFA3.75% – 5.75%Massachusetts
RISLA3.99% – 5.08%Rhode Island
Advantage Education LoanStarting at 3.50%Kentucky
EDvestinU1.993% – 8.609%New Hampshire
Brazos Higher EducationStarting at 1.89%Texas
HESAA3.70% – 5.51%New Jersey

How do state student loans work?

State-based agencies and non-profits offer private student loans to help make college more accessible. These loans can be used by students, parents, or to refinance existing loans. The loan amount you receive depends on the specific lender but can be as high as your total cost of attendance in many cases.

Repayment will begin while you’re still in school but can be deferred until after you graduate. Just remember, interest will start accruing once you’ve received the funds, so the earlier you can afford to make payments, the less you’ll pay over the life of the loan.

Does my state offer student loans?

State student loans are offered in 23 states, according to the Education Finance Council, the national trade association representing non-profit and state-based higher education finance organizations.

These states include:

If your state isn’t included in the list above, don’t worry. Some of the state programs are available nationwide. Learn more about what’s available in your state by clicking below.

Are state student loans the right choice for you?

Before considering any form of student loans — federal or private — you should always first consider all free forms of aid. This includes scholarships, grants, and work-study programs.

After taking advantage of all forms of free student aid, your next option should be federal student loans. Federal student loans are recommended over private student loans because they typically have lower rates and added benefits, such as forgiveness opportunities and income-driven repayment plans.

Unfortunately, federal student loans come with limits and many students require additional funding to bridge the gap. If you’ve reached your limit of federal student loans and still need more money, private student loans can help.

This is when state student loans may be the right choice for you.

Student loans offered through state agencies can be better than more well-known private lenders if you can receive a lower interest rate or receive unique benefits not available elsewhere. If this isn’t the case, you can consider other lenders. Check out our picks of the best private student loans.