Minnesota is one of the few states whose student loan program survived the recession. The state agency responsible for helping students plan and pay for college is called the Minnesota Office of Higher Education (MOHE), and MOHE also administers the student loan program, which is called the SELF Loan.
The SELF Loan initiative was introduced in 1984, and to date it has disbursed loans for over $1.8 billion, a considerable achievement. To obtain a SELF Loan, the student must present a co-signer who has acceptable credit (although the interest rate is not based thereon). Additionally, interest must be paid while in school, and that feature together with the guarantee provided by the co-signer help keep SELF Loan rates low.
Eligibility criteria for SELF are as follows:
- You qualify as a Minnesota resident, and attend an eligible out-of-state school.
- You are not a Minnesota resident, but you attend an eligible school in-state.
- The last elements in both of the two standards above are 1) at least half-time enrollment, and 2) clearing a satisfactory performance bar.
There is an interactive feature on the website (the “Check if you are eligible” button) that takes you directly to a list of participating schools, or you can find a page containing the list here. You will see some of the schools on that list are marked with an asterisk, meaning they do not take any new loans (for example, the Universities of Idaho and Illinois). Many of the schools are located in other states, which is a benefit to Minnesota students.
SELF Loan Cost
The SELF Loan is not based on financial need, nor does it charge any of the following fees: origination, application, or guarantee. You can always check the Frequently Asked Questions page for current SELF Loan interest rates, but as of 2013 rates are:
- Fixed rate: 6.9% for the life of the loan.
- Variable rate, which changes every quarter based on LIBOR (London Interbank Offered Rates) for the previous quarter: currently 3.3%, with a limit of 3% on interest rate changes during any 12-month period.
No individual student is ever charged more or less than other students on either rate.
Repayment Terms For Your SELF Loan
The SELF Loan’s repayment terms are simple and straightforward: you must always pay interest on the loan, it offers neither grace periods nor loan deferments (period of time during which you can suspend your payments), and it cannot be consolidated with federal student loans. Within 90 days after your loan proceeds are paid out, you must begin quarterly interest payments. Those interest-only payments continue while you meet the eligibility standards for enrollment (meaning half-time in a participating school).
