There has been a surge in new collections lawsuits in Massachusetts against student loan borrowers during the past year. Based on what I’m seeing on the ground, the majority of these suits are being initiated by one entity: an organization called the Massachusetts Educational Financing Authority, also known as MEFA.

MEFA loans are often confused with federal or public loans, because MEFA is a state lending authority. However, MEFA is effectively a private lender. Organizationally, MEFA is a quasi-public state nonprofit organization established under state law, but it operates largely independently of state government, and it is not financed through taxpayer dollars or state appropriations.

Because MEFA is effectively a private lender, MEFA loans are not eligible for federal student loan programs like income-driven repayment, Public Service Loan Forgiveness, or Direct loan consolidation. This means that unfortunately, borrowers struggling with their MEFA loan payments may have only limited options, such as a brief forbearance or a temporary reduction in payments.

At the same time, because MEFA does not issue federal student loans, it does not have the same powers to seize a borrower’s income or assets if the borrower becomes unable to pay. Unlike the federal government and federal guaranty agencies, MEFA must file a lawsuit against a borrower in state court and obtain a judgment in order to have any ability to forcibly collect on a defaulted student loan. This makes MEFA no different from any other private student loan lender.

Furthermore, state law provides limitations on what MEFA can specifically take from a borrower in terms of income or assets, and many student loan borrowers don’t realize that they have important legal rights. A collections lawsuit also provides a borrower with the opportunity to raise disputes, legal defenses, and counterclaims, and also allows the borrower to request documents and records.

If you’ve been sued by MEFA or another private student loan lender, make sure you understand your rights, and be careful about making some common mistakes that can get you into trouble.