Editor's Note: This post was updated to reflect President Biden enacting federal student loan forgiveness on Aug. 24, 2022.
In keeping with his campaign promise, President Biden announced on Wednesday a plan to forgive up to $20,000 worth of federal student loan debt per borrower.
While there still are some questions, there's one thing we know for sure: The Biden administration is not canceling private student loans.
The student loan forgiveness announced by the Biden administration applies only to those with federal student loans. These are borrowers who took out student loans owned by the U.S. Department of Education.
Private student loan borrowers, on the other hand, are those who take out loans owned by private companies, like online lenders or national banks. Even though the majority of student loan borrowers — about 92% — hold federal loans, private student loans still make up 7.71% of the $1.75 trillion total outstanding student loan debt in the U.S.
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What private student loan borrowers should do
While private loan borrowers can't count on sweeping student loan forgiveness to erase their debt, there are steps they can take to make their loans more manageable. Refinancing for a lower interest rate is certainly not as good as having your loans completely wiped out, but it's a smart financial move that will pay off the sooner you choose to make it.
When private student loan borrowers refinance, they swap their current private student loan(s) for one new loan. This can be from the same lender (if offered) or through a different lender of their choice.
Although rates have been rising, they're still relatively low so now is a good time for private student loan borrowers to consider refinancing before they go up again. The Fed is expected to continue raising rates so refinancing may not be as cheap. And if your credit score is better than when you applied for your private student loan, you have a better chance of qualifying for a low rate.
Use a loan marketplace like Credible to compare lenders or take a look at Select's top picks. You're likely to see the most savings from refinancing when choosing a lender that offers competitive interest rates, zero application or origination fees and no penalties for prepayment — which all of our selections do.
Here are our best student loan refinance companies:
- Best overall: SoFi Student Loan Refinancing
- Best for fair credit score: Earnest Student Loan Refinancing
- Best for having a co-signer: Citizens Bank Student Loan Refinancing
- Best for parent loan refinancing: Education Loan Finance Student Loan Refinancing (ELFI)
- Best for medical school loan refinancing: Laurel Road Student Loan Refinancing
Laurel Road Student Loan Refinancing
Cost
No origination fees to refinance
Eligible loans
Federal, private, graduate and undergraduate loans, Parent PLUS loans, medical and dental residency/fellowship loans, plus special pricing and reduced rates for health-care professionals (physicians, dentists, optometrists and physician assistants)
Loan types
Variable and fixed
Variable rates (APR)
From 2.50% (rate includes 0.25% autopay discount and assumes no linked Laurel Road Checking discount)
Fixed rates (APR)
From 3.99% (rate includes 0.25% autopay discount and assumes no linked Laurel Road Checking discount)
Loan terms
5, 7, 10, 15, 20 years (but also offers any term below 20 years, subject to underwriting criteria)
Loan amounts
For bachelor's degrees and higher, minimum $5,000; for eligible associate degrees in the health-care field, up to $50,000 in loans for non-ParentPlus refinance loans
Minimum credit score
N/A
Minimum income
N/A
Allow for a co-signer
Yes
Terms apply.
Education Loan Finance Student Loan Refinancing
Cost
No origination fees to refinance
Eligible loans
Federal, private, graduate and undergraduate loans, Parent PLUS loans
Loan types
Variable and fixed
Variable rates (APR)
From 2.48% (rates include an autopay discount)
Fixed rates (APR)
From 4.29% (rates include an autopay discount)
Loan terms
From 5 to 20 years for student loan refinancing; 5, 7 or 10 years for parent loan refinancing
Loan amounts
From $15,000
Minimum credit score
N/A
Minimum income
N/A
Allow for a co-signer
Yes
Terms apply.
SoFi Student Loan Refinancing
Cost
No origination fees to refinance
Eligible loans
Federal, private, graduate and undergraduate loans, Parent PLUS loans, medical and dental residency loans
Loan types
Variable and fixed
Variable rates (APR)
5.74% - 9.99% (rates include a 0.25% autopay discount)
Fixed rates (APR)
4.99% - 9.99% (rates include a 0.25% autopay discount)
Loan terms
5, 7, 10, 15, 20 years
Loan amounts
From $5,000; over $10,000 for medical/dental residency loans
Minimum credit score
N/A
Minimum income
N/A
Allow for a co-signer
Yes
Terms apply.
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