With prevailing interest rates at historic lows, some private lenders offer rates that are significantly better than a high-rate federal loan.
This is particularly true for grad school borrowers who use unsubsidized Direct loans and Graduate PLUS loans to finance their education.
But if your income is over a certain threshold, you won’t benefit from these programs.
And if you do qualify, but you’re at the high end of the spectrum, your slightly lowered payments may come at a through the refinancing process won’t make sense for every borrower, but it provides great benefits for some.
Similarly, the Teacher Loan Forgiveness Program is available for teachers who work in schools that serve low-income families full-time for five consecutive years.
These are clearly great programs for people who choose careers in public service or education, but if that’s not you, they won’t do you any good.
offer benefits and protections that do not transfer to private lenders.
For example, the government’s Pay As You Earn (PAYE) and Income-Based Repayment (IBR) programs allow borrowers to make reduced monthly payments based on financial hardship.By consolidating, the borrower would have only one student loan, with one monthly payment, interest rate, and term.