Broker Check


April 15, 2022

One of the most popular slides in our recent webinar that we got a lot of positive feedback on, was this student loan flowchart. It shows the general path that you should consider depending on your loan type, employment status, and debt to income ratio.

In general for private student loans it always makes sense to refinance assuming that you can qualify for a lower interest rate and better terms. Unlike a mortgage refinance that includes additional upfront closing costs, a student loan refinance doesn't have any costs. In fact, there are even some companies that will pay you a cash bonus to refinance your debt. With interest rates on the rise now is a great time to research your options. We direct our clients to Student Loan Planner's website to do this research as they have the highest cash bonuses negotiated with each of the lenders. If you find out about a bigger bonus elsewhere be sure to let us know!

For federal student loans it's not as easy as looking at the interest rate, so refinancing to a private loan even at a lower interest rate may not be the best idea. I breakdown federal loans into two broad categories, Direct Loans and FFEL/Other. The best benefits are available via the direct loan program, including the most popular forgiveness program, Public Service Loan Forgiveness (PSLF). If you don't have Direct loans then you can't qualify for PSLF. The good news is that you can consolidate those other federal loans into direct loans and by doing so now you will be able to take advantage of a limited waiver that will help you qualify for PSLF faster! You can read more about the limited waiver here. Keep in mind you must act before October 31, 2022 to have them qualify under this waiver.

If you are not working for a non-profit or governmental agency than you do not have the ability to qualify for PSLF but there could be other forgiveness programs that you can pursue. If your student debt to income ratio is high than you can look towards long-term forgiveness after 20 or 25 years depending on if you have loans from a graduate school program and the type income-driven repayment plan you select. There are also forgiveness programs based on your occupation including Medical/Dental, Teachers, Military, Social Workers, & Lawyers. We've compiled a catalog of all these programs and if you are interested in obtaining a copy you can text GUIDE to 609-586-9308.

You can watch the entire presentation by clicking here.

If you have questions about your specific circumstances you can schedule an introductory consultation but clicking here.