Should I refinance my student loans or wait for forgiveness programs?

Education

I have about ,000 in federal student loans at 6.8% interest. I work for a nonprofit hospital so I might qualify for PSLF in like 8 more years. But I keep seeing ads for refinancing at 4-5%. The math seems like refinancing saves money but then I lose the forgiveness option right? Anyone been through this decision? My monthly payment is right now which hurts.

Michael Williams

3 Answers

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DO NOT refinance if youre going for PSLF. The moment you refinance federal loans into private loans you lose ALL federal protections including PSLF eligibility. With 8 years left thats potentially k forgiven tax free. Even at the higher interest rate, the forgiveness math almost always wins.

Heres what I did instead - switched to an income driven plan to lower my monthly payment while still qualifying for PSLF. My payments went from to . Make sure youre submitting your employment certification form every year to track your qualifying payments. Im 7 years in with 3 to go and cant wait.

Joshua Anderson

Stay federal if you have any chance at PSLF. I refinanced 5 years ago and regret it every day. Lost eligibility for forgiveness and all the covid forbearance that happened.

Nicole Martin

Run the actual numbers. If youre 8 years into PSLF thats 80 qualifying payments already. The remaining forgiveness is almost certainly worth more than interest savings from refinancing.