What You Need To Know

What You Need To Know


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Student debt hit another all-time high in the first quarter of 2022, reaching $1.59 trillion, according to data released by the Federal Reserve Bank of New York on Tuesday.

This debt category accounts for just over 10% of total household debt, which is nearing a whopping $16 trillion. This is the second-largest category of consumer debt, behind home mortgages.

This news comes amid rumors that the Biden administration is considering $10,000 in federal student debt forgiveness, and after another extension of the federal student loan payment forbearance until Aug. 31. However, private student loans have continued to accrue interest and require repayment throughout the pandemic, which may partially explain the hike in total debt — despite only making up between 7-10% of total student debt. Additionally, new loans for current and new students are adding to the total debt.

Whether you have public or private student loans, it’s likely a burden on your overall financial picture. And while the government may take action to forgive some student loan debt, nothing is guaranteed. Here’s what you can do in the meantime.

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Student debt continues to soar, with few solutions

How to pay down your student debt

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 rates (APR)

    From 2.24%; from 2.37% for medical/dental residents (rates include a 0.25% autopay discount)

  • Fixed rates (APR)

    From 2.99%; from 3.12% for medical/dental residents (rates include a 0.25% autopay discount)

  • Loan terms

  • loan amount

    From $5,000; over $10,000 for medical/dental residency loans

  • Minimum credit score

  • Minimum income

  • Allow for a co-signer

Pros

  • No application or origination fees to refinance
  • 0.25% autopay discount already applied
  • Soft credit pull when you prequalify
  • No prepayment penalties
  • Protections include: Unemployment protection (forbearance offered in 3-month increments, capped at 12 months), Covid forbearance of payments for a minimum of 90 days if experiencing financial hardship, loan deferment if going back to school, SoFi honors first 6 months of pre -existing grace period on loans looking to be refinanced
  • Offers $100 monthly payments during residency
  • SoFi has its own Career Advisory Group to help members look for new employment
  • Access to live customer support 7 days a week
  • SoFi members get career coaching, financial advice from planners, plus more for free
  • Unique member benefits like receive a 0.125% interest rate discount on any additional SoFi lending product
  • Offers up to $310 bonus referral program

Cons

  • No co-signer release option available
  • Minimum loan size of $5,000; over $10,000 for medical/dental residency loans

Laurel Road Student Loan Refinancing

On Laurel Road’s secure site

  • 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 rates (APR)

    From 1.89%; from 2.28% for resident rates (rates include a 0.25% autopay discount)

  • Fixed rates (APR)

    From 2.80%; from 3.08% for resident rates (rates include a 0.25% autopay discount)

  • Loan terms

    5, 7, 10, 15, 20 years (but also offers any term below 20 years, subject to underwriting criteria)

  • loan amount

    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

  • Minimum income

  • Allow for a co-signer

Pros

  • No origination fees to refinance
  • 0.25% autopay discount already applied
  • Soft credit pull when you prequalify
  • No prepayment penalties
  • Protections include: Financial hardship (such as job loss) forbearance for one or more 3-month time periods (have to wait minimum 12 months in between periods), Covid forbearance of 3 monthly payments (and option to request longer), natural disaster forbearance of up to 2 monthly payments, deferment for medical students up to 6 months after their residency and fellowships (total loan term including residency, fellowship and grace period must not exceed 20 years)
  • Medical students pay only $100 per month while in residency program or fellowship
  • Graduates with associate degrees in the health-care field can refinance
  • Offers up to $400 bonus referral program

Cons

  • No co-signer release option available
  • Late fee may be assessed if any part of a payment is not received within 15 days of the due date: will not exceed 5% of the late payment or $28, whichever is less
  • May be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds or a closed account
  • Minimum loan size of $5,000

Bottom line

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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