Refinancing Student Loans May Help Borrowers

Lower Rates May Make Refinancing the Right Choice

FEb. 16, 2021

As COVID-19 continues to have a significant impact on Americans' finances, many people with student loans remain confused by the different types of relief offered and wonder what options are best for them if they are required, or are able, to make payments now.

Their decisions likely depend on the type of loans they have. While it might be a good time to consider refinancing private student loans, especially those with higher rates, Iowa Student Loan® cautions borrowers about refinancing federal loans.

Steve McCullough, president and CEO of Iowa Student Loan, the nonprofit company based in West Des Moines, Iowa, suggests a wait-and-see approach when it comes to federal student loans.

"Interest rates are low right now, so it's a great opportunity to look into refinancing private student loans, but I would caution borrowers about refinancing federal loans at this time," said McCullough. "Instead federal student loans should be consolidated separately in the Direct Consolidation Loan program.

"The federal government's pandemic assistance for federally held student loans has been extended through Sept. 30, 2021. This means continuing to suspend required monthly payments and extending 0.00% interest rates for those loans. And, there are student loan forgiveness proposals being discussed by leaders in Washington, D.C., that may or may not be acted upon in the next few months for certain federal loans as well."

To help those with private student loans who are seeking ways to pay less in interest, Iowa Student Loan has lowered its refinance loan rates to their lowest rates yet.

Young adults making payments on their own student loans or parents making payments on loans they took out for their children may benefit from rates between 2.80% annual percentage rate to 6.67% annual percentage rate. These lower rates can make a significant difference, especially for people paying on loans with rates as high as 10% or more.

All refinance applicants, and any potential cosigners, are encouraged to visit www.IowaStudentLoan.org to pre-qualify. In less than a minute, applicants can learn the rate they would get by refinancing and see potential interest savings over their current loans to make informed decisions before they apply. The quick rate check does not impact applicants' or cosigners' credit scores.

Besides refinance loans, Iowa Student Loan offers several private loan products to help students and their families pay for ongoing education. In addition, free resources for planning and paying for college are available to the public without charge on www.IowaStudentLoan.org.

# # #

Media Contact

Christopher Weishaar, Digital PR Specialist, (515) 273-7102, cweishaar@studentloan.org