In the ever-changing world of student loans, it is critical to stay up to date with current events and student loan rates. Below are the trends in student loans this week that could affect your loans and your wallet.
1 current trend in student loans for the week of June 7, 2021
1.SoFi Launches Student Loan Refinancing Option That Includes Administrative Deferral
Private student loan company SoFi has created a new refinancing program that allows federal student loan borrowers to refinance some or all of their loans without losing their current payment and interest pause on federal loans… By refinancing now, borrowers will be able to maintain historically low interest rates on their student loans.
Borrowers can apply for refinancing on the SoFi website and defer repayment until the federal abstinence deadline expires on September 30th. Approved borrowers can also cancel their refinancing in the interim and stick with their federal loans if they change their minds.
How does it affect student loans
Since most federal student loans suspended payments and interest accrual until September 30, refinancing into a private loan was not a good option for federal borrowers – even at low interest rates. The SoFi program is the first to simplify the refinancing decision for borrowers who were worried about giving up federal benefits.
Anthony Noto, CEO of SoFi, explains that the program is the best of both worlds: borrowers can fix a low interest rate without sacrificing temporary federal benefits. “We make sure that federal borrowers do not have to choose between long-term financial health and short-term assistance,” he says.
Keep in mind that borrowers who choose this option will still lose federal benefits such as income-based repayment plans, potential loan forgiveness, and extended periods of abstinence, so it is still important to consider all the advantages and disadvantages of refinancing. Refinancing is also usually only worth considering if you can get a lower interest rate than what you are paying now. However, the SoFi program could be a lifeline if you were planning to refinance after the abstinence period ends.
Whether you are new to taking out student loans or in the process of paying off, it is wise to always be aware of how student loan rates can change. As 2021 progresses, more opportunities may open up for cheaper loans or loan forgiveness; follow up Student Bank Loan News Center for the latest trends.