In the Press – Time Magazine – Why Now Might Be the Best Time to Refinance Your Student Loans

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If you have a high credit score and comfortable salary, a growing number of lenders will offer you a better deal on your student loans. But you could also lose some consumer protections.

With an MBA and a law degree from the University of Pennsylvania, Ama Karikari-Yawson had the sort of six-figure graduate school debt that student loan nightmares are made of.

Her loan payments were about $2,000 a month. Coupled with roughly $4,000 in childcare costs for her two kids, she had little left over at the end of the month, even with her cushy New York City corporate lawyer’s salary.

“I really felt like I was working to work,” says Karikari-Yawson. “All the money I was making, I hardly saved anything.”

When Karikari-Yawson’s husband saw an ad on the train for a student loan refinancing company, the couple was intrigued, and she started researching.

Some of the interest rates on Karikari-Yawson’s private loans were lower than what CommonBond, the refinancing company she ultimately chose, offered. But by refinancing her federal loans, about half of her total debt, she was able to chop $800 off her monthly payments in exchange for a longer loan term.

Last month, she quit her job as a lawyer and started working full-time on what was her side project as a children’s author and speaker.

Karikari was eligible for CommonBond’s services because of her graduate school debt. But this week, the lending company announced a giant expansion: Instead of focusing on graduate debt from just 200 institutions, it will now refinance undergraduate or graduate debt from more than 2,000 colleges. CommonBond will also refinance Parent PLUS loan debt.

The news is the latest evidence of a rapidly growing student loan refinance market. And Karikari-Yawson’s story is precisely the type that student loan refinancers hope its desired customers will identify with: someone with a comfortable salary but high monthly loan payments that have become a burden.

By Kaitlin Mulhere

Read the full article here

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