How Consolidating/Refinancing Your Student Loans Will Save You $$$


This post is for the individuals who cannot qualify for the government’s Public Service Loan Forgiveness Program (PSLFP) and carry a high interest rate on their respective student loans. The average debt upon graduation for CRNAs is ~$100,000. Like many others, I had a mix of federal and private loans when I left school.

When I crunched the numbers, I came to the conclusion that even if I did qualify for PSLFP, the amount of interest I’d end up paying the federal government would still be significantly more than if I had just refinanced and consolidated my loans with a private lender.

Let’s take a look at the following examples. Three assumptions are being made with the following examples. 1) We’re using a 10 year repayment plan as the PSLF requires you to make 120 monthly payments to your principal. 2) We’re using the standard repayment plan. 3) 5.81% is used as an average interest rate for those with previous loans (whether private or federal). At the end of 10 years, a little over $32,000 in interest payments will be made.

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Now, let’s take a look at what you’ll save if you refinance and consolidate your loans.

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The interest rate is decreased from 5.81% to 3.50% (obtained from SoFi’s website). After 10 years of paying your loans at a rate of 3.5%, you’d have paid ~$18,600 in interest. That’s nearly $14,000 of interest payments that you’ll have saved.

Needless to say, I strongly encourage those who have pre-existing student loans to consolidate and refinance to save money especially those who carry private student loans and/or do not qualify for PSLF if they carry federal student loans.


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