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Refinancing Student Loans Without a Degree

Refinancing Student Loans Without a Degree
Sulaiman Abdur-Rahman
Sulaiman Abdur-RahmanUpdated August 9, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Refinancing student loans without a degree is possible with certain lenders. Banks and other financial institutions can set their own eligibility criteria for student loan refinancing.Some lenders may require student loan borrowers to have graduated from an accredited postsecondary institution with at least an associate degree to qualify for refinancing. Other lenders may happily offer student loan refinancing to creditworthy borrowers who did not graduate from college.

Can You Refinance Student Loans Without a Degree?

As mentioned above, you may refinance student loans without a degree with certain lenders. Every lender can establish its own eligibility criteria for student loan refinancing. Some lenders may require borrowers to hold an associate degree or higher to be eligible for student loan refinancing. Other lenders, however, may have no graduation requirements for student loan refinancing.Here are some of the financial institutions that may offer student loan refinancing to borrowers without a college degree:
  • Citizens Bank
  • MEFA® (Massachusetts Educational Financing Authority)
  • PNC Bank

How to Refinance Without a Degree

If you’ve borrowed eligible student loans but never completed a degree program, you may be eligible for student loan refinancing. How to refinance education loans without a degree is as simple as submitting an application with a private lender requesting student loan refinancing.How student loan refinancing works is that borrowers submit an application with a private lender requesting a new loan agreement for refinancing student loan debt. Refinancing federal student loans can allow borrowers to replace their existing federal loans with the terms and conditions of a private loan agreement.Private lenders can set their own underwriting standards, but some may require applicants to have steady income and good credit. For subprime borrowers, it might be difficult to refinance student loans with bad credit.Reviewing the pros and cons of refinancing student loans can help you decide whether refinancing is right for you. One of the advantages of refinancing student loans is it may provide you with a lower interest rate. One of the big disadvantages of refinancing student loans with a private lender, however, is you’ll be forfeiting federal benefits. The refinanced portion of a federal student loan is not eligible for federal income-driven repayment (IDR) plans, Public Service Loan Forgiveness, or Teacher Loan Forgiveness.

Federal vs Private Student Loans

Borrowers can refinance federal student loans and private student loans. This means federal student loan borrowers may consider switching from a federal repayment plan to a private student loan refinancing payment plan. It also means that private student loan borrowers can replace their existing student loans with another private loan.The difference between private and federal student loans is that federal student loans are provided, owned, or guaranteed by the U.S. Department of Education. Banks, credit unions, online lenders, and select state-based or state-affiliated organizations may offer private student loans not guaranteed by the federal government. After a three-year payment pause, the Covid-19 forbearance is set to end on Aug. 30, 2023. As a result, interest accrual on federal student loans will resume on Sept. 1, and payments will be due starting in October 2023. Borrowers can make more than the minimum payment when paying off student loans.Some borrowers may never finish repaying a student loan during their lifetime. What happens to student loans when you die is the debt might be discharged, although some lenders may demand repayment from your estate.

Other Options to Pay Student Loans Without a Degree

Some may ask, how long does it take to pay off student loans? It can take borrowers between 10 to 30 years to pay off federal student loans and five to 25 years to pay off private student loans.The average federal student loan debt across the United States is more than $37,000 per borrower, according to the Education Data Initiative.As mentioned earlier, borrowers can make more than the minimum payment when paying off student loans. If you need relief, here are other options you may consider when paying student loans without a degree:


A student loan deferment allows borrowers to temporarily stop making payments on their student loan debt obligations. Federal student loan borrowers can request a deferment for various reasons, including economic hardship or unemployment. Some private lenders may also offer temporary deferment relief to qualifying borrowers.

Income-Driven Repayment (IDR) Plans

The U.S. Department of Education offers the following four IDR plans to help borrowers pay down their federal student loan debt:Private student loans are not eligible for any federal repayment options, including IDR plans. Depending on your income and family size, all four IDR plans may offer a lower monthly payment compared with the Standard Repayment Plan.All IDR plans can end with a borrower’s outstanding balance being forgiven at the end of the repayment period. Forgiveness may come after 20 or 25 years under any of the IDR plans, but forgiveness may come earlier for eligible SAVE Plan enrollees who had original principal balances of $12,000 or less.

Loan Forbearance

Borrowers of federal student loans may also request a forbearance, which can give borrowers a temporary pause in making student loan repayments toward principal and interest. Federal loan servicers may grant general forbearance for several reasons, including if borrowers demonstrate financial difficulties or high medical expenses.

What If You Don’t Qualify for Refinance?

Here are some options you may consider if you don’t qualify for student loan refinancing:

Getting a Cosigner

Getting a cosigner may help you qualify for student loan refinancing. A creditworthy cosigner can reduce the risk to the lender in the event of default. A cosigner accepts liability and agrees to make any necessary payments if the primary borrower defaults on the student refinance loan. A borrower may be considered in default of a private student loan agreement if the borrower fails to make any monthly payment when due.

Improving Income-Debt Ratio

Improving your debt-to-income ratio aka DTI may help you qualify for student loan refinancing. Your debt-to-income ratio measures your ability to afford new debt without defaulting on your existing obligations. Most lenders like to see a DTI below 36%. Paying down existing debt can improve your DTI.

The Takeaway

Millions of borrowers have taken out student loans without completing a degree program. Payment pauses or deferments can provide temporary relief, but student loan borrowers may seek a more permanent solution toward financial freedom.If you’re interested in student loan refinancing, Lantern by SoFi can help you compare student loan refinance rates. Refinancing might be right for you if you can lock in a lower interest rate.Explore your student loan refinancing options with Lantern.

Frequently Asked Questions

Do you have to have a degree to refinance your student loans?
Can I consolidate my student loans if I didn’t graduate?
How do I get rid of student loans if I didn’t graduate?
Photo credit: iStock/Riska

About the Author

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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