How to Refinance Your Student Loans, Even If You Didn’t Graduate

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If you left school before completing the requirements for your degree, you’re not alone. According to College Atlas, 56% of students who start a four-year school drop out before year six of their college careers. Finances play a big role in the decision, with the study finding that students from low-income households were 7.6 times more likely to withdraw than those from well-off backgrounds.

But even if you left school before graduating, you might still owe a significant amount in student loans. Refinancing is one strategy for managing debt, but your options for lenders who will refinance student loans without a degree are limited. If you’re looking for help refinancing student loans without a degree, here’s what you need to know.

Lenders offering student loan refinance with no degree

When you refinance student loans, you can simplify your debt by consolidating multiple student loans into one. You might qualify for a lower interest rate, and you can adjust your monthly payments by choosing new repayment terms.

Although your options for refinancing student loans without a college degree are narrower, they do exist. The following lenders will work with you to restructure your debt, even if you didn’t graduate from college. Note that rates and terms below are accurate as of October 2018.

  • Citizens Bank
    • Refinances student loans starting at $10,000
    • Offers APRs between 2.15% and 9.02%
  • Discover
    • Refinances student loans from $5,000
  • PNC
    • Requires that you’ve been repaying your student loans for at least 24 months
    • Offers rates between 4.98% and 7.59% APR
  • RISLA
    • Refinances student loans starting at $7,500
    • Offers APRs between 3.49% and 7.64% (with autopay)
  • Wells Fargo
    • Refinances student loans starting at $5,000
    • Offers rates between 3.99% and 9.99% APR

1. Discover’s lowest rates shown include a 0.25% interest rate reduction while enrolled in automatic payments.

Most online lenders, however, such as SoFi and CommonBond, do require a degree as part of their refinancing eligibility criteria. So if you’re searching for a lender, you might want to first look at the ones listed above. If possible, get a few different offers so you can find one with the best terms.

Eligibility for student loan refinance without a degree

In order to refinance student loans, you’ll need to fulfill certain eligibility requirements. First, you’ll have to meet the lender’s underwriting standards for credit and income.

Although few lenders advertise a specific cutoff, most look for a decent credit score. They also look for a steady source of income that you’ve had for a number of months or years. RISLA, for instance, requires that you’re making an annual salary of $40,000 or more.

Along with strong credit and income, you might also need to have a certain amount in savings and to meet a threshold for debt-to-income ratio. If your debt-to-income ratio is too high, the lender will be concerned about your ability to pay back the loan.

If you can’t fulfill these criteria, there is another option: You could apply with a creditworthy cosigner. Applying with a cosigner could boost your chances of approval, as well as help you qualify for a lower interest rate.

However, your cosigner will share responsibility for the debt, meaning their finances will suffer if you can’t pay back the loan. Make sure you and your cosigner set clear expectations about who will repay the debt — and what will happen if you lose your income — before entering a student loan refinance agreement together.

Pros and cons of refinancing student loans

Although refinancing student loans with no degree can be tricky, finding the right lender could be well worth it. When you refinance student loans, you could snag a lower interest rate on your debt. As a result, you could save hundreds or even thousands of dollars over the life of your loans.

You’ll also get the chance to choose new repayment terms. You could pick a shorter term to get out of debt faster. Or you could choose a longer term to reduce your monthly student loan payments and give your finances some breathing room.

Another benefit to student loan refinancing is combining multiple loans into one. If you’re struggling to track various due dates and bills, this consolidation could simplify repayment.

But at the same time, there are potential disadvantages to refinancing student loans.

When you refinance federal loans, for instance, you turn them into a private one. As a result, you lose access to federal protections and benefits, such as income-driven repayment plans, forbearance, deferment and Public Service Loan Forgiveness. If you’re relying on any of these programs, refinancing wouldn’t make sense for your situation.

But if you don’t need any federal options — and you’re confident you can pay back your loan on time — student loan refinance could be a savvy move. You’ll just have fewer options for refinancing providers than a borrower who graduated with his or her degree.

Other options for student loan repayment

If you’re looking for strategies to manage your student loans, refinancing isn’t your only option. If you have federal student loans, for instance, you could adjust your monthly payments with an income-driven repayment plan. You have four main options:

  • Income-Based Repayment
  • Pay As You Earn
  • Revised Pay As You Earn
  • Income-Contingent Repayment

All these income-driven repayment plans take your income and family size into account to adjust your monthly bills. They also extend your terms to 20 or 25 years, and if you still have a balance at the end, the government forgives the rest. That said, any forgiven amount will be treated as taxable income, so you’ll still have one last bill to pay on your debt.

And if you’re facing financial hardship, you could postpone payments on your federal student loans through forbearance or deferment. These programs can help you avoid default, but interest might continue to accrue on your loans.

Finally, you could choose a career that qualifies for student loan forgiveness or repayment assistance. Some of the careers eligible for forgiveness do require a degree, however, so you might consider returning to school to increase your career mobility.

These programs, by the way, are available for federal student loans, but not for private ones. If you’re struggling to pay back your private student loans, speak with your lender or servicer about your options. Although private lenders don’t typically offer as many options, yours might be able to work with you to find a solution.

Managing your student loans after withdrawing from college

Even if you didn’t finish college, you might be stuck paying off student loans from the years you did attend. That debt can be tough to pay back, especially if you have high interest rates.

But once you have a decent credit score and steady income — or can apply with a cosigner who does — you could refinance for a lower rate. Although you won’t qualify with every lender, you do have options for refinancing student loans without a degree.

And if you’re struggling to get hired for a job without your bachelor’s degree, consider returning to school to finish up your graduation requirements. Scholarships and grants could help you cover costs so you don’t have to take on additional debt to return to school.

Although it’s not for everyone, returning to school could increase your earning potential and career opportunities. In the end, you can use your higher income to get rid of your student debt once and for all.

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Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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