My fiancée just graduated law school, and I’m seeing her student loans in detail for the first time.
She has about 20 federal graduate loans (Grad PLUS and Direct Unsubsidized) through FAFSA with interest rates ranging from 7% to 9%, totaling roughly $210,000.
When I look at federal consolidation, the estimate shows payments of about $2,600/month through 2035, with around $260,000 paid in total.
I’m trying to figure out whether it would make more sense to:
- Keep the loans federal and consolidate through FAFSA
- Refinance with Sofi or another private lender to get a lower interest rate
We both have strong credit and expect a solid income after she passes the BAR, but I’m unsure whether giving up federal protections (income-driven repayment, deferment, possible forgiveness options, etc.) is worth the lower rate.
For those who’ve been in a similar situation, especially with large law school debt, did refinancing save you a meaningful amount? Or was staying with federal loans the better move?
Any advice or things we should consider before making this decision would be greatly appreciated.
$210k in Grad PLUS and Direct Unsubsidized
byu/AcrobaticMac inStudentLoans
Posted by AcrobaticMac
3 Comments
Your best approach is to list them smallest to largest and start knocking them off. The interest will kill you.
Law school grad here- also thinking about refinancing with a private lender because I don’t trust nelnet and their capitalization of interest process.
Nelnet is my servicer. I would keep federal loans because there is broader protection. The private lenders do sometimes offer cheaper interest rates but you will lose protection such as forbearance, deferments, etc.
Just my opinion but it sounds as though private lenders are SALIVATING over the expected influx of borrowers. They are not regulated or monitored very well and I will not be surprised if in 4 years, there is a major bubble from student loans that bursts. I strongly suspect that many borrowers will be approved even if they should not be akin to subprime mortgages.