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

refinance without a degree

People enroll in college to get a better life. They think a degree will lead to better job prospects, higher salaries, and a more successful future. Unfortunately, going to school can be costly. When life gets in the way, many students have to drop out.

Whether you left school because of an illness or because your major just wasn’t for you, you’re still required to make payments on your student loan debt. Refinancing can help many people manage their student loans, but refinancing without completing your degree can be tricky.

Below, learn about your options for refinancing your debt and coming up with a repayment strategy if you didn’t complete your degree.

College dropouts

The United States is experiencing an education crisis. Of the millions of people who go to college each year, less than half actually complete their degrees. In fact, the U.S. is last in a list of 18 countries for college graduation rates.

To make matters worse, one of the most common reasons students leave school is because of finances. Many drop out to take a full-time job to make ends meet or to help support their families. But when they leave, their student loans remain. That can compound the issue, making it even more difficult to go back to school.

Refinancing without a degree

For many people, refinancing their student loans makes their debt more manageable. They can get a lower interest rate, different repayment term, and even a lower monthly payment. That switch can free up money in their budgets, giving them some much-needed breathing room.

However, if you didn’t complete your degree, finding a lender who will refinance your loans is difficult. Many lenders require degree completion to be eligible for refinancing offers.

But lenders who will refinance the loans of non-graduates do exist! Citizens Bank, for example, provides refinancing loans to eligible people who have not completed their degrees. They just have slightly different requirements to apply.

To be eligible, you must have at least $10,000 in student loans to refinance and you can longer attend school. You must be a U.S. citizen, permanent resident, or resident alien with a valid Social Security number.

If you did not complete your degree, Citizen’s Bank requires you to make at least 12 on-time payments on all the loans you want to refinance. If you do not yet qualify, you have to wait for 12 months and make qualifying payments to become eligible for refinancing.

Other repayment options

If you are not able to refinance, there are still ways to make your federal student loans easier to manage. You may be eligible for income-driven repayment plans, deferment, or forbearance.

Income-driven repayment plans

If you have federal student loans, you will usually enter a standard 10-year repayment once you leave school — whether you graduated or dropped out early. But if your payments under this plan are too large for you to handle, you may be eligible for an income-driven repayment plan.

There are four income-driven repayment plans: income-based repayment (IBR), income-contingent repayment (ICR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE).

While each plan varies, the premise of all four is the same: Your monthly loan payment is capped at a percentage of your discretionary income, and your repayment term is extended. That can dramatically reduce your payments, freeing up more money in your budget for your essentials.


In some situations, you may be able to suspend payments while you get back on your feet. If you lost your job or are experiencing economic hardship that caused you to drop out of school, these options can give you a necessary break from payments.

Through deferment, you do not need to make payments for up to three years. Moreover, depending on the type of loans you have, the government may cover your interest payments. You may qualify for deferment if you are unemployed, are unable to find full-time employment, or are otherwise experiencing hardships.


If you do not qualify for deferment, you may be eligible for forbearance, where your payments are suspended for up to twelve months.

Unlike deferment, your loans will accumulate interest during this time. You can qualify for forbearance if your payments total more than 20 percent of your gross income, you are experiencing financial hardship, or are battling an illness.

To find out if you qualify for either deferment or forbearance, contact your loan servicer directly.

Managing student loans without a degree

If you left school and are struggling to manage your loans, do your homework to find out what options are available. You may be able to refinance your loans and get a more competitive interest rate, qualify for an income-driven repayment plan, or postpone payments through deferment or forbearance.

For more information on repayment options, learn how to apply for an income-driven repayment plan.

Interested in refinancing student loans?

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