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

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People enroll in college anticipating that a degree will lead to better job prospects, higher salaries and more opportunities in the future. But for a range of reasons, including college costs and life circumstances, some students have to leave school early.

After leaving school, you’re still required to make payments on your student loan debt. Refinancing can help many people manage their student debt, but refinancing student loans without a degree can be difficult.

To examine your options for refinancing student loans and coming up with a repayment strategy if you didn’t complete your degree, let’s look at the following:

Can you refinance student loans without a degree?

For many people, refinancing and consolidating student loans makes their debt more manageable. They may qualify for a lower interest rate, different repayment terms or even a lower monthly payment. That can free up money in their budgets for other financial priorities.

If you didn’t complete your degree, finding a lender who will refinance your loans with no degree can be a challenge. Many lenders require that you graduate 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, but there are slightly different requirements to apply.

To be eligible, you must have at least $10,000 in student loans to refinance and you must have made 12 qualifying loan payments after leaving school. You must be a U.S. citizen, permanent resident or resident alien with a valid Social Security number.

A few other lenders will refinance student loans for borrowers who didn’t graduate. PNC, for example, does not require graduation to apply for refinancing, but applicants cannot be in school and must be making payments on the loans they want to refinance.

Some lenders that refinance student loans without a degree
LenderSelect requirements (not a full list)
Citizens BankMake 12 full, on-time monthly payments before applying.
PNCYou’re no longer enrolled, and you’re active in repayment.
EdVestinUYou’re a U.S. citizen or permanent resident and are at least 18.
DiscoverYou’re a U.S. citizen or permanent resident and are at least 18.
Rhode Island Student Loan Authority (RISLA)You’re a U.S. citizen or permanent resident.
Advantage Education LoanYou’ve entered your grace period or repayment on the loans you want to refinance.
INvestEDYou’re a U.S. citizen or permanent resident and you or your cosigner has been employed continuously for 12 months.
MEFAYou’re a U.S. citizen or permanent resident and haven’t experienced a delinquency in the past 12 months.

Other repayment options

If you are not able to refinance student loans without a degree, 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, the standard repayment plan is 10 years once you leave school— whether you graduated or dropped out. But if your payments under this plan are too large for you to handle, you can sign up for an income-driven repayment plan.

There are four federal 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’s requirements and features vary, 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.

Deferment

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

Through deferment, you can take a break from federal loan payments for up to three years. Plus, if you have federal subsidized student loans, the government will cover your interest payments. You may qualify for deferment if you are unemployed, are unable to find full-time employment or are otherwise experiencing financial difficulty.

Forbearance

If you do not qualify for deferment, you may be eligible for forbearance, in which your federal payments can be suspended for up to twelve months at a time.

Unlike deferment, all loans will accumulate interest during this time. You can qualify for forbearance if your payments total more than 20% of your gross income, you are experiencing economic hardship or you are battling an illness, among other circumstances. Private student lenders may also offer forbearance; check in with your lender about its policies.

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

Managing student loans effectively without a degree

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

Marty Minchin and Andrew Pentis contributed to this report.