How Self-Employed Student Loan Borrowers Can Fire Their Debt

 May 28, 2021
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Self-Employed Student Loan

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Refinance Student Loan rates starting at 2.49% APR

2.49% to 11.72% 1

Visit Lender

2.50% to 6.30% 2

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4.13% to 7.39% 3

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  • Variable APR

Note that the government has paused all repayment on federally held student loans through the end of 2022, with no interest to be charged during that period and no loans to be held delinquent or in default.

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Being self-employed with student loans can be challenging, with your variable income adding to the already complex process of repaying education debt.

Fortunately, federal student loan repayment plans can make life easier if you’re an entrepreneur or freelancer. You can limit your monthly dues to a percentage of your income, and you can recertify your income level more often than most borrowers realize.

Plus, for federal and private student loans borrowers who are self-employed, refinancing could be a useful option. Even if you don’t have a steady paycheck coming in, you can qualify for refinancing to lower your interest rate or change your repayment term. Whether you should refinance, though, is an open question.

For more on how to handle student loans as a self-employed borrower, let’s tackle these two topics:

How do you repay student loans if you’re self-employed?

In some ways, self-employed student loan borrowers should manage their debt like full-time workers with traditional jobs. As an example, you can enroll in automatic payments to score an interest rate discount, for example. And, if you’re able, you can also make extra payments to get ahead of your repayment term.

Where repayment diverges for self-employed student loan-holders, however, is centered around cash-flow. If your income isn’t as stable as a 9-to-5 peer’s, you might be vulnerable to hiccups during repayment. To avoid consequences stemming from delinquency and default, here’s how to get ahead of these hiccups, depending on your loan type.

Federal loan repayment for the self-employed

Federal student loans come with a variety of safeguards, including payment postponements in the form of deferment and forbearance. But these are relatively short-term solutions and if you plan on being a self-employed student loan borrower for the long haul, you’ll want to make a more sustainable plan.

Choosing the right repayment plan is paramount. For federal loans, you were assigned a standard 10-year repayment plan upon borrowing. However, an income-driven repayment (IDR) plan could be wise for many self-employed student loan borrowers.

Under IDR plans, your monthly dues are determined by your discretionary income, as well as your loan balance and family size. To apply for one of these plans, you’ll need to complete an Income-Driven Repayment Plan Request. To prove your (taxable) income, you could be asked for…

Situation Documentation
If you filed a federal income tax return in the past two years and your current income hasn’t changed significantly since filing… Your adjusted gross income, via a paper copy of your last federal income tax return, an IRS tax return transcript or by using the IRS’ Data Retrieval Tool
If you haven’t filed a federal income tax return in the past two years or your income has changed significantly since filing… Your income via alternative documentation, such as pay stubs

Short of (or in addition to) pay stubs, look for any way to prove your level of income. You might screenshot your side hustle accounts or invoices for services rendered. Just keep in mind that your spouse (if you have one) may be required to cosign your IDR application if you filed taxes jointly (though this does not mean that they’re cosigning your debt).

How to Choose the Best Student Loan Repayment Plan for You

And if your income drops — perhaps during your slow season — after you’ve enrolled in IDR, contact your federal loan servicer and recertify your income earlier than was originally necessary. You don’t have to wait for the annual deadline for IDR recertification. As you direct them to, your servicer should update your monthly dues to reflect your lower level of income.

What about forgiveness for self-employed student loan borrowers?

Federal student loan forgiveness programs and state and private loan repayment assistance programs are typically limited to borrowers working in specific full-time careers, such as teachers and nurses. Unless you own and therefore work full time for an eligible nonprofit, Public Service Loan Forgiveness (PSLF) is unlikely to be a realistic option for self-employed student loan borrowers.

With that said, you could elect to slow-play your student loan debt: Forgiveness is available on income-driven repayment plans after 20 to 25 years. So if you keep your payments low for two-plus decades, you could have the majority of your debt canceled, eventually anyway.

Private loan repayment for the self-employed

With private student loans, your options are certainly fewer. Still, self-employed private loan borrowers aren’t completely without relief options.

Let’s look at the next-best alternative among private loan repayment options.

Federal protection lacking in private loans Next-best alternative
Income-driven repayment Once you secure a private loan, you lock in your repayment terms and conditions. With that said, an economic hardship forbearance (available with many private lenders) could be a stop-gap solution while you figure out a long-term plan, such as student loan refinancing (see below).
Loan forgiveness programs

No, there are no broad forgiveness options like PSLF for private loans — and unfortunately, state- and employer-based loan repayment assistance programs usually don’t work for self-employed borrowers — unless you work for yourself.

If you own your own business: The CARES Act passed by Congress in March 2020 gave employers 401(k)-like status for contributing to their employees’ education debt. Through 2025, companies can contribute up to $5,250 toward loan payments without the funds counting toward taxable income. You could deliver this new benefit to yourself.

On the business side, the contributions wouldn’t be subject to payroll tax, and more personally, you could whittle down your loan repayment faster. Consider other student loan tax deductions as well.

Can I refinance my student loans if I’m a freelancer or self-employed?

Thanks to innovative student loan solutions from refinancing companies, having a traditional job is no longer required to score a lower rate on your college debt. Most lenders are more concerned with your income, whether it comes from a 9-to-5 office job or a stack of 1099-MISC tax forms.

Top-rated lender Earnest, for example, requires applicants to be “employed, have a written job offer for a position that starts within six months or possess consistent income.” Some other lenders simply require applicants to have a specified minimum income.

Assuming you can prove you’re being paid on the regular — you might be asked for an income tax return instead of pay stubs — you’ll be good to go. Keep in mind that you’ll have to check off other basic eligibility boxes for student loan refinancing, such as sporting a strong credit history.

Although being out on your own professionally won’t directly hinder your refinancing application, it could make qualifying more difficult. Say, for example, you used credit to build your business. If your credit report has blemishes, if your credit score has dipped, or if your debt-to-income ratio is out of whack, you might face a denial. Opening up the conversation with potential lenders can clear up any confusion about whether your business’s balance sheet clouds your own personal finances.

Can a cosigner help a self-employed student loan borrower qualify for refinancing?
No matter where you might fall short on a refinancing application, a cosigner could lift you up to approval. They’ll need strong credit and consistent income to become eligible to join your application. And if the cosigner’s finances are in tip-top shape, it likely won’t matter as much if they’re self-employed either.

So you can refinance student loans while self-employed, but should you?

Student loan refinancing can be hugely beneficial to certain borrowers, self-employed or otherwise. The move is irreversible, however, so you want to first be aware of the pros and cons of refinancing.

If you have federal loans, there are more cons to consider. By refinancing your federal loans into a new private loan, they would be stripped of their government-owned status and therefore lose eligibility for all the safety nets discussed above.

If you have private loans, on the other hand, the question of whether to refinance is a lot more straightforward. Your loans are already private so they’re very likely only to be improved through refinancing.

Still, there are pitfalls to be aware of: If you refinance your private loans to a longer loan term, for example, you might get more breathing room in your monthly budget — but you’ll also face more interest payments over time.

It could make sense to refinance your federal loans if… It could make sense to refinance your private loans to…
● Your income is stable and you can’t foresee any possible need for government-exclusive repayment protections like IDR and PSLF ● Adjust your repayment term (perhaps lengthening it, to lower monthly dues)
● Lower your interest rate to rack up savings
● Consolidate multiple loans for a simpler repayment
● Switch to a better, more helpful lender
Remember you don’t have to refinance all of your student loans. You could elect to refinance one or more but not the whole lot.

Freelancing while repaying student loans is no easy feat, that’s for sure. If you take the right steps to manage your federal and private student loans, however, your employment type won’t stop you from eventually ending your debt.

Consider all of your options carefully. If refinancing is right for you, check out our list of the best banks to refinance student loans.

Interested in refinancing student loans?

Here are the top 9 lenders of 2022!
LenderVariable APREligible Degrees 
2.49% – 11.72%1Undergrad
& Graduate

Visit Splash

2.50% – 6.30%2Undergrad
& Graduate

Visit Laurel Road

4.13% – 7.39%3Undergrad
& Graduate

Visit Lendkey

2.49% – 7.99%4Undergrad
& Graduate

Visit Earnest

2.49% – 7.99%5Undergrad
& Graduate

Visit NaviRefi

3.24% – 8.24%6Undergrad
& Graduate

Visit SoFi

2.48% – 7.98%Undergrad
& Graduate

Visit Elfi

1.74% – 7.99%7Undergrad
& Graduate

Visit Purefy

3.69% – 9.92%8Undergrad
& Graduate

Visit Citizens

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of September 6, 2022.

2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $9 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.


This information is current as of April 29, 2021. Information and rates are subject to change without notice.

3 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 09/09/2022 student loan refinancing rates range from 4.13% APR – 7.39% Variable APR with AutoPay and 2.99% APR – 9.93% Fixed APR with AutoPay.

4 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 3.99% – 8.74% APR (3.74% – 8.49% APR with Auto Pay discount). Starting variable interest rates are 2.74% APR to 8.24% APR (2.49% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

5 Important Disclosures for Navient.

Navient Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 3.99% – 8.74% APR (3.74% – 8.49% APR with Auto Pay discount). Starting variable interest rates are 2.74% APR to 8.24% APR (2.49% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

6 Important Disclosures for SoFi.

SoFi Disclosures

Fixed rates range from 3.99% APR to 8.24% APR with a 0.25% autopay discount. Variable rates from 3.24% APR to 8.24% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

7 Important Disclosures for Purefy.

Purefy Disclosures

Purefy Student Loan Refinancing Rate and Terms Disclosure: Annual Percentage Rates (APR) ranges and examples are based on information provided to Purefy by lenders participating in Purefy’s rate comparison platform. For student loan refinancing, the participating lenders offer fixed rates ranging from 2.73% – 7.99% APR, and variable rates ranging from 1.74% – 7.99% APR. The maximum variable rate is 25.00%. Your interest rate will be based on the lender’s requirements. In most cases, lenders determine the interest rates based on your credit score, degree type and other credit and financial criteria. Only borrowers with excellent credit and meeting other lender criteria will qualify for the lowest rate available. Rates and terms are subject to change at any time without notice. Terms and conditions apply.  

8 Important Disclosures for Citizens.

CitizensBank Disclosures

Education Refinance Loan Rate Disclosure: Variable interest rates range from 3.69%-9.92% (3.69%-9.92% APR). Fixed interest rates range from  4.49%-10.11% (4.49%-10.11% APR). 

Undergraduate Rate Disclosure: Variable interest rates range from 6.39%- 9.60% (6.39% – 9.60% APR). Fixed interest rates range from 6.58% – 9.79% (6.58% – 9.79% APR).

Graduate Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).

Education Refinance Loan for Parents Rate Disclosure: Variable interest rates range from 3.69%- 9.09% (3.69%- 9.09% APR). Fixed interest rates range from 4.49% – 9.28% (4.49% – 9.28% APR).

Medical Residency Refinance Loan Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).