These States Now Offer Student Loan Refinancing – Is Yours One of Them?


Have you ever looked at your monthly payments and been frustrated at how much is going toward interest? It’s a common issue for student loan borrowers with steep balances and high interest rates. In fact, some PLUS loan borrowers have interest rates of 7.90% to 8.50%. Ouch.

One way to counter the effects of high interest rates is through student loan refinancing. The idea is similar to refinancing a mortgage or car loan, with the goal of getting a lower interest rate.

Private student loan companies like SoFi, Earnest, CommonBond, and others are dominating the market, but states are starting to realize they can help borrowers through refinancing, too. A handful of states are offering refinancing programs to borrowers in an effort to lower interest rates and minimize the burden of monthly payments.

Is your state on the list? Find out which states are paving the way for student loan refinancing.


In May 2015, legislation was passed in Connecticut to allow the Connecticut Higher Education Supplemental Loan Authority (CHESLA) to refinance student loans for state residents.

Later this year, borrowers in Connecticut can refinance their student loans and get a lower interest rate, effectively saving them money on interest and making payments more manageable.

Currently, there’s little information about eligibility requirements and interest rates for those looking to refinance. If you live in Connecticut and are interested in refinancing, you may want to keep tabs on the opportunities available later this year.


The state of Minnesota recently unveiled a new program to help student loan borrowers called Self Refi. The program, which is administered by the Minnesota Office of Higher Education, is only available to Minnesota residents who have completed their degrees and have at least $10,000 in student loan debt.

According to the Self Refi website, in order to be eligible for this loan, borrowers must:

  • Currently be a Minnesota resident.
  • Have earned a certificate, diploma, associate, bachelor, or graduate degree.
  • Have a minimum FICO score of 720 to qualify without a cosigner (650 with a cosigner).
  • Have a maximum debt-to-income ratio of 45 percent.
  • Have no delinquencies on his or her credit report.
  • Have no unpaid charge offs, liens, or judgments totaling $300 or more.
  • Have a cosigner if the borrower is not a U.S. citizen or permanent resident.

Borrowers who live in Minnesota can refinance through Self Refi and get a variable-rate loan for as low as 3.0% with a 5-year repayment term. Other options include variable or fixed-rate loans with a repayment terms of five, 10, or 15 years.

North Dakota

If you live in North Dakota, you may be able to refinance your loans at lower rates through the Bank of North Dakota’s DEAL One Loan.

Stafford, PLUS, Perkins, Direct, and private loans are eligible for refinancing. Borrowers and/or cosigners must meet credit requirements in order to be eligible.

In addition, borrowers can choose from a variable rate loan at 2.01% or a fixed rate loan at 5.20%.

Rhode Island

The Rhode Island Student Loan Authority offers student loan refinancing for PLUS, Stafford, and private student loans.

Although the refinance loan is administered by The Rhode Island Student Loan Authority (RISLA), you don’t have to live in Rhode Island or have gone to school in Rhode Island to be eligible for this loan (crazy, right?!).

Borrowers could get a fixed rate as low as 4.24% when signing up for auto-pay and can choose from repayment options ranging from five to 15 years, with or without a cosigner.

In order to be eligible for this loan, borrowers must make at least $40,000 per year. Student loan borrowers from any state can apply for the RISLA refinance loan.

Other States With Refinancing Programs

In addition to the states mentioned above, Iowa, California, and Maine have passed legislation to enact refinancing programs. These programs are still in the early stages of implementation.

What to Know Before Refinancing

Whether it’s through a company or your state, refinancing your student loans will forfeit your federal protections, such as access to income-driven plans and loan forgiveness. It’s important to understand what you may be giving up in exchange for saving money on interest.

Should You Refinance Through a Company or State Program?

Now that student loan refinancing is expanding beyond private companies, you may wonder which option is better for refinancing your student loans.

Whether you choose to work with a company or your state, it’s crucial to compare the interest rates you are eligible for, how much money you will save over time, what federal benefits you may give up, and what benefits you get through refinancing (unemployment protection, for example, which is offered by lenders such as SoFi and CommonBond).

In the end, choose wisely and make sure you understand the costs and benefits of refinancing.

Interested in refinancing student loans?

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