With the average cost of college rising at a rapid pace, so are the student loan balances of graduating seniors. New graduates and longtime borrowers alike are desperate for ways to make their student loan payments more manageable so they can get out from under the crushing weight of debt once and for all.
Yet one of the most effective ways of reducing student loan payments — by consolidating multiple high-interest loans into a single, new loan with a lower rate — is unknown by a large portion of today’s borrowers. That solution is student loan refinancing.
In a new survey by Student Loan Hero, we polled student loan borrowers of all ages to find out how well they understood the refinancing process, whether they had successfully refinanced, and if not, what was stopping them. Read on to find out what they had to say.
Student Loan Hero Refinancing Survey: 2016 Results
Are you familiar with student loan refinancing?
- Yes: 62.11%
- No: 37.89%
Have you refinanced your student loans?
- Yes. Only my federal student loans: 13.73%
- Yes. Only my private student loans: 3.59%
- Yes. Both federal and private student loans: 13.51%
- No. I have not refinanced: 69.16%
If you haven’t refinanced your student loans, why not?
- I wasn’t aware of student loan refinancing: 23.40%
- I plan to receive student loan forgiveness: 8.35%
- My refinancing application was rejected: 1.96%
- I’ve already refinanced my student loans: 15.14%
- I wish to remain on income-driven repayment: 20.09%
- Other: 31.05%
If you were to refinance your student loans (or have already refinanced), what would be (or was) your main reason for doing so?
- Lower monthly payments: 25.93%
- Lower interest rate: 33.38%
- Release a cosigner: 2.40%
- Transfer Parent PLUS loans to child/student: 2.81%
- Convert variable rate loan to fixed rate: 2.56%
- Not sure/I don’t know what refinancing is: 12.93%
- Other: 19.99%
Would you be willing to give up access to federal student loan repayment options such as income-driven repayment and forgiveness in exchange for a lower interest rate?
- Yes: 24.72%
- No: 35.88%
- Not sure: 39.40%
Survey was conducted via Google Consumer Surveys on behalf of Student Loan Hero from June 30 – July 3, 2016, with a nationally representative sample of 1,001 individuals living in the US with student loans in repayment. “Do you have student loans that are currently in repayment?” was used as a screening question (with a target answer of “yes”).