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If you’re going to school in Big Sky Country, chances are you’ve got some Montana student loans.
The average student loan debt among those earning bachelor’s degrees in Montana is $31,065, and an estimated 60% of undergrads in the state leave school with student loans, according to The Institute for College Access & Success.
If you’re currently getting your education in Montana or you’ve already graduated with debt, it’s important to understand your student loan options. This guide explains different sources of funding so you can afford school or manage your current student debt.
Federal student loans
Students attending accredited colleges in Montana can apply for federal student loans. Federal loan options include:
- Direct Subsidized Loans: Undergraduate students with demonstrated financial need might be eligible for Direct Subsidized Loans. These loans come with a low fixed interest rate: 4.45% for loans disbursed between July 1, 2017, and July 1, 2018. There’s also a 1.066% origination fee. The government covers the interest on subsidized loans while a student is in school and during deferment. There are annual and aggregate limits on the amount students can borrow.
- Direct Unsubsidized Loans: Both undergraduate and graduate students in Montana can obtain Direct Unsubsidized Loans, and there’s no requirement to demonstrate financial need. The loan origination fee is the same for Direct Unsubsidized Loans as for Direct Subsidized Loans. Undergraduates also pay 4.45% interest for loans disbursed between July 1, 2017, and July 1, 2018. But graduate students pay 6.00% interest. There are also annual and aggregate limits on Direct Unsubsidized Loans, but limits are higher for graduate students.
- PLUS Loans: Graduate students and parents of undergraduate students might be eligible for PLUS Loans. You can borrow up to the cost of attendance minus other aid received. Creditworthiness matters when applying for PLUS Loans. Those with an adverse credit history might be denied. The loan origination fee for PLUS Loans is 4.264%. These loans also come with a fixed interest rate of 7.00% for loans disbursed between July 1, 2017, and July 1, 2018.
Federal loans have significant advantages over private student loans, including flexible repayment options, such as income-driven repayment (IDR). An IDR plan can reduce your monthly loan payments to a small percentage of your income. Students who fund their education with federal loans might also be eligible for Public Service Loan Forgiveness if they work in qualifying jobs and follow program requirements.
Need help understanding your federal student loan options? Reach Higher Montana is an in-state organization that provides assistance for federal student loan borrowers.
Montana student loans
In addition to federal loans, students attending certain schools and programs in Montana might be eligible for specialized loans.
For example, nursing loans are available to Montana State University students who have demonstrated financial need and are enrolled in the school’s nursing program. There’s no fee for these nursing loans. Further, students aren’t obligated to make payments during school or for nine months after graduation. Loans must be repaid within 10 years and are charged at a fixed interest rate of 5.00%.
The University of Montana also provides some institutional loans funded through foundations and private donors. There are short-term loans for temporary financial hardship that must be repaid within 90 days, as well as long-term loans through the Henry Strong Educational Foundation.
The interest rate on Henry Strong Loans is 5.00%. The debt must be repaid within five years. Both undergraduate and graduate or professional students are eligible for this loan, but students must be enrolled in a “practical, literary, scientific, mechanical, or business” major, according to the school website. Students are eligible if they have an unmet financial need and have maxed out federal loan options.
Contact your school’s financial aid office for more information about institutional- or state-based aid that might be available to you.
Private student loans
Though federal student loans often offer more benefits to borrowers, private student loans can be a useful tool to cover gaps in school funding. Most private lenders allow students or parents to borrow up to the school-certified cost of attendance.
Students have many options for private student loans, and parents can borrow in their own names. Finding the right lender is important, so start with our list of the best private lenders for student loans.
Compare repayment terms, interest rates, and loan requirements to find the best deal for your situation. Students who can’t get a loan on their own could qualify with a cosigner.
Student loan refinancing
Unlike certain other states, Montana doesn’t offer its own student loan refinancing program for residents. But students can refinance with top private lenders. When you refinance, you get a new loan to repay your existing student debt. The new loan should ideally have a lower interest rate and better repayment terms.
You can also consolidate certain federal loans, combining them into one large loan. However, federal consolidation doesn’t lower your interest rate. If your goal is to save money over the life of your loan by lowering your interest rate, refinancing with a private lender is your best bet.
Consider the decision carefully. Although refinancing can reduce your costs and make it easier to manage loans by consolidating your debt, it does have its faults. For instance, you could lose borrower benefits, such as access to IDR plans, by refinancing federal loans.
Which student loans are right for you?
As with any debt, the less you borrow for school, the better.
Explore other options to fund your schooling without loans, such as grants and scholarships. Some schools in Montana also offer additional help for students. For example, Montana State University offers a Matched Education Savings Account to help qualifying low-income students afford an education.
By comparing all available options for Montana student loans, you can find the financing solutions that are right for your situation.
Need a student loan?Here are our top student loan lenders of 2018!
|1 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 11/1/2018. Variable interest rates may increase after consummation.
2 Important Disclosures for Discover.
3 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.94% – 12.78%1||Undergraduate, Graduate, and Parents|
|4.06% – 13.06%3||Undergraduate and Graduate|
|4.34% – 12.99%2||Undergraduate and Graduate|
|4.37% – 11.23%*,4||Undergraduate and Graduate|
|5.03% – 11.23%5||Undergraduate and Graduate|
|4.12% – 13.13%6||Undergraduate and Graduate|
|5.62% – 10.01%7||Undergraduate and Graduate|
|3.93% – 9.81%8||Undergraduate, Graduate, and Parents|
|4.26% – 12.13%9||Undergraduate, Graduate, and Parents|