Refinancing with Laurel Road
Refinancing rates from 1.89% APR. Checking your rates won’t affect your credit score.
One of the most common reasons lenders reject applicants is because they did not attend a Title IV-qualifying institution. Most student loans and refinancing options require a Title IV school to qualify. But what is a Title IV school?
A school designated as Title IV is a higher education institution that processes U.S. federal student aid. These schools can be public, private nonprofit and proprietary, and are guided by the rules and criteria set by the Higher Education Act (HEA).
It’s an important distinction that can have long-lasting implications for you. Let’s answer some key questions about Title IV and why it matters:
- What is Title IV of the Higher Education Act?
- How do schools become Title IV universities?
- Why do lenders require schools to be Title IV?
- How to find out if your school is a Title IV institution
- Why your school’s accreditation matters
President Lyndon B. Johnson signed the Higher Education Act of 1965 to create protections for college students and to make college more affordable. It also increased the number of government dollars allocated for federal loans, scholarships and more.
One of the most significant parts of the law is the Title IV section. It’s designed to ensure that a school provides quality instruction and can help students secure a good job after graduation.
Title IV schools are the only institutions where individuals are eligible for federal student aid. Attendees of these colleges can receive student loans, grants and enter a federal work-study program.
The requirements for a school to become a Title IV college are rigorous. To be eligible, the state where the school is located must authorize it to offer postsecondary educational degrees.
An agency approved by the Secretary of Education must grant accreditation after reviewing the school’s curriculum and the university must only accept students who have a high school diploma or GED.
Public, private, for-profit and vocational schools can become Title IV educational facilities. In the case of vocational schools and private colleges, the school must have a license and offer the same postsecondary programs for at least two years before they apply. Schools also have to submit financial audits to prove they adhere to auditing standards.
If it’s a for-profit institution, the school cannot have applied for bankruptcy protection. The Department of Education requires schools to issue some sort of a degree, such as an associate’s or a bachelor’s.
In the case of vocational schools, the credential must be able to be used to get gainful employment. That means that most graduates must be able to provide for themselves and keep up with their debt payments with a job after graduation.
The application process can take years, and not all schools that apply get approved. Many schools in operation don’t fit into this classification, so it’s a serious factor to consider when evaluating your college options.
If you’re looking to refinance your student loans, most lenders require that the school you used your student loans to attend is a Title IV institution.
That’s because this classification is a measure of your degree’s validity and value. When reviewing schools, the Department of Education looks to see if the college’s degree programs prepare students for gainful employment.
The Department of Education and refinancing companies look at the gainful employment rate to determine if graduates can reasonably repay their student loans. If their degree only leads to minimum wage work, graduates are unlikely to be able to repay their debt. That means they’re a less appealing candidate to lenders.
Most lenders require borrowers to graduate from a Title IV school as a safeguard, seeing these as more likely to lead to well-paying work. Of course, just because a school isn’t a Title IV college, it doesn’t mean that the education there is poor — but it may be worth doing a little extra research.
If you’d like to find out if your school is a Title IV institution or not, search for it on this list. Lenders like SoFi, LendKey and College Ave all require borrowers to graduate from a Title IV school.
Since lenders can be rigid about their eligibility requirements, it’s important to know whether your prospective school is accredited under Title IV.
A Title IV classification can be seen as a vote of confidence in the value of a school’s degree, though not all Title IV institutions are necessarily top-notch. Likewise, some schools not included under Title IV might still have a lot to offer, but it’s worth doing some additional research into the outcomes for the school’s graduates. If the school lacks this accreditation, also know that you’ll likely have a harder time finding a student loan or refinancing that loan later on down the road.
Christina Majaski contributed to this report.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.99% – 5.64%1||Undergrad & Graduate|
|1.89% – 5.90%2||Undergrad & Graduate|
|2.25% – 6.09%3||Undergrad & Graduate|
|1.89% – 6.77%4||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|1.99% – 5.41%5||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews! |
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of July 31, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 7/31/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
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 $4 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 www.laurelroad.com.
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.
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%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of September 9, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 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 10, 2020.
5 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.16% effective August 10, 2020.