Thinking about refinancing your student loans? Here's what you might pay now

Are you considering refinancing your student loans? You might want to think twice. According to a recent report, interest rates for new student loans have dropped to their lowest level in a decade, with average rates dropping to 2.80% for undergraduates and 4.30% for graduate students. However, those lower rates do not apply to refinanced loans. In fact, the report found that refinancing can potentially increase the cost of your loans by tens of thousands of dollars over the life of the loan. The report highlights the importance of carefully weighing the pros and cons of refinancing before making a decision. While refinancing can help borrowers lower their monthly payments or obtain a lower interest rate, it can also come with risks and downsides. For example, borrowers who refinance their federal loans could lose access to certain federal loan benefits, such as loan forgiveness, income-driven repayment plans, and deferment or forbearance options. Additionally, some lenders may charge fees or have strict eligibility requirements that could make refinancing difficult or impossible. It’s important to do your research and consult with a financial advisor before making any decisions. Refinancing your student loans may seem like a good idea at first, but it’s important to understand the potential costs and drawbacks before taking the plunge.