Student Loan Refinance Specialists at First Tech Financial Credit Union are available to discuss how borrowers can lower monthly payments, pay off their loans faster, or reduce the overall interest they pay.

Just under half of Washington grads have been handed a sizable student loan balance to go along with their college diploma in recent years. The Institute for College Access and Success estimates that in 2018 about 48 percent of grads in the state had an average burden of $23,500. And the percentage of borrowers who owe about that much has only climbed in the last few years.

Long story short: More and more Washington grads are leaving college with student loan debt.

Amid the coronavirus crisis—which has coupled serious health concerns with financial hardships—the stress and responsibilities that go with paying off student debt haven’t disappeared. But, there’s some potentially good news that borrowers (and their bank accounts) can benefit from.

Sandi Papenfuhs, Senior Vice President of Consumer Lending at First Tech Federal Credit Union, explains what we should be asking about student loans right now and why it might be a great time to seriously consider a refinance: 

Do I have federal or private student loans?

It’s as beneficial as ever to understand where your loan is coming from. Contact your lender to find out if you have student loans that are eligible for federal relief. Thanks to the CARES Act, most borrowers with federal loans will receive a six-month reprieve from making payments. Plus, interest on federal loans will not accrue during those six months, nor will deferring payments impact borrowers’ credit scores. It’s a pretty good deal for federal borrowers, and in most cases, it likely makes the most sense to take advantage of this relief and hold off on a refinance for a few more months.

Still, individuals with private student loans—who are most likely not eligible for CARES relief—can also take advantage of historic low rates right now. “If you have private loans or an ineligible federal loan, the best bet is to refinance to get a lower fixed rate,” says Papenfuhs. Through a student loan refinance, borrowers can lower their monthly payments, pay off a loan faster, or reduce the overall interest they pay over the life of their loan. “It’s a lot of information, but we have student loan specialists who can answer all your questions and help you find the right financial solutions to meet your individual goals,” she adds.

Are interest rates favorable right now?

In case you haven’t heard, interest rates are the lowest they’ve been since 2008. “For some, refinancing will mean having a lot more money left over each month, for others it’s a chance to pay the loan off and get out of debt much sooner,” explains Papenfuhs. Both sound pretty good, right? These interest rates are especially helpful for more recent grads: “Borrowers who had little credit history when they obtained the first loans would experience the greatest savings,” Papenfuhs adds.

What type of rate should I be looking for?

First Tech almost always recommends fixed rate loans. And now’s an ideal time to secure one for yourself. With a fixed rate loan, rates and payments stay the same month-to-month for the life of the loan, compared to those in variable rate loans, which (you guessed it) vary. “When you shop around for the best rates, a lot of lenders will highlight their lowest variable rate. ‘Variable’ means just what you think: the rate can go down or (more likely) up, making it very hard to predict and plan your future,” Papenfuhs says. A strong fixed rate, like those being offered today, can save borrowers thousands of dollars in interest over the lifetime of a loan. 

What fees should I look out for when refinancing?

Many lenders charge their borrowers fees for a variety of scenarios. Some of the most common include application fees and origination fees. Consider how these might add up when exploring your options. But remember: First Tech will never charge them. “Our mission is to bring the greatest financial value to each of our members, acting as their trusted financial advisor and advocate,” Papenfuhs says. “We also strive to be simple and transparent, and one way we do this is by avoiding unnecessary fees.”

First Tech knows that the struggle is real when it comes to student loan debt, and many student loan recipients have been faced with even tougher realities amid this unprecedented pandemic. To talk with a student loan specialist about your options and to help you find a loan solution that fits your budget and financial goals, call 1-888-422-5680 or, for more information, visit First Tech’s COVID-19 Student Loan resource page

Disclosure: First Tech is federally insured by the National Credit Union Administration. All loans are subject to credit approval. Credit Union membership is required and subject to approval. Interest rate and program terms are subject to change. Additional restrictions may apply. Eligibility depends on the school of graduation and degree. The school must be Title IV eligible, non-profit, and offer Bachelors, Masters and/or Doctorate degrees. Title IV refers to the Higher Education Act. A Title IV school is an institution that processes U.S. federal student aid.


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