2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More
2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More

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Deep in Debt From Your PhD Program? How to Refinance and Save

Kathryn Morstad
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The higher the degree, the more expensive the program. People who graduate with a PhD from a solid program are often saddled with extreme debt that can reach six figures. Now, you have a good career and want to know how to pay off 100K+ in student loans as quickly and easily as possible.

Whether you used private or federal loans (you can borrow up to $138,500 in Federal Direct loans), you may want to consider refinancing as an option to consolidate and save money over the life of your loan. There’s no magic answer, but with great income and a stable future, lenders are extremely willing to help you put your debt portfolio into a workable plan.

How much student debt does the average PhD have?

PhDs, on average, graduate from school with loans totaling $108,400. This is almost double the $66,000 for a master’s degree and while you can get a PhD without a master’s degree, you may carry debt from a master’s program and/or your undergraduate program as well.

Needless to say, this much debt can be overwhelming. Assuming $100,000 debt with an interest rate of 6.5% for 10 years and you are faced with a monthly payment estimated to total $1,135. That can have a negative impact on your ability to make other financial plans like buying a house.

Why refinancing is a great idea for large student loan balances

While there are alternatives to refinancing, such as making larger payments or using windfalls, such as tax refunds or work bonuses, you will want to consider refinancing because it affords some additional benefits, including:

  • You have the opportunity to reduce your interest rate. Interest rates have never been lower and now is a great time to use that to your personal advantage. With a rate of 3%, that loan we discussed earlier for $100,000 to be paid over 10 years would have a monthly payment of $965 for a savings of $20,385 over the life of the loan.
  • If you want to lower your monthly payment to make repaying your student loan debt more manageable, you can do that by lengthening your repayment terms. Instead of 10 years (standard for federal loans), you can choose terms up to 20 and 25 years.
  • You can pay off your debt faster with shortened repayment terms. Sure your payment will be higher, but you will be able to retire your debt much sooner and save money on interest.
  • By refinancing, you can consolidate all your student loans into one easy payment. Whether you have federal or private loans, or a mix of both, a new lender would put all of the loans into a single loan package with one due date and one interest rate. Simple and easy.

Is Student Loan Refinancing Right for You?

Find out how much you can save with these top lenders

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Fixed Rate:

2.98% - 5.79% APR

Variable Rate:

1.99% - 5.64% APR

Term:

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Loan Limits:

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Refinance Student Loans With Your Spouse

Fixed Rate:

2.99% - 5.15% APR​

Variable Rate:

2.16% - 4.46% APR​

Term:

5, 8, 12, or 15 years

Minimum Income:

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Loan Limits:

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Variable Rate:

Not offered

Term:

5, 7, 10, 15, or 20 years

Minimum Income:

No minimum

Loan Limits:

$5,000 - $300,000

Why PhD’s make excellent refinancing candidates

When lenders look at a loan application, they are looking for candidates that offer the best opportunities for loan repayment. As someone with an advanced degree, you bring several positive attributes to the table, which will hopefully include:

  • Good Credit — With a solid credit score of 670 or higher, you are demonstrating that you are credit-worthy and that is sweet music to student loan lenders. The higher your score the lower the interest rate and the more money you save in the long term.
  • Income — With an average starting salary of over $100,000 in many disciplines, PhDs bring high earning potential which contributes to a solid Debt-to-Income Ratio.
  • Debt-to-Income Ratio (DTI) — Your DTI is calculated as all of your monthly debt payments (including rent, taxes, debt payments) divided by your gross monthly income. This allows lenders to measure your ability to repay loans. An optimal ratio would be 43% of less.
  • An Advanced Degree — Just the very fact that you have an advanced degree counts towards your borrowing options. Lenders see it as a sign of hyper-responsibility that demonstrates solid judgement.

Check your best student loan refinance rates now

Now is a great time to check interest rates for refinancing with no impact to your credit score. With Purefy’s Compare Rates tool, you can input some basic personal information, like salary, degree, and debt amounts, to receive an estimated proposal from qualified lenders.

Purefy’s technology allows you to bring together a pool of top, national lenders that have been thoroughly vetted and are leaders in their industry with the best rates. Instead of you spending valuable time researching each individual company and applying for each rate, Purefy’s tool allows you a quick and easy way to see the best student loan refinance lenders — all at once — and review their offers in an “apples-to-apples” comparison.

If you have questions or would like expert advice on your student loan refinancing — don’t worry, we have incomparable support through our award-winning team of Student Loan Advisors. You can sign up for an individual, private consultation session with one of our experts and have all of your questions answered.

They’re available to discuss how refinancing works, how to compare rates, and how to navigate the final application process once you have selected your preferred lender.

A final word

People with PhD degrees are often perfect candidates for student loan refinancing. With high amounts of student debt, good credit, and solid incomes, they are well-suited to work with private refinancing lenders. They can design or customize a student loan package that saves money on reduced interest and has favorable repayment terms that meet their life goals.

Contact us today and see the difference refinancing can make in your life (at no obligation with no hidden fees).

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Student Loan Refinance Interest Rates

Hit a Historical Low

Today’s refinance rates are lower than ever, but that won’t last long. Lock in a historic low rate before they rise again.