Minnesota Student Loan Refinance Program Review
The SELF Refi Loan program offers Minnesotans the opportunity to save on both private and federal student loans through refinancing, though with rates starting at 4.25 percent and stringent eligibility requirements, this refinance program may not make sense for all borrowers.
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Sometimes a “top 10” spot is sought after, but that may not be the case for Minnesotans with college debt.
With the average Minnesota student borrower accruing $31,911 in debt by graduation, Minnesota takes the ninth spot in a list of states with the highest average debt.
The silver lining? Minnesota has a 9.37 percent student loan delinquency rate on loan payments, only slightly above average (9.23 percent), and certainly well below the highest rates which hit just above 16 percent.
One way to keep your student debt in check is to secure the best rates, and if you’re a Minnesota resident who has completed a post-secondary course of study, then you may be able to refinance your existing loan debt through the Minnesota Student Loan Refinancing Program frequently referred to as SELF Refi.
On this page:
- Program Overview
- Loan Amounts & Rates
- Eligibility Requirements
- Downsides of Program
- Alternatives to Consider
Minnesota Student Loan Refinance Program Overview
SELF Refi is made possible by the Minnesota Office of Higher Education, which is a state agency that provides students with financial aid opportunities and acts as the state’s clearinghouse for a variety of post-secondary-based data, research, and analysis.
The SELF Refi program offers eligible a borrower the opportunity to refinance their existing federal or private student loan debt.
Loan Amounts & Rates
Those who have achieved a bachelor or graduate degree can borrow up to $70,000 toward their loan amount, while those who have achieved a certificate, diploma, or associate degree can only borrow up to $25,000.
Rates currently range between 4.25 and 6.75 percent, depending on loan time (fixed interest rate or variable interest rate), loan term (5, 10, or 15 years) and the applicant’s debt-to-income (DTI) ratio.
The chart below outlines the available rates and terms as of October 2018, though variable rates are typically updated on January 1, April 1, July 1, and October 1.
Who Qualifies for the SELF Refi Program?
In order to qualify for the SELF Refi program for a lower interest rate you must be a Minnesota resident who has met the following eligibility requirements:
- Earned a certificate, diploma, associate, bachelor, or graduate degree.
- Currently employed and have been for the last 60 days.
- Has at least $10,000 in qualified student loans which can be federal or from private lenders
- Has a minimum FICO score of 700 without a cosigner, or has a minimum score of 650 with a cosigner.
- Has a DTI ratio of 45 percent or less.
- Has a credit history free of delinquencies.
Applicants that do not meet the credit requirements to refinance student loans can still apply for the loan but will need an eligible cosigner.
Cosigners must meet similar requirements to those above; however, they must have a FICO score of 720 or higher and a DTI ratio of no more than 40 percent. Cosigners can be released from the loan after the borrower has made 48 consecutive, on-time payments; they must also meet eligibility requirements at the time of the request.
Are There Downsides to This Program?
The rates for this Minnesota Student Loan Refinance Program are not ultra-competitive, with many student loan refinance companies offering rates a full 1–2 percentage points lower than the lowest rates available through the SELF Refi Loan.
However, that’s not to suggest those lower rates are easily obtainable, so Minnesota borrowers may want to include the SELF Refi Loan in their list of potential lenders.
Rates aside, borrowers should also be aware that there are no deferment options — not even while the borrower is in school — and repayment plans will begin as soon as the funds are disbursed. That said, the program does offer two four-month forbearances over the life of the loan.
It’s also important to note that borrowers who are considering refinancing their federal student loans will no longer be able to receive the benefits associated with those loans. That includes deferments, income-driven repayment plans, and in some cases, student loan forgiveness.
Finally, even though rates are not necessarily as low as those offered by alternative lenders, the credit requirements are fairly high, so some borrowers may not be eligible based on their existing credit score, debt-to-income ratio, or past delinquencies, liens, and judgments that appear on their credit report and credit history. Similarly, some borrowers with excellent credit will likely find that alternative lenders offer far better rates.
Alternatives to the Minnesota Student Loan Refinance Program
If you aren’t approved for the SELF Refi Loan program, there are other options available that offer competitive rates and less stringent eligibility requirements. However, keep in mind that your credit history will likely come into play, and those with good or excellent credit scores will secure the best rates while decreasing the likelihood of needing a cosigner.
Among some of the more notable companies are the following, each of which will require a good to excellent credit score (670 or above).
|Company||Fixed Rate||Variable Rate|
|Earnest||3.89% – 6.97%||2.47% – 6.23%||Learn More|
|ELFI||3.21% – 6.69%||2.39% – 6.01%||Learn More|
|CommonBond||3.21% – 6.45%||2.60% – 6.08%||Learn More|
In some cases, the SELF Refi program can offer those who qualify a way to decrease their existing student loan rates and maybe lower their monthly payment, though some may find other lenders offer more competitive rates and less stringent requirements. Before refinancing through the SELF Refi program, check out some alternative lenders to ensure you’re finding the best rates and benefits available.
Author: Jennifer Lobb