What are the best options for consolidating student debt?

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What are the best options to refinance or consolidate student debt (about $175K). Interest rate is 6.8% and we'd like to get that down. We have great credit and looked at SOFI but they could barely lower the interest rate.

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Thank you for your question. When looking at options for student loan consolidation, there are a few things you want to consider.


Step one: Determine your primary reason for wanting to consolidate. Is it to lower the monthly payment or to save money in the long-run by paying less interest over time? If it is to lower your monthly payment, keep in mind that you could end up paying more interest in the long-run even if the rate or payment is lowered, because the term of the new loan could be longer or the fees could be higher. 


Step Two: Compare your existing loan's fees, terms, features, and benefits to the consolidation loan. As mentioned in step one, you could end up paying more over time. You could also end up losing certain benefits from the original loan such as interest rate discounts, principal rebates, or loan cancellation benefits. Some of these benefits significantly reduce the cost of repaying your loans.


Step Three: Contact your current loan provider to discuss what options they have available. This includes not only the rate, but also the repayment plan options.


If you have Federal Student Loan(s), you can find out more about repayment options and federal student loan consolidation by visiting Studentaid.gov. For Private Student Loans, USAA has partnered with Wells Fargo to offer consolidation options. You can learn more by visiting our Student Loan page.


You can also check out our insight on Easing the College Debt Burden or contact one of our financial advisors at 1-800-531-8722 to discuss further.