A Psychologist’s Guide to Student Loan Refinancing

Last Updated on June 16, 2022

As the coronavirus outbreak highlighted, trained mental health professionals are essential. It’s no surprise that the Bureau of Labor Statistics reported that the job outlook for psychologists is much higher than the national average for all occupations, as demand for psychologists continues to grow. Becoming a psychologist can ensure you have a secure and rewarding career. 

However, most clinical, counseling, and research psychologists need a doctoral degree, so you may need to borrow a lot of money to pay for advanced degrees. According to the American Psychological Association, the expected median debt for psychologists is $110,000. 

While you may leave school with a substantial student loan balance, psychologists tend to earn a higher-than-average salary. If you have a lot of student loan debt, you can take advantage of student loan refinancing to manage your loans.  

Why refinancing is a good idea for psychologists

To refinance student loans, you apply for a loan from a private lender like Education Loan Finance for the amount of your current loans.* Your new loan will have different terms, including a new interest rate, monthly payment, and repayment term. 

While student loan refinancing can be an effective strategy for managing debt for many borrowers, it’s especially useful for psychologists. 

According to the American Psychological Association, more than half of psychologists who deliver health services are independent practitioners. If you work in the private sector, such as in a private counseling practice, you’re ineligible for loan forgiveness through Public Service Loan Forgiveness. Since you can’t qualify for loan forgiveness, refinancing your debt can be an alternative way to get some relief. 

Psychologist student loan refinance benefits

As a psychologist, there are three main benefits to student loan refinancing:

1. Lower your interest rate and save money

To pay for your education, you likely took out several different federal and private loans. While federal loans are touted for their relatively low rates and benefits, federal loans for graduate and professional degrees can have very high interest rates — some as high as 7.08%. When you refinance your debt, you can qualify for a lower interest rate and save money over the life of your loan. 

For example, if you had $110,000 in student loans at 7.08% interest and a 10-year repayment term, you’d pay $43,808 in interest charges over the course of your repayment term. 

But if you refinanced your loans and qualified for a 10-year loan at 5.5% interest, you’d pay just $33,255 in interest charges. By refinancing your debt, you’d save over $10,500. 

2. Pay off your loans earlier

If you refinance and qualify for a lower interest rate, you can also get a smaller monthly payment. But if you keep making the same monthly payment that you had before, you can put more toward the principal. By continuing to pay the same amount that you had before refinancing, you can pay off your loan months or even years ahead of schedule. 

3. Reduce your monthly payment

When you refinance your loans, you can qualify for a lower interest rate. But you can also decide to extend your repayment term. Opting for a longer term can allow you to get a lower monthly payment, giving you more breathing room in your budget. 

How to refinance your psychologist student loans

Refinancing your loans is very easy; you can complete the process in three simple steps.

1. Review your eligibility

Each refinancing lender will have their own requirements, so make sure you meet their criteria before applying. 

At ELFI, you must meet the following student loan refinancing requirements: 

• You must be a U.S. citizen or permanent resident
• You must be the age of majority or older (18 in most states)
• You must have at least $15,000 in student loans
• You must earn at least $35,000 per year
• Your credit score must be 680 or higher
• Your credit history must be at least 36 months old
• Your degree must come from an approved post-secondary institution

If you don’t meet the requirements on your own, you may be able to qualify for a loan by adding a cosigner to your application.

2. Get a rate quote

Before applying, get a rate quote to see what student loan refinance rates are available to you. With ELFI, you can use the Find My Rate tool to get a rate estimate without undergoing a credit check.*

3. Compare Terms & Rates From Different Lenders

While there are many benefits of refinancing student loans, saving money is typically the most important. For this reason, it’s important to compare different lenders’ interest rates to ensure you’re getting a good deal. ELFI offers competitive rates, flexible terms, and industry-leading customer service for refinancing your student loans. Check out our comparison with other popular lenders below.

Student Loan Refinance Comparison

Choose a company to compare with ELFI SofiEarnestLaurel Road

		Sofi	Earnest	Laurel Road
Fixed Rates APR	4.84% - 8.69%	5.24% - 9.99%	4.89% - 9.74%	5.24% - 8.75%
Variable Rates APR	5.28% - 8.99%	6.24% - 9.99%	5.89% - 9.74%	5.34% - 8.85%
Loan Terms	5, 7, 10, 15, or 20 years	5, 7, 10, 15, or 20 years	5 to 20 years	5, 7, 10, 15, or 20 years
TrustPilot Score	4.8	4.5	4.7	2.8
NerdWallet Rating	4.5	4.5	5.0	4.0
US News Rating	4.7	4.4	4.7	4.3

^{Rates and scores in this chart were obtained from lenders’ and aggregators’ websites on 8/27/2024. All information and rates are subject to change at any time. Please see each lender’s website for current information.}

4. Complete the online application

Once you find a loan with a rate and terms that work for you, you can submit your loan application online. 

To complete the application, you need to have the following documentation handy: 

• A recent pay stub or proof of employment
• W-2 from the past tax year
• Tax return (if self-employed)
• Government-issued ID (such as a driver’s license)
• Current loan account information, including account number and loan balance

6 alternative student loan repayment options for psychologists

While refinancing can help you manage your debt, it’s not an effective tool for everyone. If you decide that refinancing isn’t right for you, consider these alternative loan repayment options. 

1. Income-driven repayment plans

If you have federal student loans, you may be eligible for an income-driven repayment (IDR) plan. With an IDR plan, your loan servicer will extend your repayment term and adjust your monthly payment based on your income. 

You can apply for an IDR plan online.

2. Public Service Loan Forgiveness

If you have federal loans and work for a non-profit counseling organization, non-profit hospital, or government agency, you could be eligible for PSLF. Under this program, you can qualify for loan forgiveness after making 120 payments while working for an eligible employer for ten years.

3. National Health Service Corps Loan Repayment Program

Health service psychologists who work at sites approved by the National Health Service Corps (NHSC) for at least two years are eligible for this program. In exchange for their work, psychologists can receive up to $50,000 in student loan repayment assistance.

4. Indian Health Services Loan Repayment Program

Healthcare professionals, including psychologists, who agree to two-year service commitments at facilities that serve American Indian and Alaska Native communities can receive up to $40,000 in student loan repayment assistance through the Indian Health Services Loan Repayment Program.

5. State loan repayment assistance programs

Some states offer loan repayment assistance programs to attract and retain trained healthcare professionals. 

For example, Delaware operates the State Loan Repayment Program. Health service psychologists can receive up to $60,000 per year in loan repayment assistance in return for a service commitment.

To find out if your state has a similar program, visit the Health Resources & Administration website.  

Tackling your student loans

For psychologists with high-interest student loans, student loan refinancing can be an effective way to pay down your debt and save money. Not sure if it’s right for you? Use the student loan refinance calculator to find out how much you could save.*

*Subject to credit approval. Terms and conditions apply.  

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