Why only a select few qualify for student loan refinancing
Andrew Tremblay has a college degree, a steady job and a solid credit score, so the 27-year-old was shocked when his request to refinance his college loan was declined.
Tremblay is one of many would-be borrowers who have been shut out by refinancing lenders, as detailed in a recent article by The Boston Globe. Only those with lucrative jobs, exceptional credit history, and the ability to have their parents as cosigners can usually qualify.
Private lenders from companies including Providence-based Citizens Financial Group, and the Massachusetts Educational Financing Authority have entered the refinancing market for both private and government student loans to help overwhelmed graduates save tens of thousands of dollars.
But consumer advocates worry that student loan refinancers are leaving behind those who need the most help, and are consequently widening the gap between those who can climb out of debt and those who can’t.
“The options are geared to people who have excellent income, and excellent credit history. It’s doctors and lawyers. Those are the people who are benefiting from the refinancing programs,” Adam Minsky, a Boston lawyer specializing in student loan issues, told The Globe. “For borrowers who have larger loan balances, no cosigner, or are in financial distress, those people have no options. Nobody is going to refinance them.”
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