Should I Use SoFi to Refinance My Federal Student Loans?


Dear Steve,

I am a senior citizen with over $100,000 in student loan debt.

I have consulted with you on this site before and the plan is to use the IBR with Navient until I die. But I watched the democratic debate on 9/12/19 and there were several ads for SOFI to refinance student loans. Just curious if you know anything about this company.



Dear Jade,

If you have loans in IBR they are federal student loans. SOFI is a legitimate lender and can provide a debt consolidation loan for both regular debt and student loans.

However, it makes no sense to convert a federal student loan into a private student loan with a commercial refinancing. You will lose all the benefits of federal student loan payments like the IBR.

I assume you are in an IBR because you can’t make the regular full payment on the federal loan so putting yourself into a private student loan with limited benefits probably just doesn’t make any sense.

The odds are it makes more sense to make the Income-Based Repayment (IBR) payment and just accept you will probably die owing a balance on your student loans. But on the bright side, it will be forgiven when you pass.


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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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