The Credit Union Won’t Lower My Son’s Student Loan Interest Rate

“Dear Steve,

Too much student debt and banks wont help.

My son has a few student loans. One of them is from a credit union with an interest rate of 9.5% The payments are $658 for the next 25 years!! We have asked them to lower the rate, so he can make the payments, but they said they can’t.

My husband and I have taken money out of our retirement,to get him caught up, but this payment is too high for him to make and we are running out of retirement funds to help.

We have told the credit union he can’t make the large payment, but it falls on deaf ears. Any suggestions??


Dear Molly,

Private student loan lenders are currently not required to make loan repayments affordable. Unlike the federal government, they do not have to modify the terms or let him have lower payments. It is what it is.

I have no idea what the total amount of debt your son has in student loans but working the math backwards it appears the Credit Union loan alone is for about $70,000.

A 9.5% rate for a student loan is not a horrible rate considering he’d have to refinance it to move it to a new lender.

It might just be your son can’t afford the cost of maintaining his loans and he might have to default and face the consequences. Clearly, draining what little money you have saved for retirement is not a good option. If you keep spending what little money you have left it will just take the last of your money and not solve the problem.

So many students are obligated for student loan debt they can’t repay because they either never graduated or never found jobs paying enough to service the loan payments.

While there are some companies out there who refinance student loans like CU Student Loans or SoFi, depending on his income situation the rate could be nearly as high as he is paying now or the lender would require you to cosign and be 100 percent responsible for the debt.

See also  I'm Considering Letting Some of My Debt Go Delinquent. - Terrell

SoFi says their maximum rate is currently fixed at 7.24% but they only go out for 20 years so at that rate the payment would be about $564 a month. The CU Student Loan calculator said that with his assumed fair credit it would not be worth refinancing.

I’m not confident that lowering his payment on this loan from $658 to $564 suddenly makes his overall situation substantially more affordable. What do you think?

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

Steve Rhode

Leave a Comment