Yes, you can refinance law school loans more than once. There is no limit on how many times you can refinance a student loan for a better rate with no consequences.
#1 Student Loan Lawyer
Updated on October 6, 2022
The average law degree debt is $145,500. [Source: National Center for Education Statistics]
Many law professionals wonder whether they can and should refinance those student loans to save money. The answer is, probably!
If you are paying back federal student loans, you should only refinance if you work in the private sector and make a high income.
If you are paying back private student loans, you should refinance them as soon as you find a lower interest rate — or if you currently have a variable rate loan.
Refinancing your law school debt might easily save you $100/month or $15,000 over the life of your loan — as long as you can find a good refinance loan with the lowest interest rate. Finding a lower APR is easier if you’ve built up your creditworthiness since you originally borrowed the money.
Typically, you cannot refinance your high-interest bar exam loans, which are technically not student loans. The big difference is that you can more easily discharge a bar loan in bankruptcy, meaning the lender is taking on more risk, meaning they want to charge a higher interest rate.
Below is everything law school students and law school graduates need to know about refinancing and student loans.
Should you refinance law school loans?
Yes, you should refinance your private student loans from law school if you can find a refinance loan with a lower, fixed interest rate.
However, you should only refinance your federal student loans if you’re willing to lose your federal loan benefits — namely, Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR).
Both of these programs offer forgiveness to certain borrowers after a set number of payments and are not available for private loans.
Check out my guide to the PSLF Waiver which expires October 31, 2022, to see if you can increase your progress towards loan forgiveness.
If you work in the private sector and you make too much money for reduced payments, you aren’t really benefiting from federal loans anyway. In this case, it makes sense to refinance your U.S. Department of Education-backed student loan debt for a lower APR.
If you’re wondering when you should refinance, the best time would be when your credit score is highest. Most refinance loans base their interest rate offers on your credit history.
What are the benefits of refinancing student loans?
The benefits of student loan refinancing are pretty straightforward:
Lower interest rates
Lower monthly payment
Less cost over the life of the loan
Shorter repayment term, possibly
Cosigner release option
Consolidating payments, if you’re refinancing multiple loans
New loan servicer, if you disliked your previous one
8 best law school loan refinancing lenders
Citizens Bank, for high student loan amounts
College Ave, for those with very good credit scores
Earnest, for lower credit scores
Education Loan Finance, for low interest rates
Lendkey, for flexible loan term options
PenFed Credit Union, for great customer service
SoFi, for extra perks like financial advice and career counseling
Yrefy, for no minimum credit score to qualify or to refinance defaulted student loans
Steps to refinancing your student loans
Consider your options. Figure out if refinancing is right for you. Consider your alternatives, such as consolidation, income-driven repayment options, loan forgiveness, etc. Refinancing federal loans can cut you off from certain benefits, like PSLF and IDR.
Compare lenders. Obviously, you want to find the best interest rate for you, so compare different refinance lenders. [Credible helps you compare lots of lenders, at no cost to you.] Also, look for lenders that don’t charge origination fees, which can tack on 5% of the total loan amount onto your loan balance. Ensure your chosen lender doesn’t have any prepayment penalties, so you can pay off your current loan early if you want without consequence.
Pre-qualify for multiple refinance loans. As long as the lender doesn’t do a hard credit check to pre-qualify you, there’s no penalty if you pre-qualify for multiple refinance loans, so you can easily compare refinance rates.
Apply for one refinance loan. Fill out the application for your preferred refinance loan — typically via the lender’s website. You’ll probably need your driver’s license, social security number, and proof of income. It can take 15-60 minutes to fill out and submit, but it may take 2-3 weeks before your application is fully processed. (Don’t stop paying your current loans while your application is being processed.)
Accept that loan. About 2-3 weeks after you applied, your application will be accepted or denied. You can start making payments on the refinance loan instead of your old loans.
Enroll in autopay. Almost every private lender offers a small autopay discount for enrolling in automatic payments from your bank account — usually a 0.25% lower interest rate.
Related: Can You Refinance After Student Loan Consolidation?
How much can you save by refinancing law school loans?
You can save a substantial amount of money by refinancing law school loans, especially if you already have high-interest private student loans.
By refinancing and reducing fixed APR or variable APR by 5%, the average law student could be saving over $100/month. Even a smaller rate reduction can save you thousands of dollars over time.
To get the best interest rate, I recommend comparing lenders using Credible to compare variable interest rates or fixed interest rates at no extra cost to you.
When to consolidate vs. refinance
Consolidation is when you convert one or multiple federal student loans into one single federal loan, called a Direct Consolidation Loan. There is a slight interest rate increase. (The average rate of all loans is calculated and rounded up to the nearest 0.125%.)
Refinancing is when you transition one or multiple student loans (federal or private) into one single private refinance loan. Borrowers can typically find lower interest rates than what they were paying.
If you have federal loans, you might want to consolidate instead of refinance, giving you one monthly payment. Consolidation also makes older student loans eligible for more recent federal benefits, such as income-based repayment.
However, federal student loan consolidation resets your progress towards PSLF, which can increase what you pay during your repayment period if you work in the public sector. Consolidation may also cost you a few extra pennies a month with that slight interest rate increase.
If you have private student loans, look for refinance loans with lower, fixed interest rates. There’s almost no downside to refinancing private loans for a lower rate to save money.
Refinancing federal student loans is trickier. This only makes sense if you make too much money to qualify for income-driven repayment plans, don’t work in the nonprofit or public sector, and can qualify for a lower interest rate.
How do you know if you make too much to qualify for income-driven repayment? If your yearly income is higher than your total student debt, then you probably wouldn’t benefit from IDR plans.
Loan forgiveness for law school debt
Student loan refinancing is a great way to lower your interest rate, but it can ruin your eligibility for student loan forgiveness programs.
Loan forgiveness is the best case scenario if you qualify — you no longer have to pay back your loan. (For this article, loan forgiveness refers to forgiveness, discharge, and cancellation. Some websites even include employer repayment assistance as forgiveness.)
There are several ways you may qualify for loan forgiveness, including:
if your school shuts down,
if you suffer a temporary or permanent disability,
if you work in the public or nonprofit sector for 10 years while making on-time payments, or
if you work for certain branches of the military.
Loan forgiveness options for lawyers include:
Attorney Student Loan Repayment Program for DOJ employees
Herbert S. Garten Program, a lottery program
John R. Justice Program for public/nonprofit sector workers
Public Service Loan Forgiveness for public/nonprofit sector workers with federal loans
Income-driven repayment forgiveness for lower-income lawyers with federal loans
Loan Repayment Assistance Plans (LRAPs) from certain law schools and states
Employer student loan repayment assistance programs from certain law firms
Most loan forgiveness is tax-free as of 2021. In the past, you had to count loan forgiveness as taxable income, but Congress and the Biden Administration made most loan forgiveness tax-free through 2025 with the American Rescue Plan.
If you don’t qualify for student loan forgiveness but have federal loans, you can also apply for deferment or forbearance for a temporary break from student loan payments.
Need extra advice unique to your situation? Schedule a call with me, and I can share my years of experience as a student loan attorney.
Will refinancing loans hurt your credit?
Refinancing student loans should not hurt your credit significantly. Your loan balance remains about the same, and your payment history up to that point remains on your credit report.
Your credit score might dip a little bit due to the “hard” credit inquiry required to apply for the refinance loan, but this is a small, short-term dip. (“Soft” credit inquiries generally do not affect your credit score.)
Your credit report might also dip slightly because your refinance loan is a little newer than your original loans. Since the average age of your lines of credit helps determine your credit score, decreasing the average age with a new refinance loan can impact your credit, but not very much.
Do you have to refinance all of your loans at once?
No, you can refinance as many or as few student loans as you like at a time. You can combine two student loans into one, then another three into a separate loan if you really wanted to. Technically, you can even refinance a refinance loan.