Refinancing Student Debt – Gain Positive Arbitrage

Key Takeaways 

  • Positive arbitrage is the goal when refinancing federal and private student loan debt.
  • There are several federal loan repayment programs that can lower your payments, and if you have a good credit score, you may be able to refinance your private loans, thus reducing those payments as well.
  • Refinancing your loans and reducing payments allows you to pay loans off early with the positive arbitrage you gain, as well as pay off other debt or save up more money.

Complexity of Student Debt

Key Takeaways

  • It’s important to know your options in choosing a loan to fund your education as there are big differences between federal and private loans.
  • Federal loans have several flexible repayment options whereas private loans do not.
  • Paying your first loan payment on time and in full helps build your credit and keep it high so you can reduce interest expense on other loans.

The State of Student Debt

Key Takeaways

  • More than 70 percent of college graduates have outstanding student loans—with an average balance of $37,000—when they graduate.
  • Studies show millennials are far more concerned about paying off student debt and increasing their savings than they are about their retirement.
  • The sooner you can pay off student debt, the sooner you can start your adult financial life and wealth-accumulation years.