Is Now the Right Time to Refinance Your Student Loans? What to Know in 2025

In today’s turbulent economic climate, millions of the 42.7 million Americans with student loan debt are asking, “Should I refinance my student loans now?” And many are taking the step. But, is it right for you, and if so, is now the right time?

With uncertain interest rates, evolving forgiveness policies, and a changing job market, the answer isn’t a simple yes or no. However, for some borrowers, particularly those with private loans or stable finances, 2025 might offer unique student loan refinancing opportunities.

Why Refinance Now?

The appeal of refinancing your student loans is no mystery. You can potentially lower your interest rates, reduce the number of your monthly payments, and simplify your budget. However, if student loan refinancing is on your to-do list, it’s essential to understand that the stakes are high, especially for those with federal loans.

Recent policy changes have complicated the student loan refinancing decision. The Biden administration’s Save Plan continues to offer income-driven repayment options with eventual forgiveness. On the other hand, proposals under the Trump administration have left many wondering whether to wait or act now.

NPR’s March 2025 report highlights the current uncertainty in student loan forgiveness programs, an essential factor to consider when deciding, “Should I refinance my student loans now?”

Refinancing might offer significant financial benefits for borrowers with private loans or those who no longer qualify for forgiveness due to changing income or employment conditions. This is especially true if you can secure a lower fixed interest rate before potential future interest rate hikes.

What Experts Are Saying

Reputable sources, such as Britannica Money and CNBC, provide clear guidance for borrowers wondering whether now is the right time to refinance. According to Britannica Money, not everyone will benefit equally from federal forgiveness programs, meaning the refinancing option may be best for those with private student loans. Additionally, a February 2025 CNBC article outlines when refinancing makes the most sense:

• Strong Credit: You can qualify for a significantly lower interest rate.
• Forgiveness Eligibility: You don’t plan to take advantage of federal forgiveness or income-driven repayment plans.
• Co-signer Release: Refinancing offers the possibility to remove a co-signer from your loans.
• Fixed-Rate Stability: Securing a fixed-rate loan can be beneficial in a rising interest rate environment.

In a few words, the best candidates for refinancing in 2025 are individuals with excellent credit, reliable employment, and a solid grasp on their finances.

What You Give Up by Refinancing

An important part of answering, “Should I refinance my student loans now?” involves understanding what you have to lose.

Federal student loans come with valuable protections, such as hardship deferments, access to income-based payment plans, and some forgiveness eligibility.

Refinancing federal loans with a private lender means forfeiting those benefits permanently. Regardless of what some lenders have been saying, according to the Consumer Financial Protection Bureau.

Financial advisors suggest weighing these trade-offs carefully. If federal protections are critical to your financial security, you may want to hold off.

However, if you determine that the potential savings outweigh the benefits of federal loan programs, refinancing might be a smart financial move.

Best Student Loan Refinance Lenders of 2025

Choosing the right lender is critical for borrowers who decide that now is a good time to refinance their student loans. Here are the top five that we’ve chosen based on strict rating criteria.

Credible

While not a direct lender, Credible is an online marketplace that allows borrowers to compare offers from multiple refinance companies at once. Its platform makes it fast and easy to shop around and see your rates without impacting your credit score, and its transparency is a key advantage.

RISLA

RISLA offers competitive fixed interest rates and nationwide refinancing options, along with select borrower protections like income-based repayment in certain cases. Its reputation for excellent customer service and ethical lending practices makes it a strong contender.

ELFI

ELFI offers some of the lowest available fixed and variable rates, especially for borrowers with excellent credit. Its benefits include generous forbearance terms and the absence of application or prepayment fees.

MEFA

MEFA earns consistent high marks from borrowers, due to its nonprofit status and fixed-rate loan availability.

Notably, it provides excellent customer service and a transparent refinancing process, making it a trusted option for those refinancing parent loans or other student loan debts.

Each of these lenders offers distinct benefits and user-friendly processes. However, they also have varying requirements for credit scores, income levels, and debt-to-income ratios, so shopping around is your best bet.

Should I refinance my student loans now?

Ultimately, the answer depends on your individual circumstances. Refinancing could be a smart move if:

• You have private student loans that lack federal protections.
• You’re confident that you won’t qualify for or benefit from federal loan forgiveness.
• Your credit is excellent, and your income is secure.
• You prefer the predictability of a fixed monthly payment and a steady interest rate.

However, it may not be the best idea if:

• You rely on, or may need to rely on, federal protections, such as income-driven repayment or potential loan forgiveness.
• Your financial situation is uncertain, or you anticipate significant changes soon.
• You value the consumer benefits that come with federal loans.

Before making your decision, assessing your current loan terms, future forgiveness eligibility, and the comparative offers available from lenders like Credible, RISLA, ELFI, and MEFA is essential.

As always, read the fine print, consult with a financial advisor if necessary, and be sure that refinancing makes sense when factoring in your long-term financial goals.

Related Text: Best Personal Loans for Fair Credit