Connecticut Student Loan Refinancing and Private Student Loan Options

National student debt statistics show post-secondary graduates in Connecticut have some of the highest student debt burdens in the country. Fifty-six percent of graduates have loans and carry an average balance of $38,546, according to The Institute for College Access & Success.

What’s more, for graduate students who typically have higher balances, beginning a career in Connecticut might not be financially lucrative. That’s because Connecticut is a saturated market for health care providers (which require expensive degrees that borrowers assume will be balanced by a high-paying job) and the cost of living in the state can be untenable.

To manage student debt, some borrowers look toward Connecticut student loan refinance options when creating their debt repayment strategy. Wondering about a Connecticut student loan refinance or student loan tailored to state residents? Here’s what you should know.

State-specific Connecticut student loans

If you’re a Connecticut resident or are going to school in the state, you might qualify for a loan from the Connecticut Higher Education Supplemental Loan Authority (CHESLA).

The CHESLA loan is available to both undergraduate and graduate students. Loans start at $2,000 and could increase to cover the total amount of your academic year (up to a maximum of $125,000). And, you can add a co-borrower.

They’re offered at a fixed annual rate and have low monthly payments of $4.04 for every $1,000 borrowed while enrolled in school. For undergraduate students, interest-only payments are required during school, while graduate students can defer interest in school.

Connecticut student loans from national lenders

If your federal loans and the CHESLA loan don’t fully cover the cost of your attendance and you’re still looking for additional funds, consider borrowing from a private student loan lender to finance your education in Connecticut. Here are some of the options we recommend:

• Sallie Mae. You can receive loans for undergraduate or graduate studies. The lender also offers parent loans to help fill the gap toward a child’s education.
• Earnest. Receive flexible repayment options for both undergraduate and graduate loans. Earnest has a simple, online application so you can quickly receive a quote.
• Ascent. Ascent has a large autopay discount than many of its competitors. They offer graduate and undergraduate loans and can offer you a loan with a co-signer, based on future income or based on credit.

State-specific Connecticut refinance options

Before we go through specific refinancing options, it’s important to clarify the difference between “consolidation” versus “refinancing”. Although they’re similar concepts, Connecticut student loan consolidation refers to federal Direct Loan Consolidation where federal loans remain within the Department of Education loan system.

A Connecticut student loan refinance, on the other hand, helps borrowers combine multiple federal and/or private student loans into one private loan with a new interest rate and terms.

If your credit has improved since your original loan, refinancing your Connecticut student loan could be a smart option — particularly, if you don’t qualify for student loan forgiveness.

Refinancing your student loans might help reduce the amount you’ll pay in interest. If you’d like, you can also put those savings toward your principal, helping you get out of debt faster. However, if you refinance a federal loan, you’ll lose federal protections, like extended deferment and forbearance, and flexible repayment options.

If you’re a resident of Connecticut or refinancing a CHESLA student loan, you can choose to refinance through Refi CT. Offered through CHESLA, the Refi CT lets borrowers refinance students loan balances between $5,000 and $125,000. It has five-, 10- and 15-year repayment options and the ability to add a co-signer to the loan.

Connecticut student loan refinance options from national lenders

If you’re looking to refinance with a national lender, here are some options:

• Earnest. Not only does Earnest offer up to a $1000 bonus for Student Loan Planner® readers, but it has many flexible repayment options that let you customize your loan repayment to your specific needs.
• Laurel Road. Student Loan Planner® readers can qualify for a $750 cash-back bonus from Laurel Road. This lender caters to medical school graduates.
• ELFI. Student Loan Planner® readers can receive a sizable cash-back bonus of up to $1,275. ELFI offers variable- and fixed-rate loans.
• Splash. Splash Financial offers up to $1,000 in bonuses for refinancing, but you must refinance at least $100,000. It offers variable and fixed rates with no origination fees or prepayment penalties.

Impact of Connecticut cost of living on student loan repayment

Although living in Connecticut can cost between 14% to 48% less than living in New York City or Boston, the cost of living is still considered high compared to other cities. In 2018, CNBC ranked it as the eighth most expensive state to live in.

Paying more for living expenses could mean you have fewer funds left to repay your student debt. For student loan borrowers with a modest income, living in a location with a low cost of living can make a difference when it comes to how fast student loans are repaid.

Keep in mind that this can also impact how you move forward, financially. For example, qualifying for a mortgage can be more difficult if a higher percentage of your income is already devoted to fixed expenses, such as rent and debt repayment.

Not only can it make saving for a sizable down payment difficult, but your lender might be hesitant to approve an application, if you’re already living on the edge, financially. While balancing your loan repayment with your future financial plans, it’s important to factor in living expenses to find the best scenario to achieve your goals.

Get ahead of Connecticut student loan debt

If you qualify for student loan forgiveness in Connecticut, this could also be a savvy way to reduce your student loan debt. Aside from the federal Public Service Loan Forgiveness, Connecticut also offers the Minority Teacher Incentive Grant which provides up to $2,500 in annual stipends for four years to eligible teachers in Connecticut public elementary and secondary schools.

Loan forgiveness programs, and other options like a Connecticut student loan refinance, can make a big difference in your total out-of-pocket expenses during repayment.

Keep reading: The Biggest Pros and Cons of Refinancing