Top 10 Professions Most Likely to Refinance Student Loans

Student loan debt can end up being quite costly with interest accrued over the life of the loan. Student loan refinancing is a strategy that makes repayment more affordable. Refinancing with a private lender allows you to take out a new loan at a lower rate. If done right, this might shave off thousands of dollars in interest.

In our April 2022 Forgiveness or Refinancing Survey, we polled over 6,000 respondents about their upcoming student loan strategies. According to the survey, 16.16% of respondents plan on refinancing student loans and 13.01% plan on keeping their loans within the federal system and paying them back in full. 

The Student Loan Planner audience tends to be high-debt, high-income borrowers, with many pursuing student loan forgiveness. But for those interested in refinancing, this approach might make more sense for some professions given their high salaries and other qualifying factors. Below are 10 professions that are more likely to refinance.

10. Lawyer

In the law profession, salaries vary a lot. One lawyer might work in BigLaw, earning more than six figures, whereas someone serving a community with pro bono work might earn much less.

Our survey found that 30% of lawyers are planning to pay back their loans in full. In total, 36% are pursuing Public Service Loan Forgiveness and 34% are pursuing forgiveness through an income-driven repayment plan (IDR).

Lawyers earning a high salary with plans to pay back their debt might benefit from refinancing if PSLF or IDR aren’t attractive options. For PSLF, you have to work in the public sector and loan forgiveness through IDR requires 20 to 25 years of payments before reaping the benefits. Refinancing can expedite the repayment process and make it more affordable.

9. Pharmacist

The Bureau of Labor Statistics (BLS) found that the average pharmacist salary is $128,570 as of 2021. The BLS also notes that the job outlook is declining, meaning it’s not a growing field. Student loan debt for pharmacists might also be even higher than their salary.

We found that 40% of pharmacists are pursuing PSLF with 28% pursuing IDR forgiveness. Thirty-two (32%) percent of borrowers plan to pay back their loans. For those eligible, PSLF can make sense. If you want to get out of this field, IDR might also be attractive.

Pharmacists who want to strategically tackle their student debt can use refinancing as a tool, including applying the refinancing ladder approach to make repayment more manageable.

8. Nurse

Nurses have many forgiveness options and we found that 46% of our nurse respondents were planning on pursuing PSLF. Another 21% plan to get forgiveness through IDR and 33% plan on paying back their loans in full. Getting student loan repayment assistance from your state or federal forgiveness can make a lot of sense if you qualify.

One-third of nurses who responded to our survey said they intend on paying back their loans. If you're a nurse and among this group, look into refinancing to see if you qualify for a lower rate. Obtaining a lower interest rate saves you money and allow you to put more toward of your payment toward your principal balance.

7. Physician assistant

Physician assistants also qualify for various healthcare forgiveness programs. Our survey found that 39% of physician assistant respondents are pursuing PSLF and 21% are pursuing IDR forgiveness. A total of 40% plan on paying back their loans without a forgiveness path.

Some forgiveness options require a lot of time or commitment. So for those planning on repayment in full, refinancing can help physician assistants make it more affordable.

6. Nurse practitioner

Nurse practitioners may take advantage of many forgiveness options. Our survey found that 39% of nurse practitioner respondents plan on opting for PSLF and getting tax-free forgiveness. Another 19% plan on getting forgiveness through an IDR repayment plan.

More than a third of nurse practitioners plan on paying back their loans, with 41% of respondents stating that’s their plan.

If you’re a nurse practitioner in a state with generous programs, forgiveness can be a great option. But you don’t want to commit to employer restrictions or service commitments, refinancing can slash interest rates and save you money over the life of your loan.

5. Dentist

Dentists are known to have high debt levels and might not qualify for as many forgiveness options compared to other medical professionals. In fact, we found that only 9% of dentist respondents plan on pursuing PSLF. On the other hand, with high debt loads, 48% of respondents plan on taking advantage of forgiveness through IDR.

The remaining 42% plan to pay back their loans in full. These candidates might be a good fit for refinancing. High incomes can help with private refinance loan approvals and high debt loads can be more manageable with a lower interest rate.

4. Optometrist

Optometrists help people see more clearly and focus on eye health. Though optometrists stand to earn more than six figures, student loan debt could exceed salary.

But working at a qualified employer might be difficult, which is why only 13% of our respondents are planning to do PSLF. Though employment might not qualify for PSLF, it’s possible to get forgiveness through IDR, which 38% of respondents plan to do. A whopping 49% plan on paying back loans in full and potentially through refinancing.

3. Engineer

There are many different types of engineers with differing salaries as well. For example, industrial engineers typically earn $95,000 per year, while civil engineers earn a bit less at $88,000, according to BLS data.

Engineers typically don't have as much student loan debt as other professions in this list, and also might not always qualify for PSLF. Our survey found that 15% of engineers are pursuing PSLF and 32% are planning on IDR forgiveness.

But more than half (52%) are planning to refinance or pay back their loans. Given this career choice, refinancing can be an attractive option to pay down reasonable debt and pay less in interest over time.

Related: Top 9 Loans for Engineering Students

2. Dental specialist

A dental specialist, such as an orthodontist, can command a higher salary, but generally have higher student loan debt due to the added education required. Additionally, dental specialists may have their own practice and may not be eligible for PSLF. Our survey found that 8% of dental specialists are pursuing PSLF and 39% are planning for IDR forgiveness.

Fifty-three (53%) percent are opting to refinance, or keep their loans as-is and pay them off in full. Given the fact that this profession may not be eligible for PSLF, refinancing may be the best strategy to pay back student debt fast.

1. Business or corporate world

If you’re in business, an entrepreneur, or employed in the corporate world, you might have less student loan debt than the above professionals. Even if you don’t, you might not work for a qualified employer as you likely work for yourself or at a for-profit organization. It’s no surprise that 53% of respondents in this profession plan on refinancing or paying back their student loans in full.

A small number of respondents (9%) plan on trying to get PSLF whereas 38% of people plan on going the IDR route for forgiveness. Business owners often have to provide tax returns or additional financial documentation to get approved for refinancing. But if approved, it could be a meaningful change and help expedite the payoff process.

Should you refinance federal student loans?

Student loan refinancing can make paying back student loans more affordable. Though it’s not without a cost. Although it cuts down a few interest points and potentially thousands of dollars during your repayment term, there are lost benefits.

Namely, if you have federal loans, you'll miss out on student loan forgiveness and IDR options. Given how tumultuous the past few years have been, losing benefits, like emergency administrative forbearance on federal loan payments and interest, should be seriously considered before refinancing.

Refinancing federal loans can make sense if:

• You don’t plan on pursuing student loan forgiveness.
• You want to pay back your student debt in less than 10 to 25 years (when potential forgiveness through PSLF or IDR could happen).
• You have a high income.
• Your job is relatively stable and recession-proof.
• You have a strong credit score above 700.

If you meet this criteria, refinancing federal loans might make sense. It’s best to calculate how much you'd save through refinancing and compare it to other repayment options.

How to refinance student loans

If after weighing the pros and cons of refinancing, and calculating your savings, you decide it's the right path for you, here's what to know:

Step 1: Research lenders

There are many different refinancing lenders on the market today making it easier than ever for borrowers to find the right fit. Research lenders and look at:

• Eligibility requirements.
• Minimum and maximum refinancing amounts.
• Credit score requirements.
• Repayment terms.
• Variable versus fixed interest rates.

Find the most competitive interest rate, but also evaluate any other perks that might be available through the refinance loan. For example, SoFi® offers member perks or you might be able to skip a payment with Earnest.

Step 2: Apply for refinancing

Once you choose a refinancing lender, submit an application. A hard credit pull is performed if you decide to move forward on the lender's offer, and your credit score may drop a few points. Be sure you have your loan servicer information, total loan amount, any income verification, and other materials they may request readily aailable.

Step 3: Accept the terms of a new loan

After approval, accept the terms of the new loan. Throughout the refinancing process, make sure you’re still making payments on your original student loans until the refinance is complete. Once your previous loans are paid off, start making payments on your new refinanced loan.

What to know before refinancing

Refinancing is a great strategy to save money on interest. It can help you ditch your loan servicer and get more favorable loan terms. Be aware that if you have federal loans, refinancing means taking out a new private loan to pay off your current loans. Because refinancing transfers your debt to a private lender, you won't be able to seek loan forgiveness options.

Ensure that you shop around to find a competitive interest rate that's worth giving up federal benefits. If you’re refinancing private loans, there's less risk to refinance.

If you need help with your student loans and deciding what to do next, contact our student loan experts who can come up with a custom repayment plan for your needs. Book a consultation with Student Loan Planner.