USAA Student Loan Refinance Guide

Founded in 1992, USAA is a company that offers insurance, banking and investment products to U.S. military service members and their families.

USAA is a well-regarded financial institution by many for its high level of customer service and dedication to its members. Eligibility to join USAA is restricted to active duty military members, retired veterans and their eligible family members.

In addition to its mortgages, personal loans, and auto loans, USAA once offered rate discounts on student loans. However, its USAA student loans program has been discontinued and is no longer offered as one of its financial products.

Here’s what you need to know about the old USAA student loan program, your best student loan alternatives today, and how you can refinance your existing USAA student loans.

USAA student loans are no longer available

Technically, it was never possible to get student loans directly from USAA. The company did have a partnership with Wells Fargo whereby USAA members could earn a 0.25% interest rate discount on a Wells Fargo student loan.

In December 2016, however, USAA ended its student loan partnership with Wells Fargo. Currently, USAA doesn’t offer members any private student loans (or discounts).

Alternatives to USAA student loans

If you’re a student (or parent of a student) who wanted to take out a new USAA student loan to help pay for college, you’ll need to explore other options and providers. Here are your two main alternatives.

Federal student loans

Even if USAA student loans still existed, they would’ve been private student loans. But most borrowers should always opt for federal student loans first because of their built-in federal benefits.

First, federal student loan borrowers are eligible to join an income-driven repayment (IDR) plan. Second, there are several federal student loan forgiveness programs, most notably the Public Service Loan Forgiveness (PSLF) program. These loan options from the Department of Education offer various repayment plans for your student loan debt.

Related: Your Complete Guide to Military Student Loan Forgiveness

Finally, Direct Subsidized and Unsubsidized student loans offer low, fixed interest rates. However, one of the downsides to federal student loans is that most of them come with annual borrowing limits.

If you’re attending an affordable school or could land a lot of financial aid such as scholarships and grants, your federal student loans may be able to cover the rest of your education. But you may face a funding gap if you’re attending an expensive school and aren’t receiving a lot of financial assistance. And in that case, you may need to supplement your federal student loans with loans from private lenders.

Private student loans

One of the benefits of private student loans is that they don’t typically have hard and fast borrowing limits. Instead, most allow students to borrow up to the cost of attendance. That’s why if you’re an undergraduate student who has hit your federal borrowing limit, private student loans could help you bridge that gap.

The choice for graduate students is a bit more complex. Unlike Direct Subsidized and Unsubsidized loans, Grad PLUS loans don’t have borrowing limits. As with private student loans, Grad PLUS loans can be borrowed up to the cost of attendance.

However, the terms and fees on Grad PLUS loans are less attractive due to higher interest rates and disbursement fees.

If you plan to take advantage of IDR loan repayment or PSLF, you may want to take out Grad PLUS loans anyway. Otherwise, a private lender may be able to offer you better rates and lower fees.

At Student Loan Planner®, we have a list of several of the top private student loan lenders that you can reference. You’ll be able to quickly find key information about each lender. And you can use our private student loan links to immediately begin getting rate quotes today.

USAA student loan refinance: Why you should consider it

Are you a USAA member who took out a Wells Fargo private student loan back when USAA was still offering a rate discount? If so, you may want to consider refinancing your USAA student loans. Here’s why:

If your credit or income situation has improved since you were in college, you may qualify for lower interest rates today and be able to refinance student loans. And since Wells Fargo is a private lender, you won’t need to worry about losing out on federal benefits by refinancing those loans.

If you had federal loans, you should carefully weigh the pros and cons of refinancing. But private loans already don't qualify for federal IDR plans, forbearance, deferment, or student loan forgiveness.

Refinancing could also help with USAA student loan consolidation. When you refinance with a new lender, you may be able to consolidate all your private and federal student loans, if you wish, into one new loan.

How to refinance USAA student loans

Think that student loan refinancing is the right decision for your USAA student loans? If so, here are four steps you'll want to take.

1. Check your credit score

Your credit score is one of the most important factors that will determine your loan eligibility and interest rate.

You may be able to qualify for refinancing with a minimum credit score in the low-to-mid-600s. But if you want to receive the best rates available, you’ll probably need a good credit score of 740+.

You can check your credit reports and scores for free once per year at AnnualCreditReport.com. Or you can use a free credit score service such as Credit Karma or Credit Sesame to monitor your credit at any time.

2. Research lenders

Looking for lenders that combine low rates with generous terms is important. For example, you may restrict your search to refinance companies that don't charge application or origination fees.

You may also want to focus on companies that offer autopay discounts or a variety of repayment terms. The more repayment options that are available to you, the better chance you'll have of finding a monthly payment that fits your budget.

If you're a med school graduate who's still in residency or fellowship, you want to look for a refinance company that will accept reduced payments until you become an attending physician.

Parents who took out student loans to help pay for their child's higher education will likely need to find a lender that offers Parent PLUS refinancing. And they may also want to look for lenders that will accept requests for a cosigner release after a certain number of on-time payments.

If you’re looking to refinance your USAA student loans, here are a few of our favorite lenders:

• Earnest. Best for flexible repayment. Get a cash-back bonus of up to $1,000 when you use our link to apply.
• Laurel Road. Best for medical professionals. Get a bonus of up to $1,250 back by using our referral link.
• Credible. Best for comparing multiple lenders. Get a cash-back bonus of up to $1,250 when you use our link to visit Credible's site.

Want to compare more options? Check out the top refinancing lenders available today. Depending on the size of your loan, you could qualify for a cash bonus of $100 to $1,275.

3. Compare rates and terms

Most lenders allow you to check your pre-qualified rates using a soft credit check which won’t affect your credit score. But keep in mind that the lowest rate for your loan amount may not always be the “best” option.

One prominent example would be if the lowest rate is for a variable-rate loan. Variable-rate loans usually offer lower starting rates than their fixed-rate counterparts. But with interest rates currently sitting at all-time lows, you’d probably be exposing yourself to too much long-term risk by choosing a variable-rate loan.

Something else to pay attention to is the repayment term. For example, Lender A may offer you the lowest rate for a 5-year term while Lender B offers the best rate for a 10-year loan.

While the 5-year loan would save you the most money overall, it would also come with significantly higher student loan payments. If Lender A’s 5-year loan payment would put you in a financial bind, you’d probably be better off going with Lender B’s 10-year loan, even if it doesn't offer the largest interest rate reduction.

4. Sign the paperwork

Once you’ve decided which lender to choose, you’ll need to submit a full loan application. If approved, your lender will send over the loan agreement for you to sign.

After the loan documents have been signed, your work is done! Your new lender will then pay off your old loans and take out a new student loan in your name.

Within a few days or weeks, you’ll receive information about how and where to make payments and when your first payment is due.

For more information about the student loan refinancing process, check out our full guide. We explain when refinancing makes sense, and when it doesn't and compare 9 of the best refinancing lenders available today.