How to Refinance Student Loans Without a Degree

Written by: Matt Kuncaitis
Updated: 4/08/21

Most students enter their college years with a lot of hope for a bright career and future. However, it doesn’t always work out. Students may drop out due to the cost of school, personal or family issues, or another reason.

Unfortunately, although you may leave school, your school debt doesn’t leave you. Even though your career prospects may be uncertain without a degree, you still owe money for the student loans you took out through private lenders or the federal government. 

Many people may seek to refinance their student loans, usually to lower their interest payments, replace various student loans with a single new loan from a private lender, or consolidate them through a federal government program (federal student loans only, though). However, eligibility is more difficult for those who don’t obtain a degree. Not all private refinancing lenders will take people who didn’t graduate, so shop around or check out some of the lenders listed below.

Can I Refinance Student Loans Without a Degree?

You may be able to refinance federal and private student loans without a degree, but only with certain lenders who usually have specific eligibility requirements (e.g., having a good repayment record, having a credible debt-to-income ratio, and being a U.S. citizen). The terms and conditions of each lender need to be checked closely.

It’s important to deal with student loan debt if you have no degree. If you miss student loan payments or go into default, this can negatively impact your credit score and destroy your chances of qualifying for other loans, including ones for buying a home, cars, or a different education path. You should know that student loan debt is rarely discharged in bankruptcy court.

Putting your head in the ground and not dealing with the situation will guarantee that a financial cloud hangs over you for a long time to come, perhaps accompanied by the pain of garnished wages or withheld tax refunds. Enrolling in an income-based repayment plan or refinancing your student loans so they are more manageable and then making consistent, on-time payments can be a valuable first step in freeing yourself from this unwanted debt.

Lenders That Offer Refinancing Options Without a Degree

The following private lenders will, in some cases, offer refinancing options to students without a degree, especially if they are considered good credit risks. The rates they offer and the requirements they demand differ, though. In each case, you’ll have to contact the lender directly to see if you are eligible and under what terms and conditions.

Discover

Discover provides loans to undergraduates, graduate students, and borrowers without a degree from more than 2,400 institutions across the country. They also offer private consolidation loans. 

Borrowers without a degree must meet eligibility requirements, which include passing a credit check and having no more than $150,000 in aggregate student loan debt. Borrowers can get a 0.25% reduction in interest payments by enrolling in automatic payments.

When refinancing student loans, the smallest amount you can refinance is $5,000 and the maximum is $150,000. Discover also levies no prepayment penalties or any application, origination, or late fees.

Discover’s Help Center (click the pull-down menu on the navigation bar) provides valuable application and repayment information, and you can contact a student loan specialist by phone to get advice for your particular situation. Options are also offered for borrowers who may have trouble making payments.

Citizens Bank

Citizens Bank refinance loans have flexible payment terms for students, former students without a degree, and parents. Eligibility requirements include: 

  • Having at least $10,000 in student loans to refinance
  • Being a U.S. citizen, permanent resident, or resident alien with a valid Social Security number 
  • Having made at least 12 qualifying payments after leaving school if you have an associate degree or no degree

The bank says, “People can save an average of $2,892 per year when they refinance their federal and private loans with Citizens Bank. That’s a couple hundred bucks each month you could put toward turning a passion into a business, starting a family, getting married, or moving into a new home. You could reduce your monthly payment, lower your interest rate, remove a co-signer, and more.” 

For parents, the bank acknowledges that it can be difficult to pay multiple high-interest student loans for their kids and offers a refinancing loan, possibly saving up to 2.31% on the interest rate in one consolidated monthly payment.

Advantage Education Loan

Advantage claims that its refinance loans can possibly save you thousands of dollars, with fixed rates as low as 3.74% APR with automatic payments. It is one of the few refinance loans “that lets you consolidate both private and federal education loans into one convenient loan.” Any school-certified loans are eligible, and flexible payment terms of 10, 15, or 25 years are available. 

The minimum loan amount is $7,500 and the minimum monthly payment is $50. If a borrower requires a co-signer to get a loan and the best rate, a co-signer release is available after three years of on-time payments. 

RISLA

“Refinance, simplify, and save” is the mantra of Rhode Island Student Loan Authority (RISLA), which offers fixed rates with autopay starting at 3.19% APR. It also offers different borrower protections, including an income-based repayment program, total and permanent disability discharge (with proper medical documentation), military benefits, and loan forgiveness for student death.

The loan application process takes just two minutes to complete online. You don’t need a bachelor’s degree to apply; you just need to meet the eligibility qualifications, including a credit check, minimum income requirements, and criteria for liquidity and debt-to-income ratio. You don’t need to live in Rhode Island to apply for refinancing but may be eligible for an even lower interest rate if you live, work, or went to college in the state. 

Find the Best Refinancing or Consolidation Options for You Today

Departing college without a degree may leave you in a very stressful situation. Your earning potential and career prospects may have changed, while your debt load remains the same and may even worsen as credit card bills pile up.

With a lot of stresses on your finances and future, it just makes sense to see if you can get relief by refinancing with a private lender, perhaps getting a lower interest rate, better loan terms and conditions, and possibly consolidating multiple high-priced loans into a single, more affordable one. You may want the money savings to plow back into your student debt. Government and private lenders aren’t allowed to levy prepayment penalties.

Not all private lenders will cover the refinancing of student loans for people who don’t get degrees. Not only must you find one that will, but you should also go to them directly to see what they can offer you for your particular situation. They should answer all of your questions, including: What will my interest rate and monthly payments be? Are there deferment and forbearance options? What kind of flexibility is built into the repayment plans? The list goes on.

Visit CollegeFinance.com, your trusted source of college financing information, to find out more about the pros and cons of student loan refinancing and other topics directly related to your needs.

FAQ: Student Loan Refinancing Without a Degree

Can You Get Student Loan Forgiveness If You Didn’t Graduate?

Federal Student Aid provides a list of ways you might possibly get forgiveness, cancellation, or discharge for student debt. For example, you might be eligible for the Public Service Loan Forgiveness (PSLF) program if you are employed by a government or nonprofit organization and have “made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.” You might also qualify for a federal loan discharge if your school closed while you were there or soon after you withdrew.

What Happens to My Student Loans If I Don’t Graduate?

After you drop out of college, the clock starts running on the student loans you have taken out. Six months later, your grace period is over and your first loan payment is due. If you want to maintain your creditworthiness and keep away the cloud of bad debt, you need to start paying. 

If the payments are hard to make and you have a federal student loan, you could look into converting to an income-driven repayment plan. If you are having trouble making the minimum monthly payments, you might want to look into seeing if you are eligible for student loan forbearance or deferment.

What Are My Student Loan Repayment Options If I Don’t Graduate?

Even if you don’t graduate, it’s still possible for you to refinance or consolidate your student debts as long as you meet eligibility requirements. Refinancing can possibly help you save money (giving you breathing space if your financial circumstances are difficult), change your repayment terms (if, for example, you want to change from variable interest rates to fixed interest rates, or vice versa), or to remove a co-signer. Read more about the pros and cons of refinancing your student loans.