Student loan refinancing is a fantastic option in many high-earning professions, and engineering is no exception. Most engineering students pursue bachelor’s degrees, and the average engineer’s student debt falls roughly in line with the national average of $35,173.
While engineers work hard to earn their degrees, the payoff is oh, so worthwhile. The average entry-level salary for engineers is $57,506, and the average salary across all experience levels is $79,000. This varies by the type of engineering you choose, as well. Big data engineers are among the highest-paid in 2020, with a median salary of $155,000.
Engineering students are often top candidates for student loan refinancing because of their low debt-to-income ratios. Here are a few more things you should consider refinancing your engineering student loans:
Benefits of Student Loan Refinancing for Engineers
Student loan refinancing is a strategy that can help engineers better manage and pay off debt. When you refinance your engineering student loans, a private lender will “purchase” your debt from your original lenders. You can request rate quotes from several different lenders, then refinance with the one that offers you the most competitive rate. Decreasing your interest rate means you’ll pay less over the life of the loan.
Here are just a few of the benefits of student loan refinancing for engineers:
- Ability to consolidate student loans into one monthly payment
- Option to choose between fixed and variable student loan refinancing interest rates
- Chance to earn a lower interest rate, potentially lower than federal student loans
- Opportunity to change your student loan repayment term
To see how much you could save by refinancing your engineering student loans with Education Loan Finance, try our Student Loan Refinance Calculator.
How to Refinance Engineering Student Loans
Refinancing your student loans is normally a quick and simple process, and you can apply in minutes at home. If you’re curious about the process of refinancing, take a look at our student loan refinancing guide.
Researching lenders has very few downsides. Most lenders prequalify applicants using a soft credit check, which won’t hurt your credit score. Just know that before you can officially refinance your loans, your lender will likely need to do a hard credit check.
Here are the next steps to take if you’re thinking about refinancing your engineering student loans:
- Figure out which how much or which loans you’d like to refinance.
- Make sure you meet student loan refinancing eligibility requirements.
- Shop around and compare pre-qualified rates from multiple lenders.
- Submit an application to refinance your student loans
- Finalize the loan application by reviewing the loan terms & signing the documents provided by the lender.
Alternatives to Pay Off Engineering Student Loans
If student loan refinancing doesn’t seem like the right fit, you have plenty of alternatives to explore. From student loan assistance to student loan forgiveness, engineers may qualify for a variety of repayment options.
Student Loan Forgiveness for Engineers
Select engineers may qualify for Public Service Loan Forgiveness (PSLF). If you do qualify, you’ll make payments for a specified amount of time, normally 10 years, then the remaining balance will be forgiven. You will, however, still have to pay taxes on the forgiven amount.
Here are a few ways in which engineers may qualify for Public Service Loan Forgiveness:
- Working in areas of national need could provide up to $10,000 in loan forgiveness over five years of service
- Working for a non-profit, government agency, or other eligible employers could provide loan forgiveness after 120 payments (10 years)
- Working as a teacher could provide up to $17,500 in loan forgiveness if working at a low-income school or other eligible agencies
If you aren’t sure which is right for you, research student loan refinancing vs. PSLF. While both may help decrease your debt, it’s important to know how they compare before taking the next steps.
Income-Based Repayment Plans
If you don’t qualify for Public Service Loan Forgiveness, you may also choose to pursue an income-based repayment plan. These types of plans set a monthly payment as a percentage of your income. Income-based repayment may be a good fit for entry-level engineers who are still working toward higher salaries.
Here are a few types of income-based repayment plans available to engineers:
- Pay-as-You-Earn (PAYE): PAYE plans are based on a percentage of your adjusted gross income and family size. They are available to individuals who borrowed after 10/1/2007, or those who received eligible Direct Loan disbursements after 10/1/2011.
- Revised Pay-As-You-Earn (REPAYE): REPAYE plans are similar to PAYE plans, but do not have date restrictions on the loans. They do take your state of residence into consideration, however.
- Income-Based Repayment (IBR): IBR plans require you to be experiencing financial hardship. If you qualify, they are based on a percentage of your adjusted gross income and family size.
- Income-Contingent Repayment (ICR): Many individuals who can’t qualify for PAYE or IBR plans apply for ICR. These start as a percentage of your adjusted gross income, then grow as your income grows.
State Student Loan Assistance Programs
Engineers are highly valued in the professional world. Some states and private organizations have created student loan repayment assistance programs for STEM professionals, with the goal of encouraging students to pursue these careers.
If you’re an engineer looking for student loan assistance, here are a few examples of state-driven programs you may be eligible for:
- Harold Arnold Foundation
- Wavemaker Fellowship
- North Dakota DEAL Loans
Employer Student Loan Repayment Assistance Programs
Some employers provide student loan repayment assistance as a job benefit, which operates similarly to a 401(k). You designate a certain dollar amount to your student loan payments each month, and your employer matches your contribution up to a cap amount. These types of benefits can help improve employee retention rates while supplying necessary financial aid.
Refinance Your Engineering Student Loans with ELFI
If you’re ready to refinance your engineering student loans, ELFI can help. By refinancing your engineering student loans with ELFI, you’ll enjoy benefits including:
- No application fees
- No origination fees
- No penalty for paying loans off early
- If approved for refinancing, ELFI has a referral bonus program
Ready to get started? Learn more about student loan refinancing with ELFI and apply today.
