New State Program Offers Refinancing Of Student Loans

Minnesota officials on Thursday announced a program that will enable residents to refinance their student loans.

The Dayton administration and legislators announced a new loan refinancing program Thursday to help Minnesotans tackle their student loan debt. According to information released in a press release by Lieutenant Governor Tina Smith, a typical student carries approximately $32,000 in school loans.

“Many of them are carrying really, really heavy debt loads because interest rates were so high in the late 2000s”.

To qualify, an applicant must be a Minnesota resident, have finished at least one postsecondary program and either have a FICO credit score of 720 or higher or have a co-signer who does.

A new student loan refinancing program now available to Minnesota residents aims to help out on that front.

The Project on Student Debt says 70 percent of Minnesota bachelor’s degree recipients graduate with loan debt. A program aimed to refinance qualified student loans. There are also 882,000 borrowers in the state.

“This is an example of how we can help those who have carried the burden of the debt”, said state Rep. Gene Pelowski, DFL-Winona, who chaired the Minnesota House Higher Education Committee when the SELF Refi initiative was first approved in 2014. The state is concerned about the risk of the default rate going up and damaging the regular student loan program, he said.

MPR reports that as many as 500,000 Minnesotan graduates could be eligible for SELF Refi, which the state is funding through the sale of bonds and hopes will provide a boost to consumers and the wider economy.

The program is managed by the Minnesota Office of Higher Education.

“We’re using that fund to create this refinancing opportunity for those particular groups of students that got hammered in the 2005 to 2013 range”, said Pogemiller.

The expansion could take the form of lowering the credit score necessary to qualify, in order to open the refi program to more borrowers, he said.