ST. PAUL, MN – A new student loan refinancing program is now available to Minnesota residents who want to lower their monthly payments or overall student debt burden. Today, at Winona State University, Lt. Governor Tina Smith, Higher Education Commissioner Larry Pogemiller, and state lawmakers announced the new SELF Refi program. The new initiative will help eligible borrowers manage and reduce their student loan debt by refinancing their debt at a lower rate. 

 

“Minnesota ranks fifth highest in the country for student loan debt, with the typical student carrying an average of $31,579 in debt,” said Lt. Governor Tina Smith. “Minnesota’s new SELF Refi program will help student borrowers reduce their interest payments and save money. This is an important first step to improve college affordability and increase educational opportunities for all students.”

 

In 2014, Governor Mark Dayton and the Minnesota Legislature enacted crucial reforms giving the Office of Higher Education the authority to refinance student loans through the sale of revenue bonds. 

 

“Since 2013, we have focused on two priorities in higher education – controlling the high cost of tuition, either by freezing it or lowering it, and reducing student debt,” said Rep. Gene Pelowski, who chaired the Higher Education Committee when the SELF Refi initiative was first passed. “This new loan refinancing program is just one of the ways we are addressing the staggering problem of student debt.”

 

The SELF Refi program is managed by the Minnesota Office of Higher Education (OHE) and patterned after the SELF Loan, an OHE loan program that has disbursed over $2 billion in loans since 1984  to help students pay for college. Neither program relies on public dollars, but is instead funded through the sale of bonds.

 

“Our primary goal in structuring SELF Refi was to create a program that offers a cost-savings for borrowers and  is sustainable for the long-term,” said Commissioner Pogemiller. “If this program is successful, we are optimistic it can be expanded to include more student loan borrowers in the future.”

 

To be eligible for the SELF Refi program, borrowers must be a Minnesota resident, have completed at least one postsecondary credentialed program, and either meet certain credit criteria or have a credit-worthy cosigner. It is anticipated that the majority of all student loans will qualify. 

 

“With Minnesota Students graduating with the fifth highest loan debt, I am proud that I was able to lead the initiative in the Senate to provide Minnesotans with options to reduce student loan debt and improve their financial health,” said Sen. Greg Clausen, who was the Senate sponsor of the SELF Refi provision.

 

The competitive rates offered through the SELF Refi program can help some students locked into higher rate private loans not only reduce their monthly payments, but also lower their overall debt. Some borrowers may also see the SELF Refi program as a way to shorten the duration of their student loans, or extend them over a longer period of time, which also reduces their monthly payments.

 

For eligible borrowers 5, 10 and 15-year loans will be available, with current interest rates ranging from 3 percent for a 5-year variable to 6.95 percent for a 15-year fixed rate. For example, if eligible for the lowest rates, a borrower with $40,000 in student loans at 8 percent interest rate could save as much as $200 a month, or up to $25,000 over the duration of their loan through the SELF Refi program. 

 

More information on the SELF Refi program, and how to refinance your student loans through this new initiative, is available at: www.selfrefi.state.mn.us