As you consider how to manage student loan debt, it’s important to understand the similarities and differences between federal loan programs and private student loan refinancing. Keep in mind that you will lose eligibility to existing and future federal benefits and programs when you refinance federal student loans. If you need help determining your best path to repayment, our student loan specialists can help with a free consultation to explore all your options.
| Federal Student Loan | Laurel Road Refinanced Loan | |
|---|---|---|
| Repayment Terms | 10-30 Years | 5-20 years1 |
| Interest Rate | A standardized, fixed interest rate that depends on the type of loan and when it was taken out. | New interest rate based on your creditworthiness as a borrower. |
| Income Driven Repayment (IDR) |
There are several IDR plans, all of which adjust the borrower’s payments based on income and family size. Our student loan specialists can help you understand your IDR options during a free consultation. |
Not Available |
| Public Service Loan Forgiveness (PSLF)2 |
PSLF allows borrowers employed at qualifying nonprofit organizations and government entities to have their Federal Direct Loans forgiven after ten years of qualifying payments. Our student loan specialists can help you understand if you qualify through a free consultation. |
Not Available |
| Length of Forbearance3 |
Most federal student loans’ discretionary general and mandatory forbearance allows for borrowers to request forbearance for up to 12 months at a time. If borrowers continue to meet eligibility requirements when that forbearance expires, they may request another forbearance. General forbearance is limited to no more than 36 months over the life of the loan. You can find out more about these programs on the federal loan website. |
Economic hardship: For terms 10 years or greater, up to 12 months total of one or more (but not consecutive) 3-month time periods over life of loan. Lesser limits for 5 and 7 year terms. Natural disaster forbearance: 3 month increments up to 6 months maximum. |
| In-school Deferment | Federal loans allow borrowers to defer payments should they return to school as long as they’re at least a half-time student, and with certain subsidized loans, the U.S. Government may pay the interest during the deferment period. | Laurel Road offers a return to graduate school deferment option. |
| Default Timeline | Federal student loans enter default after 270 days of missed payments. | Laurel Road student loans are considered in default after 90 days of missed payments. |
| Grace Period | Federal loan grace periods extend 6 months beyond your graduation date. | Laurel Road honors an up to 12-month grace period beyond your graduation date. |
| In the Event of Permanent Disability | The federal government will discharge the loan – for both borrower and cosigner – in the event of permanent disability of the borrower. | Laurel Road may forgive (waive or cancel) some or all of the loan balance – for both borrower and cosigner – in the event of permanent disability of the borrower. |
| In the Event of Death of the Borrower | The federal government will discharge the loan – for both borrower and cosigner – in the event of permanent disability or death of the borrower. | Laurel Road will discharge the loan – for both borrower and cosigner – in the event of death of the borrower. |
| Eligible for Student Loan Interest Tax Deduction | Student loan interest is tax deductible for those who qualify based on their income levels. Consult a tax advisor for more information | Student loan interest remains tax deductible for those who qualify based on their income levels. Consult a tax advisor for more information |
| Credit Reported as a Student Loan | Federal loans are categorized as “student loans” on your credit report. | Private loans from Laurel Road are also categorized as a “student loan” on your credit report. |
This information is an overview of the various programs. Please consult studentaid.gov/ for detailed information about federal programs. For more information on Laurel Road offers and terms visit laurelroad.com/faq.
