We’ve written before about service members struggling with student loans but today we bring you news about refinance options for veterans dealing with educational debt. And we’ve also written before about SoFi (aka Social Finance Inc), a private lender that matches borrowers with investors. Now SoFi is expanding their offerings with the recently launched SoFi Fund for the Veteran Community that offers vets with educational debt another option for refinancing their student loans. While every refinance program must be closely evaluated to see if it’s a fit for the borrower’s specific financial circumstances and loan criteria, this is an interesting new option for veterans. Because it’s a new program, only time will tell how the response rate and success of the program will be.
Many assume that the GI Bill covers the cost of schooling but it falls well short in most cases. The GI Bill is intended to cover the cost of in-state public school tuition but, in fact, many soldiers and veterans must borrow to finance their education. SoFi’s CEO Mike Cagney says, “It is a common misconception that the Post 9/11 GI Bill covers the entire cost of education after military service. We estimate that the average veteran in private, graduate-level programs completes school with $50,000 in student debt.”
Even with the GI Bill in place, service members average $27,000 in loans for their undergraduate degrees and as Cagney points out, more than double that for graduate degrees. SoFi’s new program presents refinance offers to veteran borrowers that may offer lower interest rates compared with certain Federal graduate level loan programs. These may be worth considering if your current loan interest rates are higher than those offered by SoFi.
Obtaining a degree can be key for those transitioning out of the military – it’s a must-have for success in the civilian world. To be eligible for SoFi’s Veteran Fund, the borrower must have completed or be currently enrolled in a degree-granting program from one of SoFi’s eligible schools. The borrower must also have served satisfactorily in one of the branches of the US armed forces and have obtained an honorable discharge.
SoFi’s Fund for the Veteran Community offers lower rates than the Federal Direct Grad PLUS (in-school loans), unsubsidized Stafford loans and Grad PLUS refinance loans. With rates ranging from 5.74% for a five year SoFi loan up to 6.875% for a 15 year SoFi less a .25% discount if you enroll in auto-pay, this lower interest rate can be a boon to veteran borrowers. Borrowers who are considering SoFi’s (or any other) refinance or consolidation program should consider how the refinance will affect their ultimate interest amount paid, length of loan and repayment options.
What is promising about the program is that it’s not only funded by advocates of veterans’ education but is managed by veterans as well. A roster of vets with outstanding service records are overseeing the administration of the program and have pledged to fulfill SoFi’s mission of becoming a top veteran support organization with a high level of integrity and reputation.
A caveat to mention is that SoFi hasn’t been around for as long as other lenders, so they don’t have as much of a track record. So far, though, borrowers seem to be happy with their SoFi loans. Read some questions below Tuition.io asked some of SoFi’s veteran refinance program participants and their responses to us:
Tuition.io: How has SoFi helped you to get a better grip on your student loans?
SoFi Veteran Borrower: SoFi highlighted the competitive advantages of getting a loan through their program. Before then, I guess I just blindly assumed that government student loans were the best options out in the market. As a vet, it was comfortable to just go with any government program due to my past. Unfortunately our interests did not align. SoFi brought up the key questions and really forced someone like me to understand what the numbers looked like. They helped highlight how the past model of banks and government loans were broken. Very eye opening and a bit shocking.
Tuition.io: What were your options if the SoFi plan had not been launched?
SoFi Veteran Borrower: I would have just kept my government loans and probably seek private bank loans to supplement my education costs.
Tuition.io: Would you recommend this program to other veterans/soldiers with student loans? If so, why?
SoFi Veteran Borrower: Absolutely. It’s not just the rates but the social aspect of it that really interests me. As a Vet who’s learning how to navigate the networking scene, I understand how powerful a social network can be. Other Vets need to get exposure to that early in their professional development. Getting to know more people who have vested interest in my professional and financial well-being is invaluable.
No matter whether you owe public or private educational debt – at the undergraduate or graduate level – check out Tuition.io’s free student loan management tool to see all of your loans in one simple dashboard. Also, check out our blog for lots of great information on paying off your student debts. To learn more about Tuition.io, click here.