Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government and many lenders. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.
* * *
If you’re attending a Louisiana college, student loans might be a vital part of your plan to pay for your degree, along with scholarships, savings and grants. And if you’ve already graduated and are struggling with Louisiana student loans, you too have options, such as refinancing student loans or deferring payments.
To help you manage your finances, we put together this comprehensive guide to getting and refinancing student loans in Louisiana. Take a look to see what could work best for your situation.
|Louisiana student loan debt: At a glance|
|Average debt at graduation||$27,151|
|Percent of students that graduate with debt||49%|
|National ranking for amount of debt (among 50 states and D.C.)||33|
|Info based on the Class of 2018
Source: The Institute for College Access & Success
How to get student loans in Louisiana
Before you turn to Louisiana student loans to pay for college, it’s smart to first look at other available resources. Start with money for college students, like grants and scholarships, then tap into college savings or your own earnings. Use student loans last to cover any remaining college costs.
While some states have their own education loan programs, Louisiana isn’t one of them. So if you need student loans in Louisiana, your two main options are federal student loans from Federal Student Aid, or private student loans from a bank or similar lender. Here’s what you need to know about each one.
Federal student loans
Federal student loans are probably your best option. They offer an accessible, affordable and simple way to pay for college, so you should prioritize using these types of loans over private student loans.
Federal student loans carry low uniform interest rates, along with affordable one-time loan fees. Here’s a look at current federal student loans:
|Federal student loan||Who can use it?||Interest rate||One-time loan fee||Interest paid for you during deferment||Annual loan limit|
|Subsidized||Undergraduate students with a demonstrated financial need||2.75%||1.059%||Yes||Up to $5,500 per school year|
|Unsubsidized||Undergraduate students||2.75%||1.059%||No||Up to $7,500 per school year for dependent students
Up to $12,500 per school year for independent students
|Unsubsidized (for graduate students)||Students working toward a graduate or professional degree||4.3%||1.059%||No||Up to $20,500 per school year|
|PLUS||Graduate students and parents of undergraduate students||5.3%||4.236%||No||Cost of attendance, after all other student aid is applied|
|All information current as of July 16, 2020. Source: Federal Student Aid|
To apply for federal student loans, you’ll first need to submit a Free Application for Federal Student Aid (FAFSA). You aren’t required to have a certain credit score or a cosigner to get federal student loans. Your college will evaluate your eligibility for different financial aid programs and help you go through the process of claiming them.
If you’re eligible for direct subsidized loans, you should choose these first, as the government will cover any interest that accrues while you’re enrolled in school, as well as for the first six months after you leave and any period of deferment. Then, borrow direct unsubsidized loans as needed.
If you hit your borrowing limits on these loans but still have college costs to pay, you might then need to turn to a federal PLUS Loan. Parents can take out parent PLUS loans to help pay for their undergraduate child’s education, while graduate students can use grad PLUS loans to pay for their own costs.
Private student loans
After federal student loans, you might still have a funding gap for your Louisiana college costs, at which point you’ll probably want to consider private student loans. These have some key differences from federal student loans.
First off, you’ll need good credit (or a student loan cosigner with good credit) to qualify for a private student loan. Your credit history and score will also determine the private student loan rates you’re offered, and you might also have the option to choose between a fixed or variable rate.
Each private student lender also has its own repayment terms, as well as its own policy on deferring payments while you’re still in school or for a grace period after your enrollment ends.
Unfortunately, private student loans don’t generally offer many of the same repayment protections provided by federal student loans, such as deferment or forbearance, access to a wide range of repayment plans or student loan forgiveness.
All of this means that it’s important to perform a wide search and comparison of private student lenders. You’ll need to check out the costs and features of each option to find the best private student loan for your situation.
Here are a few private Louisiana student loans to kickstart your search.
¹ Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
² Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
How to refinance Louisiana student loans
Once you’ve graduated from college, you’ll need to take on the challenge of repaying your student loans. If you have federal loans, and you want to bring them together into a single loan with a single monthly payment, you can look at a direct consolidation loan.
This will lump all your federal loans together, using a weighted average of the interest rates, and also opens up the option of lengthening your loan term to lower the monthly payment.
Another option to consider is refinancing your Louisiana student loans with a private lender. Unlike direct consolidation loans, private student loan refinancing can let you lower your interest rate and potentially change the terms.
If you have relatively higher-interest student loans, such as a PLUS loan or private student loans, refinancing can replace those with a new lower rate. As with consolidation, you can lengthen your term to lower your monthly payments, but you can also shorten it to pay off student debt faster.
Refinancing won’t be right for everyone, however. You’ll need good credit and other solid financial factors — or a cosigner who does — to qualify to refinance student loans. Consider the potential drawbacks of student loan refinancing, too — this can include losing out on federal student loan benefits, like access to income-driven repayment plans or federal student loan forgiveness.
The best way to know if refinancing student loans could be a good move for you is to explore your options. Here are some lenders you might consider to refinance student loans in Louisiana.
- Lela RefiHELP
- Offered by the nonprofit Louisiana Education Loan Authority (Lela) and serviced by Aspire Servicing Center
- For Louisiana residents only
- Refinances $5,000 to $175,000 in student loans
- Fixed rates only, with annual percentage rates (APRs) starting at 3.25%, as of July 16, 2020
- Rate discount of 0.25% for autopay enrollment
- Offers refinancing of $5,000 to $500,000 in student debt
- Variable rates currently starting at 1.99% annually, or fixed rates as low as 3.19%
- Laurel Road
- Refinancing available for a minimum of $5,000 of student loans borrowed for a bachelor’s degree with no upper limit
- Refinancing of up to $50,000 also offered for loans borrowed for an associate degree in the healthcare field
- Variable rates are currently at 1.99%, or 3.20% for fixed rates
- Refinance $5,000 up to the full balance of qualified student loans
- Current APRs run 2.99% – 6.29% for variable rates, or 3.20% – 6.29%for fixed rates, although other rates may be available for refinancing medical school debt
If you think refinancing could be a good move for you, the next step is finding the right lender to refinance student debt. Compare offers among Louisiana and national lenders to find your best deal out there.
Some final tips on student loans in Louisiana
Finding the best student loans in Louisiana, and then managing them after graduation, could be a tall order. But while Louisiana might not have as many robust student loan and refinancing options as some other states, there are both online and traditional lenders with options that can fit a range of borrowers’ needs.
Take time to research your options. The money you can save, even by trimming a small amount off your interest rate, for example, can pay hefty financial dividends down the line.
Note: Student Loan Hero has independently collected the above information related to student loan interest rates and terms. The financial institutions mentioned have neither provided nor reviewed the information shared in this article.
Rebecca Safier contributed to this report.