Financial groups introduce student loan refinancing plans

The options for refinancing student loans are growing slowly but steadily.

Citizens Financial Group, the United States' 15th-largest bank, has introduced a program that will allow some clients to refinance their outstanding federal student loans. To be eligible, applicants must have very high credit scores and steady employment. Citizens Financial originally established a similar plan for private loans earlier this year, and the new program will effectively allow borrowers to turn their federal loans into private ones, which are currently cheaper.

The bank's fixed-rate loans will have interest rates as low as 4.74 percent, whereas the rates for federal loans over the past eight years have ranged anywhere from 3.86 to 8.5 percent.

"While a college education is one of the best investments a young adult can make, paying for it afterward while trying to achieve other financial milestones can be difficult," said Citizens' president of education finance Brendan Coughlin in a press release. "Loans that are affordable when students are 18 years old often are not the best solutions for them five or more years later, when they have built a strong credit history."

Other institutions are working on the early stages of similar plans. Discover Financial launched a program in April for clients to consolidate their federal and private loans into a single one with a new interest rate. Currently, federal loans can only be consolidated with little change to interest rates, but a bill will soon be put to a vote that could allow borrowers to refinance without going through a private bank.

Student loan management software is a useful tool for lenders and borrowers alike to navigate a market that has been making headlines of late. With private institutions beginning to offer refinancing options and the possibility of new federal regulations looming, this software can help all parties stay up to date on the latest changes.