How much can you actually save through student loan refinancing? | Earnest

How much can refinancing actually save you? We ran the numbers

By Corey Buhay | Published on January 22, 2026

)

TL;DR

Only 1 in 10 borrowers who could save money by refinancing actually do. That’s according to a 2025 Earnest data analysis, which used a mix of public and proprietary data to analyze the potential impact of student loan refinance savings for a range of borrowers. The study discovered that tons of borrowers are missing out on a potentially significant financial move. The reason? Many folks just aren’t sure if it’s going to be worth it.

Like any big money play, refinancing takes a little bit of research. It can be hard to make that kind of leap if you’re worried that the savings are going to be negligible. To find out what kinds of savings borrowers can realistically expect, we crunched the numbers for four types of borrowers using real-world data. And what we found might surprise you.

How much can refinancing save you on your student loans?

We’ll look at examples that show it’s not unrealistic for borrowers to save anywhere from $8,000 to $15,000 by refinancing their student loans. While the actual numbers depend on borrowers’ loan size, interest rates, and financial goals, they demonstrate the possibilities that are out there—and the kind of cash that 90% of eligible borrowers could be leaving on the table.

Here’s a deeper look at four examples of different kinds of borrowers—from the early college grad to the supportive parent.

The early-career grad looking for a lower interest rate

Let’s say you graduated college just a few years ago. You’re 27 years old, you’re just getting into the swing of things at your first real-deal job, and your loans look a little something like this:

Now let’s say you refinance your loans with a private lender and score a modest 5.2% fixed rate. If you keep your 10-year loan term, your monthly payment will drop from $518 to $482. That might not seem like a huge difference. But over the course of the next decade, that translates to more than $4,000 in savings over the life of the loan. That’s enough to pay for a globe-trotting vacation or the beginnings of a down payment for a home—all from making just one small change.

The working professional hoping to accelerate debt pay-off

You’re in your mid-thirties and you’re starting to bring in a higher salary, but your loans are eating away at your hard-earned paycheck. Refinancing could help you get out of debt faster and start putting more of your money to work.

Let’s say your debt looks like this:

The good news is that if you’re an established earner with a high income and good credit, you’ll likely qualify for a lower interest rate than a fresh grad. So, let’s say you get an offer for a 4.8% interest rate. If you refinance to a slightly lower term—7 instead of 10 years—you’ll pay a little more each month (around $982 instead of $813). But that temporary sacrifice will net you nearly $15,000 in savings. You’ll also be out of debt three years sooner. That means more freedom to invest, plan for a home, or start lining your kid’s college fund.

The Parent PLUS borrower with a high interest rate

If you took out loans to help cover your child’s education, first things first: bless you. Now, let’s look at where that left your finances. Parent PLUS loans have among the highest interest rates of any federal loan product, which leaves many parents feeling a little stuck in the years after their child graduates. Let’s say your loans look like this:

Refinancing federal debt comes with a few caveats. When you refinance student loans, you convert those loans to private debt. Private debt isn’t eligible for federal protections like deferment, forbearance, and income-driven payment plans. However, if you don’t expect to take advantage of those protections, refinancing could help you seriously drop your interest rate. Keep in mind that private lenders often offer their own perks in lieu of federal benefits. For example, Earnest offers the ability to skip a payment through a single, one-month forbearance and a discount for enrolling in AutoPay.

Let’s say your long credit history and good credit score helped you score a 5.0% rate offer on your Parent PLUS loan refinance. If you keep your loan term the same, your monthly payment will drop by more than $100 per month. Better yet, you’ll save more than $9,000 over the life of your loan. That’s enough to pad your retirement, finance that overseas vacation, or get around to those home improvements you’ve been putting off. Refinancing lets you start fresh without handing off the burden to your child.

The high-income earner who wants to get out of debt fast

Refinancing isn’t just for folks desperate to lower their monthly payment. It can also help you shorten your loan term and get out of debt faster. If you’re making enough money to cover a high monthly payment, refinancing could help you pay off your debt in up to half the time. Let’s say you have:

Now let’s see what happens when you refinance your student loans to a 5-year term. Lenders tend to offer lower rates on shorter loan terms. In this case, let’s say you scored a 4.2% fixed interest rate. Your monthly payment will shoot up from $1,362 per month to $2,221 per month. But over the life of your loan, you’ll save more than $30,000 in interest—and get out of debt five years early. That could free up some serious cash to start a business, buy a home, or make higher-impact investments.

How accurate are these examples?

These four refinancing examples are aggregates—they don’t correspond perfectly to real-life individuals. However, they do accurately reflect the experiences of average borrowers all across the U.S. Refinancing can make a huge difference in your savings, even if you only have a modest principal balance. Reduce your interest rate by 1 to 2%, and you could see thousands of dollars back in your pocket.

Student loan refinancing can seem intimidating at first glance, but it’s far more common than you think. Better yet, it isn’t just for the ultra-wealthy or math-minded: it’s a smart, practical move for everyday borrowers who want to pay less over time.

Get your personalized savings estimate

Wondering how these numbers could look for you? Check your personalized rate today. It only takes minutes, and it won’t affect your credit. Then, crunch the numbers for yourself: use Earnest’s student loan refinancing calculator to see how much you could save.

)

Corey Buhay

Corey Buhay is a writer and editor based in Boulder, Colorado. She’s passionate about literature, the outdoors, and doing her taxes by hand. She has been writing about student loans and personal finance for Earnest since 2019. You’ll find her work in Outside Magazine, Backpacker Magazine, Smithsonian, and The Denver Post.

Disclaimer

This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.
1 Please note that you will lose benefits associated with your underlying federal loans, such as federal Income-driven Repayment Plans, Economic Hardship Deferment, Public Service Loan Forgiveness, or other deferment and forbearance options, if you refinance into a private loan. If you file for bankruptcy, you may still be required to pay back this loan.
2 Choosing to refinance to a longer term may lower your monthly payment, but increase the amount of interest you may pay. Choosing to refinance to a shorter term may increase your monthly payment, but lower the amount of interest you may pay. Review your loan documentation for the total cost of your refinanced loan.
3 The above examples were calculated using the Earnest student loan refinance calculator. Rates and other terms provided in the above tables may not be representative of rates or terms offered by Earnest. These are example rates and terms for comparison purposes only. Savings are not guaranteed and vary. For current rates, please visit www.earnest.com.