Rates are at their lowest in 3 years. Here’s what that could mean for your student loans

By Kaydee Ambas, CFEI® | Published on March 4, 2026

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Student loan borrowers have navigated a lot over the past few years. Between the payment pause, policy changes, and the possibility of federal forgiveness, many people chose to wait before making long-term decisions about their loans. That was a reasonable approach given the uncertainty.

Now, student loan refinancing rates at Earnest have dropped to their lowest level in three years. If you’ve been thinking about lowering your monthly payment or reducing the amount of interest you’ll pay over time, this may be a strong moment to explore your options.

Why this rate drop matters right now

Interest rates reached historic lows in 2020 and 2021 before rising sharply in 2022 and 2023.

That’s what makes today’s shift important: Refinancing rates haven’t been this low in three years.

Lower rates can help borrowers:

• Reduce monthly payments
• Pay less total interest over the life of the loan
• Potentially shorten repayment timelines

Even a small rate change can create meaningful savings, depending on your loan amount and repayment term.

What waiting has cost some borrowers—and why that context matters today

Over the past three years, many borrowers held off on refinancing because of federal forgiveness discussions, new repayment plans, and changes to servicers. These were legitimate reasons to pause and reassess.

But interest adds up over time. And understanding how rate changes impact total costs can help you make a more confident decision today.

Consider the graph below, which illustrates how much interest a borrower could have saved by now over the past three years if they refinanced when rates were last this low.

Let’s say you had $50,000 in student loans at 7.54% APR. That was the APR (including the ~4% origination fee) on Federal Grad PLUS loans disbursed for the 2022-23 academic year.

If you refinanced to 4.94% APR three years ago, which was the weighted average coupon for signed Earnest loans in 2022, you would have lowered your monthly payment by about $65 and saved roughly $3,585 in interest by now.

These figures are illustrative, but they help show how changes in interest rates can affect your total cost over time—and why today’s lower rates may be worth a closer look.

Example above is for illustration only and may not reflect actual Earnest rates or terms. Eligibility and offers depend on your credit profile. Savings are not guaranteed and will vary.

What today’s lower rates could mean for you

Every borrower’s situation is different, but refinancing at a lower rate may help you:

Lower your monthly payment

A reduced interest rate spreads less interest across your remaining payments.

Pay less interest over the life of the loan

This is especially impactful if you have a high balance or long repayment term.

Pay off your loan faster

If your monthly payment stays the same at a lower rate, more of your payment goes toward principal.

If you’re thinking about exploring your options, checking your rate is quick and won’t affect your credit.

Who might benefit the most from refinancing right now

You may want to take a closer look at refinancing if:

• You have a high fixed rate from before 2020
• Your financial profile has improved (income change, credit score increase, reduced debt)
• You want to consolidate multiple loan payments into one
• You're looking to lower your total interest paid

Borrowers who held off during the payment pause or policy changes may find today’s environment more favorable.

A few things to consider before you refinance

Refinancing isn’t the right choice for everyone. It’s important to understand:

• Federal benefits—such as income-driven repayment (IDR) plans or forgiveness programs—don’t transfer to private loans
• You won’t qualify for federal emergency forbearance if it becomes available in the future
• It’s helpful to compare your current rate, loan balance, and repayment goals before making a decision. Using a refinance calculator can help.

If you’re not sure whether refinancing aligns with your financial goals, reviewing your personalized rate can help you understand what’s possible.

The bottom line: Today’s rate drop creates an opportunity

With our refinancing rates at their lowest point in three years, this is a moment worth paying attention to. Whether you’re focused on lowering your monthly payment, reducing the amount of interest you’ll pay, or paying off your loans faster, checking your rate today can help you make a confident, informed decision.