The Easier Way to Refinance DACA Student Loans

By Corey Buhay | Published on July 10, 2026

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As a recipient of Deferred Action for Childhood Arrivals (DACA), you face a number of unique challenges when it comes to paying for higher education. If you’ve applied for college, been accepted, and secured funding, you’re already way ahead of the curve. However, since DACA recipients have fewer loan options than U.S. citizens or permanent residents, it can be easy to get stuck with higher interest rates.

Fortunately, refinancing offers a pathway to lower your interest rates, reduce your monthly payment, and get out of debt faster. Here’s how to refinance student loans as a DACA recipient.

How to refinance student loans as a DACA recipient

Student loan refinancing is a way of swapping out your current student loans for a single, new loan, often with a lower interest rate and better terms. Here’s how the process works.

1. Determine if it’s a good time to refinance

Whether or not it’s a good time to refinance can depend on individual circumstances and goals. But generally, here are a few situations when it may be a good idea:

• When your credit score has improved: Lenders typically offer better rates and terms to borrowers with higher credit scores. If your credit score has improved since you initially took out your student loans, or if you’ve established a good credit history, you may qualify for lower interest rates through refinancing.

• When national interest rates are low: Refinancing rates are greatly affected by the US economy. If national rates are high, it may be a good idea to wait to refinance until they lower again.

• When you have a stable income: Lenders also consider your income and employment status when determining your eligibility. If you have a stable job and a steady income, it may boost your odds of both getting approved and securing better loan terms.

• When you want to simplify your repayment: Refinancing also allows you to consolidate multiple student loans into a single loan. The new loan amount will be the cumulative total of all your previous loans, but you’ll be left with a single monthly payment. This can streamline your repayment process, giving you one monthly bill to stay on top of instead of multiple.

It’s important to keep in mind that refinancing federal student loans with a private lender means giving up federal benefits, like income-driven repayment plans, loan forgiveness options, and access to federal loan protections. However, since most DACA students are not eligible for federal student aid, you generally won’t have to worry about this.

2. Determine your eligibility

Student loan refinancing can be more difficult for DACA students than American citizens or permanent residents. That’s because refinancing involves taking out a new loan with a new lender. So, you’ll have to meet many of the same eligibility requirements as you did when you first took out your student loans.

Some refinance lenders view DACA recipients as international students, and therefore require them to have U.S.-based cosigners. A cosigner is a creditworthy adult who agrees to be responsible for your full loan amount if you become unable to make your payments.

Other lenders see DACA students as risky borrowers since DACA status could potentially change if new legislation is passed. If that were to happen, DACA students could end up with the same status as other Dreamers or undocumented students, which would make lending more complicated.

Even if current legislation remains the same, DACA students have fewer legal protections than U.S. citizens or permanent residents. For that reason, many lenders have stricter requirements. To apply for refinancing, you’ll likely need to have:

• A great credit score to have your application considered

• An excellent credit score to qualify for a lender’s best rates

• A U.S.-based cosigner if your lender requires one

• Valid DACA status and proof of legal residency in the U.S.

• Proof of stable income and employment

Fortunately, some lenders — including Earnest — now offer no-cosigner refinance options for DACA students. This makes it possible to refinance your student loans on your own, even if you don’t have a creditworthy friend or relative to lean on. The other benefit to cosigner-free refinancing is that it offers a path to cosigner release if you want to free a previous cosigner from their obligation.

3. Shop around

Next, you’ll need to find a refinance lender. This could be a bank, nonprofit credit union, or an online lender. Many financial institutions that work with DACA students will refinance both undergraduate and graduate student loans. As you’re shopping, look for lenders that offer:

• Low interest rates

• Fixed rates or variable rates, depending on your preference

• Great customer service

• Intuitive online account management tools or a user-friendly app

• A long track record as a reputable lender

• Flexible repayment options

• Hardship provisions, like forbearance or deferment options

While you’re comparing rates, be sure to look for discount offers that you might qualify for. Some lenders, like Earnest, offer a 0.25% rate discount when you sign up for automatic payments. This small autopay discount may not sound like a lot, but it can save you hundreds of dollars over the life of your loan.

Also keep an eye out for hidden fees and costs. Some private lenders may charge origination fees, late fees, or prepayment penalties. Others, like Earnest, provide absolutely fee-free refinancing.

4. Get prequalified

Prequalification involves submitting a few details about yourself to a lender in exchange for a rate estimate. This will give you a better idea of the exact rates a lender can offer you based on your personal finances.

To prequalify for student loan refinancing, you may need to submit personal and financial information like income, credit score, debt, and other relevant details. A lender will use the information to determine your odds of approval, how much you may be eligible to refinance, what repayment terms you can access, and what rates are available to you.

Unlike submitting a formal application, prequalification doesn’t trigger a hard credit check, which can temporarily harm your credit score.

Keep in mind that prequalification doesn’t guarantee approval, or that you’ll be able to access the exact terms you’ve been prequalified for. These are just estimates. To get approved for refinancing, you need to complete the full application process, which involves a hard credit check and income verification.

5. Pick a lender and apply

Once you’ve narrowed down your list to a few lenders, choose one with the best rates, customer service, and other features most important to you. Then, fill out a formal application. On your application, you’ll likely need to provide:

• Personal identifying information

• DACA status documentation

• Your social security number (if you got one for FAFSA or employment reasons)

• Details about your current student loan debt

• Bank account information

Unlike prequalifying, applying for a loan usually results in a temporary drop in credit score. However, credit bureaus make an exception for borrowers who are shopping around responsibly.

This is called the rate shopping exception. If you apply for several refinance loans within a short period of time (usually a two-week period), credit bureaus will only count these as one application. This means your credit score will only drop once, minimizing the damage.

6. Continue paying your old loans through the 10-day payoff

After a few business days, you should receive a response to your application. If it’s accepted, the lender will then make you a loan offer.

Before you say yes to this offer, read it carefully and make sure you understand the loan term, repayment plan, and fee structure. If you accept, your new lender will pay off your current private student loans for you. When this is complete, the new lender will issue your new loan.

Keep in mind that this process isn’t immediate. Usually, it takes about 10 days. During this period, called the 10-day payoff period, you’ll continue making payments to your old lender.

These payments may come with additional interest, which is calculated and prorated for the time it will take your new lender’s loan payment to reach your old lender. When the payoff period is finished, you’ll receive a written notice telling you that your old loans are officially closed. Only at this point is it safe to stop paying your old bills and begin making payments to your new lender.

The pros and cons of refinancing DACA student loans

Pros

Student loan refinancing gives you the opportunity to:

• Simplify your monthly bill and loan repayment plan.

• Shorten your repayment term to pay off your loans faster.

• Lengthen your repayment term to lower your monthly payment.

• Choose between fixed and variable interest rates.

• Release a cosigner if you had one on your previous student loans.

Cons

Refinancing also comes with these challenges:

• If you had federal student loans, refinancing will make them private student loans and therefore result in the loss of federal protections. (However, since most DACA recipients don’t qualify for federal student aid, this likely won’t apply to you.)

• If you refinance to a longer loan term, your monthly bill will decrease, but you’ll end up paying more money in interest over the life of the loan.

• If you refinance to a shorter loan term, you’ll save money over the life of your loan, but your monthly payment could go up over the near future.

• Most lenders’ lowest rates are variable. This can make variable-rate loans tempting. However, variable interest rates can go up or down according to national market trends. So, if you refinance from a fixed to a variable APR (annual percentage rate), you’ll have to accept the risk that your rates could rise in the future.

Learn more about refinancing DACA student loans

Taking out student loans can be a critical investment in your future. But that doesn’t mean they have to be an extraordinary burden. Refinancing can give you the opportunity to reduce your interest rate, lower your monthly payment, and pay off your student loan debt faster.

Refinancing can be tough for non-citizens, which is why Earnest has created a new refinancing program specifically for DACA recipients. With Earnest, you can apply for fee-free refinancing without a cosigner. If you qualify for a lower interest rate, you could save up to thousands of dollars over the life of your loan. Check your rate today to see how much you could save with Earnest. It’s fast, free, and won’t affect your credit score.

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About the Author

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.