The Complete Guide to Student Loans in Arizona

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The Student Debt Crisis

For the purposes of this article, we’re focusing on Arizona and their borrowers.

No one wants to spend most of their lives paying off a loan that was taken out as a way to improve the quality and stability of their future.

With the consistent rise of tuition, cost of living and other daily expenses, people are having to take out more and more student loans to be able to set themsevles for the future, so you’re not alone in worrying about how you’re going to pay off your student loan debt and live a life you love.

The national student loan debt in America as of 2018 is $1.52 trillion from 45 million borrowers, with each borrower averaging $27,975.

The average student loan debt in Arizona is $23,967, which is below the national average. This can be a substantial amount of debt for many borrowers, and with interest rates ranging from 3.4%-7.9% in 2018, the financial impact over the life of the loan could range anywhere in the tens of thousands of dollars, depending on the loan.

The long-term financial impact of your student loans can leave you discouraged or even distraught, but rest assured, there’s a way that you can pay off your debt with less stress (and interest) and that’s through student loan refinancing and consolidation. Let’s get to know our options…

Should I Refinance or Consolidate My Student Loans and What is the Difference?

Student Loan Consolidation is the process of combining multiple student loans into one single loan. The interest rate of your new loan is calculated based on a weighted averaged of all of the interest rates of your previous loans to create your new interest rate.

Federal or Public loans are consolidated through the government and private loans are consolidated through the private sector.

Is Consolidation Right for Me?

If you’re looking to pay one student loan payment a month or are needing to lower your monthly payments by extending your repayment term up to 25-years then you may benefit from student loan consolidation. Unlike refinancing, consolidation is mostly used for convenience, or changing up the terms such as length of re-payment and monthly payment, rather than decreasing the interest rate of a loan.

Cautions: Extending the term of your loan repayment will likely result in more interest accrued and therefore more out-of-pocket over the life of the loan. In addition, you could lose some borrowers benefits when you consolidate. Benefits like: principle rebates, loan cancellation benefits or interest rate discounts may no longer apply. Conversely, loan consolidation programs often offer other incentives like “on-time payment bonuses”, so ask ahead of time and consider all the pros and cons, before you consolidate your loans .

Student Loan Refinancing is the process of taking out a new loan to pay off existing loans (both private and federal) at lower interest rate and/or better repayment terms. This process most often reduces the monthly payment amount and total amount repaid due to the new lower interest rate. The interest rates are determined by your credit score and if you have good – excellent credit, and steady income it can lead to lower monthly payments and better repayment terms.

Is Refinancing Right for Me?

Just like mortgage and auto loans, student loans can be refinanced more than once, so it’s worth it to explore this option. If the weight of hefty monthly payments and high interest rates are overwhelming you, then you should consider refinancing. If you have a steady income and a decent credit score borrowers can often save significantly over the life of the loan and even lower your monthly payment.

Cautions: Be aware that your federal student loans are currently protected if something happened to your income. So, if you rely on income-based repayment plans or student loan forgiveness programs, then refinancing your federal loans might not be right for you. When refinancing your federal student loans, you will no longer be eligible for benefits and protections on loans provided by the federal government. A few benefits you’ll lose by refinancing federal loans are Income-Based Repayment (IBR), Pay As You Earn (PAYE), Income-Contingent Repayment (ICR), and Public Service Loan Forgiveness (PSLF).

So, if you rely on income-based repayment plans or student loan forgiveness programs, then refinancing your federal loans might not be right for you. However, your private student loans aren’t affected by losing such benefits.

For a better understanding of where you fit in to the debtors landscape in Arizona and how refinancing might help you save money through lower-interest rates, we’ve compiled a list of the largest borrowing markets in Arizona as well as every 4-year college in Arizona and their loan averages.

We have also included information on interest rate trends to give you a more comprehensive guide of student loan debt in Arizona and our top picks for lenders that may help you refinance or consolidate your student loans.

Student Loan Debt for Arizona's Top 4 Cities

Phoenix

In Phoenix, college students who attend a 4-year private or public school, take out an average of $29,467 in student loans. That’s 1.23% higher than the state’s average.

Tucson

The average student loan debt that a college student takes out to pay for their 4-year education in Tucson is $25,546. That’s 1.07% higher than Arizona’s average.

*Prescott

Prescott, with an average student loan debt per borrower of $23,730 is 0.99% lower than the state’s average.

Flagstaff

In Flagstaff, the average student loan debt is $30,974. Students who attend college in this city borrow 1.30% more than Arizona’s average student loan debt amount per borrower.

Tempe

The average student loan debt in Tempe is $24,650 that’s 1.03% more than the average amount that students in Arizona take out in 4 years.

*Student Loan Average for Prescott also includes colleges in Prescott Valley.

Average Student Loan Debt for 4-Year Colleges and Universities in Arizona

College

City

Tuition In-State

Tuition Out-State

Average Student Loan Per Borrower

Private or Public

American Indian College of the Assemblies of God Inc

Phoenix

$11,700

$11,700

$16,240

Private

Arizona Christian University

Phoenix

$23,972

$23,972

$21,172

Private

Arizona State University

Tempe

$10,104

$26,684

$20,988

Public

Brown Mackie College-Phoenix

Phoenix

$11,772

$11,772

$30,184

Private

Brown Mackie College-Tucson

Tucson

$12,888

$12,888

$31,492

Private

Chamberlain College of Nursing-Arizona

Phoenix

$18,495

$18,495

$25,668

Private

College America-Flagstaff

Flagstaff

$16,968

$16,968

$40,076

Private

CollegeAmerica-Phoenix

Phoenix

$16,968

$16,968

$41,588

Private

Collins College

Phoenix

$14,880

$14,880

$32,880

Private

DeVry University-Arizona

Phoenix

$15,835

$15,835

$37,392

Private

Dine College

Tsaile

$1,320

$1,320

*N/A

Public

Embry Riddle Aeronautical University-Prescott

Prescott

$33,408

$33,408

$21,256

Private

Grand Canyon University

Phoenix

$16,500

$16,500

$27,180

Private

International Baptist College

Chandler

$11,250

$11,250

$10,240

Private

National Paralegal College

Phoenix

$7,800

$7,800

$31,536

Private

NorthCentral University

Prescott Valley

$8,808

$8,808

*N/A

Private

Northern Arizona University

Flagstaff

$10,038

$23,820

$21,872

Public

Prescott College

Prescott

$28,896

$28,896

$26,204

Private

Southwest University of Visual Arts-Tucson

Tucson

$22,944

$22,944

$16,540

Private

University of Advancing Technology

Tempe

$20,403

$20,403

$28,312

Private

University of Arizona

Tucson

$10,860

$34,290

$20,820

Public

University of Phoenix-Online Campus

Phoenix

$9,467

$9,467

$33,228

Private

University of Phoenix-Hohokam Campus

Phoenix

$10,560

$10,560

$33,536

Private

University of Phoenix-Southern Arizona Campus

Tucson

$10,547

$10,547

$33,332

Private

Western International University

Phoenix

$6,000

$6,000

$23,000

Private

Student Loan Interest Rate Trends for 2019

Over the last 12 years, federal student loan interest rates have been rising and falling. And over the last few years, rates have been steadily increasing. Here’s a chart of the interest rate trends for Direct Subsidized Loans (loans for undergraduate students who demonstrate financial need), Direct Unsubsidized Loans (loans for undergraduate, graduate, and professional students regardless of their financial need, and Direct Plus Loans (loans for graduate or professional students and parents of dependent graduate students to help cover education expenses not covered by other aid).

Although student loan borrowers take out federal loans, many borrowers also take out private student loans. And unlike federal, private student loans can either be fixed or variable. So even these loans affect how much interest you’ll pay. It’s likely you’ll payback more since your federal and private loans are separate.

Below is a graph that list a few of the best private student loan lenders and the average interest rates they offer.

Private Lender

LendKey

SallieMae

College Ave

Discover

Variable Rates

5.85% – 6.99%

4.50% – 10.11%

4.20% – 11.44%

4.84% – 13.49%

Fixed Rates

4.68% – 6.54%

6.00% – 10.23%

5.29% – 12.78%

6.34% – 13.99%

Importance of Repaying Your Student Loan Fast

Here are a few examples of how much you’re paying back over 10 years with different interest rates.

If you took out a total of $24,000 throughout your college education, with a repayment term of 10-years, and your interest rates’ average is 4.22%, then you’re paying $5,461.20 in interest. And your total repayment amount is over $29,000.

Let’s increase the interest rate by just one point to see how it affects your over-all cash out of pocket.

If you took out a total of $24,000 throughout your 4-year college education, with a repayment term of 10-years, and your interest rates’ average is 5.21%, then you’re paying $6,843.60 in interest. And your total repayment amount is over $30,000.

As you can see, interest rates can add thousands of dollars to your loan, which can lead you to paying far more than you initially borrowed. If you’re looking for ways to lower your interest rates and monthly payments while keeping sane, then ​​​​​​​there are options out there for you. 

Top 7 Student Loan Refinancing Providers

SoFi

SoFi is the leading provider that helps borrowers refinance their federal and private student loans in all 50 states. To qualify, you need to be a US resident or permanent citizen, completed your undergraduate or graduate program from a Title IV-accredited school with a minimum loan amount of $5,000, employed or have a job offer that starts within 90 days, steady income, and a credit score of at least 650.

If you qualify, you’ll have an option to choose a repayment term of 5, 7, 10, 15, or 20 years. Your variable rates will fall between 2.54% and 7.12% APR, with auto pay. Your fixed rates will fall between 3.90% and 8.07% APR, with auto pay.

Once you sign up, you become a member of the SoFi student loan refinancing community. Your membership will bring you a 0.125% rate discount on new loans through SoFi, free career coaching, financial advisors, a community of people just like you through SoFi hosted networking experiences and unemployment protection with a 12-month cap over the lifetime of your loan.

When your loan is in forbearance, SoFi will provide you with help from their Career Team to help you find new employment. If you return to graduate school at least half time, undergo disability rehabilitation, or serve in active duty, you’ll be able to get your loan deferred. Also, SoFi will reduce your payments if you’re a medical or dental resident to $100/month for up to 4 years.

There’s no origination fee or prepayment penalty. And SoFi also allows greater-than-minimum payments and biweekly payments via autopay.

One thing to keep in mind is that you can’t release your cosigner, even after years of on-time monthly payments. Bring this up to your potential cosigner, so you’re both on the same page about what’s going to happen once you’ve refinanced your loan.

Earnest

Earnest is ideal for borrowers who want flexibility in their monthly payments. They allow you to customize your monthly payments to your preference and adjust your repayment term to match it. You can also extend your payment date up to a week and make greater-than-minimum payments. In addition to that, Earnest lets you skip one monthly payment every 12 months if you know you won’t be able to pay.

You can refinance your parent PLUS, federal and private loans, with a repayment term between 5 and 20 years. Earnest’s variable rates are 2.55% – 6.97% APR, with auto pay. Their fixed rates are 3.89% – 7.89% APR, with auto pay. You’ll also have the option to switch between variable and fixed rates every 6 months during the life of your loan. There’s no origination fee, prepayment penalty, or late fee.

To qualify, you need to be a U.S. citizen or possess a 10-year, non-conditional green card, have a minimum credit score of 650, must have attended a Title IV-accredited school, a minimum loan amount of $5,000, graduated or within 6 months of graduation and have a consistent income or a job offer that starts within 6 months.

Earnest offers academic and military deferment and forbearance in three-month increments up to 12 months total. In the event of death or disability, Earnest will forgive your loans.

A few things to remember is that with Earnest, you can’t use a cosigner to refinance your loan. If your credit score isn’t 650 or above, it’ll be more difficult for you to qualify. Another thing is that they aren’t available in Alabama, Delaware, Kentucky, Nevada, and Rhode Island. Variable rates aren’t available to borrowers in Arkansas, Illinois, Minnesota, New Hampshire, Ohio, Tennessee, and Texas.

Education Loan Finance

Education Loan Finance, Elfi, is ideal for borrowers who are interested in extremely low-interest rates,  wants to work with their own dedicated personal loan advisor, or can use their referral bonus for extra cash.  Borrowers can refinance their parent PLUS, federal, and private loans, with repayment terms of 5, 7, 10, 15, and 20 years, variable rates between 2.8% and 6.01% APR, and fixed rates between 3.39% and 6.69% APR. There’s no origination fee or prepayment penalty.

To qualify, you must have at least a 680 credit score, graduated with at least a bachelor’s degree, minimum income of $35,000 per year, a U.S. citizen or permanent resident, a minimum loan amount of $15,000, and attended a Title IV-accredited school that’s on Elfi’s approved school list.

Elfi offers military deferment and forbearance up to 12 months. They also give you the option to release your cosigner, however, you must reapply and pass the credit check by yourself. If you’re looking to pay more than the minimum, you can via auto pay.

Something to keep in mind is that Elfi does have a late fee that’s equal to 5% of the past due amount or $50, depends on which one is less. They also don’t offer academic deferment. If something permanent happened to you and you couldn’t pay your loan anymore, then Elfi would review your case and determine if you’re eligible for forgiveness.

CommonBond

CommonBond is ideal for borrowers who want generous forbearance terms and to help children in the developing world to live their dreams. You can refinance your federal, private, and parent PLUS loans. You’ll have the option of a repayment term of 5, 7, 10, 15, or 20 years for fixed or variable loan rates and 10 years for hybrid loans. CommonBond’s variable loan rates are 2.69% – 7.43% APR, fixed rates are 3.67% – 7.25% APR, and hybrid rates are 4.40% – 6.35% APR, with auto pay. There’s no origination fee or prepayment penalty. They do have a late fee of 5% or $10, whichever is less.

To qualify, you need at least a 660 credit score, steady income, to be a U.S. citizen, permanent resident, or H1-B, J-1, L-1, and E-3 visa holder, graduated with at least a bachelor’s degree, a minimum loan amount of $5,000 and attended a Title IV-accredited school.

One of CommonBond’s most promising features is that you get forbearance for up to 24 months, in three-month increments, over the life of your loan during economic hardships. They also have an in-school and military deferment option. After 24 months of on-time monthly payments, you’ll be able to release your cosigner. You can pay more than your monthly minimum via auto pay.

If you were to die or become disabled, your loan would be forgiven if you don’t have a cosigner. However, if you do have one, then your cosigner will have to take pay off the remainder of your loan.

CommonBond has partnered with Pencils of Promise, which provides young students in the developing world access to schools, teachers, and technology so that they can live their dreams.

CommonBond doesn’t lend loans to borrowers in Mississippi, Nevada or Vermont.

Laurel Road

Laurel Road is ideal for borrowers who graduated from the healthcare field and wants 100% of their loan refinanced at low rates, available in all 50 states. Borrowers can refinance their federal, private, and Parent PLUS loans. Your repayment term options are 5, 7, 10, 15, and 20 years. Laurel Road’s variable rates are 3.23% – 6.65% APR and fixed rates are 3.50% – 7.02% APR. There’s no origination fee or prepayment penalty, however, there’s a late fee equal to 5% of your missed payment or $28.

To qualify, you need at least a credit score of 660, steady income, to be a U.S. citizen or permanent resident with a valid green card, graduated for an undergraduate or graduate Title IV-accredited school and have a minimum loan amount of $5,000.

While they don’t offer academic deferment, they do offer military deferment, forbearance for up to 12 months throughout the life of the loan, and reduced payments for medical and dental residents with payments of $100/month until six months after their residency ends.

Laurel Road is one of the few refinancing companies that help borrowers with an Associate Degree refinance their loans. However, they only help borrowers who have a degree in certain healthcare fields. In the event of death or disability, they’ll forgive at least part of your loan.

You can refer a friend to Laurel Road and earn up to $400 in cash, even if you’re not a customer. Also, you can release your cosigner if you make 36 on-time monthly payments.

Citizens Bank

Citizens Bank is ideal for borrowers who didn’t graduate and non-U.S citizens, available in all 50 states. Unlike other lenders who require you to graduate, Citizens help borrowers who didn’t graduate but made 12 payments after leaving school. Also, if you’re not a U.S citizen, but your cosigner is at least a permanent resident, they’ll refinance your loan for you.

You can refinance your federal, private, and parent PLUS loans with repayment term options of 5, 10, 15, or 20 years. Citizens Bank variable rates are 2.98% – 9.72% APR and their fixed rates are 3.89% – 9.99% APR. There’s no origination fee or prepayment penalty. However, there is a late fee of 5% of your payment amount.

To qualify, you need a credit score of at least 680, minimum income of $24,000, and at least $10,000 in loans.

They do offer academic and military deferment if you return to school half or full-time or you’re on active duty. If you are experiencing economic hardship, your loan can go into forbearance in two-month increments, for a total of 12 months over the life of your loan. They also allow you to release your cosigner if you’ve had 36 on-time monthly payments. You’re allowed to pay more than your monthly minimum via auto pay. Also, if you died or became disabled, they’ll forgive your loan.

Also, if you’re an existing customer of theirs before applying for refinancing, then you’ll get an additional 0.25% interest rate discount.

A few things to remember are that Citizens Bank has a cap on the loan amount they’ll refinance. If you’re an undergraduate student, you can refinance a maximum of $90,000. Graduate students with a graduate, doctoral, or MBA degree loan amounts cap at $225,000, law degrees cap at $300,000, and dental or medical degrees cap at $350,000. So, if you know that your loan amounts are higher than their maximum, this bank may not be the right fit for you.

Lendkey

Lendkey is ideal for borrowers who prefer not to refinance their student loans through big banks. Unlike other lenders, Lendkey is a platform of not-for-profit community banks and credit unions that you can compare at once and pick the one that best fits your needs.

You can refinance your federal, private, and parent PLUS loans with repayment term options of 5, 7, 10, 15, and 20-years. Lendkey’s variable rates are 2.7% – 8.96% APR, and their fixed rates area 3.49% – 8.93% APR. There’s no origination fee or prepayment penalty, however, there’s a late fee that solely depends on the lender.

To qualify, you need at least a 660 credit score, minimum income of $24,000 or $12,000 with a cosigner, U.S citizen or permanent resident, at least an associate degree from a Title IV-accredited school, and live in one of their qualifying states.

They don’t offer academic or military deferment. However, if you’re on a 5, 7, or 10-year loan plan, your loan can go into forbearance for four months at a time, up to 12 months total. If you’re on the 15 or 20-year loan plan, your loan can go into forbearance 6 months at a time, up to 18 months total. You can also make interest-only payment for the first four years if you’re on the 15 or 20-year loan term. You can make greater than minimum monthly payments via auto pay.

While there’s no guarantee that you’ll be forgiven for your loan if you die or become disabled, lenders on Lendkey typically do forgive borrowers.

They’re not available in Maine, North Dakota, Nevada, Rhode Island, and West Virginia.

Methodology

The data derived from this article includes information from only 4-year private and public Arizona colleges. Information obtained about student loans only include federal student loan reports. 

When determining which providers are the best for borrowers, we took into account interest rates, repayment plans, requirements, what states they lend to, deferment, forbearance, and other unique perks that borrowers would find useful.

Sources

https://ticas.org/posd/map-state-data#overlay=posd/state_data/2018/tx

https://withfrank.org/frank-college-search/

https://studentloans.net/student-loan-debt-statistics/

https://studentaid.ed.gov/sa/about/data-center/student/portfolio

http://www.collegecalc.org/

https://collegescorecard.ed.gov/

 

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August 19, 2019

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