Case Study - Mike, an attending physician refinances his loans

Mike is married to Michelle, who is staying home to take care of their newborn baby.

Mike’s income is greater than his medical school student debt:

Mike's annual income: $280,000 

Student loan balance: $250,000 (Direct Unsubsidized Loans, Grad PLUS @ 6% interest rate)

Mike wants to pay off his loans quickly and focus on growing his family, wealth, and plan for retirement

Mike’s question:

“Should I refinance my student loans?”

Sample strategy:

Refinance his federal student loans and save over $40,000!

The Result:

Let’s say Mike just started his 10-year Standard payment at $2,776/month.  If he is able to refinance his federal student loan with a private lender at a 2.99% interest rate with a 10-year term, he would pay $2,413/month and save $43,518 in total. If Mike is comfortable paying $4,491/month for a 5-year term, he can save $63,598.