So…should I refinance my federal student loans?

COVID-19 has meant many terrible things for the world, families, and individuals. And while it might be very mercenary to say it in this moment, one of the other things it has meant is a sharp economic downturn with interest rates at their lowest in two years. For that reason, despite saying I would not consider another student loan refinance until December of 2020 when I had expected to have paid off Private Loan 1, Private Loan 2, and have a better debt-to-income ratio, I am now considering it again…

So…should I refinance my federal student loans?

My current federal student loan profile is the following:

Using the Credible App, I sought to prequalify to see which rates I might be offered by lenders. Credible came back with the following offers, all offered by SoFi:

Rate 1: Fixed at 4.76%, monthly payment of $586.00, 15 year repayment term
Rate 2: Variable at 4.76%, monthly payment of $586.00, 15 year repayment term
Rate 3: Fixed at 5.22%, monthly payment of $502.00, 20 year repayment term
Rate 4: Variable at 5.22%, monthly payment of $502.00, 20 year repayment term

I would, without a doubt, save money on a refinance. The difference between a 4.76% and a 5.806% interest rate is significant. It becomes even more significant if you consider that 5.806% is not a weighted average and I have significantly more student loans at the higher 6.8% interest rate.

However, once you move federal student loans to a private lender, you lose all of the protections of a federal loan, which include in-school, unemployment, disability, and death protections. (Although, death is mitigated to some extent as my employer provides a free insurance policy in the amount of one year’s salary, and I pay $1.20 a month for $50,000 of additional insurance, which is more than enough to cover any outstanding obligations I currently have in the event of my untimely death).

So…should I refinance?