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If you’re considering refinancing some or all of your student loans, you may wonder what comes next on your financial to-do list.

Refinancing student loans could result in a lower monthly student debt payment, either due to a lower interest rate, a longer loan term, or both.

Lower payments can free up some of your income for other key financial goals. Read on to learn how refinancing your student loans could help make your financial future more secure.

What Happens When You Refi Student Loans?

Understanding what happens after student loan refinancing is key to planning your next steps.

As mentioned above, when you refinance, you get a new loan to replace your existing loans. Ideally, the new loan will have a more favorable interest rate or more flexible loan terms that will help reduce your monthly payment. SoFi’s student loan refinancing calculator can help determine how much refinancing could save you. You could then put those savings toward other goals.

Keep in mind, when you refinance a federal student loan into a private loan, you lose the benefits and protections that come with a federal loan, like deferment, forgiveness, and income-driven repayment plans.

What Is Your Next Financial Goal?

As you consider refinancing, it’s a good idea to keep your other financial goals in mind. How can refinancing student debt — and perhaps lowering the percentage of income dedicated to repayment — help you achieve those goals? Take a look at the following scenarios that might apply to you.

1. Pay Down High Interest Debt

Once your student loan debt is under control, turn your attention to any high-interest debt you may be carrying on credit cards. There are two common ways people approach paying down debt. Which one you choose depends on your financial situation.

•  The Debt Avalanche. With this system, you start by paying your debt with the highest interest rate first, by making payments above the monthly minimum. You do this while still keeping up with minimum payments on any other debt. Once that debt is paid off, you move to the debt with the next highest interest rate and do the same thing. When you eliminate your highest rate debt with the debt avalanche method, you can more quickly lower your overall debt picture.

•  The Debt Snowball. In this scenario, you pay off your debt in order of the smallest to the largest balances, regardless of interest rate. This way you see some of your smallest debts paid off quickly and get a psychological boost from doing so. As you pay off each debt, you assign the amount of the payment you were making on that balance to the next debt. Your debt repayment builds momentum, known as “the snowball effect.”

Recommended: Which Debt to Pay Off First: Student Loan or Credit Card?

2. Start an Emergency Fund

Having money saved for unexpected expenses is a vital part of financial wellness.

But saving for emergencies is a challenge for many Americans. According to a 2025 survey by U.S. News, 42% of Americans don’t have an emergency savings fund, and 40% don’t have enough cash or savings to cover a $1,000 emergency expense.

Starting or boosting your emergency fund with money saved on student loan payments is a great way to help keep your budget intact and stay out of debt.

To determine how much you should have in your emergency fund, the rule of thumb is that the amount should be equal to at least three to six months of living expenses (or take-home pay). That way, if you lose your job, have an accident, or get sick, you’re likely to have enough to see you through until your situation improves.

3. Increase Retirement Contributions

Are you putting away as much as you can for retirement? Starting early can pay off big down the line, thanks to the magic of compounding returns over time — and the fact that earnings grow tax-deferred in retirement accounts such as traditional IRAs and 401(k)s, and tax-free in Roth IRAs.

If your employer offers a matching 401(k) contribution benefit, upping your game may be even more important. This is free money. Whenever possible, contribute the amount necessary to qualify for the full match so you take the best advantage of this key benefit.

4. Save for the Next Stage of Life

With less student debt, you’re probably looking at what’s next. That may mean buying a car, saving for a down payment on a home, starting a family, or expanding a business. You can use what you save by refinancing your student loans to help achieve these other important life goals.

Careful budgeting means you can put the difference between your old student loan payment and your new one toward other important life goals.

Once you establish the goal you’re saving for, consider opening a high-yield savings account dedicated to that purpose. You’ll earn interest while your nest egg accumulates but still have liquidity so your money is available when you’re ready to pursue your goal.

5. Invest

Starting an investment account outside of retirement savings can be an important financial goal in and of itself. The reason? Long-term stock market returns consistently outperform many other types of investments. Over the past decade through December 2024, the average annual return for the Standard & Poor’s 500 Stock Index was 11.0%.

Returns vary, of course, depending on the years you are invested and the economic environment. But over the long haul, investing in stocks early — even small amounts — can pay off in the future.

To get started, two investment vehicles you may want to consider are mutual funds and exchange traded funds (ETFs). A mutual fund is a collective investment which pools funds from many investors to invest in stocks, bonds or other securities. ETFs work much the same way but unlike mutual funds, ETFs can be bought and sold like a stock as the price goes up or down during the day.

How to Pay Off Student Loans Ahead of Schedule

As we’ve seen, a refinance can help lower your monthly payments and perhaps bring some much-needed wiggle room to the rest of your finances.

That may motivate you to keep the momentum going and look at ways you can repay your remaining student debt faster. Here are two tried and true strategies.

Pay More Than the Monthly Amount

Your monthly payment amount isn’t set in stone. You can always pay more than the minimum amount. Payments over the minimum monthly amount owed are applied directly to the principal. So even a little bit extra can lower the amount of your loan and help you save on interest over the life of the loan.

Dedicate a Windfall to Student Loans

Another strategy for paying student debt faster: Whenever you get a windfall, use some or all of it to make a lump sum payment toward your student loan principal. Think tax refunds, cash gifts, work bonuses, or income from a side gig or inheritance.

What to Avoid After Refinancing Student Loans

After refinancing student loans, be careful not to fall into a common trap: It’s called “lifestyle creep,” and it happens when you spend all of your discretionary income instead of directing some of it to financial goals.

To avoid lifestyle creep, mindfully adjust your budget to account for any increase in income — such as lower student loan payments. That way the money will be put to good use instead of being frittered away.

Recommended: Living Below Your Means: Tips and Benefits

The Takeaway

Refinancing your student loans may help you lower your monthly payments, freeing up funds to put toward other financial goals. You might choose to pay down high-interest credit card debt, boost your emergency fund or retirement account, or even pay off your student loans faster. Just remember that refinancing federal student loans makes them ineligible for federal benefits.

Photo credit: iStock/RossHelen

FAQ

What are the benefits of refinancing student loans?

The benefits of refinancing student loans include potentially lowering your monthly payments if you qualify for a lower interest rate, replacing your old loans with one new loan that’s easier to manage, and possibly getting more flexible repayment terms.

It’s important to note, however, that refinancing federal student loans means you’ll lose access to federal programs and protections like income-driven repayment and deferment.

How can student loans affect your future?

Paying off student loans can make it more difficult to achieve other financial goals, such as setting up an emergency savings fund, saving for a house, and investing for your future. Paying off your loans ahead of schedule, if possible, or refinancing them if you can qualify for a lower interest rate, could save you money that you can put toward reaching your other goals.

Does refinancing student loans hurt your credit?

When you apply to refinance, a lender does a hard credit inquiry to check your credit. The hard inquiry can cause your credit score to temporarily drop a few points. However, over the long term, refinancing might help your credit if you consistently make your monthly payments on time because it improves your payment history.

SOSLR-Q225-037

If you’ve been thinking about going back to college to finish your degree, you may have wondered, how long are college credits good for? Are the credits I earned years ago still worth anything? Do college credits expire?

The answers to those questions depend on a few different factors. Here’s what you need to know about when college credits expire.

When Do College Credits Expire?

Technically, college credits don’t expire. When students earn credits for taking college courses, those credits will always appear on the official transcript from the school they attended.

The question is whether another school or program will accept those credits if a student wants to transfer them. And that can be a gray area.

The good news is that older, “nontraditional learners” — undergraduate and graduate students in their mid-20s, 30s, 40s, and up — are not an unusual sight on college campuses these days. Schools that hope to attract students who are looking to complete a degree may be especially open-minded about transferring their credits.

In the fall of 2023, more than 6.2 million adults ages 25 and older were enrolled in college, accounting for almost one-third of total enrollment, according to the National Center for Education Statistics. And the number of adults going back to school and getting a bachelor’s degree or higher has been on the rise for at least a decade, the Census Bureau reports. So most college admissions offices should be prepared to answer questions about how long are college credits good for, the possibility of transferring old credits, or if some credits have a shelf life at their school.

Those policies can vary. A college doesn’t have to accept transfer credits unless it has a formal agreement with the transferring institution or there’s a state policy that requires it. A credit’s transferability also may depend on the type of course, the school it’s coming from, or how old the credit is. These deciding factors are sometimes referred to as the three R’s: relevance, reputation, and recency.

What Criteria Do Schools Consider?

How long do college credits last? Here are some things schools may look at when deciding whether to accept transfer credits:

Accreditation Is Key

Accreditation means that an independent agency assesses the quality of an institution or program on a regular basis. Accredited schools typically only take credits from other similarly accredited institutions.

General Education Credits Usually Transfer

Subjects like literature, languages, and history tend to qualify for transfer without a challenge. So if you completed those core classes while working toward your bachelor’s degree, you may not have to repeat them.

Other Classes May Have a ‘Use By’ Date

Because the information and methods taught in science, technology, engineering, and math courses can quickly evolve, credits for these classes may have a more limited shelf life — typically 10 years.

Graduate Credits May Have a Short Life Expectancy

If the coursework for your field of study in graduate school would now be considered out of date, it’s likely that some or all of your credits won’t transfer. Graduate program credits are generally denied after seven years.

There Could Be a Limit on Transfers

Many institutions set a maximum number of transfer credits they’ll accept toward a degree program. For example, the Rutgers School of Arts and Sciences won’t take more than 60 credits from two-year institutions for an undergraduate degree, and no more than 90 credits from four-year institutions. No more than 12 of the last 42 credits earned for a degree may be transfer credits.

At the University of Arizona, the maximum number of semester credits accepted from a two-year college is 64. There is no limit on the credits transferred from a four-year institution, but a transfer student must earn 30 semester credits at Arizona to earn an undergraduate degree. And credit won’t be given for grades lower than a C.

Some Transfer Credits May Count Only as Electives

If a student’s new school determines that an old class was not equivalent to the class it offers, it may require the student to repeat the coursework in order to fulfill requirements toward a major. But the new school still may consider the old class for general elective credits, which can at least reduce the overall course load required to obtain a degree.

If at First You Don’t Succeed, You Can Try Again

Many schools allow students to appeal a credit transfer decision — whether it’s an outright denial or a decision that a course will be allowed only as an elective. The time limit for an appeal may be a year, a few weeks, or just a few days, so it can pay to be prepared with the evidence necessary to make your case.

The relevant paperwork might include a class syllabus, samples of completed coursework, and a letter from the instructor that explains the coursework.

Students also may have to meet with someone at the school to talk about their qualifications, or they may be asked to take a placement exam to test their current level of knowledge in a subject.

How to Request Transcripts

Some schools allow students to view an unofficial record of their academic history online or in person through the registrar’s office. So if it’s been a while and you aren’t sure what classes you took or what your grades were, you might want to start there.

After a refresher on what and how you did at your old college, it might be time to check out how your target school or schools deal with transfer credits.

Many colleges post their transfer credit policies on their websites, so you can get an idea of what classes you may or may not have to repeat. Or you can use a website like Transferology.com, or try the “Will My Credits Transfer” feature at CollegeTransfer.net, to get more information about which credits schools across the country are likely to accept.

When you’re ready to get even more serious, you may want to see if your target school makes transfer counselors available, or if someone in the academic department you’re interested in will evaluate your record and advise you as to how many of the credits you’ve earned might be accepted toward your major.

You’ll probably need to have an official transcript sent directly to your target institution to document your grade-point average, credit hours, coursework, and any degree information or honors designations. There may be a small fee for this service, and it could take several days to process the request.

Once your target school has had time to review your transcripts, you can expect to receive a written notice or a phone call telling you how many of your credits will transfer. When you know where you stand, you can decide if you want to appeal any of the school’s transfer decisions, if you’re ready to move forward in the application process, or if you want to check out other schools.

Previously, students who still owed money to their schools could find it difficult to get their official transcripts because schools could withhold transcripts in those cases. But as of July 2024, new federal regulations require colleges to release transcripts for credits the student paid for with federal aid, such as federal loans, grants, or work-study. The only credits schools may withhold are those that the student still owes money for.

State governments may have their own laws regarding transcripts. The following 13 states ban most holds on transcripts.

•   California

•   Connecticut

•   Colorado

•   Illinois

•   Indiana

•   Louisiana

•   Maine

•   Maryland

•   Minnesota

•   New York

•   Ohio

•   Oregon

•   Washington

•   The District of Columbia also bans transcript holds.

In addition, certain schools may have their own policies about transcript holds. So some students might hit a road bump at the registrar’s office if they’re behind on their loans.

Recommended: Private Student Loans Guide

How Old Debt Can Affect Transferring Credits

Of course, one of the basics of student loans is repaying them. If you’re delinquent, the problems caused by unpaid student debt can go beyond trouble with transcripts.

If you’re planning to return to school and you’re behind on your student loans, you may have difficulty borrowing more money until you’ve put some money toward student loans and gotten them back on track.

The Federal Student Aid (FSA) Program offers flexible repayment plans, loan rehabilitation and loan consolidation opportunities, forgiveness programs, and more for federal borrowers hoping to get back in good standing. The Federal Student Aid office’s recommended first step (preferably before becoming delinquent or going into default) is to contact the loan servicer to discuss repayment options.

Another possible solution for those who have fallen behind on their payments can be refinancing student loans. Borrowers with federal or private student loans, or both, may be able to take out a new loan with a private lender and use it to pay off any existing student debt.

One of the advantages of refinancing student loans is that the new loan may come with a lower interest rate or lower payments than the older loans, especially if the borrower has a strong employment history and a good credit record. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.) A student loan refinancing calculator can help you determine how much you might save.

Even if you’re doing just fine and staying up to date on your student loan payments, if you’re thinking about going back to school and you’ll need more money, a new loan with just one monthly payment might help make things more manageable.

However, if you have federal loans, it’s critical that you understand what you could lose by switching to a private lender — including federal benefits such as deferment, income-driven repayment plans, and public student loan forgiveness.

Recommended: How to Get Out of Student Loan Debt

Moving Forward (With a Little Help)

If you’re excited about the possibility of going back to school to finish your degree (or earn a new one), you might not have to let concerns about financing keep you from moving forward.

You can contact your current service provider with questions about payment options on your federal loans. And if you’re interested in refinancing with a private loan now, you can start by shopping for the best rates online, then drill down to what could work best for you.

With SoFi, for example, you can prequalify online for student loan refinancing in minutes, and decide which rate and loan length suits your needs.

FAQ

Are my college credits still good after 20 years?

Possibly, but it depends what kind of credits they are. Credits earned for core courses like English, history, art, and languages should still be valid after 20 years. However, credits for STEM (science, technology, engineering, and mathematics) courses typically expire in 10 years, and graduate-level courses generally expire in seven years.

Do your credits expire if you don’t finish your degree?

Technically, college credits don’t expire if you don’t finish your degree. However, you may or may not be able to transfer them to another school, depending on what type of credits they are and how long it’s been since you earned them. Credits for core courses like English and history typically remain valid over the long-term and you should be able to transfer them. But credits for STEM courses generally expire after 10 years.

Can a college withhold your transcripts if you still owe them money?

As of July 2024, thanks to new federal regulations, a college can no longer withhold your transcript for credits you paid for with federal aid, such as federal loans, grants, or work-study. The only credits schools are allowed to withhold from your transcript are those for which you still owe money.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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