Getting a Lower Interest Rate with Navient

Michael Lux Blog, How to Guides, Lower Payments, Student Loans 23 Comments

The shift of massive amounts of student loans from Sallie Mae to Navient has been a headache for many borrowers.  However, to the credit of Sallie Mae/Navient, one of the great programs created at Sallie Mae remains alive and well with Navient.

The program is called the “Rate Reduction Program”.  It is designed to give borrowers a break who are struggling with their private student loans.  The exciting part of this program is that it applies to private student loans.  While there are great federal programs for lowering payments and student loan forgiveness, the Rate Reduction Program was among the very first of its kind in the private sector.

Borrowers who sign up for the Rate Reduction Program can get their interest rates lowered down to 3% or lower depending on individual circumstances.  For those with double-digit interest rates, it is a huge savings!

The major downside with the Rate Reduction Program is that Navient doesn’t want to make it too easy to sign up for or too popular.  When people sign up, Navient makes less money on interest.  The program is good for them, because it keeps people paying, and some money is better than none.  However, Navient clearly has motivation to keep this program as a last resort for borrowers.

If you want to get signed up for the rate reduction program, try these steps:

  1. Start out organized – Navient will have a ton of questions about your finances, so have detailed information about your income and all of your monthly expenses.
  2. Talk to someone from the Rate Reduction Program – When call the standard Navient number, they will first direct you to a customer service representative.  This person may not even be aware of the rate reduction program.  Asking to be transferred to the people who administer the Rate Reduction Program directly saves you a bunch of time and increases your odds of success.
  3. Work with the person on the other end of the phone – The interest rate reduction is not a term of your student loan or a legal requirement.  Navient is under no obligation to lower your interest rate.  Being nice instead of demanding will increase your odds of success.
  4. Apply each year – The interest rate reduction only lasts for one year.  If you want to stay on the program, you must reapply each year.  Be sure to set a reminder for yourself so that you don’t forget.

If you are denied…

If you cannot get your interest rate lowered, it is likely because Navient thinks you are making enough money to afford your student loans at your current interest rate.

It obviously sucks if they can lower your high interest loans, but the good news is that you might be able to take your business elsewhere.

If Navient thinks you can afford your debt, other lenders may think the same thing.  By refinancing or consolidating your loans, you can permanently lock in a lower rate.  There are a ton of companies offering student loan consolidation and refinancing.

If you do get a lower interest rate…

If you can get a lower interest rate, through Navient or another company, take advantage of it.

Use the money you save each month and apply it towards your higher interest loans.  The more you can attack the principal balance of your debt, the sooner it will be gone.