SoFi is not a traditional student loan servicer - they're a private lender offering refinancing. Their terms are generally clearer than federal servicers, and their customer experience is better, but the fundamental tradeoff is giving up federal protections for potentially lower interest rates. The terms lock you into private loan rules.
Once you refinance federal loans with SoFi, they're private loans forever. There's no going back. You lose PSLF eligibility, income-driven repayment plans, federal forbearance rights, and borrower defense discharge - even if these programs would have benefited you.
SoFi offers variable rate loans that can change monthly. While initial rates may be lower than fixed options, there's no cap on how high rates can go over the loan term. In rising rate environments, total costs can exceed original estimates significantly.
SoFi loan agreements include mandatory arbitration clauses. Disputes must be resolved through individual arbitration rather than courts, and class action lawsuits are prohibited. You waive your right to a jury trial.
While SoFi offers unemployment protection and forbearance, these options are more limited than federal programs. Forbearance is typically granted in limited increments rather than extended periods, and there's no income-driven repayment option.
SoFi's loan terms are written more clearly than typical federal servicer communications. Rates, payment schedules, and total costs are presented more transparently than the confusing federal loan system.
SoFi's website and app are significantly better than federal servicer portals. Payment management, autopay setup, and account information are easier to access and understand.
Like federal loans, SoFi doesn't charge prepayment penalties. Extra payments go directly to principal, and you can pay off loans early without fees.
SoFi refinancing may make sense if:
Do not refinance if: