Yasmin Naghash’s dream of becoming an attorney came true upon graduation from American University’s Washington College of Law. Her sense of accomplishment, however, was tarnished by the unexpected and mounting pressure of her six-figure student debt and the feeling that there was no light at the end of the tunnel. The burden, she says, was both financial and psychological. 

The terms of her original law school student loans with the government would take 30 years to pay off in full. To put that time in perspective, that’s ten times as long as it took to obtain her law degree. 

Naghash is not alone; not by a long shot. According to the National Association of Realtors Research Department and American Student Assistance, U.S. student loan debt stands at $1.4 trillion, amounting to 10 percent of all outstanding debt and 35 percent of non-housing debt. 

Today’s Economic Crunch

Young professionals and others entering the workforce are facing financial pressures unlike any recent generation. College graduates and those with advanced degrees are up against significant amounts of student debt. Compounding this, the cost of living is growing as housing costs continue to rise in cities across America.

In the National Association of Realtors’ Student Loan Debt and Housing Report 2017, it was clear that student loans had a negative impact on many parts of the respondents’ lives. As a result, many millennial borrowers are delaying major life events like marriage, taking a vacation, or looking for a job where they’d be happier than in their current (higher paying) one.

When it came to housing choices, student debt had a particularly odious impact on respondents: 

  • 83 percent of non-homeowners cite student loan debt as the primary factor delaying them from buying a home.
  • 22 percent were delayed by at least two years in moving out of a family member’s home.

Debt and the Stress Related to it 

A recent Oliver Wyman survey indicates that 80 percent of working professionals with student debt consider their student debt to be a source of either significant or very significant stress. The effect of such stress is almost incomprehensible.

Some well-planned strategies, though, reduce both the burden and the stress.

Working alongside the right banking partner, you can identify your long- and short-term financial goals and develop a strategy designed to best serve those goals. 

Treat Your Loan Like a Business

Student loan repayment plans can be analogous to the launch of a new business. Just as a well-crafted business plan carefully lays out a roadmap to success (including the path to profitability), an intelligently structured student loan repayment plan carefully lays out the most efficient and economical way to bring the debt down to zero.

“When you’re developing a plan to tackle your student loan debt, start by seeking out the lowest interest rate on the market,” said James Herbert, head of student loan refinancing for First Republic Bank. “Securing a low interest rate is the number one way to decrease your monthly payment and long-term cost of borrowing.”

The Power of Refinancing

Simplifying student loan debt through refinancing may enable borrowers to slash the cost of their debt. Shortening the duration of the loan and taking advantage of low interest rates are steps that could potentially save borrowers thousands, even hundreds of thousands, over the term of the loan.

“Consider working with a private banker who can guide you through the process, making sure you take full advantage of the opportunity. A banker’s personal attention can ensure the rate and term you select helps you meet your unique financial and life goals. Whether you’re saving to buy a home, have children, travel, or simply saving to save, refinancing your student loans may save you a massive amount of interest while also letting you choose the loan that’s right for your life today, not when you took on the debt,” continued Herbert.

Consolidating your student loans into one will also ease the process of managing your monthly payments and minimize the time spent on your loans and the risk of missing an installment. 

Student loan repayment can be stressful, yet with preplanning and guidance from a trusted financial advisor, graduates can keep their loans on track and focus on what they originally set out to do: launch their career. 

A Life Changing Experience

Naghash made the decision to refinance with First Republic Bank, and while it may sound like hyperbole, doing so has been a life-changing experience for her.

“I not only have more disposable income at the end of each month either to save or spend, I know I will be student-loan-free five years from now,” Naghash said. “Before I refinanced my law school loans, I felt a sense of personal failure that despite having a graduate school degree, I could not free myself from its financial chains for 30 years; but now that getting to the finish line is quite attainable, I live with a newfound personal freedom that you just don’t get anywhere.” 

“We forget that compounding interest can be a mighty foe when you’re the borrower; but by drastically reducing the government interest rate through private refinancing, I will have saved about $140,000 of my earned income, giving me the power of choice to shape my future again,” she continued.



First Republic offers private banking, private business banking and private wealth management, including investment, trust and brokerage services. First Republic’s complete line of banking products for individuals and businesses includes student loan refinancing rates among the lowest in the country. First Republic specializes in delivering exceptional, relationship-based service, with a solid commitment to responsiveness and action. 

The strategies mentioned in this document may have tax and legal consequences; therefore, you should consult your own attorneys and/or tax advisors to understand the tax and legal consequences of any strategies mentioned in this document. First Republic Bank does not provide tax or legal advice.

Published on: Dec 13, 2017