Citizens Financial Group in Providence, R.I., has upgraded its education refinance loan product to enable college graduates to refinance federal student loans in addition to private student loans.

To be eligible for a refi, a borrower needs at least $10,000 in federal student loan debt. Furthermore, the maximum debt a borrower can refinance for a bachelor's degree is $90,000, $130,000 for graduate and doctoral degrees, and $170,000 for professional degrees.

Upon refinancing, the borrower then has between 15 and 20 years to repay the loan, Citizens, which Royal Bank of Scotland is spinning off, said in a page on its website explaining the loan benefits.

The $130 billion-asset company launched its education refinance loan earlier this year. So far, Citizens has helped borrowers lower their monthly student loan payments by an average of $127 and their average annual percentage rate has gone down by 1.5%, the company said in a press release on Wednesday.

Federal student loans make up 92% of student loan debt in the U.S., the bank said, citing industry estimates. Citizens created the education refinance loan to help student loan borrowers save money and manage the long-term cost of college by offering lower monthly payments, reduced interest rates, and the ability to lock a variable rate into a fixed rate.

An education refinance loan provides interest rates as low as 2.31% for variable rates, while the minimum fixed rate a borrower can obtain is 4.74%, Citizens said. Additionally, the education refinance loan carries no application, origination or disbursement fees or prepayment penalties.

"While a college education is one of the best investments a young adult can make, paying for it afterward while trying to achieve other financial milestones can be difficult," Brendan Coughlin, president of education finance for Citizens Financial Group, said in the release. "Loans that are affordable when students are 18 years old often are not the best solutions for them five or more years later, when they have built a strong credit history."

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