RBS Citizens announced Tuesday that it will start offering refinancing options to college graduates who have student loans with private lenders.

The Providence, R.I., company joins a short list of lenders in the business of refinancing student debt.

"After graduation, many students successfully build their credit and are off to a promising start to their career, and they deserve more flexibility regarding their student loans," Brendan Coughlin, head of education and auto finance at RBS Citizens, said in a news release.

The RBS Citizens loans will only be available to refinance and consolidate private student loans - not federal debt, which has grown substantially in recent years. The company said that it plans to offer fixed-rate loans with interest rates as low as 5.24%, as well as variable rate loans.

Borrowers will be eligible for discounts of a quarter of one percentage point if they have certain accounts with RBS Citizens, or if they agree to make automatic monthly payments from their bank accounts.

The loans will be available from Citizens Bank and Charter One Bank, both of which are operated by the RBS Citizens Financial Group. That company, with $130.7 billion of assets, is owned by the Royal Bank of Scotland.

RBS Citizens is introducing the loans at a time when regulators have been lamenting the lack of options for college graduates who are locked into high interest rates.

"Borrowers, even after graduating and attaining employment, find themselves unable to take advantage of their improved credit profile and today's historically low interest rates," Rohit Chopra, student loan ombudsman at the Consumer Financial Protection Bureau, said in a November speech.

Only a handful of lenders currently refinance student debt. They include Wells Fargo (WFC), SunTrust Banks (STI), Darien Rowayton Bank in Darien, Conn., as well as nonbank startups Social Finance and CommonBond.

The high cost of acquiring customers has been cited as one key reason why more lenders haven't jumped into the refinancing market. Meanwhile, established student lenders such as SLM Corp. appear to have no incentive to refinance their existing customers at lower interest rates.

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