Five lenders who jumped into the business since 2012 already have refinanced about $5 billion in loans, while Goldman Sachs Group Inc. estimates $200 billion of student loans could be eligible for refinancing.
Sarah Ciopyk, an associate attorney practicing general litigation in New York, refinanced about $175,000 of federal loans into a new private loan with a 4.74% rate offered by CommonBond Inc. in May. Ms. Ciopyk had initially borrowed the funds at rates up to 7.9% to attend Cornell Law School, from which she graduated in 2013.
Historically, refinancing for a lower rate was generally limited to the small slice of the market handled by private lenders.
The Consumer Financial Protection Bureau, which says it has heard from borrowers about difficulties finding refinancing options, has stepped up scrutiny and looked into obstacles holding back more widespread refinancing activity.
The Providence, R.I., lender refinanced $655 million of loans in the first half of this year, nearly triple the level of all of 2014, when it added student-debt refinancing.
Five of the biggest refinancing entrants-SoFi, Citizens, CommonBond, Darien Rowayton Bank and Earnest Operations LLC-have collectively refinanced more than $5 billion since 2012, according to data provided by the lenders.
Sharon Krikhely, a 34-year-old family-medicine doctor in Forest Hills, N.Y., said she refinanced about $185,000 of private and federal student loans with Darien Rowayton Bank, a lender based in Darien, Conn., in July.