Here's a puzzle of modern finance: during a period when borrowing costs are at rock-bottom levels and tens of millions of borrowers have refinanced their mortgages, it remains impossible for many gainfully employed Americans to refinance their student loan debt.

As debt burdens have spiked — the latest government estimate of total outstanding student loans is $1.2 trillion, up from $1 trillion less than two years earlier — one might expect lenders to be tripping over each other in a rush to peddle more affordable student loans.

But while a handful of companies have begun to serve the most credit-worthy borrowers, most lenders remain unconvinced that refinancing student debt is worth their time and effort. For potential new entrants, high acquisition costs are a barrier, and the established student lenders appear to have no incentive to refinance their existing customers.

The result is a situation that's bad for borrowers and may be harmful to the broader economy.

"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, lamented in a speech Monday.

Chopra suggested that hefty student loan payments may be preventing many consumers from purchasing homes. Even though they have landed in solid jobs and are now making their payments on time, they are locked into interest rates that are commensurate with their credit risk from a decade earlier, rather than today.

"It's kind of crazy that an employed law school graduate who's making $160,000 a year would be paying the same interest rate as a college freshman," says Derek Kaknes, chief executive officer of Prime Student Loan, a company that seeks to match consumers with lenders who will refinance their student debt.

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