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Student loan refinancing

A lower rate can help—but only after you price what you give up.

Refinancing replaces one or more loans with a new private loan. It may simplify payments or reduce interest, but refinancing federal loans permanently removes them from the federal student aid system.

Borrower reviewing student loan refinancing numbers

Federal loans lose federal protections when privately refinanced

A private refinance may remove access to federal repayment plans, deferment and forbearance rights, forgiveness programs, and certain discharge protections. This choice generally cannot be reversed.

Federal Student Aid warning CFPB comparison

Refinancing versus federal consolidation

Private refinancing

A new private loan

  • Rate is based on lender criteria, credit, income, and term
  • May combine private and federal loans
  • May lower the rate for highly qualified borrowers
  • Federal benefits are lost on refinanced federal balances
Direct Consolidation

A new federal loan

  • Combines eligible federal loans into one federal loan
  • Uses a weighted-average fixed rate under federal rules
  • Can simplify servicing and change eligibility for some plans
  • Does not turn federal debt into private debt
Review Direct Consolidation

When refinancing may be worth comparing

You may be a stronger candidate when most of the following are true:

  • You have stable income and an emergency fund.
  • Your credit profile—or a co-signer’s—is strong enough to qualify for meaningfully better terms.
  • You are refinancing private loans, or you have carefully evaluated the value of every federal benefit.
  • You can afford the payment even if a variable rate rises.
  • The new APR and total cost are lower after considering the repayment term.

Compare offers without being distracted by the headline rate

Feature Question to ask
APR Is the quoted rate fixed or variable, and does it require autopay?
Term How do 5-, 10-, 15-, and 20-year options change the payment and total interest?
Co-signer Is one required, and can the co-signer be released later?
Hardship support What happens after job loss, illness, military service, or another hardship?
Discharge terms What happens after death or total and permanent disability?
Fees Are there origination, late, returned-payment, or other charges?

Use a break-even calculation

Compare the remaining cost of your current loans with the projected total payments under the new loan. A lower monthly payment can come from stretching repayment over more years, which may increase total interest.

Repayment rules changed on July 1, 2026

Federal repayment-plan eligibility now depends in part on when new loans were first disbursed. Use the official Loan Simulator and current Federal Student Aid guidance rather than an older article or calculator.

Open the federal Loan Simulator