What refinancing is
Refinancing federal student loans means a private lender pays them off and you owe the lender a new private loan, with terms the lender sets. This is different from a federal Direct Consolidation Loan, which stays federal.
What the federal loans had
StudentAid.gov’s comparison of federal and private loans lists what federal loans carry:
- Fixed interest rates for the life of the loan. Private loans can be fixed or variable.
- Income-driven repayment, where the payment follows your income (RAP and IBR today).
- Postponement options (deferment and forbearance) set in federal rules. For private loans you have to ask the lender.
- Public Service Loan Forgiveness, which is only for federal Direct Loans.
- No prepayment penalty. With a private loan you need to check.
It can’t be undone
StudentAid.gov says private student loans cannot be consolidated into a Direct Consolidation Loan. Once federal loans are refinanced into a private loan, there is no route back to the federal plans.
Comparing the numbers
The refinance calculator compares the total cost of a rate and term you have been offered with your federal fixed plan. It doesn’t list lenders or say which to choose.
Not financial or legal advice. This page explains the published rules. It does not tell you which plan to choose. Your loan servicer and StudentAid.gov have the final word on your account.
Official sources
- StudentAid.gov: Federal Versus Private Loans
- 34 CFR 685.219, Public Service Loan Forgiveness (current eCFR)
- 34 CFR 685.209, income-driven repayment plans (current eCFR, as amended May 1, 2026)
Last verified Oct 17, 2026. Corrections are logged on What changed.
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