Student Loans

Should I refinance my federal loans privately?

The interest a lower rate saves, priced against the protections a private loan does not carry. One of those two is arithmetic and the other is not.

Refinancing costs more over the loan$4,979.26

The monthly payment falls by $215.73. A lower monthly payment on a longer term is the shape every refinancing advertisement takes, and here it costs more in the end.

  • $730.19Keep federal, monthly
  • $514.45Refinance, monthly
  • $27,622.41Keep federal, total interest
  • $32,601.67Refinance, total interest
  • $87,622.41Keep federal, total repaid
  • $92,601.67Refinance, total repaid

What the arithmetic cannot price

Refinancing federal debt privately is not a rate decision. It is a sale: a lower rate in exchange for protections a private loan does not carry. These are the ones you give up, permanently, on the day the new loan pays off the old one.

  • Income-driven repayment. The Repayment Assistance Plan and Income-Based Repayment tie the payment to income. A private loan does not, so a fall in income becomes a missed payment rather than a smaller one.
  • Public Service Loan Forgiveness. Refinancing privately ends any path to PSLF permanently, including credit for payments already made. A borrower part-way through 120 payments is giving up everything counted so far.
  • The RAP interest waiver. Under the Repayment Assistance Plan the Department waives interest a full on-time payment does not cover, so the balance never grows. A private loan capitalizes unpaid interest instead.
  • Death and disability discharge. Federal loans are discharged on death or total and permanent disability. Some private lenders offer this and some do not, and it is a term of the contract rather than a right.
  • Deferment and forbearance on federal terms. Federal deferment and forbearance are set by regulation. A private lender's hardship programme is discretionary and can be withdrawn.
  • Time-based forgiveness. A federal balance is discharged after the plan's horizon, 20, 25 or 30 years depending on the plan. A private loan runs until it is paid.

This site does not underwrite anything and cannot tell you whether a lender would offer you that rate. Compare the figure above against what those protections are worth to you, which depends on facts about your life that no calculator has.

This is a sale, not a rate comparison

Refinancing federal loans with a private lender pays off the federal loans. Every federal protection goes with them, permanently, on that day. The interest saved is arithmetic and this page does it. What you give up is not arithmetic, and the list above is there so the decision is made with both halves in view.

Watch the term, not the payment

A lower monthly payment on a longer term is the shape almost every refinancing offer takes, and it very often costs more in total. Set the two terms equal before comparing rates, then lengthen the private one and watch what happens to the lifetime figure.

Who this is least likely to suit

Anyone working towards Public Service Loan Forgiveness, because refinancing ends it and forfeits every payment counted so far. Anyone whose income is variable or uncertain, because income-driven repayment has no private equivalent. Anyone who would struggle if the payment could not be reduced.

Sources

  1. Repayment plans and important definitions, U.S. Department of Education. Checked on . Backs which plans are open to which borrowers from 1 July 2026; the Tiered Standard term brackets and its $50 minimum; the effect of a single post-cutover disbursement on all of a borrower's loans.
  2. Income-driven repayment plans, U.S. Department of Education. Checked on . Backs the IBR, PAYE and ICR formulas and forgiveness horizons.
  3. Court actions affecting income-driven repayment, U.S. Department of Education. Checked on . Backs the status of SAVE after the 10 March 2026 order; the 1% automatic debit reduction; that income-driven payment counters are not currently displaying.
  4. Reimagining and Improving Student Education (RISE): Federal Student Loan Program, final regulations, Office of the Federal Register. Checked on . Backs the regulation implementing the plan changes, effective 1 July 2026.
  5. Public Service Loan Forgiveness, U.S. Department of Education. Checked on . Backs the 120 qualifying payments and which plans qualify; that Tiered Standard payments do not qualify; the qualifying and non-qualifying employer categories; that the vacated employer rule has no effect.
  6. Teacher Loan Forgiveness, U.S. Department of Education. Checked on . Backs the $17,500 and $5,000 amounts and who each applies to; the five complete and consecutive years requirement; that the same service cannot count towards PSLF.
  7. Total and Permanent Disability discharge, U.S. Department of Education. Checked on . Backs the three qualification routes; the automatic discharge through quarterly data matches; the three-year monitoring period and that a VA-based discharge has none.
  8. Closed School discharge, U.S. Department of Education. Checked on . Backs the 180-day window and the automatic discharge one year after closure; the refund of payments and deletion of adverse credit history.
  9. Court actions affecting income-driven repayment, U.S. Department of Education. Checked on . Backs that the tax exclusion covered discharges from 1 January 2021 to 31 December 2025; that a milestone reached before 2026 remains covered if the discharge is processed later.

The rules behind this calculator were last checked on .

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