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Federal loans: what you give up
Refinancing federal student loans with a private lender ends access to income-driven repayment, Public Service Loan Forgiveness, federal deferment and forbearance, and any future federal relief. Weigh the interest saved against that safety net. Private loans have none of these protections, so refinancing them carries less trade-off.
Savings on $40,000 (10-year terms)
| Current rate | New rate | Monthly savings | Total savings |
|---|---|---|---|
| 6.5% | 5% | $30 | $3,592 |
| 7.5% | 5.5% | $41 | $4,884 |
| 8% | 6% | $41 | $4,947 |
| 9% | 6.5% | $53 | $6,301 |
| 12% | 8% | $89 | $10,629 |
Example rates are for comparison only, not offers or current quotes. Your rate depends on credit, loan-to-value and lender.
Sources and assumptions
Related
Frequently asked questions
Should I refinance federal student loans?
Only if the savings outweigh losing federal benefits such as income-driven repayment and forgiveness programs.
Can I refinance student loans more than once?
Yes. Private refinancing can usually be repeated if rates fall.