Refinancing federal student loans: what changes
General information, not advice. Refinancing suits some borrowers and not others; the trade-offs are below.
What you give up by refinancing federal loans
A private refinance pays off your federal loans. It is permanent: you can't move the new loan back to the federal program. You lose:
- RAP, IBR and every income-driven plan, including payments that drop when income drops
- Forgiveness after 20–30 years of income-driven payments
- Public Service Loan Forgiveness (PSLF)
- The RAP interest waiver and $50 principal match
- Federal deferment and forbearance (unemployment, economic hardship, military, cancer treatment)
- Federal discharge on death or total and permanent disability, and school-closure discharge
Check an offer you already have
Type the rate and term from a written offer. We don't quote or estimate refinance rates.
Get your federal payment and total from the RAP vs IBR comparison. A variable-rate offer can change; this check treats it as fixed. Fees, if any, are not included.
Compare refinance marketplaces
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When people look at refinancing
RAP payments have no cap: above $100,000 AGI they are 10% of income however small the balance. IBR is capped at the 10-year standard payment. Borrowers with high incomes who aren't working toward PSLF or income-driven forgiveness sometimes compare a private loan's fixed payment with these numbers. Borrowers whose income could fall, who work in public service, or who expect forgiveness lose the most by leaving the federal program.
Things to check in any offer
Whether the rate is fixed or variable, any origination fee, the term, what happens if you lose your job, and whether the lender offers forbearance or discharge on death or disability. Compare offers on the lender's own written terms.