Should You Refinance Your Student Loans?

Refinancing replaces your existing loan with a new private loan, ideally at a lower rate. The math is simple for private loans — if the new rate is lower, you generally save money. For federal loans, the math is only half the picture: refinancing permanently converts them into a private loan, forfeiting protections that don't have a private-market equivalent.

What You Permanently Lose Refinancing Federal Loans

Per the CFPB, this conversion is one-way — there is no path back to federal status once refinanced, even if program rules or relief options change in the future.

How the Math Works

The calculator compares your current payment and total interest against the new refinanced terms, so you can see the pure financial trade-off — separate from the federal-protection trade-off, which it can't quantify in dollars.

How to Use This Calculator

Select whether your current loan is federal or private first — if federal, you'll see exactly what you'd be giving up regardless of how good the new rate looks. Then enter your current balance, rate, and remaining term, plus the new rate and term you've been quoted.

When Refinancing Federal Loans Might Still Make Sense

• You're not pursuing PSLF or Teacher Loan Forgiveness and have no plans to
• You have stable, well-above-median income with little risk of needing IDR
• You have a fully funded emergency reserve covering 6+ months of payments
• The rate reduction produces clear, documented savings even under a conservative timeline

When It's Risky

If you hold Parent PLUS loans, are enrolled in or approaching eligibility for any federal forgiveness program, or have variable/seasonal income, refinancing federal loans carries meaningfully higher risk — the safety net you'd be giving up exists specifically for situations like income disruption.

Refinancing Private Student Loans

If your loans are already private, refinancing carries none of the federal trade-offs above — it's a more straightforward decision based purely on whether the new rate and term beat your current terms.

Where This Fits Your Bigger Picture

Compare your post-refinance payment against your budget using our net income calculator, or weigh it against other debt using our debt avalanche calculator if you're prioritizing across multiple balances.

Frequently Asked Questions