Can You Refinance and Consolidate Federal Student Loans?

Is federal student loan consolidation or refinance an option?When it comes time to pay off your federal student loans, you may find yourself overwhelmed. Many who have either graduated or left school ask if it’s possible to refinance or consolidate these debts. So, is federal student loan consolidation or refinancing an option?

Yes, You Can Refinance and Consolidate Your Federal Student Loans!

Yep! Federal student loan consolidation and refinancing is possible. However, whether you should or not is absolutely up to your particular circumstances, income, and debt.

Consolidate and lower the interest on your student loans
Variable APR from 1.87% – 5.33%
Fixed APR from 2.30% – 5.96%

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Should You Refinance?

Refinancing your federal student loans means financing your loans again, usually with a lower interest rate. This creates an actual new loan, but with a different, private lender, rather than through the federal government.

While you generally will have a lower interest rate, refinancing with a private lender means you give up certain federal benefits like loan forgiveness and income repayment plans. However, if your interest rate is particularly high, you may truly benefit from a refinanced loan. It’s important to weigh the pros and cons before you take the plunge.

If you’re interested in refinancing a loan, make sure to talk to private lenders about your credit, potential interest rates, and any other signs that you should refinance your loans. You may find a plan that is appealing and works for you.

Should You Consolidate?

Consolidation, unlike refinancing, is actually available through the federal government. This allows you to combine all of your federal student loans into one large loan, with a new rate. However, it only combines your federal student loans; private loans will not be consolidated through this method.

Consolidation doesn’t particularly save you money, but it can be beneficial if you have multiple student loans. Keeping track of repayment becomes easier if you only have one. The new loan’s interest rate may also be appealing: it is created by the weighted average of all your previous loans’ rates. If your older loans from 2006 or before are variable, consolidation could help you avoid higher interest rates in the future. It may also allow you to make lower monthly payments, but on the other hand, it might extend the term of your loan.

As with refinancing, it’s important to consider the pros and cons of consolidation. You may lose certain borrower protections with your new loans. You should carefully weigh the benefits to decide if it’s right for you and your bank account, and other signs that you should consolidate your loans.

What Are Your Other Options?

If refinancing or consolidation doesn’t sound right for you, you do have a few more options if you can’t repay your loans at the current rate or simply can’t afford them. You may be eligible for deferment or forbearance, but these are short term solutions and not everyone can apply. Another option available to you may be income-driven repayment plans which can definitely help with paying off your federal student loans at a rate you can afford.

If you’re struggling to pay your student loans back or just need assistance on the options available to you, make sure you talk to your lender. They can walk you through your options. Never simply stop paying your loan as it could have extremely negative consequences. Before refinancing or consolidating your loans, always weigh the pros and cons.

Use College Raptor’s new Student Loan Finder to discover personalized loan options. Compare lenders and interest rate to find the ideal student loan—for FREE!


Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.88% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
Laurel road company logo.
Variable APR: 1.64% - 5.65%*
Fixed APR: 2.25% - 5.75%*
Undergraduate and Graduate
Commonbond company logo.
Variable APR: 1.96% - 7.02%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
Fixed APR: 2.44% - 5.97%*
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.87% – 5.33%**
Fixed APR: 2.30% – 5.96%**
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94% - 4.84%*
Fixed APR: 2.99% - 4.94%*
Undergraduate and Graduate
VISIT College Ave
Variable APR: 1.86% - 6.01%*
Fixed APR: 2.47% - 5.99%*
Undergraduate and Graduate, Parent PLUS

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

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