Student Loans
Student loans split into two very different worlds, federal and private, with different protections and rules. Knowing which you hold shapes every decision that follows.
Federal loan rates
Fixed, set by Congress
Private refi rates
5% to 12%+
Repayment plans
Standard, graduated, income-driven
Key protection
Federal loans only
Figures above are typical ranges for general guidance only. Your actual rate and terms depend on your credit, income, and lender, and change over time. Confirm current numbers directly with a lender.
Federal student loans come with protections that private loans do not: income-driven repayment plans that cap your payment as a share of income, deferment and forbearance if you hit hard times, and potential forgiveness through programs like Public Service Loan Forgiveness. If you hold federal loans, those protections are valuable and you should think hard before giving them up.
Private student loans, by contrast, are ordinary loans from banks and lenders. They are priced on your credit, lack the federal safety nets, and are the main candidates for refinancing. Refinancing replaces one or more loans with a new private loan at a new rate. For a borrower with strong credit and stable income who holds high-rate private loans, refinancing to a lower rate can save real money.
The decision that trips people up is refinancing federal loans into a private loan. Doing so can lower your rate, but it permanently forfeits income-driven repayment, forgiveness eligibility, and federal hardship options. For most federal borrowers, that tradeoff is not worth it. Refinancing makes the most sense for high-rate private loans, not for federal ones you might someday need to protect.
When it makes sense
- You hold high-rate private loans and have strong credit and steady income.
- You want to understand income-driven repayment before choosing a plan.
- You are weighing whether forgiveness programs apply to your situation.
What to watch for
- Refinancing federal loans into a private loan permanently gives up federal protections.
- A lower payment from a longer term can mean more total interest.
- Forgiveness programs have strict rules; confirm eligibility before counting on them.
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Best Student Loan Refinancing Lenders of March 2026
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Frequently asked questions
Should I refinance my student loans?
It depends on what you hold. Refinancing high-rate private loans to a lower rate can save money if you have strong credit. Refinancing federal loans into a private loan is usually a mistake, because you permanently lose income-driven repayment, forgiveness eligibility, and hardship options.
What is income-driven repayment?
It is a set of federal repayment plans that cap your monthly payment at a percentage of your discretionary income and extend the term. Payments rise and fall with your income, and any remaining balance may be forgiven after the plan's term. These plans apply to federal loans only.
What is the difference between federal and private student loans?
Federal loans come from the government with fixed rates and strong borrower protections like income-driven repayment and forgiveness. Private loans come from banks and lenders, are priced on your credit, and lack those protections. Knowing which you hold drives every other decision.