July 7, 2021

Can You Refinance Federal Student Loans?


Yes, you can refinance federal student loans. Refinancing your student loans means having a private lender pay off your existing balance by giving you a new loan with new terms. Here are more details about refinancing federal student loans and how to go about the process.

Refinancing Federal Student Loans

Federal student loans help pay for college. At the time you got your existing loan policy, you may not have been satisfied with your interest rates. You may consider refinancing your federal student loans when your current financial situation has changed. Your few years studying in college may have given you enough time to boost your credit score, which means you could get more favorable interest rates with a new student loan policy.

How To Refinance Federal Student Loans

There are three steps to refinancing your federal student loan:

  1. Shop and Compare Providers: Assess all your options for private student loan providers. Find one with a policy that suits your current financial situation.
  2. Apply and Sign Documents: Submit your documents to the private student loan provider of your choice. Some private lenders may require you to undergo screening to assess your qualification for their policies.
  3. Pay Your Old Loan: Be sure to confirm whether your new student loan has completely paid off your federal student loans when you sign your private lender’s documents.

What Happens When You Refinance Federal Student Loans?

When you refinance your federal student loans, you will get a new policy with new terms according to your current credit score and financial situation. You can only refinance your federal student loans through a private lender. The federal government has no student loan refinancing programs. The federal government does have student loan consolidation options, which are different programs altogether.

The private lender will pay off your existing federal student loans through the new policy they give you. You can no longer return your government loans to the federal student loan program when you refinance them through a private lender. Accordingly, you will lose access to the following federal student loan benefits:

  • Payment and Interest Waiver: The pandemic prompted the government to freeze existing federal student loan payments and interest. No private lenders have taken student loan relief initiatives.
  • Payment Postponement: The federal government has deferment and forbearance programs that help you by pausing your federal student loan payments. This postponement mainly benefits students who face sudden financial issues.
  • Repayment Plans: The federal government offers flexible repayment plans that may depend on your income. The repayment program will adjust the amount you pay back according to your monthly salary.
  • Loan Forgiveness: There are several federal loan forgiveness programs available to public service workers. If you work in the healthcare sector, teaching industry, or for a non-profit, you will lose access to federal loan forgiveness programs designed for these workers.
  • Loan Discharge: Certain federal student loan policies carry loan discharge benefits that may eliminate remaining balances if they meet the correct conditions.

Conclusion: Can You Refinance Federal Student Loans?

You can refinance federal student loans through private lenders. The private lenders will pay off your existing federal student loans by giving you a new student loan policy, which you must pay off according to the new terms. If you are wondering whether refinancing your federal student loans is a good idea, visit our article on the pros and cons of refinancing student loans.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

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