Since private student loans are held by a private bank or lender, you can’t refinance private student loans to federal loans.
The reverse, however, is possible. You can refinance private and federal student loans into a new private student loan with a new, ideally lower, interest rate. When you refinance federal student loans, it’s important to understand you lose access to federal benefits and protections.
Here’s what to know about why you can’t convert private student loans to federal loans, how you can combine both into a new refinanced loan, and how to make the choice that’s right for you.
Table of Contents
Key Points
• Private student loans cannot be converted into federal student loans, but federal loans can be refinanced into private loans.
• Refinancing private and federal loans into a new private loan may lower interest rates but eliminates federal protections like income-driven repayment and loan forgiveness.
• Federal consolidation allows borrowers to combine multiple federal loans into one without losing federal benefits, but it does not apply to private loans.
• Federal student loans offer benefits such as debt forgiveness programs, income-driven repayment options, and guaranteed deferment or forbearance in times of financial hardship.
• Private loans typically require a credit check, may have variable interest rates, and offer fewer repayment protections compared to federal loans.
Transferring Private Student Loans to Federal Loans
It isn’t possible to refinance private student loans to federal loans since private loans can only be held and owned by private financial institutions. Your federal student loans, on the other hand, can be converted into a private loan.
Although private and federal loans serve the same purpose — to finance your education — they differ in significant ways. One of the biggest distinctions is that private loans are not eligible for federal programs and benefits.
Recommended: Types of Federal Student Loans
How to Combine Private and Federal Student Loans
While there’s no way you can refinance private student loans to federal loans, the reverse is possible: You can convert a federal loan to a private loan to combine your federal and private student debt into a new private loan.
Refinancing
You can combine federal and private student debt by refinancing your federal student loans into a private loan. Refinancing is offered by a private lender and requires a credit check. This repayment option lets you refinance existing federal loans, private student loans, or a combination of both into a new private student loan.
The new refinancing lender pays your original loan(s) in full and creates one refinanced student loan for the total amount it paid on your behalf. Over time, you’ll repay your new lender your principal refinance amount, plus interest charges.
Overall, a student loan refinance can help you combine multiple loans into a single loan at a new rate and potentially better terms. It also results in one monthly payment. Depending on your credit score and other qualifying factors, it might help you access a lower interest rate.
Be aware that since a refinanced federal loan is no longer a part of the federal student loan system, you’re giving up federal benefits and protections if you refinance a federal student loan.
Recommended: Guide to Refinancing Private Student Loans
Consolidating
Federal student loans can be combined, or consolidated, through the federal Direct Loan program. With a Direct Consolidation Loan, your federal loans are combined into a single new loan with a new interest rate that’s an average of all of your existing federal loan rates, rounded up to the nearest eighth of a percent.
Some reasons to consolidate your federal loans include simplifying your payments and qualifying for federal student loan programs such as income-driven repayment plans or Public Service Loan Forgiveness (if your existing federal loans weren’t eligible for these programs to begin with).
Private loans are not eligible for federal loan consolidation. As mentioned earlier, you can only combine federal and private student loans together when you refinance your loans into a new private loan.
Recommended: How and When to Combine Federal and Private Student Loans
Benefits of Federal Student Loans
Although converting your federal student loans into a private loan might have its advantages, there are serious caveats to consider before moving forward. Ultimately, refinancing federal loans through a private lender means you’ll lose access to valuable federal benefits and protections.
Debt Forgiveness
A major benefit that federal student loans offer is access to student debt forgiveness and cancellation. Depending on your personal situation, you might be able to have a large portion of your federal student debt forgiven.
Some programs offered for federal loans include:
• Public Service Loan Forgiveness (PSLF). Borrowers who work full-time for a government entity or not-for-profit organization might be eligible for loan forgiveness. While working for a qualified employer, you must enroll in an income-driven repayment plan and make 120 qualifying payments toward your federal loans. Afterward, your remaining federal loan balance is forgiven.
• Teacher Loan Forgiveness (TLF). Under TLF, educators who work full-time at an approved low-income school or service agency can earn up to $17,500 in forgiveness. You must agree to a five-year service contract and meet other requirements.
• Perkins Loan Cancellation. If you have eligible Perkins Loans, you might be eligible for loan cancellation or discharge, depending on your employment service or unique circumstances.
Recommended: Trump’s Changes to PSLF: What Borrowers Need to Know
Income-Driven Repayment
Federal student loan borrowers who are struggling to afford their standard 10-year monthly payments can explore one of the Department of Education’s income-driven repayment (IDR) plans.
Each repayment plan calculates your monthly payment based on a percentage of your discretionary income and your family size. Some borrowers under an IDR plan may qualify for a $0 per month payment.
However, under Trump’s One Big Beautiful Bill, three of the four income-driven repayment plans will end on July 1, 2028. Borrowers must switch to the one remaining plan, the Income-Based Repayment (IBR) plan, or the new Repayment Assistance Plan (RAP).
Guaranteed Postponement
You might suddenly be hit with financial hardship, like being temporarily unemployed or experiencing an accident that inhibits your ability to make payments. In this stressful situation, federal student loans provide the option to request payment deferment or forbearance.
These federal protections pause your federal student loan payment requirement without penalty. During this time, interest still accrues and is added to your principal balance.
You’re ultimately responsible for repaying it back, as well as any interest that capitalizes when payments resume. However, this guaranteed postponement offers financial relief during difficult times.
Some private loans may offer deferment or forbearance options during times of financial hardship, but the options vary by lender.
For new loans taken out after July 1, 2027, economic hardship and unemployment deferment will no longer be available for federal student loans.
How Private and Federal Student Loans Differ
To decide whether refinancing your federal loans into a private loan makes sense for you, it’s important to know how private student loans vs. federal student loans differ.
| Federal Student Loans | Private Student Loans |
|---|---|
| Provided by the U.S. government. | Provided by a private financial institution. |
| Most programs don’t require a credit check. | Good credit, or a cosigner, is generally required. |
| Fixed interest rates. | Fixed or variable rates offered. |
| Payments are deferred until you leave school or drop below half-time. | Payments might be due while you’re enrolled in school, but this varies by lender. |
| Income-driven repayment options available. | Repayment plans vary by lender. |
| Access to loan forgiveness or cancellation. | Generally doesn’t offer loan forgiveness. |
| Offers interest subsidies for borrowers with financial need. | Loan interest is typically not subsidized. |
| Offers extended deferment or forbearance. | Rules on postponing payments vary by lender. |
Recommended: Private vs. Federal Student Loans
The Takeaway
Refinancing private student loans to federal loans is unfortunately not possible. You can, however, refinance federal student loans to a private student loan. Before refinancing a federal student loan, though, decide whether you might need to leverage government benefits, like income-driven repayment or loan forgiveness programs. You’ll lose these useful benefits by refinancing all of your federal loans.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Is it possible to change private student loans to federal?
No, there is no way to change private student loans to federal loans. However, you can refinance your private and federal loans together, ideally to qualify for a lower rate or better loan terms. If you go this route, you will be changing your federal student loan(s) into a private loan.
Is it possible to change federal student loans to private?
Yes, you can change a federal student loan to a private student loan through refinancing. A private refinance lender will pay off your original federal loan, and you’ll have to make payments to your new private lender for the principal balance, plus interest. Changing your federal student loans to a private loan, however, will mean you lose access to federal repayment plans, forgiveness programs, and other protections.
How can you combine private and federal student loans?
You can combine private student loans and federal student loans with a refinance student loan. Student loan refinancing is provided by a private lender, so any federal loans you refinance will become private and you’ll lose the government benefits and protections you had under the federal loan system.
Photo credit: iStock/YayaErnst
SoFi Student Loan Refinance SoFi Loan Products
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
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