Should I refinance my student loans?
For most new grads with federal undergrad loans, the answer right now is no. Put in your loan and the rate you were offered, and see which side you're on.
| Keep the loan | Refinance | |
|---|---|---|
| Monthly payment | – | – |
| Interest you'll pay from here | – | – |
Your federal rate depends on the year you borrowed
Federal loan rates are fixed for life and set by law each July. If you graduated in the last five years, your loans are probably at one of these. The year is when the loan was first paid out; grad means unsubsidized graduate loans.
| School year (July–June) | Undergrad | Grad | PLUS |
|---|---|---|---|
| 2020–21 | 2.75% | 4.30% | 5.30% |
| 2021–22 | 3.73% | 5.28% | 6.28% |
| 2022–23 | 4.99% | 6.54% | 7.54% |
| 2023–24 | 5.50% | 7.05% | 8.05% |
| 2024–25 | 6.53% | 8.08% | 9.08% |
| 2025–26 | 6.39% | 7.94% | 8.94% |
| 2026–27 | 6.52% | 8.07% | 9.07% |
Now compare: on October 16, 2026, SoFi's 10-year fixed refinance rate started at 6.57% APR, and that's with every discount, up to 10.99%. Its 5-year fixed started at 4.49%. (SoFi quotes APRs; the federal table shows interest rates.) Every undergraduate rate in the table is at or below that 10-year starting rate. And 6.57% is the bottom of SoFi's range, not a quote; a soft-pull rate check shows what you'd actually get.
The short version: if your loans are federal undergrad loans, a 10-year refinance today trades your federal safety net for a rate that isn't lower. A 5-year term can be lower, at a much bigger payment. The math can only work when your rate is above what you actually qualify for. In this table that's mostly grad and PLUS loans (7.05% to 9.08%), or private loans.
What you give up when federal loans become private
Refinancing pays off your federal loans with a new private loan. These go away, permanently:
- Income-driven repayment. Federal plans, including the new Repayment Assistance Plan (RAP) created by the One Big Beautiful Bill Act, tie your payment to your income. Private lenders set their own terms.
- Public Service Loan Forgiveness. PSLF forgives what's left on federal Direct Loans after 120 qualifying payments while you work full-time for an eligible employer. PSLF covers only federal Direct Loans. A refinanced loan is private, so it doesn't count.
- Federal options to pause or lower payments if you lose your job or hit a hard stretch. With a private loan, you ask your lender and take what they offer.
- Discharge if you die. Federal loans are discharged when the borrower dies. Private loans follow the lender's contract; check whether yours discharges the loan at death.
You also can't undo it. A private loan can't be consolidated into a federal Direct Consolidation Loan, so there's no way back.
When refinancing does make sense
- Your loans are already private. Nothing federal to lose. If your credit or income has improved since you borrowed, a lower rate is savings.
- You have federal grad or PLUS loans at a rate clearly above what you qualify for, steady income, an emergency fund, and no plan to use PSLF or an income-driven plan.
- You're paying it off fast. At SoFi, shorter terms start lower: 4.49% APR for 5 years against 6.57% for 10 (October 16, 2026). Remember you can also pay a federal loan off faster without refinancing; there's no prepayment penalty.
If you do it, get three quotes
- Check your rate with three or more lenders. SoFi, for one, shows your rate with a soft pull and runs a hard pull only if you continue. Check each lender's disclosure.
- Compare the same term. A 5-year rate against a 10-year rate isn't a real comparison.
- Know whether it's fixed or variable. Federal rates are always fixed. Private refinance loans can be either, and a variable rate can rise.
- Refinance only the loans that win. You don't have to move everything. Keep low-rate federal loans where they are.
- Read the hardship terms before you sign: what happens if you lose your job.
Questions
Should I refinance my federal student loans?
Usually not in your first few years. Refinancing turns a federal loan into a private one, and you lose income-driven repayment, Public Service Loan Forgiveness and federal options to pause payments. On top of that, undergraduate federal loans first paid out from July 2020 through June 2027 carry 2.75% to 6.53%, and the lowest 10-year refinance rate SoFi advertised on October 16, 2026 was 6.57% APR with every discount.
Who does refinancing actually help?
Borrowers with private loans at high rates, and borrowers with federal graduate or PLUS loans whose rate is clearly above what they actually qualify for, who also have a steady income and no plan to use forgiveness or an income-driven plan.
Does checking refinance rates hurt my credit?
It depends on the lender. SoFi, for one, says it runs a soft pull that doesn't affect your score to show your rate, and a hard pull only if you continue the application. Check each lender's disclosure before you start.
Can I refinance back into a federal loan later?
No. A private loan can't be consolidated into a federal Direct Consolidation Loan, so once federal loans are refinanced with a private lender, there's no way back to the federal benefits.
Is a lower monthly payment the same as saving money?
No. Stretching the same balance over more years lowers the payment but can raise the total interest you pay, even at a lower rate. The calculator shows both numbers so you can see the trade.
Sources
- Federal student loan interest rates, by year first disbursed (studentaid.gov)
- Federal repayment plans after the One Big Beautiful Bill Act, incl. RAP and PSLF (studentaid.gov)
- Federal versus private loans (studentaid.gov)
- Discharge due to death (studentaid.gov)
- SoFi student loan refinancing rates and soft-pull disclosure, checked October 16, 2026
Not refinancing? See whether extra money should go to the loan or into investing.