What you actually give up when you refinance federal student loans
Refinancing is the only student loan decision that cannot be reversed. This page lists everything that ends the day it completes, cited to the rule it comes from.
Every refinance calculator on the internet will tell you what you save. Almost none will tell you what it costs, because they never ask the questions that would let them work it out. They collect your balance, your rate and your new rate, and a tool holding only those three numbers can produce exactly one kind of answer.
The savings figure is usually correct as far as it goes. The problem is what sits on the other side of the ledger, unmeasured.
Almost every mistake in student loans is recoverable. Choosing the wrong repayment plan is recoverable. Missing an employment certification is recoverable. Spending three years in a job that does not qualify for forgiveness is recoverable. Converting a federal loan into a private one is not. There is no mechanism to return, at any price, under any hardship.
The complete inventory
Below is everything that stops applying the day a refinance completes. Two of these can be given a defensible dollar figure. The rest cannot, and this page does not pretend otherwise, because inventing a confident number for the value of a disability discharge would be worse than admitting the limit.
1. Public Service Loan Forgiveness
PSLF cancels the remaining balance on Direct Loans after 120 qualifying monthly payments made while working full time for a government or qualifying nonprofit employer. Private loans cannot qualify, and there is no provision to transfer or restore payments already made. A borrower eighty payments in who refinances does not get eighty payments of credit on the new loan. They get nothing.
PSLF forgiveness is also not taxable federally, which since 1 January 2026 makes it worth materially more than the same dollar forgiven under an income-driven plan. Seethe methodology page for how the calculator values this.
2. Income-driven repayment
A federal payment can be recalculated against your income at any point, in either direction, for the life of the loan. If your income halves, your federal payment can follow it down, and on some plans it can reach zero. A private loan payment is fixed by contract and does not care what happened to your income.
This is the protection borrowers most often discover they needed after it is gone, because nobody refinances while expecting their income to fall.
3. Unemployment and economic hardship deferment
Unemployment deferment and economic hardship deferment are statutory entitlements under 34 CFR 685.204. They are not favours. Under the Repayment Assistance Plan, months spent in either one also count toward the 360 payments required for forgiveness, under 34 CFR 685.209(k)(8), so the clock does not stop while you are out of work.
Private lenders often advertise hardship forbearance. It is usually capped at a few months over the entire life of the loan, it is granted at the lender's discretion, interest normally continues to accrue, and the terms can be changed. It is a policy, not a right.
4. Death discharge
Federal loans are discharged when the borrower dies. The balance is not a claim against the estate, and the family does not inherit it. Parent PLUS loans are discharged on the death of either the parent who borrowed or the student the loan paid for.
Some private lenders offer this and some do not. Terms differ between lenders, and a lender can change its policy. If this matters to you, get the specific terms in writing before you sign, and check whether a cosigner remains liable.
5. Total and permanent disability discharge
Federal loans can be discharged on a finding of total and permanent disability. This is a statutory route with a defined process, not a lender courtesy, and it is generally unavailable on private refinanced loans.
6. Borrower defense and closed school discharge
These federal routes exist for borrowers whose school misled them or closed while they were enrolled. They apply to federal loans. Refinancing a federal loan that might one day support such a claim extinguishes the claim along with the loan.
7. The servicemember interest-rate cap, with an important qualification
This one is usually stated too broadly, and the broad version is easy to rebut. The Servicemembers Civil Relief Act, at 50 U.S.C. 3937, caps interest at six percent on obligations incurred before the borrower entered military service. The cap attaches to the obligation, not to whether the loan is federal, so a private loan taken before service also keeps it.
What refinancing actually does is create a new obligation. If that happens during or after entry into service, the new loan is not a pre-service obligation and the cap does not reach it. That is the accurate claim, and it is narrower than "refinancing forfeits SCRA".
What can honestly be priced, and what cannot
The calculator on this site puts a dollar figure on two of the items above and refuses to put one on the rest. That split is deliberate.
| Protection | Priced? | Why |
|---|---|---|
| PSLF forgiveness | Yes | The projected balance at the 120th payment is computable from your inputs, and it is not taxable, so the whole amount counts. Discounted to today. |
| Income-driven forgiveness | Yes | Computable the same way, then reduced by tax, because this forgiveness became federally taxable on 1 January 2026, then discounted. |
| Unemployment and hardship deferment | No | Pricing this would mean estimating your probability of unemployment. Instead the tool states the concrete counterfactual: what you would still owe each month if it happened. |
| Death and disability discharge | No | Pricing this would mean applying a mortality or disability estimate to you personally. The tool shows the balance that would be cancelled instead. |
| Income-driven repayment access | No | The value depends entirely on income shocks that have not happened yet. It is listed as permanently lost rather than given a fake number. |
The unpriced items are listed in the same ledger as the priced ones, and that is the point. Leaving them out of the ledger entirely, which is what happens on every calculator we audited, is not neutral. It silently records their value as zero.
When refinancing federal loans does make sense
This site is not opposed to refinancing. It is opposed to refinancing decided on half the information. There are borrowers for whom it is straightforwardly correct:
- You only hold private loans. Nothing above applies. It is an ordinary rate decision and you should shop hard.
- Your income is high and stable relative to the balance, you are not in public service, and no income-driven plan would ever produce forgiveness for you. Then the federal protections you are giving up are mostly ones you would never use, and a lower rate is real money.
- The rate gap is large. A borrower at nine percent refinancing to five percent is in a different position from one moving from 6.5 to 6.45.
- You have already ruled out forgiveness deliberately, not by accident, and you have an emergency fund that could carry the fixed payment through a job loss.
Notice that all four depend on facts a three-input calculator never collects. That is the whole argument of this site.
The option most people are never shown
Refinancing is not all or nothing, and the choice is not "refinance everything" against "do nothing". A borrower holding both private and federal loans can refinance only the private ones. The federal loans keep every protection listed on this page, and the private loans get whatever better rate is available.
Lender calculators do not model this, for a reason that is not hard to guess. The calculator on this site treats it as a fourth column alongside the others.
Run your own numbers, or readexactly how the figures are produced first.
Common questions
Can I undo refinancing my federal student loans?
No. There is no mechanism to convert a private loan back into a federal one, at any price, under any hardship. Federal consolidation only accepts federal loans. This is the only student loan decision with no route back, which is why it deserves more care than choosing a repayment plan.
Do I lose PSLF progress if I refinance only some of my loans?
You lose it on the loans you refinance. Loans you leave federal keep their qualifying payment count and continue to earn credit. Refinancing is not all or nothing, and for someone holding both private and federal debt the numbers often favour splitting.
Is federal consolidation the same as refinancing?
No, and confusing them is expensive. A Direct Consolidation Loan is a federal loan that keeps federal protections, and its rate is the weighted average of the loans it repays rounded up to the nearest eighth of a percent, so it does not lower your rate. Private refinancing replaces federal loans with a private loan and can lower the rate, but it ends every federal protection.
Do private lenders offer deferment and forbearance?
Some do, as a matter of company policy rather than law. Federal deferment and forbearance are statutory entitlements defined in 34 CFR 685.204 and 685.205. Private hardship programmes are typically capped at a few months over the life of the loan, are granted at the lender’s discretion, and the terms can change after you sign.
What happens to my student loans if I die?
Federal loans are discharged on the death of the borrower, so the balance is not a claim against the estate. Parent PLUS loans are discharged on the death of either the parent borrower or the student. Private lenders vary: some discharge, some pursue the estate, and some pursue a cosigner. Confirm the specific terms in writing before refinancing.