Federal Consolidation vs Private Refinance
This calculator compares federal Direct Consolidation with private refinancing. Enter your loan balances and rates; the tool calculates the consolidation rate — a weighted average rounded up to the nearest eighth per 34 CFR 685.215 — next to a private rate you supply. On $95,000 across four loans, the choice determines whether you keep IDR and PSLF access.
Your federal consolidation rate
The weighted average of your loans is , rounded up to the next one-eighth of one percent.
- On ConsolidateRefinance
- Rate
- Monthly payment
- Interest paid
- Total paid
What each loan contributes
The private quote is cheaper by in interest — read what that costs you in federal protections before you sign.
Federal consolidation is cheaper here by in interest, and it keeps every federal protection.
Consolidation does not lower your rate: by law the Direct Consolidation Loan rate is the weighted average of the loans you consolidate, rounded up to the nearest one-eighth of one percent. It keeps loans federal. Refinancing is a private loan that replaces them.
What refinancing gives up that consolidation keeps
- Income-driven repayment and the payment that moves with your income.
- Public Service Loan Forgiveness and income-driven forgiveness eligibility.
- Discharge on death or total and permanent disability under federal rules.
- Federal deferment, forbearance and rehabilitation rights.
Consolidating resets some counters too — consolidating loans that already have qualifying payments toward forgiveness can affect that count, so check your record first.
How Federal Consolidation Rate Is Calculated
Federal Direct Consolidation does not lower your interest rate. It blends the rates of your existing federal loans into a single weighted average, then rounds that average up to the nearest one-eighth of a percent. If you hold a $40,000 loan at 5.5% and a $55,000 loan at 6.8%, the weighted average is approximately 6.25%. Rounded up to the nearest one-eighth, your consolidation rate becomes 6.25% (already on an eighth) or 6.375% depending on the precise decimal. The calculator handles this rounding for you.
The benefit of consolidation is access, not savings. A Direct Consolidation Loan is a new federal loan, which means it qualifies for income-driven repayment plans including RAP, for Public Service Loan Forgiveness, and for federal forbearance and deferment. If your loans are scattered across multiple servicers, consolidation also simplifies billing into a single monthly payment. The trade-off is that you may pay slightly more interest due to the upward rounding, and any progress toward IDR forgiveness on the original loans resets to zero.
What You Lose by Choosing Private Refinance
Private refinancing replaces your federal loans with a private loan from a bank or online lender. The rate may be lower—especially if your credit score and income have improved since you originally borrowed—but the loan is no longer federal. You permanently lose access to income-driven repayment plans like RAP and IBR, Public Service Loan Forgiveness, and any remaining IDR forgiveness (which is now subject to federal income tax from 2026 onward, per the ARPA §9675 expiry on December 31, 2025). You also lose federal forbearance, deferment, and death and total-and-permanent-disability discharge.
Borrowers on student-loan forums report that the decision often hinges on job stability and career path. If you work in public service or expect to use IDR for more than a few years, consolidation preserves options that private refinancing destroys. If you earn well above your loan balance, plan to repay aggressively, and do not qualify for PSLF, the lower private rate may save more than the federal safety net is worth. The calculator places both numbers side by side so you can see the monthly and lifetime cost of each path before choosing.
Federal consolidation preserves IDR and PSLF access. Private refinancing does not. Weighted-average rounding rule per 34 CFR §685.215. Refi rates are illustrative.
Next in this cluster
Related student loan calculators
Sources
-
Sources: 34 CFR §685.215 (federal consolidation rounding rule); ed.gov Direct Consolidation fact sheet; studentaid.gov IDR/PSLF protections; ARPA §9675 expiry (Dec 31, 2025).
- Federal Direct Consolidation Loan interest rate — the weighted average of the loans being consolidated, rounded up to the nearest one-eighth of one percent (Federal Student Aid, studentaid.gov, Loan Consolidation).
- Amortisation, daily interest accrual and payoff arithmetic — standard loan mathematics; every figure on this page is computed from the numbers you enter.