Student loans have a way of making you feel powerless.
But the truth is, you have more control than you think.
This is a somewhat complicated question, especially since these terms are sometimes used interchangeably. Federal loan consolidation Federal loan consolidation is offered by the government and is available for most types of federal loans—no private loans allowed.
For example, consolidation simply means combining multiple student loans into one loan, but you get different results by consolidating with the federal government vs. Student loan refinancing is when you apply for a loan under new terms and use that loan to pay off one or more existing student loans. When you consolidate with the government, your existing federal loans are combined into one new loan with a new rate, which is a weighted average of your old loans’ rates.
(Note: the last variable rate federal student loans were disbursed in 2006.If you don’t anticipate needing or qualifying for federal loan benefits, getting a lower rate can save you a significant sum.For example, the average So Fi borrower saves about ,000. The decision depends a lot on your specific situation. Do you plan to take advantage of federal loan benefits?If your financial situation has improved since you first signed on the dotted line, you may be able to refinance student loans at a lower interest rate, which can allow you to:1. Unlike consolidation, student loan refinancing is only available from private lenders.And while most private lenders will only refinance private loans, a few, including So Fi, will refinance both private and federal student loans, so you can consolidate all of your loans into one.