Repayment after the 2025 law · calculator
Student loan refinance calculator
Refinancing $60,000 of federal graduate loans at 8.07% into a private loan at 6% over the same ten years would lower the payment from $730 to $666 a month and save $7,688 of interest, if nothing goes wrong for a decade. That is the whole case for refinancing, and the calculator measures it with the rate a lender actually offers you. The other side of the ledger does not appear on the lender's quote. A private loan pays off your federal loans for good: you lose the Repayment Assistance Plan, whose payment follows your income and can fall to $10, Income-Based Repayment for older loans, Public Service Loan Forgiveness, forgiveness after 20 to 30 years of income-driven payments, and the federal deferments and forbearances. The 2025 law did not change that trade; it made the federal side more valuable for borrowers with modest incomes, through the RAP interest waiver, and less flexible for new borrowers, who now have two plans instead of many.
Interest saved by refinancing
$9,483
$651 a month instead of $730
| Total repaid on the federal loans | $87,622 |
| Total repaid after refinancing | $78,139 |
| RAP payment you would give up, single, no dependent | $350 |
A private loan cannot use RAP, IBR, PSLF, federal forgiveness or the federal deferments. Compare before you sign. How this is calculated.
What a lower private rate saves on paper, and the federal options that disappear the day the federal loans are paid off.
Checked by Radif Partners · Editorial policy · How we calculate
What each rate saves on $60,000
The table compares the federal 10-year payment at the 2026-27 graduate rate with private fixed rates over the same term. It shows the gross saving before you weigh what refinancing gives up.
| Rate | Monthly payment | Total over 10 years | Difference with federal |
|---|---|---|---|
| 8.07% | $730 | $87,622 | $0 |
| 7% | $697 | $83,598 | $4,024 |
| 6% | $666 | $79,935 | $7,688 |
| 5% | $636 | $76,367 | $11,255 |
| 4% | $607 | $72,896 | $14,726 |
The federal options you give up
The Repayment Assistance Plan sets the payment from income, not from the balance: 1% to 10% of AGI, minus $50 per dependent. If your income falls by half after a job loss, so does the payment, and interest that an on-time payment does not cover is waived (34 CFR 685.209). Borrowers with loans made before July 1, 2026 also keep IBR. A private loan has none of this; the contract payment is due whatever happens to your income.
Public Service Loan Forgiveness is the largest item for many graduate borrowers. A nurse at a nonprofit hospital with $90,000 of loans at 8.07%, a $62,000 income, one child and 48 qualifying payments behind her would, on RAP, see about $114,858 forgiven tax-free after the remaining 72 payments. Refinancing would turn that into a debt to repay in full.
Discharge and hardship
Federal loans are discharged on the borrower's death or total and permanent disability, and since 2026 such discharges remain excluded from federal income by section 108(f)(5) of the tax code, which now also covers private education loans (Public Law 119-21, section 70119). Whether a private lender cancels a loan on death or disability depends on its contract. Federal deferments for unemployment and economic hardship still exist for loans made before July 1, 2027; private hardship programs are discretionary.
Refinancing only part of the debt
Nothing forces you to move everything. A borrower can refinance the highest-rate federal loans, often graduate PLUS loans taken before July 1, 2026, and keep the rest on a federal plan. The federal loans left behind still qualify for RAP or IBR on their own balance. The calculator works loan by loan: enter only the balance you are considering.
Lower the federal rate first
Before comparing offers, check the federal auto pay discount: 0.25% off normally, and 1% in total for borrowers enrolled by December 31, 2026, until June 30, 2028 (Department of Education). On a 8.07% loan that brings the rate to 7.07% for the period, which narrows the gap with many private offers while keeping every federal option. Then run your case in the plan comparator to see whether an income-driven plan would forgive part of the balance; if it would, refinancing gives that away.