How to Decide when to Combine Federal Student Loans and Private Loans

Student loan refinancing and federal loan consolidation can simplify matters. But can you consolidate federal and private loans together? Read on to learn more.

When looking at student loan debt, it can feel overwhelming to figure out how to make all the payments manageable. It’s especially challenging when you have both federal and private student loans.

Student loan refinancing and federal loan consolidation can simplify matters. But can you consolidate federal and private loans together?

Let’s take a look at your options to consolidate federal and private loans so you can make a decision that works for you.

three students studying at table outside

Can you consolidate private and federal loans?

When looking to consolidate student loans, many borrowers wonder if you can put private and federal loans together.

The reality of the situation is that it’s possible, but it comes with some caveats. 

  • Federal loan consolidation: This is the process of combining your federal student loans into a single monthly payment through a federal Direct Consolidation Loan. You can’t add private loans to a federal consolidation.
  • Student loan refinancing: On the other hand, student loan refinancing is the process of replacing your current loans — paying them off — with a new loan. You can use this method to pay off both private and federal student loans at the same time.

Before you decide to consolidate federal and private loans with refinancing, it’s essential to carefully consider the situation and determine if it’s the right move for you.

How to decide if you should consolidate private and federal loans together

There are some critical factors to consider as you decide whether to consolidate federal and private loans through student loan refinancing. Here’s what to look at before you move forward.

Interest rate

While there are some attractive interest rates available through student loan refinancing, you might not always get the best rate. Organizations such as Juno can help you with student loan refinancing, giving you access to the best deals. However, even then, you might not get the best interest rate compared with federal loan rates.

Depending on the disbursement date and type of loan, federal loans have varying interest rates. Double-check your current rates to see if refinancing will give you a better rate. You’ll have access to the best rates if you have a good credit history and income or if you can find a co-signer who does.

With federal loan consolidation, you’ll have a weighted average rate for the student loans you decide to consolidate, rounded up to the nearest one-eighth of one percent. Your credit score and income don’t matter with a federal loan refinance, and you won’t get a special break on your interest rate.

Remember: You’ll be able to pay off your federal student loans with a private refinance, but you won’t be able to use federal loan consolidation for your private student loans. 

Take a look at the current situation and get quotes from lenders to see what your interest rate is likely to be. Then decide whether you can save money on interest over the life of the loan when you refinance your federal loans with your private loans.

Federal student loan benefits

It’s not just about the interest rates, though. Federal student loans come with a variety of benefits that you don’t get with private student loans, including:

  • Student loan forgiveness: There are different programs, including Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness programs, designed to encourage specific jobs. If you qualify, you could have some or all of your remaining federal student loan balance forgiven after you meet certain conditions.
  • Income-driven repayment options: You can access various income-driven repayment plans. If your income drops or you experience some other issue, it’s possible to choose one of these plans and lower monthly payments to a percentage of your discretionary income. Income-driven repayment can go a long way toward managing your student loans — and staying on track for forgiveness — when you don’t make a lot of money.
  • Deferment or forbearance: Finally, the government has programs that allow you to pause student loan payments for a set period of time. The conditions vary, but these are programs you can access if you meet the criteria. Many private lenders don’t offer programs based on standard requirements.

Because student loan refinancing is paying off other loans, once you use it on your federal loans, you no longer have federal loans. Instead, you’ve used a private loan to pay off your debts to the federal government. None of these federal loan benefits apply to you anymore.

If you think you might want to apply for student loan forgiveness, or if you think you might need access to income-driven repayment or deferment, it might not make sense to refinance your federal loans.

Refinancing your student loans

Even though you can consolidate private and federal student loans together, it’s not always the best idea. Some borrowers choose to refinance their private student loans to one lower interest rate and consolidate their federal student loans separately. 

While that doesn’t simplify matters as much as having just one payment and one interest rate, it can be beneficial in some cases. You still make things easier by reducing the number of payments you have. Overall, you’ll potentially pay less in interest on your private student loans when you refinance. However, you keep your federal loan benefits — especially access to PSLF — intact just in case you need them.

As you refinance, don’t forget to compare lenders. Juno makes it easy by providing partner deals to see what’s available to you depending on your situation and the types of loans you have. Compare rates and choose a lender that works for you. Then, decide which loans you want to refinance and which you want to keep with the government for a separate consolidation.

Juno's Exclusive Student Loan Refinance Deals

earnest-logoBest for Most


Can’t be refinanced with a cosigner


Fixed starting at 5.09% APR, Variable starting at 5.89% APR including the .25% autopay discount and the .25% Juno discount.

Juno benefit:

Rate reduction of 0.25%


Soft Credit Check to get rates; Hard Credit Check to refinance

splash-financialAlternative Best for Most


May be able to refinance with a cosigner


Fixed starting at 4.96% APR, Variable starting at 4.99% APR. May include autopay discount.

Juno benefit:

Up to $1,000 cash back based on loan amount


Soft Credit Check to get rates; Hard Credit Check to refinance

laurel-roadBest for Medical Professionals


May be able to refinance with a cosigner


Fixed starting at 5.74% APR, Variable starting at 5.49% APR*

Juno benefit:

Rate reduction of 0.25%*


Soft Credit Check to get rates*; Hard Credit Check to refinance

Bottom line

Can you consolidate private and federal student loans together? Yes, but only if you pay them off through the process of private refinancing. You won’t be able to combine federal and student loans together if you go through the federal student loan consolidation process.

Carefully consider your needs and long-term financial goals before you move forward. Then, decide on a course of action most likely to benefit you over time.

Miranda Marquit

Written By

Miranda Marquit

Miranda has 10+ years of experience covering financial markets for various online and offline publications, including contributions to Marketwatch, NPR, Forbes, FOX Business, Yahoo Finance, and The Hill. She is the co-host of the Money Tree Investing podcast and she has a Master of Arts in Journalism from Syracuse University


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