What is the difference between federal “consolidation” and private loan “refinance”?
A Direct Consolidation Loan from the federal government allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment for your federal student loans at one interest rate instead of multiple payments.
Refinancing your student loans involves working with a private lender like your credit union. This lender will pay off your existing loans (which may include private and federal loans) and combine them through consolidation. You will then make a single loan payment to the new private lender.