How to Transfer Student Loans to Another Lender: 5 Options to Consider

If you’re looking to change lenders—whether to get a better interest rate, simplify your monthly payments, or remove a parent from a loan—you have options. The right path depends on your loan type (federal or private) and your goals.

Below, we’ll break down five ways to transfer student loans to a new lender or servicer, including when each one makes sense, how they work, and what to watch out for.

Table of Contents

1. 1. Refinance your student loans
2. 2. Consolidate federal loans with a Direct Consolidation Loan
3. 3. Switch servicers through PSLF
4. 4. Refinance Parent PLUS loans into the child’s name
5. 5. Transfer via cosigner release

1. Refinance your student loans

Best for: Borrowers with good credit who want a lower interest rate or simpler repayment.

Student loan refinancing involves taking out a new loan with a private lender and using it to pay off your existing federal or private loans.

Key benefits:

• Lower your interest rate and save on interest
• Choose new repayment terms (shorter or longer)
• Combine multiple loans into one

Risks:

• Refinancing federal loans means giving up federal benefits like Income-Driven Repayment (IDR) plans and forgiveness programs

Read More:

Pros and Cons of Refinancing

How to do it:

1. Compare rates from lenders (Our favorites include SoFi, Earnest, and ELFI)
2. Apply and get approved based on your credit and income
3. Use your new loan to pay off the old one
4. Start making payments to the new lender

Compare

the best student loan refinance lenders.

Looking to refinance in a high-interest-rate environment might be unwise if the goal is a lower interest rate.

However, if your credit score and report have significantly improved, refinancing to a new loan may result in a lower interest rate regardless of the current rate environment. Refinancing to a variable-interest-rate loan could be beneficial, assuming rates decrease, but that’s always a risk because rates could increase again at any time.

2. Consolidate federal loans with a Direct Consolidation Loan

Best for: Federal student loan borrowers who want to simplify payments or change servicers.

A Direct Consolidation Loan combines multiple federal loans into a single loan with one monthly payment.

Key benefits:

• Keeps your loans federal (so you retain benefits)
• May restart or extend eligibility for Public Service Loan Forgiveness (PSLF) or IDR plans

Risks:

• Consolidation can reset your qualifying payment count for PSLF
• Won’t lower your interest rate—it uses a weighted average

How to do it:

1. Apply through StudentAid.gov
2. Choose your new loan servicer during the process
3. Start making payments to your new servicer

3. Switch servicers through PSLF

Best for: Federal borrowers pursuing Public Service Loan Forgiveness.

If you apply for PSLF, your loans are automatically transferred to MOHELA, the dedicated PSLF servicer.

Key benefits:

• Required for PSLF
• May streamline tracking of qualifying payments

Risks:

• Only available if you work full-time for a qualifying employer and are on an eligible repayment plan

How to do it:

1. Use the PSLF Help Tool
2. Submit your employment certification form
3. Once approved, your loans will transfer to MOHELA

4. Refinance Parent PLUS loans into the child’s name

Best for: Parents who want to shift repayment responsibility to their child.

Federal Parent PLUS Loans can’t be transferred to a student through the Department of Education, but some private lenders let the student refinance the loan into their own name.

Lenders that allow it:

• SoFi: Offers flexible repayment terms and deferment options
• ELFI: Known for assigning personal loan advisors to help with the process

How to do it:

1. Student applies to refinance the loan into their own name
2. Approval depends on the student’s credit and income
3. The new loan pays off the Parent PLUS loan, and the parent is no longer responsible

Read More:

How to Transfer Student Loans to Another Person

5. Transfer via cosigner release

Best for: Cosigners who want to remove themselves from a private loan after the borrower proves their ability to repay.

Some private lenders allow cosigner release after 12 to 36 on-time payments.

What to know:

• Only applies to private loans with a cosigner
• Borrower must show strong credit and income
• Not all lenders offer this option

How to do it:

1. Contact the lender and request a cosigner release application
2. Provide proof of income, employment, and credit history
3. If approved, the loan is transferred fully to the borrower

What else to know after you transfer

Once your loans are refinanced, consolidated, or otherwise transferred:

• Double-check that the original loan is marked “paid” on your credit report
• Set up autopay with your new lender to get any available rate discounts
• Cancel any old payment schedules with your bank

FAQ

Can I transfer my federal student loans to a private lender?

Yes, but only by refinancing. This converts federal loans into private ones and means losing access to forgiveness, IDR plans, and deferment protections.

Can I choose a new loan servicer without consolidating?

Only in limited cases, like through PSLF. Otherwise, federal borrowers can’t manually switch servicers.

Can spouses transfer loans to each other?

Not currently. Most lenders do not offer spousal loan refinancing or transfers. Some allow joint consolidation, but few offer full transfer of ownership.