I understand that you are talking about a federal loan. This means the feds are due their money. Why should it matter if a loan (is still a loan, in good standing) is refinanced? There are many reasons a change in terms is helpful. One reason we have experienced is that there had to be a second or third loan with different terms for junior or senior years. That made multiple monthly payments. If the payee is willing to show timely payments, why deny the payee the simple process to refinance? That is like a penalty, confining a payee to terms and possibly undue reason that payments were difficult, when there were multiple payments to make to Sallie Mae. Like I said, why make multiple monthly payments harder on new grads? These people (if lucky enough to land a good paying job) are paying huge income tax, unlike the top 1%. They often have no kids and do not have deductions for homes, so often they may not be money savvy and unaware how to use deductions.