Students who have all their loans with just one lender may not have a choice of refinancing options, since the law requires them to consolidate with that lender. But if the loans are with more than one lender, students can choose to go with any consolidator. A bill that is expected to pass in Congress would remove that restriction.

With less than a month before rates rise, it may be wise to choose consolidation with one of the lenders from whom you already borrow, says Ms. Coolidge at the University of California. The reason: There may be less lag time in processing, since the lender will already have much of the necessary paperwork.

Adding to the confusion, there are two separate federal student-lending programs with different refinancing options. Some colleges, including Columbia University and the University of California at Los Angeles, get their federally guaranteed loans through private banks and other institutional lenders. At others, such as Harvard College and Ohio State University, students borrow directly from the government. These direct borrowers get an up front rebate of 1.5% of the principal loan balance, which they get to keep if they make a certain number of payments on time.

The problem arises when a student borrowing directly from the government chooses to refinance through an institutional lender. This results in the student forfeiting the rebate, which is then added back to the balance of the loan. The government's direct-lending program has its own refinancing program.