Differentially private SGD (DPSGD) enables privacy-preserving training of language models, but often reduces utility, diversity, and linguistic quality. We introduce DPRefine, a three-phase method that initializes a model using data synthesis from a small pre-trained LM with rigorous filtering, applies DP finetuning on private data, and performs self-distillation to refine outputs. This approach significantly outperforms vanilla DPSGD, with AlpacaEval preferring DPRefine’s generations in 78.38% of cases across all datasets and metrics, while also demonstrating substantial improvements in lexical diversity, achieving 85.31% in MSTTR and 86.82% in Jaccard similarity. Our fine-grained analysis reveals that DPRefine reduces linguistic errors in generated text by 84%, mitigating grammar errors, spelling mistakes, and missing punctuation commonly associated with DPSGD. It also reduces inconsistencies present in non-private models, such as fabricated details and misattributed quotes. We find that small models like GPT-2 and T5 are effective for initialization and distillation, highlighting their potential in enabling scalable and efficient deployment of high-performing, privacy-preserving language models with improved linguistic quality and consistency.