Best Student Loans 2026

Our recommendation

SoFi is our top-scoring pick in Student Loans, at 9.8/10 — it highlights “No fees ever”.

Earnest sits just 0.2 behind at 9.6, close enough that the deciding factor is usually which specification matters more to you — it highlights “Customizable terms”.

Both scores are our editors’ assessment of published specifications, pricing and terms against the criteria in our rating methodology — they are not aggregated customer reviews.

Exhaust federal options first

This is the one piece of near-universal guidance in student lending. Federal loans carry protections that private loans generally do not: income-driven repayment, extensive deferment and forbearance rights, discharge on death or total permanent disability, and eligibility for forgiveness programmes. A private loan may quote a lower interest rate, particularly with a strong cosigner, but you are trading away those protections permanently.

Access to federal aid starts with the FAFSA. Submit it every year you are enrolled, and submit it early, because some state and institutional aid is awarded until funds run out.

The federal ladder

• Direct Subsidised — for undergraduates with demonstrated financial need. The government pays the interest while you are enrolled at least half-time, during the grace period and during authorised deferment. Take these first.
• Direct Unsubsidised — no need requirement, and interest accrues from disbursement, including while you study.
• Direct PLUS — for graduate students and for parents of undergraduates. Higher interest rate and origination fee, a credit check for adverse history, and for parent borrowers, fewer repayment protections than student borrowers get.

Subsidised and unsubsidised loans have annual and aggregate limits by year of study and dependency status. When those limits are reached, the realistic choices are PLUS, private borrowing, or reducing the cost — and reducing the cost deserves genuine consideration before more debt.

Interest capitalisation: the mechanism that quietly enlarges the balance

Unpaid accrued interest can be capitalised — added to your principal — at certain events, after which you pay interest on the interest. On unsubsidised and PLUS loans this happens routinely, for example at the end of a grace period or when leaving certain repayment or forbearance arrangements. Paying even small amounts toward interest while still enrolled reduces the balance that gets capitalised. Also note that federal loans carry an origination fee deducted at disbursement, so you repay slightly more than lands in your account.

Repayment plans

The standard plan repays over ten years at the lowest total interest. Income-driven plans set payments as a share of discretionary income, adjust annually as income changes, and cancel any balance remaining after a long qualifying period — with the trade-off of more interest paid over time. Income-driven plans are also the route to Public Service Loan Forgiveness, which can cancel the remaining federal balance after the required number of qualifying monthly payments while working full-time for a government or qualifying non-profit employer. If you work in that sector, certify your employment regularly rather than discovering years later that payments did not count.

When repayment becomes difficult, deferment and forbearance pause payments temporarily. Interest usually continues to accrue — on subsidised loans it may not during deferment — so a pause is not free. Switching to an income-driven plan, where the payment can fall very low, is often better than a long forbearance. What you should not do is stop paying without arranging something: federal default carries wage garnishment, tax refund offset and loss of forgiveness eligibility.

Refinancing: a genuine trade, not an upgrade

Refinancing replaces existing loans with a new private loan at a new rate. Refinancing federal loans into a private loan permanently forfeits income-driven repayment, federal forbearance rights, disability discharge and forgiveness eligibility, and it cannot be reversed. That can still be the right decision for a borrower with stable high income, secure employment and no interest in forgiveness, where a lower rate saves real money. It is usually the wrong decision for someone in public service, with variable income, or in a field where a career change is plausible. Refinancing private loans into a better private loan involves no such loss and is simply worth shopping.

Comparing private lenders

• Fixed or variable. Variable rates start lower and can rise; check the cap and the index.
• Cosigner and cosigner release. Most undergraduate private loans need one. Ask specifically whether release is available, after how many consecutive on-time payments, and what credit test the primary borrower must then pass.
• In-school options — full deferment, interest-only, or small fixed payments. Paying interest while studying costs less overall.
• Fees and penalties — origination fees, late fees, and whether prepayment is genuinely free.
• Hardship provisions — how much forbearance the lender allows, in writing, and what happens on death or disability of the borrower or cosigner.
• Prequalification — many lenders show indicative rates from a soft credit check that does not affect your score. Compare several before submitting a full application.

Federal programme rules, interest rates, limits and forgiveness terms are set by law and regulation and change over time. Confirm current details with the official federal student aid service and your loan servicer, and confirm private terms with the lender before borrowing.