Private Student Loan Rates: How Much Do Student Loans Cost in 2026?

Breaking Down the True Cost of a Private Student Loan

The interest rate gets all the attention, but it is not the only thing that determines what your loan actually costs. Private student loans have several cost components that interact in ways personal loans do not.

APR (Annual Percentage Rate) is the number that matters most because it wraps the interest rate and mandatory fees into a single figure. When a lender charges a 5% origination fee (like MPOWER), the effective APR is significantly higher than the stated interest rate. Always compare APR to APR, not interest rate to interest rate.

Origination fees are rare in private student lending, but not extinct. Of our 15 lenders, only MPOWER (5%) and Prodigy Finance (4-5% administration fee) charge one. The remaining 13 charge zero origination fees, which is a meaningful advantage over the personal loan market, where origination fees are common.

In-school repayment choice is a hidden cost driver unique to student loans. Deferring all payments during school is convenient, but unpaid interest capitalizes (gets added to your principal) after the grace period. On a $30,000 loan at 6% over four years of school, plus a six-month grace, capitalized interest adds roughly $8,500 to the balance. Choosing interest-only payments during school can save 17% or more on total loan cost. This is not about the rate; it is about the repayment structure you select.

Late fees vary by lender. Five of our 15 lenders charge zero late fees: Abe, SoFi, Ascent, Custom Choice, and ISL Education Lending. Others charge 5% of the past-due amount, typically capped at $25 to $50. Prepayment penalties are nonexistent across all 15 lenders we reviewed.

What Actually Affects Your Rate

Your co-signer’s credit score is the single biggest factor. Private student loans are underwritten primarily on the creditworthiness of the co-signer, not the student. Approximately 90% of undergraduate private student loans are co-signed. A co-signer with a FICO score above 750 can help secure rates in the 3% to 5% range. Without a co-signer, most undergraduates will face significantly higher rates, if they qualify at all. Sallie Mae reports that students are four times more likely to be approved with a co-signer.

Your in-school repayment choice affects the rate itself at some lenders, not just the total cost. Sallie Mae, for example, offers rates 0.5 to 1 percentage points lower for borrowers who choose interest-only payments versus full deferral, because the lender’s risk is reduced by in-school payments. Abe and College Ave similarly adjust rates based on repayment options.

Loan term length matters. Shorter terms (5 to 7 years) generally carry lower APRs than longer terms (15 years) because the lender’s money is at risk for less time. The monthly payment will be higher on a shorter term, but the total interest paid will be substantially less.

Your school and degree program can influence pricing. Some lenders adjust rates based on degree type (graduate and professional programs sometimes qualify for different rates) or school. The cost of attendance, which determines maximum loan amount, also factors in: larger loans at higher-ranked schools may carry modestly different pricing.

The type of lender you choose matters more than most families realize. Nonprofit lenders like ISL Education Lending, EdvestinU, and INvestEd consistently offer the lowest rate ceilings (8.70% to 10.49%) because they are not maximizing profit. Fintechs like Sallie Mae, Earnest, and College Ave offer the lowest rate floors (2.75% to 4.49%) but also the highest ceilings (15% to 17%). Specialist lenders serving international students (MPOWER, Prodigy) charge the highest rates (10%+) because they are underwriting borrowers with no U.S. credit history.

How to Actually Get a Lower Rate

Get prequalified with multiple lenders. This is the single most impactful thing you can do. Most of our reviewed lenders (College Ave, Earnest, SoFi, Ascent, Custom Choice, Abe, ELFI, ISL, and EdvestinU) offer soft-pull prequalification, which lets you see estimated rates without impacting your credit score. Get quotes from at least three to five lenders and compare APRs. Sallie Mae is a notable exception: it does not offer soft-pull prequalification and performs a hard inquiry on application.

Bring the strongest co-signer you can. The co-signer’s credit profile drives the rate more than any other factor. If you have access to a co-signer with a 750+ FICO score and stable income, you will qualify for the lowest advertised rates. Some borrowers shop among family members to find the strongest co-signer available.

Choose interest-only payments during school. This not only saves 15% to 17% on total loan cost by preventing capitalization, but at some lenders, it also qualifies you for a lower interest rate. The monthly cost during school is real (on a $30,000 loan at 6%, interest-only payments are about $150/month), but the long-term savings are substantial.

Enroll in autopay. Most lenders offer a 0.25% rate discount for automatic payments. EdvestinU and Funding U offer 0.50%, double the standard. It is free money; enroll immediately after disbursement.

Choose the shortest term you can afford. A 10-year loan almost always carries a lower APR than a 15-year loan. On a $30,000 loan, the difference between 10 and 15 years at 6% fixed is roughly $5,600 in total interest. If you can handle the higher monthly payment, the shorter term wins.

Consider nonprofit lenders. ISL Education Lending caps at 8.70% fixed, EdvestinU at 10.44%, and INvestEd at 10.49%. Even their worst-case rates are better than the mid-range rates at most fintech competitors. If downside protection matters more than chasing the absolute lowest floor rate, nonprofits deserve serious consideration.

Fixed vs. Variable Rates: Which Should You Choose?

Fixed rates stay the same for the life of the loan, providing predictable monthly payments. Variable rates are tied to a benchmark index (usually SOFR or Prime) and can increase or decrease over time. In early 2026, the gap between fixed and variable floor rates is relatively narrow (about 0.5 percentage points on average), which reduces the incentive to take on variable rate risk.

For a 10 or 15-year student loan, fixed rates are generally the safer choice. If rates rise over the next decade, a variable-rate borrower could see their monthly payment increase significantly. Variable rates may make sense for borrowers who plan to refinance within a few years or who are confident that rates will remain stable or decline. If you are unsure, choose fixed.

Four lenders in our review offer fixed rates only (ISL Education Lending, EdvestinU, Funding U, and MPOWER), while one (Prodigy Finance) offers variable rates only. The remaining 10 offer both.

How Private Rates Compare to Federal Student Loan Rates

The advertised floor rates for private loans are lower than federal rates, which creates an understandable temptation. But only the most creditworthy borrowers with strong co-signers qualify for those floor rates. The average private student loan borrower pays a rate comparable to or higher than the federal rate, while giving up income-driven repayment, forgiveness programs, and hardship protections that federal loans provide. Always exhaust federal options first.

The Bottom Line

Private student loan rates in 2026 range from a floor of 2.70% fixed (ISL Education Lending) to a ceiling of 18.00% (MPOWER, including origination fee impact). The average low fixed APR across our 15 reviewed lenders is 4.53%, and the average high is 14.79%. For variable rates, the average low is 4.98%, and the average high is 15.42%.

The biggest mistake you can make is accepting the first offer you see. The spread between the cheapest and most expensive lender for the same borrower profile can be 5 percentage points or more, which translates to thousands of dollars over a 10 or 15-year term. Prequalify with multiple lenders, bring a strong co-signer, choose interest-only payments during school if you can afford them, enroll in autopay, and always exhaust federal loan options first. Your rate depends on your specific financial profile, but you have more control over it than you might think.

Data and methodology: Rates are sourced from lender websites and disclosure documents, verified as of February 2026. Averages are calculated across all lenders that offer the respective rate type (14 lenders for fixed, 11 for variable). Federal rates are for the 2025-2026 academic year. For individual lender details, see our full reviews. Rates are updated monthly.