Private student lender snapshot for October 2026
| Lender | Fixed APR | Variable APR | Terms | Notable features |
|---|
| SoFi | 2.99% to 15.99% | Not published | See lender terms | 0.25% auto-pay discount and job-loss deferment |
| Sallie Mae | 2.08% to 17.49% | 3.75% to 16.95% | 5, 8, 10, or 15 years, 20 for graduate | Cosigner release and a 0.25 point auto-pay discount |
| College Ave | 2.19% to 17.99% | 3.89% to 17.99% | 5, 7, 10, 12, 15, or 20 years | Up to 100% of cost of attendance, cosigner release after half the term |
| Earnest | 2.99% to 12.85% | 6.75% to 13.05% | 5 to 15 years | No origination fee, no prepayment penalty, no late fees |
Those figures come from CNBC Select and other lender comparisons published in October 2026, and they are quoted bands rather than offers for one borrower. Your rate depends on your credit, your income, and how much the lender can cover. The CNBC Select private loan comparison shows the full methodology.
Which repayment plans and forgiveness apply?
This is where the two products are not comparable at all. Federal loans come with repayment plans tied to your income and forgiveness programs that can erase a balance. Private loans come with a schedule and nothing else.
The federal menu in October 2026 covers four fixed-payment plans and four income-driven plans.
The new RAP plan sets payments at 1% to 10% of adjusted gross income divided by 12, minus $50 per dependent, with a $10 floor and a 30-year term.
The new Tiered Standard plan assigns a 10 to 25 year term based on your balance, and it is the default for loans disbursed from July 1, 2026.
Eligibility depends on your first disbursement date. If any Direct Loan was disbursed on or after July 1, 2026, you can repay eligible Direct Loans under RAP or Tiered Standard only.
Older borrowers keep access to Standard, Graduated, Extended, IBR, ICR, and PAYE, with ICR and PAYE ending no later than July 1, 2028.
The forgiveness menu includes Public Service Loan Forgiveness after 120 qualifying payments, Teacher Loan Forgiveness up to $17,500, income-driven discharge after 20 to 30 years, plus disability, closed school, false certification, unpaid refund, and death discharges.
The Federal Student Aid forgiveness page lists each program and its conditions.
A private lender offers none of it. There is no income-driven payment, no forgiveness, and no statutory deferment. Some lenders offer job-loss protection for a few months, and that is the entire safety net.
What happens to your credit and to your cosigner?
Federal borrowing does not touch your credit file, and a private loan can damage it twice. That is a real cost that never shows up in the rate comparison.
Direct Subsidized and Unsubsidized Loans carry no credit check. PLUS is the exception, since it requires credit with no adverse history, and an applicant with a late payment can appeal with documentation of mitigating circumstances. Every other federal loan path stays off your credit report.
Private underwriting works the other way. Lenders generally look for a credit score of 670 or above plus stable income, and students with little US credit history use a creditworthy cosigner.
From that point the borrower and the cosigner share full liability, and a late payment lands on both credit files.
Cosigner release is a lender perk rather than a legal right. Some lenders release a cosigner after 24 to 48 on-time payments, and others require that at least half the repayment term has passed.
Read the lender's terms before you sign, because release from a cosigner does not happen on a fixed date.
Consolidation deserves its own look when you already carry older loans, and our consolidation loan calculator walks through the math. Borrowers who took SAVE ended up in a transition that our SAVE plan deadline guide explains in detail.
How did the 2026 rule changes reshape both options?
Four changes landed on July 1, 2026 and one more is still moving. Anyone comparing rates from an article written before July is comparing two different products.
- The SAVE plan ended, and borrowers who did not choose a new plan were moved to a fixed-payment plan automatically.
- RAP and Tiered Standard launched, and RAP counts for PSLF while Tiered Standard does not.
- Grad PLUS ended for borrowers first disbursed on or after July 1, 2026.
- Parent PLUS now has a $20,000 annual cap and a $65,000 aggregate cap per dependent student.
- Auto-pay interest rate reduction rose from 0.25% to 1% for borrowers enrolled from July 1, 2026.
The legislative spine behind those changes is the One Big Beautiful Bill Act, signed on July 4, 2025, and the Department of Education final rule published on May 1, 2026 with a July 1, 2026 effective date.
A court order on June 24, 2026 stayed part of the professional-degree definition, so some programs flip in and out of that status while the case proceeds.
Private lenders moved too. Several cut fixed-rate pricing for the strongest credit profiles while keeping higher bands for thin files, which is why the difference between a federal rate and a private rate is now wider at the top end than at the bottom.
When is a private loan the right choice?
Private borrowing makes sense in three situations: when federal caps fall short, when you have no US credit, and when you need funds fast. Outside those cases it costs more and protects less.
Federal caps are the first reason. A family at a school with a $70,000 cost of attendance can hit the dependent undergraduate limit at $5,500 to $7,500 a year, and the gap has to come from somewhere.
That is the textbook case for a private loan or a parent loan, and it is why the order of operations matters.
The second reason is international students, who are generally barred from federal loans unless they hold an eligible non-citizen status. Our guide to student loans for international students covers the international lenders that underwrite without a US cosigner.
The third reason is timing. Federal disbursement follows the school enrollment and aid packaging cycle, and a private lender can sometimes release funds sooner. That speed has a price, so use it when the gap is real rather than as a default.
One last comparison point. Federal loans come with a six-month grace period after you leave school or drop below half-time, and the Department pays the interest on subsidized loans during that window.
Private loans have no grace period unless the lender grants one, and interest starts accruing from the first payment date.
Next steps for choosing your student loan
Work the federal options first, and treat the private loan as the gap rather than the plan. The order of borrowing decides the total cost more than the choice of lender.
- Estimate your family's cost of attendance at each school before you look at any rate.
- File the FAFSA early and collect every scholarship and grant offer you can.
- Take the federal Direct Loans you are eligible for, even at the lower annual caps.
- Compare the total repayment, not the monthly payment, before you sign a private note.
- Read the cosigner terms closely and check when release becomes possible.
- Enroll in auto-pay for the 1% interest rate reduction where it applies.
- Recheck the terms each July, because rates and limits reset every year.
Your plan choice matters as much as the loan type, and the Federal Student Aid repayment plans page explains which plans your first disbursement date allows.
When you compare federal and private student loans for your own case, work the federal options first, then treat a private note as the gap.
Verify current requirements. Federal student loan rules, interest rates, borrowing limits, and repayment plans change at least once a year. Rates reset every July 1 and loan limits are re-announced each fall.
This guide reflects the rules published by the U.S. Department of Education and Federal Student Aid as of October 2026, including the changes made by the One Big Beautiful Bill Act signed July 4, 2025 and the Department final rule effective July 1, 2026.
Before you sign a loan or switch a repayment plan, confirm the current terms on studentaid.gov, with your loan servicer, and with your school's financial aid office. Nothing here is financial, tax, or legal advice.
Photo: kaboompics, Pixabay Content License, via Pixabay (https://pixabay.com/photos/woman-write-notepad-girl-female-792162/)
Fazlur Rahman
