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Best Student Loans in 2023

Student loans are a common way for students to pay for college. In fact, 69% of students report using student loans to fund their education. We all know that student loan debt is a massive burden for college graduates. That’s why it is important to make smart moves if you are taking out student loan debt. You should exhaust all the best student loan opportunities before you take out any loans with less favorable terms.

The three major things that you want to consider when thinking about student loans are interest rates, repayment terms, and student experience.

Here are our recommendations for the best student loans. Note that these include both federal student loans and private student loans.

Now, onto our student loan recommendations:

Keep on reading to learn even more about the interest rates, fees, and repayment terms for these top student loans, as well as the “best of the rest” student loan options for students to consider.

Top student loans in 2022

Best overall student loan: Federal Direct Loans

Federal Direct Student Loans include subsidized and unsubsidized loans, but graduate students are only eligible for unsubsidized loans. These student loans are issued through the Department of Education. To apply for federal Direct Loans, students will need to submit the FAFSA.

The U.S. Department of Education has a useful help center that includes live chat, email support, and phone support.

  • Eligible degrees: Undergraduate and Graduate
  • Interest rate: Undergraduates: 2.75% (fixed), Graduate students: 4.30% (fixed)
  • Repayment terms: Wide range of repayment options including income-based repayment plans that can lower your monthly payment

Our take: Federal student loans are the best option for most students due to competitive interest rates and flexible repayment options such as income-driven repayment and deferred payment during grad school. Students who seek careers in public service may also be eligible for loan forgiveness.

Learn more: Federal Stafford Loans review

Best student loan for low-income students: Subsidized Federal Direct Loans

For low-income students, there is a specific type of Direct Student Loan that does not accumulate interest when you are in school, in deferment, or in the months after graduation. This can save you money and makes the subsidized Federal Direct Loans a great option. The only downside to these student loans is that they are capped at $2,000 per academic year.

As with all federal student loans, students with any questions can contact the U.S. Department of Education via live chat, email or phone with any questions.

  • Eligible degrees: Undergraduate only
  • Interest rate: Variable and Fixed are both offered, but specific rates vary depending on lender
  • Repayment terms: Loan terms range from 5-10 years, but depend on lender

Our take: If you qualify for subsidized student loans via the FAFSA, they are the most favorable type of student loans. As discussed, the only real downside is that they are capped per school year.

Learn more: Subsidized Federal Stafford Loans Review

Best marketplace for comparing private student loans: Credible

If you are considering private student loans, a student loan marketplace will allow you to compare your different options and shop around. Credible is our recommendation for the best student loan comparison tool, because it offers a great user experience, does not require a credit check, and will compare reputable lenders including Ascent, Sallie Mae, and others.

  • Eligible degrees: Undergraduate and Graduate
  • Interest rate: Variable and Fixed are both offered, but specific rates vary depending on lender
  • Repayment terms: Loan terms range from 5-10 years, but depend on lender

Our take: If you are considering taking out private loans, we suggest that your search with Credible. They make it easy to shop around and find the best student loans for both undergraduate and graduate students.

Learn more: Credible

Best private student loan lender: Ascent Student Loans

Ascent is an online student loan lender that offers student loans for both undergraduate and graduate degrees. Unlike other lenders, Ascent does not charge any application fees and offers student loans to students with and without a co-signer.

One interesting option that Ascent offers is a “future income-based” student loan that is useful for students who don’t meet the credit requirements or don’t have a co-signer. Ascent offers other perks to students such as discounts for automatic payments and the option to put your loan into forbearance for up to 24 months

  • Eligible degrees: Undergraduate and Graduate
  • Interest rate: Fixed (3.39 – 14.50%) and Variable (2.4 – 12.98%)
  • Repayment terms: Loan terms range from 5-10 years, but depend on lender

Our take: As an online lender, Ascent offers a great user experience and some very student-centric benefits (longer forbearance than most lenders and discounts for automatic discounts).

Learn more: Ascent Student Loans

Best income share agreement provider: Stride Funding

Stride Funding is not a traditional student loan company and instead offers students Income Share Agreements. The idea of an Income Share Agreement or ISA is simple: students agree to pay back future earnings in return for funding. Generally, students agree to pay back a certain percentage of their earnings for a specific amount of time (or until they pay a specific amount of money off).

The benefit to students is that you only pay back your ISA when you are making a certain amount of money. At Stride, if you are unemployed or making a less than $40,000 per year you will not be required to pay back anything. Students also do not need a cosigner (unlike some student loan providers)

Stride Funding is one of the largest ISA providers and works with hundreds of universities. Stride also offers other perks for students like career services support.

One of the big downsides of Stride ISAs is that they aren’t available for all majors or at all colleges.

  • Eligible degrees: Undergraduate college junior or senior and graduate students who are within 2 years of graduating.
  • Interest rate: N/A
  • Repayment terms: Students do not pay interest rates, but a percentage of their income which can range from 3 to 9% for about 5 years.

Our take: Stride ISAs are a great option for students who qualify for them based on their major and college. The fact that you don’t have to pay back your income if you are unemployed or making under $40k is a big benefit for students.

Learn more: Stride Funding Review

Best of the rest

Here are some of the other student loan options to consider that did not make it into the above best student loan list. Note that these student loan lenders are listed in alphabetical order.

Federal Direct PLUS Loans

  • Interest rate: 5.30% (fixed)
  • What we like: Direct PLUS Loans are eligible for nearly all of the federal student loan repayment plans, including income-based repayment. PLUS loans can also be taken out up to the cost of attendance (minus any financial aid).
  • What we don’t like: Fixed interest rates of 5.30% are above average.
  • Learn more: Direct PLUS Loan Guide

Funding U

  • Interest rate: 7.99% to 13.49% APR (fixed)
  • What we like: Funding U student loans don’t require a cosigner or credit history–instead, they do require a minimum GPA and college graduation rate.
  • What we don’t like: Loans are only available in 30 states and fixed rates of 7.99% to 13.49% are higher than average.
  • Learn more: Funding U

Sallie Mae® (for undergraduate students)

  • Interest rate: 5.99% to 16.33%* APR (variable), 4.50% to 14.83%* APR (fixed)
  • What we like: Sallie Mae offers student loans to part-time students, as well as non-U.S. citizens and DACA students.
  • What we don’t like: Quotes require a hard credit check.
  • Learn more*: Sallie Mae

*Lowest rates shown include the auto debit discount

Summary of the best student loans

Bottom line for students

For most students, federal Direct Student Loans are going to be the best loans and offer the best interest rates and repayment options. You should almost always utilize these loans before considering private loans or Parent PLUS loans. This is why every student, regardless of demonstrated financial need, should be submitting the FAFSA.

For students who qualify, income share agreements are a new and exciting option that can be less daunting than student loans. Due to their flexible repayment schedule, graduates aren’t under as much pressure to find a high-paying job immediately. If this sounds like a good option for you, we recommend contacting your school and some third-party providers to see if you qualify.

Also see: How much student loan debt is too much?