Ratings Methodology for Student Loan Origination

Our comprehensive rating system for the private student loan market considers a range of factors.

20+ lenders reviewed

10+ categories designated

60+ data points analyzed

Methodology, broken down by category

NerdWallet’s overall ratings for student loan origination are weighted averages of ratings in the following primary categories:

5.0

Overall score

Our evaluation includes the number of loan terms, length of grace period, forbearance options, in-school deferment availability and in-school and post-graduation repayment options. Lenders with the highest marks for flexibility generally offer hardship forbearance of 12 months or longer, a variety of repayment options, a grace period of longer than six months and features to help with faster repayment.

Affordability (15%)

Factors we consider include interest rates, possibility of rate reductions and fees charged. Lenders that score well for affordability have competitive interest rates, with a higher percentage of borrowers qualifying for the lowest rates. These lenders charge no fees and reduce rates for setting up automatic payment, which helps to maintain regular, on-time payments.

Availability (15%)

We look at items like the range of borrower types served, school needs covered, states where available and co-signer practices. Top lenders for availability generally lend to students in all states for a range of needs, such as undergraduate and graduate studies. These lenders accept the use of co-signers but don’t require it. For borrowers who do use a co-signer, the lender offers a co-signer release after 12 months.

Transparency (25%)

We assess the ease of getting information from the lender, such as a low and high rate range, rate estimates and loan terms and minimum credit score and income requirements. Top lenders for transparency generally allow borrowers to get their interest rate and loan terms with a soft credit check. These lenders also disclose key information, such as rate range, available loan terms and eligibility requirements on their website.

Customer experience (20%)

We take into account access to a dedicated advisor, use of an in-house customer service team, live chat availability and complaints process. Top lenders generally have a defined complaint process and separate complaint department or ombudsman, live chat, in-house customer service and a willingness to work with borrowers facing financial difficulty.

Variations in scoring and weighting

Our scoring and weighting varies some for different types of student loans. For example, the ability to add a co-signer carries less weight for parent loans than it does for undergraduate loans. For this reason, a lender's star rating can differ by product.

We may adjust a lender's rating up or down based on the following:

Any unique product features (not scored in other categories) that benefit consumers.
Lack of any 5-star must-haves.

Five-star must-haves ensure that our highest scoring lenders offer what we consider to be the most important student loan features:

A soft credit check.
Current rates displayed on the lender’s website.
At least 12 months of forbearance.
No origination/loan fee.
Full In-school deferral.

Half a star is deducted from lenders who meet the point requirement for five stars but don’t meet the must-have criteria.

Data collection and review process

We survey 20 banks, credit unions and online lenders that offer private student loans and student loan refinancing, including the top lenders by market share and online search volume, as well as lenders that serve some specialty or nontraditional markets.

Surveys for all lenders are similar, although some questions differ by the product types offered. All surveys include more than 60 data points.

Our team checks lender websites to confirm key survey responses. We also follow up with company representatives as needed. At least one writer and an editor verify facts in every lender review to ensure accuracy.

Data accuracy

Student loan reviews are reassessed and fully updated every 12 to 18 months. Our team also updates data as needed through the year, such as rate changes, new features and star ratings. We keep in contact with providers to ensure information is current.

The review team

NerdWallet's student loans review team covers a range of education and college finance topics. Our writers and editors have over 30 years of combined experience in finance. Each team member adheres to NerdWallet’s strict guidelines for editorial integrity.

In addition to NerdWallet, the work of our team members has appeared in The New York Times, The Associated Press, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media outlets.