Hardi MULYONO, Arief HADIAN, Nelvitia PURBA, Rudy PRAMONO / Journal of Asian Finance, Economics and Business Vol 7 No 10 (2020) 929–938 929 929 Print ISSN: 2288-4637 / Online ISSN 2288-4645 doi:10.13106/jafeb.2020.vol7.no10.929 Effect of Service Quality Toward Student Satisfaction and Loyalty in Higher Education Hardi MULYONO 1 , Arief HADIAN 2 , Nelvitia PURBA 3 , Rudy PRAMONO 4 Received: August 01, 2020 Revised: September 06, 2020 Accepted: September 12, 2020 Abstract This study analyzes the effect of quality of services provided to the students’ in relation to their satisfaction and loyalty. Respondents in this study were seventh semester students of Universitas Muslim Nusantara Al-Washliyah, the total number of students was 312. Data analysis techniques in this study used was SEM (Structural Equation Modeling) using the SmartPLS program. The results showed that students’ satisfaction significantly mediated the correlation between academics and students’ loyalty, between non-academic and students’ loyalty, between reputation and students’ loyalty, and between campus access and students’ loyalty; on the other hand, students’ satisfaction was not significant in mediating the correlation between program issues and students’ loyalty. The findings suggest that it is necessary to improve the quality of lecturers to improve students’ academic abilities and communication skills. As far as non-academic aspects are concerned, conducting training and development efforts and increasing awareness programs for administrative staff is important. For the reputation aspect, to carry out several marketing campaigns which predict to have an effect upon students in building positive perceptions of campus has to be executed as well. Meanwhile for access aspect, it should be made certain that every student can have direct access to staff employees, and it is necessary to improve dimensions which can increase students’ satisfaction so that students are convinced of their choice of campus and then they are likely to recommend their chosen university and spread positive things about their institutions. Keywords: Service Quality, HedPERF, Student Satisfaction, Student Loyalty, University Student JEL Classification Code: E44, F31, F37, G15 existing higher education institutions (Angell, Heffernan, & Megicks, 2008). Therefore a higher education institution, which aims at gaining a competitive advantage in the future, needs to find an effective and creative way to attract, maintain and foster stronger relationships with students (Hasan, Ilias, Rahman, & Razak, 2008). For this reason Universities as academic institutions should continue to innovate, diversify their structures and find new ways to provide their services more effectively to their customers (Rain, Sinha, & Sahney, 2011; Rahman et al, 2020). The occurrence of this phenomenon was challenging the Universities to provide the best service to students in order to win the competition. As the market have become more competitive for universities, Universitas Musim Nusantara Al-Washliyah as a private university in Medan has kept on improving the quality of services provided to the students so that it can maintain students’ satisfaction and loyalty. Quality of service has a big role for various institutions as a way of maintaining the number of students by capturing the education market (Yeo, 2008). Providing the best service is a key to success in surviving the competition (Zeithaml, 1. Introduction At present, the competition among private universities is so high, that students’ satisfaction has to be prioritized by the universities. Attracting new students and retaining existing students has become an urgent and important goal for many 1 First Author. Universitas Muslim Nusantara Al Washliyah, Indonesia. Email: hardimulyono@umnaw.ac.id 2 Universitas Muslim Nusantara Al Washliyah, Indonesia. Email: ariefhadian@umnaw.ac.id 3 Universitas Muslim Nusantara Al Washliyah, Indonesia. Email: nelvitiapurba@umnaw.ac.id 4 Corresponding Author. Lecturer, Pelita Harapan University, Indonesia [Postal Address: MH Thamrin Boulevard 1100, Klp. Dua, Kec. Klp. Dua, Tangerang, Banten 15811, Indonesia] Email: rudy.pramono@uph.edu © Copyright: The Author(s) This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.