ABSTRACT Grounded in social cognitive theory, this study aims to explore how service quality and commercial friendship contribute to enhancing student loyalty and facilitating long-term positive relationships between universities and their students. It also examines the mediating role of trust in management policies and practices, as well as in faculty and staff within this framework. Structural equation modeling is used to test the hypotheses using the survey data collected from students in higher education institutions within Pakistan. The research reveals that service quality has a significant impact on students’ loyalty to their university, with trust serving as a crucial mediator in this relationship. Conversely, commercial friendship does not directly influence student loyalty. However, trust in management policies and practices effectively bridges the gap between commercial friendship and student loyalty. These findings are pivotal for crafting effective student retention strategies. This study makes a unique contribution by identifying the pathways to student loyalty through service quality, commercial friendship, and trust in management and faculty. It represents the first empirical investigation into the role of individual-organizational factors in the context of educational services marketing, offering valuable insights for enhancing student retention efforts.