5 Things You Need To Know About Iowa Student Loan

University of Iowa students considering Iowa Student Loan

Flickr user Alan Light

After exhausting all scholarship and other financial aid opportunities, many students require a private student loan to cover the rest of their college costs. Iowa Student Loan is committed to helping students and families obtain that funding. It’s a great option for students who are residents of Iowa or out-of-state students attending college in Iowa.

Iowa Student Loan offers two types of loans – Partnership Loan and College Family Loan. Each loan has its own unique terms and conditions, eligibility requirements, and repayment options. Here are 5 things you should know about Iowa Student Loan.

Partnership Loan

The Partnership Loan is created for students who wish to borrow money to fund their own college education.

All Iowa students may apply for the Partnership Loan. This is regardless of whether they choose to attend a college in Iowa or any other state in the country. Students from other states attending any college or university in Iowa may also apply for a Partnership Loan, provided that they meet the other eligibility criteria.

Students who do not meet all requirements will need to have a cosigner to qualify.

College Family Loan

Similar to the federal PLUS loan, the College Family Loan is a loan created for parents and family members who wish to borrow money to cover their student’s college education.

Unlike the PLUS loan, however, this private loan has no origination fee, no late payment fees, and is available to other family members or friends, instead of just parents. It also tends to have lower interest rates.

Eligibility Criteria

To be eligible for the Partnership Loan:

  • Be of majority age if applying without an eligible cosigner. Students not of majority age will need an eligible cosigner.
  • Are an American citizen or permanent resident of the United States, with proper documentation. If applying with a cosigner, the cosigner must be an American citizen or permanent resident of the United States, and must reside in the country.
  • Be a resident of Iowa attending any accredited, degree-granting college or university across the US.
  • A Non-Iowa resident attending any accredited, degree-granting college or university in the state of Iowa.
  • Be accepted, enrolled, or attending an eligible education program at least at half-time basis and be making satisfactory academic progress.
  • Not have defaulted on any federal or private student loan.

In addition, you or your cosigner must meet these underwriting criteria:

  • Have a minimum FICO score of 670
  • Be able to show continuous employment over the preceding 2 years unless retired or disabled
  • Not have any repossessions, tax liens, garnishments by credit providers, charge-offs, collection amounts, or previous bankruptcies.

To be eligible for the College Family Loan:

  • Be of majority age if applying without an eligible cosigner.
  • Are an American citizen or permanent resident of the United States, with proper documentation. If applying with a cosigner, the cosigner must be an American citizen or permanent resident of the United States, and must reside in the country.
  • Have a minimum FICO score of 670.
  • Be able to show continuous employment over the preceding 2 years unless retired or disabled.
  • Not have defaulted on any federal or private student loan.
  • Don’t have any repossessions, tax liens, garnishments by credit providers, charge-offs, collection amounts or previous bankruptcies.

Additionally for the College Family Loan, the student (for whom the funds are being borrowed) must:

  • Be an American citizen or permanent resident of the United States.
  • Be accepted, enrolled or attending an accredited, degree-granting college or university on at least half-time basis and be making satisfactory academic progress.

If you and the student you are requesting the funds for meet the qualifying criteria, you will be required to complete a Student Authorization Form.

Loan Limits

The minimum amount you can borrow through either loan is $1,001. The maximum is no more than $80,000 cumulative or no more than the cost of attendance, whichever is lower.

 Repayment Options

You have 3 repayment options – immediate payment, interest-only payment, and deferred payment.

Immediate Payment – This option features the lowest interest rates. It involves making regular payments of principal and interest starting immediately after the loan is fully disbursed, while you are enrolled in college. The repayment period stretches over 10 years.

Interest-Only Payment–This option involves making regular interest-only payments starting immediately after the loan is disbursed, while you are enrolled in college. This features slightly higher interest rates as compared to the immediate payment option but lower than the deferred payment option. By paying off the interest every month, you prevent any increases to the loan balance. The repayment period extends over 10 years.

Deferred Payment – With this option, you postpone your payments while still in school. You only start making payments 6 months after you graduate, drop below half-time enrollment, or leave school. The repayment period extends over 15 years.

Iowa Student Loan Discounts

All borrowers may be eligible to for a 0.25% discount on the interest rate on signing up for auto pay. This is regardless of whether you’ve borrowed under the Partnership Loan Program or the College Family Loan Program.

Provided that you meet all the requirements, you may also be eligible for the Armed Forced Interest Reduction.

Online Application

Both students and their parents can apply for private student loans through an online application. The application is simple and straightforward, starting with a few questions to determine eligibility.

If you are a student applying for a loan to fund your own college education, you will need to provide details about your state of residence and location of your college. You will also be asked if you are completing the application in Iowa.

If you are applying under the College Family Loan Program, you will have describe your relation to the student you’re borrowing for. You will also need to provide details about your state of residence, the state you are currently located in, your student’s state of residence, and the location of their school.

College Planning & Financial Aid Tools

Iowa Student Loan goes out of their way to advise students and their parents to first exhaust their federal loan options before considering applying for a student loan. They also offer prospective borrowers plenty of advice on how to reduce borrowing costs.

If you have no other option but to take a private student loan, Iowa Student Loan offers a handy student loan payment calculator that gives you an estimate of your monthly payments. This allows you to make informed decisions about how much you should borrow and which repayment option will work out best for you.

Should You Borrow From Iowa Student Loan?

If you are an Iowa resident or a student from another state studying in a qualifying school in Iowa, Iowa Student Loan is definitely an option you should consider if you need a private loan.

But it’s good to explore all of your options. Check out College Raptor’s free Student Loan Finder, where you can compare rates and lenders side by side to find the loan that best fits your needs.

College Raptor Staff

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