Iowa Student Loan is a private, non-profit student loan lender.

Iowa Student Loan Pros and Cons

  • Post author:Bob Haegele
  • Post last modified:June 4, 2023

Iowa Student Loan is based in West Des Moines, IA and was founded in 1979. They are a non-profit student loan lender. They manage over $2.6 billion in student loans.

With so many student loan options, it can be difficult to decipher the best option. In this post, we will look at Iowa Student Loan and who can benefit from them.

Iowa Student Loan does not service their student loans. Currently, Aspire Servicing Center is their student loan servicer. The following message is found in the footer of

Loan servicing, including billing and other customer service, will be provided by Aspire Servicing Center.

Aspire will handle any issues you may have.

Nowadays, this is fairly common with student loans; typically, the lender and the servicer are not the same entity. This is true of AES Student Loans, for example. Federal loan servicing is similar as well; FedLoan is not a student loan lender.

Iowa Student Loan Types of Loans Offered

Iowa Student Loans offers multiple student loans. There will be different types of student loans available to you depending on whether you are a current student.

Terms and interest rates vary as well. Your credit history (or your family member’s) will be a factor. Each lender has their own criteria, but in general, your interest rate will be lower if you are deemed a lower risk of default.

Although Iowa Student Loan does not explicitly state a student loan limit, this amount is usually between $75,000 and $120,000 for undergrad students.

As its name implies, these loan are intended for students who attend school in Iowa. They may also be available for for Iowa residents who attend school in another state.

Partnership Advance Education Loan

Partnership Advance Education Loans are available to both undergraduate and graduate students. Rates can be either fixed or variable. Interest rates vary for both; the ranges are:

  • Fixed APR: 5.30% – 6.85%
  • Variable APR: 5.86% – 7.76%

The way variable interest works is that it is adjusted based on current market rates. Interest rates are on the rise right now but are still relatively low.

According to NerdWallet, the average interest rate for private student loans is currently 4.22% to 13.66% for for interest rates. For variable, the range is 2.93% to 13.01%.

Most interest rates were at least double what they are in the 1980s, for example. I’m not exactly an economist, but interest rates can’t go much lower. This would suggest that they can only rise in the future.

And with fixed interest, you always know what the interest rate will be. That makes your budget less variable, which is one of the challenges of budgeting.

I am not trying to make your decision for you; in fact, I would recommend speaking with your school’s office of financial aid before making a decision. It does seem like an easy decision at first glance, but such an important decision should get more than a glance.

College Family Loan

As its name implies, a college family loan is a loan taken out in the name of your family member. Thus, the family member, and not the student, is considered the borrower.

The college family loan is a private student loan and the interest is fixed – there is no variable APR option. Currently, the rate ranges from 5.30% to 6.85% – the same as the APR for the partnership loan.

6.85% is fairly high, so if you are going to have someone help with your college costs, it would be ideal to find someone with an excellent credit score. Typically, a score above 750 is considered excellent.

If you know for certain you are going to use Iowa Student Loan, this approach could be beneficial. If you are just entering college, there is a strong chance you don’t have much of a credit history. Thus, your rate may be higher.

However, an older family member might be able to lock in a much lower rate. A 1% difference in APR may not sound like much, but it definitely is – especially if you are repaying your loans for 20 or 30 years.

Iowa Student Loan Payment Options

Have you ever heard the phrase “personal finance is personal?” It’s definitely true – everyone’s finances are different; thus, Iowa Student Loan has several payment options to suit your needs.

They offer three basic payment options: immediate payment, interest-only payment, and deferred payment. All three are available with both the partnership loan and the college family loan.

Immediate Payment

If you opt for immediate payment, you will have to make payments with Iowa Student Loan while in school. The same applies if your family member has a college family loan.

While not the most convenient option, it will be the best option financially if you can make it work. Payments will be higher, but you prevent the loan balance from growing. In addition, this option has the lowest interest rate (5.30% fixed, 5.86% variable).

As a result, you will pay less overall. If you are just entering college, that may not seem like a big deal. Later down the line, though, you will be glad you chose this option.

Interest-Only Payment

Interest-only payment is a middle ground between immediate payment and deferred payment. With this option, you only pay on the interest while in school. This prevents increases of the balance on your loans with Iowa Student Loan.

The interest rate is middle-of-the-road at 5.50% or 6.06% for fixed and variable interest, respectively. At the same time, your monthly payment can be less than half of the other options since you aren’t paying down the principle.

You will still pay more with this option than with immediate payment because you are paying interest on a principle that isn’t decreasing.

Deferred Payment

Deferred payment refers to waiting until after college to make payments on your loans with Iowa Student Loan. Interest rates on these loans is highest and interest will accrue while you are in school. Interest rates are 5.38% and 6.08% for fixed and variable interest, respectively.

Monthly payments will be lower, but you will pay more overall due to the additional time of interest accruing.

It may not seem ideal to have to make payments on your loans while in school. You might think of your college years as the best years of your life and be able to enjoy them without financial worry. While that makes sense, it’s important to consider what you gain in return.

Making payments while in school ensures that your loan balance will not continue to grow. You may have heard of someone being “upside down” on your house; this would be similar. The expression refers to owing more than something is worth.

In this case, that would be your degree. You would be upside on it after graduating.

The reason I am pointing these things out is not to convince you. However, I think those entering college often don’t think about the long-term cost implications of deferred payment.

Making payments while in school may require you to work full time, which you may not be able to handle. If that is the case, don’t fret. Just understand that you could be sacrificing financial freedom down the road as a result.

Iowa Student Loan Refinancing

Iowa Student Loan offers refinancing for its borrowers. The name for the program is the Reset Finance Loan.

APR for refinancing starts at 3.25%, making this a potentially much more affordable option. Keep in mind that this is the lowest rate; it does go up to 7.25%.

Who is Eligible?

Not all borrowers will be eligible for Reset. Though a specific figure is not given, Reset is available to creditworthy borrowers. If you are not eligible with your own credit, you may apply with a creditworthy cosigner.

Iowa Student Loan also mentions that applicants are only eligible if they have not defaulted on a private or a government student loan. Borrowers must be US citizens and cosigners must reside in the US.

Reset Finance Loan Repayment

Although there are interest rates mentioned above, there are different rates depending on your repayment. You can have 5, 10, 15, or 20-year repayment plans. Each one has different interest rates. Ranges are as follows:

  • 5-year term: 3.50% – 5.90%
  • 10-year term: 4.63% – 6.65%
  • 15-year term: 5.13% – 7.03%
  • 20-year term: 5.63% – 7.50%

As you can see, interest rates steadily increase the long the repayment period. Such is standard when borrowing. The longer the repayment, the greater the risk of default.

Monthly payments are lower with a longer repayment term, but that’s only because the payments are more spread out. However, your interest rate will be higher with a longer repayment, which means you will pay more overall.

See this PDF from Iowa Student Loan for full information about refinancing rates.

Iowa Student Loan Interest Rate Reduction

Like many student loan lenders, Iowa Student Loan does offer an interest rate reduction. The reduction is offered when you enroll in auto-pay and amounts to 0.25%.

I have reviewed other student loan lenders and this percentage is standard with most of them. When you enroll in auto-pay, you make it less likely you will miss a payment. It also makes it more convenient since you don’t have to pay manually every month.

Overall, having a small interest rate reduction for enrolling in auto-pay is win-win. Again, 0.25% might not sound like much, but it can really add up – especially if your repayment is for 20-30 years.

Iowa Student Loan Scholarships

Iowa Student Loan offers several scholarships. Because they offer so many scholarships, we won’t give you all the details of every scholarship here. Instead, we will cover some of the highlights.

Programs are offered for both high school seniors and for parents. This makes sense because both students and parents may be borrowers for Iowa Student Loan.

Student Scholarships

Scholarships for high school students include:

  • 32 $2,000 scholarships
  • 10 $1,000 awards
  • Five $1,000 awards (for students from states surrounding Iowa)

Each one of the above scholarships/awards will be given to students who meet a particular set of criteria. For example, the $2,000 scholarships will be awarded to students who score high on an assessment.

Parent Scholarships

Scholarships are also available for parents from Iowa Student Loan. While the total amount is less than that available for students, there are still quite a few.

Scholarships for parents include:

  • 50 $1,000 awards
  • 10 $1,000 awards (parents/guardians of Iowa high school students)

As you can see, there are quite a few scholarships available to both parents and students. Combined with federal student aid and other grants/scholarships, Iowa students can greatly reduce the cost to attend college.

Making Payments

As mentioned previously, Iowa Student loan is a lender but not a servicer. Thus, you won’t see anything about making payments on their website.

All payments will be handled by Aspire Servicing Center. You will want to visit their website if you want to learn about making payments.

Iowa Student Loan Forgiveness

Student loan forgiveness may be available in certain situations. For example, Iowa Student Loan offers student loan forgiveness for nurse educators and teachers.

If you are having trouble making payments, your best course of action is to contact them directly. They recommend this in the refinancing suggestion of their website. It is better for both parties if you avoid delinquency, so they are willing to provide as much help as possible.

Iowa Student Loan Sets Students up for Success

With several student loan options for both students and parents, Iowa Student Loan has options for most borrowers. Interest rates are generally on the low end of what private lenders offer.

Iowa Student Loan also has scholarships and awards for both parents and students. As a result, both parties are able to lessen the financial burden college can often present.

They offer refinancing with interest rates potentially as low as 3.25%. Compared to some student loans, that is quite low.

Overall, Iowa Student Loan has numerous options that should ease the burden of attending college. Do you have experience with Iowa Student Loan? Let us know what you think.


Hey there. My name is Bob Haegele and I'm a personal finance writer who has been freelancing since 2018. Since then, I've built a six-figure career as a freelance writer. My work has been featured in Business Insider, Forbes Advisor,, USA Today, and many other outlets. Interested in starting a blog of your own? Check out my post on starting a blog.

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