Best Student Loans in Iowa of 2024

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ByChristopher Boston
Edited byJonathan Ramos
ByChristopher Boston
Edited byJonathan Ramos

Updated: December 28, 2023

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The rising costs of higher education in Iowa are transforming what was once a pathway to success into a daunting financial challenge. As such, the search for the best student loans in Iowa has become a critical mission for students and families aiming to invest in their future without drowning in debt.

MoneyGeek found that Risla is the overall best lender of student loans in Iowa. Students looking for the lowest interest rates may consider College Ave, whereas those with bad credit may fare best with Funding U. International students may get the best deal with Discover, while students who need a co-signer may prefer PNC.

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Understanding Student Loans

Student loans are financial tools that empower individuals to pursue higher education by providing the necessary funds to cover the associated costs. They are an essential component in making education accessible to a broader population.

A student loan operates on the principle of borrowing a sum of money for educational purposes, with an agreement to repay the amount plus interest. The repayment usually commences after the student has completed their studies, with the interest accumulating from the time the loan is disbursed.

Student loans are divided into two categories:

  • Federal student loans: Federal student loans are government-sponsored and often have benefits like fixed interest rates and income-based repayment plans.
  • Private student loans: Private student loans are offered by private lenders and may have different interest rates and repayment conditions, often requiring a credit check or a co-signer.

By distinguishing between these two types, students can craft a borrowing strategy that minimizes financial risk while maximizing educational opportunities.

Best Private Student Loans in Iowa

Private student loans are financial products offered by banks and other private lending institutions to help students pay for their education. They are separate from federal loans and are governed by the individual terms set by the lender.

In some circumstances, private student loans might be the right choice. If a student has exhausted all federal aid options and still needs additional funds to cover tuition or other educational expenses, these loans can provide the necessary financial support.

While private student loans can be a valuable resource, they have specific pros and cons that must be carefully considered. They may allow for greater borrowing flexibility and potentially offer lower interest rates to those with good credit. However, they often lack borrower protections such as income-driven repayment plans. They may also have variable interest rates that can lead to higher overall costs.

Best Overall


  • Risla

    • 2.99%–4.74%Fixed APR Range
    • Not availableVariable APR Range
    • $1,500–$150,000Loan Amount Range
    • Not required if borrower meets qualificationsCo-Signer

    Risla is a nonprofit agency that provides affordable college financing options, including fixed-rate student loans and student loan refinancing.

    Pros

    • Offers fixed-rate loans.
    • Income-based repayment option available.
    • Provides loan forgiveness program for nurses.

    Cons

    • Not available in all states.
    • Loans are subject to credit approval.
    • Does not offer loan pre-qualification.
    Risla

    Risla

Best With Lowest Interest Rates


  • College Ave

    • 4.43% - 17.99%Fixed APR Range
    • 5.59% - 17.99%Variable APR Range
    • $1,000 minimum, no maximumLoan Amount Range
    • Not requiredCo-Signer

    College Ave is a private student loan company that offers loans for undergraduates, graduates and parents of college students. They provide flexibility in repayment terms and loan options.

    Pros

    • Variety of loan products, including undergraduate, graduate and parent loans.
    • Multiple repayment options, including interest-only payments while in school.
    • No origination fees or prepayment penalties.

    Cons

    • Requires a credit check, potentially making it hard for students with no or low credit history.
    • Doesn't offer loan pre-qualification, so you won't know your rate until you apply.
    • Co-signer release only after half the loan term has passed.
    College Ave

    College Ave

Best for Those With Bad Credit


  • Funding U

    • 6.99% – 12.49%Fixed APR Range
    • 7.49% – 12.99%Variable APR Range
    • $3,001 up to $20,000Loan Amount Range
    • Not requiredCo-Signer

    Funding U is a private student loan company that offers no co-signer student loans. It makes lending decisions based on academic records, future earning potential and other school-related factors.

    Pros

    • No co-signer required.
    • Loans are based on academic success and career potential — not credit scores.
    • Fixed-rate loans.

    Cons

    • Limited loan amounts.
    • Available in a limited number of states.
    • Does not offer loan pre-qualification.
    Funding U

    Funding U

Best for Parents


  • Education Loan Finance (ELFI)

    • From 3.20%Fixed APR Range
    • From 1.20%Variable APR Range
    • Minimum of $1,000Loan Amount Range
    • U.S. citizen or permanent residentCo-Signer

    ELFI is an online lender that provides student loan refinancing products. It's known for its competitive rates and various term options.

    Pros

    • Competitive interest rates.
    • No application fees, origination fees or prepayment penalties.
    • Offers personalized customer service.

    Cons

    • Requires a credit check, which could be a hurdle for some borrowers.
    • Does not offer in-school student loan options, only refinancing.
    • The minimum loan amount for refinancing is higher compared to other lenders.
    Education Loan Finance (ELFI)

    Education Loan Finance (ELFI)

Best for International Students


  • Discover

    • 3.99%–11.59%Fixed APR Range
    • 1.79%–11.09%Variable APR Range
    • $1,000 up to 100% of college expensesLoan Amount Range
    • Optional Co-Signer

    Discover is a well-known financial institution that offers private student loans for undergraduate and graduate students, as well as student loan refinancing.

    Pros

    • Offers a one-time cash reward for good grades on each new student loan.
    • Multiple repayment options available.
    • No origination fees, late fees or prepayment penalty.

    Cons

    • Requires a credit check, which could be a hurdle for some borrowers.
    • Doesn't offer pre-qualification, so you won't know your rate until you apply.
    • No co-signer release option.
    Discover

    Discover

Best for Those That Need a Co-Signer


  • PNC

    • 2.99%–9.89%Fixed APR Range
    • 1.09%–8.19%Variable APR Range
    • $1,000–$50,000Loan Amount Range
    • AllowedCo-Signer

    PNC is a traditional bank offering private student loans to undergraduate and graduate students and student loan refinancing.

    Pros

    • Offers a variety of loan products, including loans for undergraduate, graduate and health and medical professions.
    • Provides options for interest rate discounts.
    • Co-signer release is available after certain conditions are met.

    Cons

    • Requires a credit check, which could be a hurdle for some borrowers.
    • Loans are subject to approval.
    • Doesn't offer pre-qualification, so you won't know your rate until you apply.
    PNC

    PNC

Federal Student Loans in Iowa

Federal student loans are loans provided by the U.S. government to assist students in financing their education. They are known for their borrower-friendly features, such as:

  • Deferred payment options: Federal loans often allow deferment of payments during school or financial hardship. This flexibility can be a lifeline for students, enabling them to focus on their studies without the immediate burden of loan repayment.
  • Interest rate caps: Federal student loans have caps on interest rates, ensuring they don't exceed exorbitant levels. This protects borrowers from unexpected spikes in interest and helps keep repayment more affordable.
  • Access to consolidation: Federal loans can be consolidated into a single loan with a fixed interest rate. Consolidation can make managing loans easier by combining multiple payments into one, and it may even lead to a lower overall interest rate, saving money in the long run.
  • Eligibility for loan forgiveness: The remaining loan balance can be forgiven for those working in qualifying jobs. Loan forgiveness programs generally provide a significant financial incentive for those in certain careers like public service or teaching.

How to Apply for Federal Student Loans in Iowa

Pursuing higher education in Iowa requires taking the following steps to apply and secure federal student loans:

1
Understand Iowa's educational costs and opportunities

Start by researching the tuition and fees at Iowa's colleges and universities and explore any state-specific financial aid programs. Understanding the costs and available resources in Iowa helps you gauge how much federal student loan assistance you may need.

2
Complete the Free Application for Federal Student Aid

The Free Application for Federal Student Aid (FAFSA) is the gateway to federal student loans. When completing the form, include the Iowa schools you're interested in attending. This ensures that your financial information is sent to those institutions, allowing them to determine your eligibility for federal loans.

3
Review your Student Aid Report

After submitting the FAFSA, you'll receive a SAR summarizing your information. Carefully review this report, as it's the basis for your financial aid package in Iowa, and any inaccuracies can affect your eligibility for federal student loans.

4
Evaluate financial aid offers

Once admitted, you'll receive financial aid offers from the Iowa schools you've applied to. Carefully evaluate these offers, considering your financial needs and educational goals, and determine the right federal student loan amount for you.

5
Complete entrance counseling

If you're new to federal student loans, you'll need to complete entrance counseling. This online session educates you about the responsibilities and rights of borrowing federal student loans, ensuring you're well-prepared for this financial commitment.

6
Sign the Master Promissory Note

The Master Promissory Note (MPN) shows your commitment to repaying the federal student loans. It’s critical to read and understand the terms specific to your loans before signing this legal document.

The Types of Federal Student Loans Available in Iowa

The federal student loan system offers various options to support students in their pursuit of higher education. Each type of loan serves a specific purpose and comes with distinct features:

  • Direct Subsidized Loans: Available to undergraduates with financial need, Direct Subsidized Loans feature interest payments covered by the government during certain periods. This benefit reduces the long-term cost of the loan, making it a valuable option for students who need financial assistance.
  • Direct Unsubsidized Loans: These loans are accessible to both undergraduates and graduate students without the requirement to demonstrate financial need. While offering broader eligibility, they do accrue interest from the start, necessitating careful planning to manage the overall cost.
  • Direct PLUS Loans: Aimed at graduate students and parents of undergraduates, Direct PLUS Loans can fill financial gaps by allowing borrowing up to the full cost of attendance. They require a credit check, aligning with borrowers who have a solid credit background and need substantial funding.
  • Direct Consolidation Loans: Direct Consolidation Loans offer a pathway to simplify repayment by merging multiple federal loans into one. This can lead to a more organized repayment schedule and may open doors to different repayment plans, suiting those who want to streamline their federal loan management.

Student Loan Forgiveness in Iowa

Student loan forgiveness is a financial provision that allows a borrower to have all or part of their student loan debt canceled, meaning they are no longer required to make payments on the forgiven amount. This can be an essential financial relief for those who meet specific criteria, often related to their profession or public service commitment.

In Iowa, there are unique programs designed to provide student loan forgiveness, such as:

1
Iowa Health Care Award Program

The Iowa Health Care Award Program aims to support registered nurses and nurse educators working in Iowa. Eligible individuals can receive $6,000 per year for up to five consecutive years of full-time employment.

To qualify, applicants must work as a registered nurse or nurse educator in a service commitment area. The application process involves completing the specific application form for this program.

2
Public Service Loan Forgiveness (PSLF) Program

While the Public Service Loan Forgiveness (PSLF) Program is a federal initiative, it's also applicable to Iowa residents working in public service roles within the state. Eligible individuals must have Direct Loans and work full-time for a qualifying employer, such as a government or non-profit organization in Iowa. They must also make 120 qualifying monthly payments under a qualifying repayment plan.

The application process includes submitting the Employment Certification Form annually or when changing employers and submitting the PSLF application after making the required payments.

Tips for Managing Student Loans

From borrowing wisely to staying organized, managing student loans is a multifaceted task that requires careful attention. Below, we delved into the key aspects of student loan management.

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Scholarships and Grants as Alternatives

Unlike loans, where the financial responsibility extends into a student's post-graduate life, scholarships and grants offer a debt-free approach to education. Scholarships often recognize individual achievements or talents, while grants may be geared toward specific needs or demographics.

The benefits of these awards resonate deeply within the educational community in Iowa, as they empower students to pursue their dreams without the financial constraints that loans can impose. By alleviating the need for repayment, scholarships and grants can open doors to education for diverse students, fostering a culture of learning and achievement that enriches the entire state.

To find and apply for scholarships and grants in Iowa, we broke down the process in the following steps:

1
Assess your unique qualifications

Start by evaluating your unique strengths, interests, academic achievements and financial needs. Understanding what you bring to the table will help you identify scholarships and grants in Iowa that are most relevant to your situation.

2
Explore various opportunities

Investigate multiple sources for scholarships and grants, including Iowa's state education department, college financial aid offices, local community groups and reputable online search platforms. Diversifying your search will help you discover a wide range of opportunities specific to Iowa students.

3
Gather necessary documentation

Collect the necessary supporting documents like academic transcripts, letters of recommendation or proof of Iowa residency early in the process. Having these documents ready will facilitate a smoother application and prevent last-minute scrambling.

4
Tailor essays to each opportunity

If essays are required, write responses that are tailored to each specific scholarship or grant, reflecting the values and goals of the awarding organization. Customized essays demonstrate your genuine interest and alignment with the award's objectives.

5
Complete your applications

Complete each application with precision, following all instructions and guidelines meticulously. Double-check your work for accuracy, as a well-prepared application reflects your commitment to the opportunity and attention to detail.

The Impact of Student Loans on Credit

The relationship between student loans and credit scores is nuanced, where responsible management can lead to financial benefits, and missteps can have lasting consequences. Student loans, like other forms of credit, are reported to credit bureaus, and how they are handled directly influences your credit score.

Paying student loans on time is a vital aspect of credit management. Each on-time payment builds a positive credit history, contributing to a higher credit score. This can translate into more favorable borrowing terms in the future, such as lower interest rates on a mortgage or car loan.

On the other hand, student loan default represents a serious financial misstep with far-reaching implications. Defaulting on a student loan can cause a dramatic decrease in the credit score, limiting access to future credit and potentially affecting other areas of life, such as renting an apartment or qualifying for certain jobs.

Frequently Asked Questions

Student loans are a common means of funding education, but they can also be a source of confusion and uncertainty. We answered some frequently asked questions about student loans in Iowa to help you better navigate this complex landscape.

What are the eligibility criteria for student loans in Iowa?
How do I apply for a student loan in Iowa?
What is the difference between subsidized and unsubsidized federal loans?
How does interest work on student loans?
What are the repayment options for student loans?
What happens if I can’t repay my student loan?
What is student loan forgiveness and how can I qualify?

About Christopher Boston


Christopher Boston headshot

Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.

Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.


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