College Family Loan and Federal Direct PLUS Loan Comparison

The College Family Loan features options that allow you to decide if you would like to start repayment while your student is in school or if you would rather defer repayment until the student graduates, leaves school or drops below half-time enrollment.

The Federal Direct PLUS Loan is typically placed into repayment once the loan has been fully disbursed. The borrower has the option to place PLUS Loans into deferment during school and for six months after school.

Because of these differences, the table below only focuses on College Family Loans that either require immediate repayment or defer repayment until after school so that the comparison between the two loans is equal. To view the different interest rates and annual percentage rates (APRs), requirements and other details for the College Family Loan, please view the College Family Loan comparison table (PDF).

Comparison Table

Iowa Student Loan's College Family Loan is designed to supplement — not replace — other sources to fill funding gaps for students. Students should work with financial aid professionals at their respective colleges and universities to explore and exhaust all sources of student financial aid — including federal loans for students, which are always better than private loans for students — before seeking other options.

  College Family Loan Federal Direct PLUS Loan
Before Applying
Borrower Parent, family member or friend Parent (for dependent undergraduate students)
Student (for graduate or professional degree students)
Interest Rate Immediate Payment, fixed-rate options:
  • 5.50% interest rate — 5.50% APR
  • 6.00% interest rate — 6.00% APR
  • 6.20% interest rate — 6.20% APR
  • 6.30% interest rate — 6.30% APR
Deferred Payment, fixed-rate options:
  • 5.80% interest rate — 5.56% APR
  • 6.30% interest rate — 6.02% APR
  • 6.52% interest rate — 6.22% APR
  • 7.22% interest rate — 6.86% APR
College Family Loan comparison table (PDF)
7.60% fixed rate for loans first disbursed on or after July 1, 2018, and before July 1, 2019

(The U.S. Department of Education does not provide APR calculations for federal student loans. As a guide for comparing costs, however, the costs of these loans are approximately equivalent to APRs of 8.60%1 for loans that enter immediate repayment and 7.62%2 for loans that are deferred.)
Origination Fee 0% 4.248% for loans first disbursed on or after Oct. 1, 2018, and before Oct. 1, 2019
Payments Required While Enrolled In-school payments may be required based on the loan selected. The borrower may choose options requiring principal and interest payments or interest-only payments while the student is enrolled in school or may choose to defer payments while the student is enrolled. Repayment begins when the loan is fully disbursed. An in-school deferment may be requested to postpone payments until after the student graduates, leaves school or drops below half-time enrollment.
Borrower Benefits 0.25% interest rate reduction with automatic payment withdrawal 0.25% interest rate reduction with automatic payment withdrawal
Repayment Term 10 or 15 years 10 years (may be extended up to 25 years depending on loan balance)
Employment and Income Criteria Current employment and acceptable debt-to-income ratio required. No employment or income check requirement.
Cosigner Requirement No; however, a borrower who does not meet the underwriting and credit criteria on his or her own may apply with one or more cosigners. No; however, an endorser can help a borrower with an adverse credit history.
Repayment
Repayment Plan Flexibility and Assistance
  • Standard and two graduated repayment plans
  • Short-term payment relief that reduces payments for a specified amount of time, after which the loan is recalculated and payments are adjusted so the loan is paid off in the original loan term
  • Deferment is available
  • Dischargeable in bankruptcy if the borrower can meet undue hardship criteria
  • Loan forgiveness granted for death or permanent disability of the borrower or student
  • Standard, extended and graduated repayment plans available for all PLUS Loans
  • Income-driven repayment plans available for PLUS Loans made to students only
  • Deferment and forbearance options available
  • Dischargeable in bankruptcy if the borrower can meet undue hardship criteria
  • Loan forgiveness granted for death or permanent disability of the borrower or if the student on whose behalf a parent obtained the loan dies
Payment Late Fees None; Iowa Student Loan does not charge late fees. Up to 6%

Additional Information Provided

Iowa Student Loan provides financial information to encourage responsible borrowing. In addition, applicants and cosigners will see loan materials that include statements recommending they exhaust all sources of student financial aid before considering a private student loan.

Truth in Lending Act Disclosures

All private loan applicants are provided Truth in Lending Act disclosures and must complete a self-certification form before loan funds are released to a college or university. Private student loans are also subject to state consumer credit laws.

1 Annual percentage rate (APR), finance charge and monthly payments are based on borrowing $10,000, a 4.248% origination fee and a fixed interest rate of 7.60% during the 120-month principal and interest repayment period.

2 Annual percentage rate (APR), finance charge and monthly payments are based on borrowing $10,000, a 4.248% origination fee, deferring interest and principal for 51 months and a fixed interest rate of 7.60% during the 51-month in-school and separation period and the 120-month principal and interest repayment period.