Iowa Legislation Gives Borrowers Needed Loan Information

Parents of College Students Can Compare Private Loan Options to Federal Program

August 3, 2026

As students prepare to head back to college, many Iowa families may be confused on what is the best way to pay for it. Financial aid, savings and student loans are all options families may have access to, but the choices leave them unsure.

"We always encourage students to use savings and earnings, and other financial aid options like grants, scholarships and work-study, before borrowing," said Steve McCullough, president and CEO of ISL Education Lending. "And then when borrowing, students should exhaust their federal student loan options first."

Once those options are exhausted, families face choosing between additional federal loans for parents and private education loans, options that may not always be clear to new, or even returning, borrowers.

"If you're relying on additional loans to cover some of your student's college expenses this year," McCullough said, "you need to understand the best option for your family's own situation. And that often starts with interest rates as a large portion of the debt that students and families eventually repay is interest."

Compare Your Borrowing Options

If you are considering borrowing to help pay for your student's higher education expenses, it is important to compare loan options carefully. Differences in interest rates, fees and repayment terms can affect the total cost of borrowing by thousands of dollars over the life of the loan.

"ISL Education Lending was a strong supporter of a new law, HR703, that passed in the last session of the Iowa General Assembly," McCullough said. "It calls for Iowa College Aid to inform parents if the supplemental student loan program created by the state offers lower-cost loans than the federal Direct PLUS loans for parents, as is the case with some of our loans."

ISL Education Lending Partnership Loan Program

The Partnership Loan Program was created by the Iowa legislature in 1992, and ISL Education Lending, a nonprofit overseen by the state, was named as the program administrator and financier. Its board of directors, appointed by the governor, set a goal for loans in the program, including the College Family Loan for parent borrowers, to be less expensive than the federal program.

For the upcoming 2026 fall semester, Iowa College Aid has certified that the College Family Loan does in fact offer loans at a lower cost than the PLUS loan for parents.

Families that need more money than students can get on their own should visit the website that Iowa College Aid created in accordance with the state legislation. This website compares the cost of the loans and links to a comparison of all their other terms and conditions.

"Choosing the right loans matters because it can have a significant impact on the amounts that families will have to repay," McCullough said, "and the repayment assistance that will be available to them."

Visit https://educate.iowa.gov/compareAPR for more information.

How the Numbers Stack Up

The U.S. Department of Education does not provide an APR for its federal Direct PLUS loan program. As a guide for comparing costs, however, the highest rate for ISL Education Lending's College Family Loan entering immediate repayment is 8.45% APR. The 9.07% interest rate on the federal Direct PLUS loan, on the other hand, translates to a 10.09% APR when combined with an upfront fee of 4.228%. The following comparison can be made for every $10,000 borrowed on the College Family Loan's lowest and highest APRs compared to the PLUS Loan.

*Using the indicated PLUS loan rate of 9.07% and the upfront fee of 4.228%, the APR for the PLUS loan with immediate repayment is 10.09%. ISL Education Lending's highest College Family Loan APR for an immediate repayment option is 8.45% with no origination fee.

Using the indicated PLUS loan rate of 9.07% and the upfront fee of 4.228%, the APR for the PLUS loan, which enters repayment immediately, would be 10.09%. ISL Education Lending's highest College Family Loan APR for an immediate repayment option is 8.45% with no origination fee.

For more information, visit https://www.IowaStudentLoan.org.

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Media Contact

Christopher Weishaar, Digital PR Specialist, (515) 273-7102, cweishaar@studentloan.org