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Compare the Partnership Loan to the Federal Direct PLUS Loan

There are many things to consider when choosing between a Partnership Loan and a Federal Direct PLUS Loan. The first thing is to understand who the borrower is for PLUS Loans.

  • The PLUS Loan is for parents of dependent undergraduate students and is in the parents' name, and the undergraduate student has no obligation to repay the loan. This is different than the Partnership Loan where the undergraduate student is the primary borrower one or more cosigners may be needed.
  • Graduate or professional degree students can take out the PLUS Loan in their own name and are responsible for repaying the loan.

Use the chart below to compare all the facts about the Partnership Loan and the PLUS Loan. If you're a parent who prefers to take out a supplemental loan in your name instead of having your student take on more debt, you may compare the PLUS loan to our College Family Loan, which has the same fixed interest rates as the Partnership Loan.

Our Method

The Partnership Loan features options so you can decide if you want to start repayment while you're in school (two choices) or if you would rather defer repayment until after school. 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 Partnership Loans with fixed interest rates that either require immediate repayment or defer repayment 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 Partnership Loan, please go to the Options tab or view the Partnership Loan comparison table (PDF).

Comparison Table

Iowa Student Loan's Partnership Loan is designed to supplement — not replace — other sources to fill funding gaps for students and parents. Students and parents should work with financial aid professionals at their respective colleges and universities to explore and exhaust all sources of student financial aid before seeking a Partnership Loan.

  Partnership Loan Federal Direct PLUS Loan
Before Applying
Borrower Student (undergraduate or graduate)
(Cosigners may be needed.)
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
Variable-rate loan options also available, as is the Interest-Only Payment, fixed-rate option
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.)

No variable-rate loan option
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. Borrowers may choose options requiring principal and interest payments or interest-only payments while in school or may choose to defer payments while 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 yearsTerm dependent on option selected. 10 years (may be extended up to 25 years depending on loan balance)
Employment and Income Criteria Current employment and acceptable debt-to-income ratioThis helps to protect consumers from borrowing more than they can afford to repay. required. No employment or income check requirement.
Cosigner Requirement Yes; however, a borrower who meets the underwriting and credit criteria on his or her own is not required to include a cosigner. No; however, an endorser can help a borrower with an adverse credit history.
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
  • DefermentDeferment is granted at the sole discretion of Aspire Servicing Center. Borrowers may be granted time if they are in a residency/internship program, serving in the military or having financial hardship. Supporting documentation is required. Aspire Servicing Center may request that borrowers in financial hardship provide a budget work sheet and make payments prior to granting 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
  • 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%

View Partnership Loan interest rates, requirements and other details.

Additional Information Provided

Partnership Loan applicants and borrowers are provided with additional financial information during the application and approval process to encourage responsible borrowing. In addition, loan materials include statements that recommend exhausting all sources of student financial aid before considering a private student loan.

Student Loan Game Plan

Partnership Loan applicants must complete Student Loan Game PlanSM during the application process. Student Loan Game Plan is an online tutorial that educates borrowers and their cosigners on the consequences of overborrowing and ways to reduce the need to borrow. It shows them how borrowing decisions today can affect their financial future.

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.

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Subject to credit approval, loans are made by Iowa Student Loan or Bank of Lake Mills. Bank of Lake Mills does not have an ownership interest in Iowa Student Loan. Bank of Lake Mills is not affiliated with the school you attended or are attending. Bank of Lake Mills is Member FDIC. Loan servicing, including billing and other customer service, will be provided by Aspire Servicing Center.