Private loans for students and parents of dependent students are financing options offered by banks, credit unions, and online lenders to cover educational expenses not met by federal aid or other sources. These loans are based on the borrower's creditworthiness, often necessitating a co-signer, especially for students with limited credit history. Interest rates and terms vary among private lenders, and borrowers should carefully compare offers to secure the most favorable terms.

Things to Consider Before Obtaining a Private Loan

Selecting the best loan option for you and your family may be confusing, but the following tips may be helpful:

  • Decide who will borrow the loan - you or another family member. A student without a credit history will require a creditworthy co-signer to receive loan approval.
  • Decide on a fixed or variable interest rate loan. Fixed rates are set for the life of the loan while variable rates change throughout, even while you are still in school.
  • Decide if payments will be made toward the interest and/or principal even while you are still in school. Making payments towards the interest prevents the overall loan balance from increasing due to capitalization of interest.
  • Decide what borrower benefits are important to you. Can the co-signer be released from repayment obligations when the loan is in repayment for a certain period of time? Is there an interest rate or principal reduction if certain requirements are met?

Finding a Private Loan Lender

There are many private financial institutions, banks, and credit unions that offer student loans. To review a list of private lenders we have curated that require a U.S. co-signer, review the preferred lender list, an online comparison tool. You can link to loan applications directly from this site.

Lenders that may offer international student private loans without a U.S. co-signer include MPower Financing, Ascent (specifically for DACA students), Prodigy Finance Student Loan (specifically for Masters-level coursework), and SoFi. 

Your lender:

  • Sends your application to our office after your loan has been credit-approved and you have signed the necessary documents on their end.
  • Provides you with the interest rate, co-signer requirements, and loan disclosures.
  • Requires the school to limit private loan amounts to the cost of attendance minus other aid you are receiving so you may not receive the exact loan amount you requested.

Private Loan Comparison Tool

Preferred Lender List

Steps to Borrow a Private Loan

The Office of Student Financial Aid will certify a private loan from any lender selected by the student. The private loan process can take up to six weeks from application to disbursement. It is strongly recommended that students begin their private lender research a few months before their U-Bill is actually due for their intended enrollment term - fall, winter, spring, summer.

A common timeline of the private loan process:

  1. Complete the lender's online application, paying close attention to the type of loan application for your specific program.
  2. Your co-signer should complete all application materials, usually called an addendum, and submit all requested documentation.
  3. The lender (not the University) completes all underwriting and makes the credit decisions.
  4. Once approved, the loan application is sent to UI for school certification.
  5. UI students receive an email from OSFA indicating that loan counseling is required. The email includes instructions about scheduling the loan counseling meeting.
  6. Depending upon peak processing times, allow up to three weeks to meet with a financial aid advisor to have your loan approved.
  7. Allow two weeks for the lender to send the funds to UI and for the Billing Office to apply them to your U-Bill. Private loan funds will not be refunded until classes start.

Important Reminders

  • You may not receive the exact loan amount you applied for. The amount is typically limited to the cost of attendance minus other aid.
  • Interest accrues on private loans from the date of disbursement, although actual repayment does not begin until your lender's grace period ends after you graduate, or you drop below halftime status. The grace period length can vary by lender.
  • All private student loans are based on credit history, and most will require a co-signer if the student has little or no credit history. Co-signers are encouraged for all borrowers because it may help reduce interest rates and processing fees, and it improves the chances the loan will be approved.
  • Each loan program offers various repayment incentives to consider. Ask your lender about repayment options and co-signer release.
  • Private loans are not based on financial need and although it is encouraged, the completion of a FAFSA is not required.

There are several private student loans available that can help you meet financial needs for past-due balances from a recent prior semester. If you have already maximized your federal aid for a previous semester, you may qualify for additional financial assistance from one of these private lenders. Please note that terms and conditions are subject to change over which the University of Iowa has no control. 

The lenders below offer options for prior semester balances. Please note that the last date of attendance is calculated by the last date you were reported as enrolled for the semester. The loan that you apply for must fall within the applicable time frame allowed by the lender in order to be certified. Please keep in mind that a loan for a past-due balance may only be applied to a previous term balance and cannot include current enrollment or current charges.

  • Citizens One (up to 365 days past end of the enrollment period, if graduating or intends to enroll here or elsewhere)
  • College Ave (no more than 365 days from the date the student's account is determined to be past due. In order to qualify, the student must be enrolled, intending to enroll again at Iowa, or have graduated.)
  • Iowa Student Loan (180 days after the loan period end date; if student withdraws, must be certified on/prior to last date of attendance)
  • Sallie Mae Student Loans (up to 365 days past the last day of enrollment, if graduating or intends to enroll here or elsewhere)
  • SoFi (up to 180 days past end of loan period if student is still enrolled, planning to enroll, or final term)

The Office of Student Financial Aid assists students looking for private loans by providing a preferred lender list that students and parents can consider when choosing financing options. We recommend that you research your options carefully when considering private loans. You are not required to use the lenders on this list when obtaining a private student loan. You may consider checking with your local bank or credit union for student loan options or, if a non-resident, checking with your state's Higher Education agency to see if there are loan options available to you, such as the Minnesota SELF loan. All lenders on the preferred lender list were selected based on the following standards:

  1. The lender requires certification by the school, so that the loan can be accounted for in the student's financial aid offer.
  2. The lender offers reasonable and competitive interest rates and fees.
  3. The amount borrowed does not exceed the cost of attendance minus other aid.
  4. The lender is affiliated with Education Loan Management (ELM) and ELMSELECT and agrees to underwrite and credit-approve loan applications before presenting the loan for certification on ELM.
  5. The lender disburses funds via electronic funds transfer (EFT) to the University of Iowa, rather than directly to the student.
  6. The lender provides consistent, timely, and accurate customer service to both University of Iowa staff and students. To that end, a representative is required to meet with staff in the Office of Student Financial Aid each academic year.

Please note that a lender may be removed from the list if the above conditions are not maintained. If unethical or deceptive practices are perceived, or if origination, processing, or servicing concerns arise that cannot be resolved satisfactorily, the University of Iowa retains the right to alter its preferred lender list at any time and to select lenders that consistently provide competitive products, along with responsible practices and policies that best serve our students.

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