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.

Before using a private student loan, consider all federal financial aid options first. Contact our office to review your federal aid options so you fully understand what is available to you. Federal loans often offer lower interest rates and more flexible repayment options than private student loans.

The maximum amount of federal aid you may receive for the 2025–26 academic year is listed below. Your FAFSA determines your eligibility for federal financial aid.

  • Federal Pell Grant – A maximum of $7,395 for the 2025–26 academic year. The exact amount depends on a student's student aid index (SAI) from the FAFSA and their enrollment.
  • Federal Supplemental Educational Opportunity Grant (SEOG) – A maximum of $1,000. Eligibility for this grant is determined by a student's SAI and enrollment.
  • Federal TEACH Grant – Provides up to a maximum yearly amount of $4,000 to undergraduate or graduate students admitted to the College of Education and enrolled in a TEACH eligible program.
  • Federal Direct Loan – Government-backed financial aid options, providing favorable terms and repayment flexibility.
    • Dependent Undergraduate loan limits:
      • $5,500 per academic year for first-year students
      • $6,500 per academic year for second-year students
      • $7,500 per academic year for third-year students and above
    • Independent students may qualify for additional Direct Loan funds:
      • $4,000 per academic year for first- and second-year students
      • $5,000 per academic year for third-year students and above
    • Graduate and professional students can review Direct Loan limits and interest rates on our website.
  • PLUS Loan – A federal loan for parent borrowers or graduate professional students. This loan does not have a maximum for the 2025–26 academic year, but the amount may not exceed the total remaining Cost of Attendance.

Decisions to be Made 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?

The Truth in Lending Act requires a lender to obtain a signed Self-Certification Form from a loan applicant before disbursing a private student loan. This form should be provided by the lender. If the lender does not provide this form, you may access it here and provide the lender (not the University of Iowa) with the signed, completed form. Contact the Office of Student Financial Aid if you need any help with the completion of this form. 

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, 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 you choose. The process from application to disbursement can take up to six weeks, so we strongly recommend starting your lender research several months before your U-Bill is due for your intended term (fall, winter, spring, or summer).

Steps to Borrow a Private Loan

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.

Private Loan Approval Process

Once approved, your loan is sent to UI for certification. Watch for an email from OSFA with instructions to schedule required loan counseling.

During peak times, it may take up to 3 weeks to meet with an advisor and finalize approval.

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.

Private Loans for Prior Semesters

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 some of the lenders below may not currently be listed on our preferred lenders list. Likewise, other lenders not listed below may also offer private loans for prior semesters. The terms and conditions for each lender are subject to change over which the University of Iowa has no control.

Please note that the last date of attendance is calculated by the last date you were reported as enrolled for the semester. The loan 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 from a prior academic year may only be applied to that academic year.

  • Abe Student Loans (Up to 18 calendar months after the student’s academic period end date or graduation date)
  • Ascent (No later than 180 days from the loan term end date, if currently enrolled or recently graduated. Must not have withdrawn with no intent of re-enrolling)
  • Citizens One (Up to 365 days from when the past balance is due, if currently enrolled or recently graduated)
  • 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)
  • ELFI (For a past semester within the same academic year for undergraduate students. For the previous semester for graduate students)
  • Earnest (Up to 365 days prior to a past due balance)
  • 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 Loan (Up to 365 days past end date of the last enrollment period, if graduating or intends to enroll here or elsewhere)
  • SoFi (Up to 180 days after the loan period end date, or 12 months as long as the student is enrolled the next semester, current semester, or has recently graduated)

Preferred Lender List Disclosures

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 loan options with competitive interest rates, relative to applicant credit history.
  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. The Office of Student Financial Aid reviews this preferred lender list annually. 

Learn more about Student Consumer Information related to Student Financial Assistance.

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