ISL Education Lending Overview
ISL Education Lending (formerly Iowa Student Loan) is a nonprofit 501(c)(3) organization established in 1979 and based in West Des Moines, Iowa. Despite its Iowa origins, ISL offers private student loans and refinancing nationwide (in 48 states; Maine and Oregon excluded). Loans are made by Iowa Student Loan Liquidity Corporation or Bank of Lake Mills, Member FDIC. ISL is one of the few nonprofit student lenders with national reach, offering multiple loan types: the Partnership Loan (standard student), College Family Loan (parent/family), a No-Cosigner Loan for Graduates, and several refinancing products including in-school refinancing.
ISL’s defining advantage is its rate ceiling. The Partnership Loan’s fixed APR caps at approximately 8.70%, which is the lowest maximum rate in this entire review series. For context, Sallie Mae’s ceiling is 17.49%, Earnest’s is 16.49%, and even the best fintech competitors cap above 14%. This means ISL’s worst-case pricing is better than most competitors’ mid-range pricing. Combined with zero late fees, no origination fees, and co-signer release after 24 payments, ISL delivers a genuinely borrower-friendly product.
Borrowers should, as always, exhaust federal loan options before considering any private student loan.
Pros and Cons of ISL Education Lending Student Loans
Pros
- Lowest rate ceiling in the review series (~8.70% fixed). Even borrowers who receive ISL’s highest rate pay less than the mid-range rate at most competitors. This protects less-qualified borrowers from extreme pricing.
- Zero fees of any kind. No origination fee, no application fee, no late fee, no prepayment penalty. ISL is one of a small group of lenders (with Abe, SoFi, and Ascent) that charges absolutely no fees.
- Nonprofit mission. As a 501(c)(3), ISL’s mission is student-focused rather than profit-driven. The organization also offers scholarships and financial literacy resources.
- Co-signer release after 24 payments. Standard for the industry; better than many banks (Citizens 36 mo., EdvestinU 24 mo., INvestEd 48 mo.).
- In-school refinancing available. ISL is one of few lenders that allows borrowers to refinance existing student loans while still enrolled, potentially locking in a lower rate before graduation.
- No-cosigner loan for graduate students. Fixed rate of approximately 7.69%-7.96% APR, available without a co-signer.
- Illinois Partnership Loan with rate reduction. Illinois residents attending in-state schools may qualify for additional rate discounts.
Cons
- Fixed rates only for in-school loans. No variable rate option. Borrowers who prefer variable rates or who expect rates to decline must look elsewhere.
- Only 10 or 15-year terms. No 5, 7, or 20-year options for in-school loans. This limits flexibility for both aggressive repayers and those needing lower monthly payments.
- Not available in Maine or Oregon. Two states are excluded.
- Technology cited as dated. Consumer reviews mention glitches and limitations in ISL’s online platform that make the borrowing and repayment experience less modern than fintech competitors.
- 20 CFPB complaints in 2024. Higher than several smaller lenders, though still reasonable for the portfolio size. Some complaints relate to older loan servicing issues.
ISL Education Lending Rates and Fees
ISL’s Partnership Loan fixed APR ranges from approximately 2.70% to 8.70% (with 0.25% autopay discount). The College Family Loan has a similar range (approximately 3.20%-8.70% fixed). The No-Cosigner Loan for Graduates carries a fixed rate of approximately 7.69%-7.96% APR. All are fixed rates; no variable option is available for in-school loans. ISL charges zero origination fees, zero application fees, zero late fees, and zero prepayment penalties. The only discount is the 0.25% autopay reduction.
ISL In-School Repayment and Loan Terms
Loan amounts range from $1,000 up to cost of attendance minus other aid. Terms are 10 or 15 years. Three in-school repayment options: immediate (full P&I, lowest rates), interest-only, or deferred. Grace period is 6 months. Co-signer release is available after 24 consecutive on-time principal and interest payments and meeting underwriting criteria at the time of request. ISL also offers up to 24 months of deferment for certain refinance products and up to 84 months for in-school refinance borrowers.
ISL Eligibility and Application Process
Available in 48 states (not Maine or Oregon). Must be enrolled at a Title IV institution. Minimum credit score of 670. Typical approved credit score is 762. Soft-pull prequalification available. Decision typically within one business day. Co-signer recommended but not required if borrower meets credit criteria. U.S. citizens and permanent residents only. Application is fully digital.
How ISL Education Lending Compares
Feature | ISL Education Lending | Abe |
Fixed APR | 2.70% – 8.70% | 2.75% – 15.61% |
Variable APR | Fixed only | 3.53% – 15.91% |
Rate Ceiling | ~8.70% | ~15.61% |
Origination Fee | None | None |
Late Fee | None | None |
Loan Amounts | $1K – COA | $1K – COA |
Terms | 10 or 15 years | 5, 7, 10, 15, or 20 years |
Co-signer Release | 24 months | 12 months |
In-School Options | 3 (defer, interest, full) | 4 (defer, $25, interest, full) |
Grace Period | 6 months | 6 + 6 months |
Refinancing | Yes (incl. in-school) | No |
Nonprofit | Yes (501c3) | No (for-profit) |
Final Verdict on ISL Education Lending Student Loans
ISL Education Lending earns a 3.5 out of 5.0. Its signature strength is the rate ceiling: at approximately 8.70% fixed, ISL guarantees that even the least-qualified approved borrower pays less than what many competitors charge their mid-tier borrowers. Combined with zero fees (including no late fees), nonprofit status, co-signer release, and a unique in-school refinancing option, ISL offers one of the most borrower-protective products in the private student loan market.
The trade-offs are a fixed-rate-only offering, limited term options (10 or 15 years), dated technology, and exclusion of two states. Borrowers who want variable rates, shorter or longer terms, or a more polished digital experience may prefer fintech alternatives. But for rate-conscious families who prioritize downside protection and borrower-friendly terms, ISL is among the best options in this series.
Before applying, exhaust all federal student loan options. Federal Direct Subsidized and Unsubsidized Loans offer income-driven repayment and forgiveness protections no private lender matches.
