ISL Education Lending Reviews: Student Loan Refinancing and Private Student Loans

Full Review

ISL Education Lending, formerly Iowa Student Loans, is a nonprofit state student loan lender that was established in 1979. Despite its regional affiliation, ISL offers nationwide student loan refinancing via its Reset Refinance Loans.

ISL may be a good choice if it offers a lower rate than other refinance lenders or you don’t meet their eligibility criteria. ISL doesn’t have a minimum income requirement, and you can qualify if you don’t have a degree — or haven’t even graduated yet.

While some lenders let you refinance within a few months of graduation, ISL offers true in-school refinancing. If you have private student loans, refinance as soon as you can get a lower rate. If that’s while you’re in school — and before loans enter repayment — refinancing could reduce your interest costs and the amount you repay overall.

ISL also offers specific refinancing loans for medical residents, health professionals and parents. Rates and terms can vary by product. For example, in-school refinancing has a 15-year term only. Understand the details of your loan before accepting.

ISL REFINANCING AT A GLANCE

• You can refinance without a degree.

• You can refinance before graduation or during a medical residency.

• Generous forbearance policy for struggling borrowers.

• Up to 24 months of deferment for general and medical residency refinance, or up to 84 months of deferment for in-school refinance.

HOW ISL COULD IMPROVE

ISL, like other five-star loans, isn’t perfect. They could improve by offering additional programs such as:

• Biweekly student loan payments via autopay.

ISL student loan refinancing details

• Interest rates, fees and terms

  • Soft credit check to qualify and see what rate you’ll get: Yes.

  • Loan terms: Five, seven, 10, 15 or 20 years; 15-year term only for in-school refinancing.

  • Loan amounts: Minimum $5,000. Maximum $400,000.

  • Can transfer a parent loan to a child: No.

  • Application or origination fee: No.

  • Prepayment penalty: No.

  • Late fees: No.

  Compare ISL's range of interest rates with other student loan refinance lenders. Your actual rate will depend on factors including your, or your co-signer’s, credit history and financial situation. To see what rate ISL will offer you, apply on its website.

• Requirements

  Financial

  • Minimum credit score: 670 (660 for in-school refinance).

  • Minimum income: No income requirement.

  • Typical credit score of approved borrowers or co-signers: 762.

  • Typical income of approved borrowers: No income requirement.

  • Maximum debt-to-income ratio: 40%-45%, depending on loan type, or 25% if a mortgage or rent is not included.

  • Can qualify if you’ve filed for bankruptcy: Yes, after seven years have passed.

  Other

  • Citizenship: Must be a U.S. citizen or permanent resident.

  • Location: Available in 49 U.S. states and Washington, D.C.; Maine residents are not eligible.

  • Must have graduated: No.

  • Must have attended a school authorized to receive federal aid: No.

  • Percentage of borrowers who have a co-signer: Approximately 64%.

• Repayment options

  • Academic deferment: Borrowers are eligible for up to 24 months of deferment and can use it for this purpose. No specific academic deferment option.

  • Military deferment: Yes.

  • Economic hardship deferment: Yes, borrowers are eligible for up to 24 months of deferment.

  • Forbearance: No.

  • Reduced payments for medical residents: Medical residents can pay $75 per month during their residency.

  • Graduated repayment: If borrowers experience financial difficulty, this alternate repayment plan is available.

  • Co-signer release available: Yes, after 24 months of on-time payments.

  • Death or disability discharge: Yes, the loan will be forgiven if the borrower dies or becomes permanently disabled, even if the loan has a co-signer.

  • Loan discharge if co-signer dies or becomes disabled: No.

  Repayment Preferences

  • Allows greater-than-minimum payments via autopay: Yes.

  • Allows biweekly payments via autopay: No.

• Customer service

  • Loan servicer: Aspire Servicing Center, which is an affiliate of ISL.

  • In-house customer service team: Yes.

  • Process for escalating concerns: Yes.

  • Borrowers get assigned a dedicated banker, advisor or representative: No.

  • Average time from approval to payoff: Seven days.

Before refinancing with ISL

Before deciding on a student loan refinance lender, compare student loan refinance options to make sure you’re getting the best rate you qualify for. In addition to interest rates, compare lenders’ repayment options and the flexibility they offer for borrowers who are struggling to make payments.

If you aren’t eligible to refinance with ISL

If ISL denies your refinance application, the lender will let you know why. Depending on the reason, you may want to consider other lenders or need a co-signer.

NerdWallet recommends prequalifying with multiple refinance lenders before you apply. This will let you know which lenders you may be eligible with, without affecting your credit.

STUDENT LOAN REFINANCE RATINGS METHODOLOGY

Our survey of more than 29 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and the top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.

We consider 41 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

Full Review

ISL offers undergraduate, graduate and parent student loans. Unlike many state-based lenders, you don’t have to be from or attending college in Iowa to qualify; funding is available nationwide.

Consider ISL if you can’t qualify for a low interest rate elsewhere. As a nonprofit, ISL has maximum rates below many lenders, while also providing consumer-friendly features such as no late fees and 24 months of forbearance if you run into financial difficulties.

ISL PRIVATE LOANS AT A GLANCE

• Loans available nationwide, except in Maine.

• Generous forbearance policy for struggling borrowers.

• Term based on repayment option selected.

• Graduated repayment plan, which allows borrowers to begin with lower payments and increase them 10% every two years.

• Academic deferment if you’re enrolled at least half-time.

HOW ISL COULD IMPROVE

ISL could improve its private student loan product by offering:

• More loan term options.

ISL private student loan details

• Interest rates, fees and terms

  • Soft credit check to qualify and see what rate you’ll get: Yes.

  • Loan terms: 10 or 15 years based on repayment option.

  • Loan amounts: $2,001 (based on residency and school location) up to annual cost of attendance minus other aid received. No cap.

  • Application or origination fee: None.

  • Prepayment penalty: No.

  • Late fees: No.

  Compare ISL's range of interest rates with other private student loan lenders. Your actual rate will depend on factors including your — or your co-signer's — credit history and financial situation. To see what rate ISL will offer you, apply on its website.

• Requirements

  Financial

  • Minimum credit score: 660.

  • Minimum income: No minimum requirement.

  • Typical credit score of approved borrowers or co-signers: 782.

  • Typical income of approved borrowers: Did not disclose.

  • Maximum debt-to-income ratio: 40%, or 25% if a mortgage or rent is not included.

  • Can qualify if you’ve filed for bankruptcy: Yes, after seven years have passed.

  Other

  • Citizenship: Must be a U.S. citizen or permanent resident.

  • DACA borrowers: Not eligible.

  • Location: Available in 49 U.S. states and Washington, D.C.; Maine residents are not eligible.

  • Must be enrolled half-time or more: Yes.

  • Loan can be used for past due tuition: Yes, within 180 days past the loan period end date.

  • Types of schools served: Borrowers must be pursuing a degree at an eligible Title IV school in the United States or Puerto Rico.

  • Percentage of borrowers who have a co-signer: Approximately 82%.

• Repayment options

  In-school repayment options:

  • Immediate repayment: Make full payments as soon as the loan is disbursed, while you’re still in school.

  • Deferred payments: Don’t make any payments while you’re in school.

  • Interest-only repayment: Pay interest every month you’re in school and during the grace period.

  Post-school repayment options

  • Grace period: 6 months.

  • Income-based repayment option: No.

  • Academic deferment: Yes, must be enrolled at least half-time.

  • Military deferment: Yes.

  • Forbearance: Borrowers are eligible for 24 months of forbearance over the life of the loan.

  • Co-signer release: Yes, after the first 24 consecutive monthly principal and interest payments are received on time and the borrower meets credit and underwriting criteria.

  • Death or disability discharge: Yes; the loan will be forgiven if the borrower dies or becomes permanently disabled.

  • Loan discharge if co-signer dies or becomes disabled: No.

  Repayment preferences

  • Allows greater-than-minimum payments via autopay: Yes.

  • Allows biweekly payments via autopay: No.

• Customer service

  • Loan servicer: Aspire Servicing Center, which is an affiliate of ISL.

  • In-house customer service team: Yes.

  • Process for escalating concerns: Yes.

  • Borrowers get assigned a dedicated banker, advisor or representative: No.

  • Average time for approval: About 24-48 hours, once the application is submitted and all required documents are received.

Before applying for an ISL loan

Before taking out an ISL loan or any other private student loan, exhaust your federal student loan options first. Submit the Free Application for Federal Student Aid, known as the FAFSA, to apply.

» MORE: NerdWallet’s FAFSA Guide

Compare your private student loan options to make sure you’re getting the best rate you qualify for. In addition to interest rates, look at lenders’ repayment alternatives and the flexibility they offer to borrowers who struggle to make payments.

If you aren’t eligible for an ISL loan

If ISL denies your student loan application, the lender will let you know why. Depending on the reason, you may want to consider other lenders.

If you don’t have access to a co-signer — or still aren’t eligible with one — consider lenders that don’t require co-signers or specialize in bad or no credit student loans.

STUDENT LOAN RATINGS METHODOLOGY

Our survey of more than 29 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.

We consider 40 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.