3 Key Takeaways for Iowa College Funding
- Start with Federal Aid First: Complete your FAFSA to access federal grants and loans with better terms and protections than private options—Iowa students can borrow $5,500-$12,500 annually in federal Direct Loans depending on their year in school.
- Consider Community College Transfer Strategy: Save thousands by completing general education requirements at Iowa Lakes Community College or North Iowa Area Community College before transferring to a four-year university—reducing total borrowing by 30-50%.
- Choose the Right Private Lender: If additional funding is needed beyond federal aid, CENT Credit Union partners with ISL Education Lending (iowastudentloan.org) for competitive rates and Iowa-focused service rather than high-fee national lenders.
As August arrives and students head to (or back to) campus, it becomes time to map out a plan to tackle the crucial question: How do we pay for college? With tuition costs continuing to rise, understanding your student loan options has never been more important.
At CENT Credit Union, we’re committed to helping our members navigate major financial decisions, including education funding. While we don’t directly offer student loans, we partner with trusted organizations to ensure our members have access to the best educational financing options available. This comprehensive guide will help you understand the student loan landscape and make informed decisions about funding your family’s educational goals.
The Reality of College Costs in Iowa
Before diving into loan options, it’s important to understand the current cost of higher education in Iowa. According to recent data, the average annual cost of attendance varies significantly depending on the type of institution:
Public Four-Year Universities (In-State Tuition)
- University of Iowa, Iowa State University, and University of Northern Iowa: Approximately $20,000 depending on a variety of factors including cost of tuition, fees, food and housing, and transportation
Community Colleges
- Iowa Lakes Community College (Emmetsburg), North Iowa Area Community College (Mason City), and Western Tech Community College (Le Mars): Calculated by credit, so the final cost will vary, but an estimate of $5,000-$8,000 is appropriate
Private Colleges and Universities
- Buena Vista University (Storm Lake), Morningside University (Sioux City), Waldorf University (Forest City): Approximately $45,000-$50,000 annually
For many Iowa families, these costs represent a significant financial commitment that requires careful planning and often, student loan assistance.
Understanding Federal Student Loans: Your First Stop
Federal student loans should be your first consideration when exploring education financing. These loans offer protections and benefits that private loans typically don’t provide.
Federal Direct Subsidized Loans
Available to undergraduate students with demonstrated financial need, these loans offer several advantages:
- The government pays the interest while you’re in school at least half-time
- Current interest rates are fixed and typically lower than private loan rates
- No credit check required for students
- Annual borrowing limits based on your year in school and dependency status
Federal Direct Unsubsidized Loans
These loans are available to both undergraduate and graduate students regardless of financial need:
- Interest accrues from the time the loan is disbursed
- Higher borrowing limits than subsidized loans
- No credit check required for students
- Fixed interest rates set annually by the federal government
Federal Direct PLUS Loans
These loans are available to parents of undergraduate students and graduate students:
- Can borrow up to the full cost of attendance minus other financial aid
- Requires a credit check
- Higher interest rates than student Direct Loans
- Immediate repayment required unless you request deferment
When Federal Loans Aren’t Enough: Private Student Loan Options
Despite federal loan availability, many families find they need additional funding to cover the full cost of college attendance. This is where private student loans come into play, and it’s where CENT Credit Union’s partnership becomes valuable.
ISL Education Lending: CENT’s Trusted Partner
Rather than offering student loans directly, CENT Credit Union refers our members to ISL Education Lending (iowastudentloan.org), Iowa’s trusted source for education financing. This partnership ensures our members have access to competitive rates and Iowa-focused service while maintaining the personalized guidance they expect from CENT.
Why We Choose ISL Education Lending:
- Iowa-Based: Understanding of local colleges, universities, and community needs
- Competitive Rates: Often better than national lenders
- Flexible Options: Students and parents borrowing on behalf of a student can apply
Smart Borrowing Strategies for Iowa Families
Start with Free Money First.
Before considering any loans, exhaust all grant and scholarship opportunities:
Iowa State Grants and Scholarships:
- Iowa Tuition Grant (for private colleges)
- All Iowa Opportunity Scholarship
- Iowa National Guard Educational Assistance Program
- Iowa Vocational Rehabilitation Services grants
Institutional Aid:
- Merit-based scholarships from individual schools
- Need-based grants from colleges and universities
- Work-study programs that provide income while attending school
Community Scholarships: Many northern Iowa communities, businesses, and organizations offer local scholarships. Check with:
- High school guidance counselors
- Local civic organizations (Rotary, Lions Club, etc.)
- Chamber of Commerce scholarship programs
- Agriculture-related scholarships for rural students
CENT Credit Union Scholarships: CENT distributes thousands in scholarships to its high school senior members who apply. Watch for the next round of scholarships to be announced in the spring.
Calculate Your Real Need
Before borrowing, create a realistic budget that includes:
- Tuition and mandatory fees
- Room and board (or living expenses if commuting)
- Books and supplies
- Transportation costs
- Personal expenses
Many families overestimate college costs or fail to account for money-saving strategies like living at home, attending community college first, or working part-time.
Consider the Community College Advantage
Iowa’s community college system offers an excellent way to reduce overall education costs:
Transfer Strategy Benefits:
- Complete general education requirements at a fraction of four-year costs
- Community colleges often offer seamless transfer agreements and excellent pre-professional programs
- Many students can complete two years of coursework for less than one year at a four-year university
Popular Transfer Programs:
- Liberal Arts transfer degrees
- Business administration prerequisites
- Pre-nursing and health sciences
- Engineering and technology foundations
The Application Process: Step-by-Step Guide
Step 1: Complete the FAFSA
The Free Application for Federal Student Aid (FAFSA) is required for all federal aid and many institutional scholarships:
- Available October 1st for the following academic year
- Use the IRS Data Retrieval Tool for accurate tax information
- List Iowa schools in order of preference
- Submit as early as possible for maximum aid consideration
Step 2: Review Your Student Aid Report (SAR)
After submitting the FAFSA, you’ll receive a SAR showing:
- Expected Family Contribution (EFC)
- Eligibility for federal grants and loans
- Any corrections needed to your application
Step 3: Compare Financial Aid Offers
Once colleges provide aid packages, compare them carefully:
- Look at total out-of-pocket costs, not just tuition
- Understand the difference between grants and loans
- Consider the long-term debt implications of your choices
Step 4: Apply for Private Loans if Needed
If federal aid, scholarships, and the college’s financial aid package don’t cover all costs, contact ISL Education Lending through iowastudentloan.org.
Smart Repayment Strategies
Understanding Grace Periods
Most student loans offer a grace period after graduation:
- Federal Direct Loans: 6-month grace period
- Private loans: Varies by lender
- Use this time to secure employment and create a repayment budget
Federal Loan Repayment Options
Federal loans offer multiple repayment plans:
- Standard Repayment: Fixed payments over 10 years
- Graduated Repayment: Lower initial payments that increase over time
- Income-Driven Plans: Payments based on income and family size
- Public Service Loan Forgiveness: For qualifying public service employment
Red Flags to Avoid
Predatory Lending Practices
Be wary of lenders that:
- Guarantee approval regardless of credit
- Charge high upfront fees
- Offer rates that seem too good to be true
- Pressure you to borrow more than you need
- Have poor customer service reviews
Overborrowing
Many students borrow more than necessary. Avoid:
- Using student loans for non-educational expenses
- Borrowing without understanding repayment implications
- Choosing expensive schools without considering return on investment
- Ignoring less expensive alternatives
CENT Credit Union’s Role in Your Education Funding Journey
While we don’t offer student loans directly, CENT Credit Union provides valuable support for families navigating education financing:
Accounts that Help You Plan for the Expected
CENT offers products that support your education funding goals:
- High-yield savings accounts for college savings
- Certificates of deposit for longer-term education planning
- Personal loans for educational expenses not covered by student loans
- Checking accounts with student-friendly features
Education financing doesn’t end at graduation. We’re here to help with:
- Loan consolidation advice
- Refinancing considerations
- Post-graduation financial planning
- Building credit during and after college
Making the Right Choice for Your Family
Choosing how to fund a college education is one of the most significant financial decisions many families make. The key is to approach it strategically, understanding all your options and their long-term implications.
Questions to Ask Yourself:
- Have we maximized all grant and scholarship opportunities?
- Are we borrowing only what we need for educational expenses?
- Do we understand the total cost of repayment over the life of the loan?
- Have we considered all school options, including community college transfers?
- Are we comfortable with the monthly payment obligations after graduation?
Taking the Next Steps
- Complete or update your FAFSA if you haven’t already
- Contact ISL Education Lending at iowastudentloan.org if you need private loan funding
- Review and accept your financial aid packages from schools
- Apply for any remaining scholarship opportunities
- Finalize all loan paperwork and understand disbursement schedules
- Complete entrance counseling required for federal loans
- Set up loan servicer accounts for future communication
- Create a budget for managing money during the school year
Long-term Planning
- Track your total borrowing across all years of school
- Explore internships and work opportunities that could reduce future borrowing needs
- Stay informed about repayment options and loan forgiveness programs
- Consider meeting with CENT’s team to discuss post-graduation financial goals
Your Education Investment Deserves Expert Guidance
Funding a college education is an investment in your family’s future, and like any major investment, it deserves careful consideration and expert guidance. While the process can seem overwhelming, you don’t have to navigate it alone.
At CENT Credit Union, we’re committed to helping our northern Iowa members make informed financial decisions. Visit any of our locations to discuss your education funding strategy, or contact us to learn more about how we can support your family’s educational goals. For student loan applications and information, visit our website at this link: https://www.centcu.org/student/
Remember, the education investment you make today will impact your family for years to come. Take the time to understand your options, borrow responsibly, and plan for successful repayment. Your future self will thank you for the careful consideration you put into this important decision.
CENT Credit Union is dedicated to empowering our North and Northwest Iowa members with financial know-how. For more tips and resources, check out our Making CENTs blog (https://www.centcu.org/making-cents-blog) or chat with our team at any of our locations.
CENT Credit Union is Federally Insured by NCUA. NMLS# 409396. Equal Housing Lender.