ISL Student Loan Refinance Review

Our Rating: C ⓘ (Compare)

ISL may be best for borrowers who are still in school. ISL is a nonprofit lender that offers many refinancing options, including special rates for medical doctors, residents, and dentists.

*Medical and dental refinance loans are limited to $400,000.
**Lowest rates always include the 0.25% interest reduction for enrolling in auto-pay.

Skip to: Rates & Fees | Eligibility Requirements | Repayment Options | Consumer Reviews & Complaints | FAQ

ISL Refinance Rates & Fees

ISL Education Lending (ISL) has fixed rates for student and parent refinance loans between 6.93% and 11.82%. ISL also offers in-school refinance loans, and medical & dental professional and resident refinance loans (6.63% to 11.02% APR). Lowest rates always include the 0.25% interest reduction for enrolling in auto-pay.

Additional information about ISL refinance rates:

• Checking your rate with ISL will not affect your credit score. They will conduct a soft, not hard, credit inquiry (learn the difference).
• ISL does offer a discount for setting up auto-pay: 0.25% interest rate reduction.
• No variable rates.

ISL refinance rates recent history:

Over a two-year period (2022-2024), ISL increased its lowest and highest available student refinance APRs by an average of 137%.

In 2023, ISL raised its lowest available fixed rate for new loans 75.9% (from 3.94% APR). Its highest fixed rates were 26.8% higher (from 9.33% APR) than they were at the end of 2022.

In 2022, ISL raised its lowest and highest available rates 61.5% and 50.0%, respectively.

Additional Fees

Beyond interest rates, there are a number of fees a refinance lender may charge up-front or during the loan servicing period. Below is a list of these fees that ISL does or does not charge.

1. Application fee – fee to apply for rates & approval.
2. Loan origination fee – fee to create the new loan.
3. Disbursement fee – fee for distributing funds to lenders to pay off loans that have been refinanced.
4. Prepayment penalty – fee for making extra payments to reduce a refinance loan balance or pay it off early.
5. Late payment fee – fee for making a late payment.
6. Returned payment fee – fee for failed payments due to insufficient funds, also known as a “bounced check”.
7. Collection fee – fee for collection activity on a defaulted debt.

Current Promotions & Offers

ISL periodically offers limited time promotions. One current promotion is a $500 cash back bonus offer for medical resident loan refinancing. Check the ISL website before you refinance to take advantage of any new offers.

ISL appears to offer a referral program but does not specify program benefits.

ISL Refinance Eligibility Requirements

To qualify for refinancing with ISL, all borrowers must meet the criteria below.

• Citizenship Requirement: U.S. citizenship or permanent residence.
• Income Requirement: no minimum income disclosed; maximum debt-to-income ratio 40% to 45% (including rent or mortgage payments).
• Credit Score Requirement: 670 minimum TransUnion FICO Score 8; for in-school refinance borrowers, the minimum score is 660.
• Graduation Requirement: none.
• Location Requirement: U.S. residence (including APO and FPO addresses).

Additional restrictions apply for specific individuals and loans.

• Monthly payments for approved credit may not exceed 40% of gross monthly income (if a mortgage or rent is not included, debt-to-income ratio cannot exceed 25%).
• Applicants and/or cosigners with a mortgage who earn a combined income greater than or equal to $100,000 per year must have monthly payments for approved credit that do not exceed 45% of gross monthly income.
• No previous bankruptcies.
• No charge-offs, reposessions, collections, judgments, foreclosures, wage garnishments, or tax liens.
• No defaults on any student loans, federal or private.

ISL Student Loan Repayment Options

Lenders vary greatly on the benefits and options provided to borrowers during the loan servicing period. Additionally, benefits may only be available on a case-by-case basis. ISL offers some relief options.

Deferment & Forbearance

ISL does not explicitly offer any deferment or forbearance options. Instead, ISL refers borrowers to its servicer, Aspire Servicing Center, for assistance; this assistance is unspecified and may or may not include discretionary forbearance or deferment.

Aspire Servicing Center is a for-profit subsidiary of ISL.

Additional Options

ISL may offer other opportunities for relief or contract modification.

• Co-signer release is available after 24 consecutive, qualifying payments.
• Death / disability discharge is available in the unfortunate circumstance that a borrower passes away or suffers total permanent disability.
• If a co-signer dies or is permanently disabled, the borrower will not be required to find another co-signer; in this case, ISL will effectively release the co-signer (or their estate) from his or her obligation.

ISL Reviews, Complaints & Lawsuits

Beyond our own findings, our team also collected the most genuinely insightful customer experiences we could find, including any instances of legal action against the company in which the details became public.

ISL Online Reviews

Below are 3 samples of ISL customer reviews we found on public forums, included here for their value as unsolicited and uncensored user experiences. Note that these reviews are unverified, may include inaccuracies, and may provide outdated information (about rates, bonus offers, etc.). Some reviews have been edited for length or clarity.

“I have 37K in private loans from postbacc that I have regretfully not even looked into refinancing until now. I was approved through ISL with a fixed rate of 4.75% (worlds away from my current 8.5% with Navient). The finance charge is ~8K, which from what I can tell, is a normal part of this process right? Also, I signed on for the quickest repayment plan, which obviously has the highest monthly payments once residency is over. I won’t be able to afford that, but opted for the plan to get the lowest interest rate, with plans to just refinance again before I get to that full repayment period after residency.” – _perestroika on reddit, 11/10/2021

“I was able to go through with a loan refinancing through the company ‘Iowa Student Loan’ and quite literally cut my payments in half. Knocked my interest rates in half as well. For the first time in over 5 years, I can breathe. I’m not going to bed stressed out about how I’m going to pay next month’s bills and therefor was able to get some time to better my mental health, job hunt a bit, and now work for a company that I really enjoy the work I do and, while I still don’t make GREAT pay, pays me enough to live comfortably. Sorry for the run-on sentence there, but I’m just over the moon with joy to type this.” – eccles714 on reddit, 6/5/2020

“I’ve been in school on and off for awhile (stay at home Mom of two young children) and I’ve always dealt with Iowa student loan liquidity. Now all of a sudden I start getting info from [a different, for-profit loan servicer] and my monthly payments almost double. Doesn’t seem right!” – Jenn2182 on ComplaintsBoard.com, 8/22/2012

More (unfiltered) customer reviews of ISL are available at TrustPilot.com (4.7 out of 5).

ISL Consumer Complaints

As consumer finance companies, student loan refinancing lenders fall under the jurisdiction of the Consumer Financial Protection Bureau (CFPB), a federal agency. As part of their mission, the CFPB allows consumers to log official complaints. These complaints are publicly available on the CFPB official website.

Complaints about ISL Education Lending are listed in the database under Iowa Student Loan Liquidity Corporation (ISLLC). Since March 2, 2012, consumers have filed 168 complaints about ISLLC, equivalent to one (1) complaint every 26 ½ days; this is nearly twice as high as the average daily complaint rate among reviewed lenders.

In 2021, ISLLC received 20 complaints, which is equivalent to:

• 59.3% higher than its average annual complaint rate.
• one (1) complaint for every $3.228 million in that year’s corporate revenue.
• one (1) complaint for every 11 employees.

The allegations made in these complaints are unverified, are not necessarily representative of all consumers’ experiences with ISL, and may contain outdated information (about rates, bonus offers, etc.). Note that a lender with a large customer base is likely to also have a higher number of complaints when compared with smaller lenders.

Below we’ve included 3 of the most recent complaints (as of this writing) in which the consumer consented to sharing their details.

Complaint 8675003
4/2/2024
North Carolina

“I put in a change of address prior to moving. My mail carrier returned some of my mail in error ( ( I was told by XXXX ). In the meantime, I was in good standing with Aspire aka Iowa Loan Servicing as an IBR plan was in place good through XX/XX/year>. However, in their attempt to send me correspondence, they not only placed that I could not be found ( they still had my phone number and email address and did not use it to ” find ” me ). From XX/XX/year> and every month up until recently, they put a negative report on file stating I was behind and added an amount over XXXX per account ( XXXX accounts ) stating I was late. I called and spoke to their billing department and the woman stated that she did not say I was late just could not be found and the information could not be removed. This has caused my credit score to drop significantly and now has caused a problem with me obtaining gainful employment. I had a problem with their reporting in the past even though I kept in good standing with them they still falsely reported information about late payments and stated they are in their rights to do so. How can I ever pay them if I am consistently undermined by their tactics with my credit report to find gainful employment to be able to pay them off without enquiring more interest and fees? I XXXX to better my life not to make things worse. Please help me.”

Complaint 8656723
3/29/2024
Georgia

“Aspire XXXX XXXX frequently adjusts the interest rate, to the point that each payment seems to not cover the ever changing rate. Its now almost XXXX XXXX interest. At this point I cant pay off my loans. This has to change, this is an extortionist practice!”

Complaint 8231740
1/26/2024
Iowa

“As provided in the prior response from Aspire/Iowa Student loan ( see below ) they provide various reasons and dates of payments on accounts in reference to statute of limitation. However, as you will see in the attached account statements for each account the information provided by Aspire/Iowa Student Loan is not factual as it relates to the last payment made/date on each of the loans in question. XX/XX/XXXX Loan has a last payment date of XX/XX/XXXX ( had a balance of {$2400.00} ) XX/XX/XXXX Loan has a last payment date of XX/XX/XXXX ( had a balance of {$8000.00} ) XX/XX/XXXX Loan has a last payment date of XX/XX/XXXX ( had a balance of {$9900.00} ) As you can see, in comparison to the inaccurate information provided by Aspire in their XX/XX/XXXX statement- they are not practicing the ” law ” that they reference in their response. They are purposely damaging my credit and putting me in arears with IRS. ISL STATEMENT XX/XX/XXXX Although XXXX XXXX states in her complaint that the three loans were of similar age and account status, the actions taken were in compliance with federal and state practices. The state of Iowa has a statute of limitations on a written contract of 10 years. The last payments that satisfied a minimum monthly payment for loan sequence 2 ( disbursed XX/XX/XXXX ) and loan sequence 3 ( disbursed XX/XX/XXXX ) were received on XX/XX/XXXX. The statute of limitations for these two loans expired in XXXX. The last payment that satisfied a minimum monthly payment for loan sequence 1 ( disbursed XX/XX/XXXX ) was made on XX/XX/XXXX, extending the statute of limitations for that loan into XXXX. In XXXX, loan sequences 2 and 3 were written off due to being out of statute. At that time, the IRS required a 1099-C be issued. The 1099-C was provided to both XXXX XXXX and the IRS. Before the statute of limitations expired for loan sequence 1 in XXXX, the defaulted loan was turned over to a law firm for collection. Loan sequence 1 was subsequently charged off on XX/XX/XXXX, as part of a settlement between XXXX XXXX, the law firm and the loan owner.”

For a full list of complaints made against ISL in the CFPB’s Consumer Complaint Database, click here.

ISL Lawsuits

Iowa Student Loan Liquidity Corporation (ISLLC), ISL’s parent company, is currently subject to civil action alleging “Violation of Due Process and Equal Protection”. In 2023-2024, Iowa Legal Aid filed lawsuits on behalf of ISL customers in two Iowa district courts.^[1][2][3][4]

As of April 2024, Iowa courts are in the process of consolidating these four (4) separate lawsuits into one class action.^[5]

ISLLC was heavily criticized for its own legal action in the early days of the COVID-19 pandemic when ISLLC initiated over a dozen lawsuits against indebted student borrowers. By early April, ISLLC agreed to cease new lawsuits and “retroactively dismiss any suits filed after the declaration was issued.”^[6]

Previously, ISL has faced charges from the U.S. Department of Education (for which the lender was required to pay $2.4 million) and 31 complaints to the Iowa Consumer Protection Division of the attorney general’s office.^[7][8]

Note that while this information is updated regularly, ongoing legal action is subject to change.

Frequently Asked Questions

These are the most common questions consumers have about student loan refinancing with ISL.

• Is ISL good for refinancing student loans?
  ISL may be a good option for borrowers who are still in school or who have not earned a bachelor’s degree.

• Does ISL have a minimum credit score requirement to refinance student loans?
  Yes, ISL discloses a 670 minimum credit score to qualify for student loan refinancing.

• Are ISL loans federal?
  No, ISL loans are not federal. ISL has no affiliation with the federal government or the U.S. Department of Education.

• Does ISL charge a prepayment penalty?
  No, ISL charges no penalties for early payments or repaying a loan in full before its term is over.

• Does checking your rates with ISL hurt your credit score?
  For its prequalification process, ISL performs a soft credit check, which will not hurt your credit score. If you proceed with an application, however, ISL will perform a hard credit check that may affect your credit score.

• Is ISL a bank?
  No, ISL is not a bank nor is it affiliated with any bank.

• Can I refinance a ISL loan?
  You can refinance ISL student loans, student loans from another private lender, and federal loans. There is no limit to the number of times a borrower may refinance with ISL. Note, however, that every new line of credit requires a hard credit check that may affect your FICO score.

• Can I refinance just some of my loans with ISL?
  Yes, you can refinance some, all, or just one of your qualifying student loans with ISL. You may choose to refinance your private loans only or refinance private and federal loans together.

• Can I refinance loans that have already been refinanced?
  Yes, you can refinance loans as many times as you want with ISL. Note that each time you refinance, you will have to submit a new application; every application requires a hard credit check that may affect your credit score.

• Can my spouse and I refinance our loans together with ISL?
  ISL does not refinance loans with more than one borrower. A spouse may act as a co-signer, however.

• How long does it take to refinance with ISL?
  ISL does not specify a timeline.

• Who services ISL refinance loans?
  ISL refinance loans are serviced by ISL’s for-profit subsidiary Aspire Servicing Center.

• Does ISL offer a grace period?
  No, ISL does not offer a grace period with its student loan refinancing.

• Can I get any special rates or discounts with ISL?
  Yes, ISL offers a 0.25% interest rate reduction with enrollment in automatic payments. They also offer special rates to military (active duty and veterans), medical doctors, and dentists.

• What happens if I file for bankruptcy?
  Filing for bankruptcy will not discharge your ISL refinance loan.

• Does ISL partner with any major student refinance lender marketplaces?
  Sparrow advertises ISL as a featured student loan refinance lender.

Compare Student Loan Refinance Reviews

Sources

1. PacerMonitor, McDonald v. Iowa Student Loan Liquidity Corporation (ISLLC)
2. PacerMonitor, Gibson v. ISLLC
3. PacerMonitor, Mason v. ISLLC
4. Justia, Dockets & Filings: Zambrano c. ISLLC
5. United States Judicial Panel on Multidistrict Litigation, Case MDL No. 3112
6. Washington Post, Higher Education: As Americans faced layoffs and lost wages, student loan companies kept going to court to collect
7. Des Moines Register, Reader’s Watchdog: Reader Feels Trapped by Nonprofit Student Loan Firm
8. Career College Central, Sweeping the Student Loan Scandal Under the Rug
9. ISL Education Loans (ISL), Student Loan Refinance
10. ISL, Request Information About the Referral Program