Iowa Student Loan, a nonprofit group that helps students obtain loans for college, will soon stop offering private loans.

“This is really in reaction to the economy’s recent situation, the subprime market in particular,” said Jack Wilkie, media spokesperson for Iowa Student Loan.

Private loans, Wilkie said, are typically a last resort for families that need more money after all other funding options with more favorable terms, such as grants, scholarships and personal savings, have been exhausted. Even with this last-resort role, private loans constitute a sizable amount of loans distributed.

“In the 2007 fiscal year, we gave about 81,000 consolidated loans and around 29,000 private loans,” Wilkie said. “About one-third of the loans that year were private.”

In response to the market, the organization is assembling a group of lenders to help fund both federally guaranteed and private student loans for the upcoming academic year.

“We have a group of more than 70 lenders for federally guaranteed loans,” Wilkie said. “We’re confident we will meet demands for the estimated 60 to 70 thousand students who will need them this fall.”

Iowa Student Loan is not as confident, however, about private loans, and will only continue to take applications until April 30. After that, their availability depends on how much commitment is given by outside lenders.

“We’re really happy that we got the federal loans taken care of, honestly,” Wilkie said. “The support we’ve been receiving from banks and credit unions has been phenomenal.”

Chad Olson, program coordinator of the ISU Office of Student Financial Aid, said the university knew a move like this was coming and took steps to help students.

“At the time that Iowa Student Loans announced this, we had organized a few private lenders that students could turn to,” he said. “We were concerned about the obtainability of a loan, so we have a Web site that will help students that need a private loan.”

The site, www.financialaid.iastate.edu/Loans/FundingIssues.php, contains a list of private lenders students have used in the past and a comparison the features different lenders offer, such as when loan repayment begins, the annual loan limit and whether a co-signer is needed.

Olson wanted to reassure students who may be apprehensive about the status of their federal loans.

“Some students might think that this will affect their Stafford loan, and that is not the case,” Olson said. “Everyone qualifies for a federal loan.”

Wilkie said that, if Iowa Student Loan can get the same level of support for private loans it has for federal loans, then maybe it can keep distributing them. Otherwise, students will have to go elsewhere.