Federal family education loan (FFEL)

"Federal family education loan (FFEL)" submitted by SchoolGrantsfor Editorial Team and last updated on Thursday 26th May 2011

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Federal education loans are available through the William D. Ford Federal Direct Loan Program (“Direct Loans”). Stafford, PLUS and Graduate PLUS loans are part of the Federal Family Education Loan FFEL program. The advantage of federal aid is that the government pays the interest on selected loans while the student is in school. Students don’t have to make payments until they leave school or drop below half-time status. The Federal Family Education Loan Program (FFELP) was formerly known as the Guaranteed Student Loan (GSL) Program. Funds for these programs are provided by private lenders and the loans are guaranteed by the federal government. Former Senator

Robert Stafford of Vermont is the namesake of these programs.

The FFEL Program includes the Federal Stafford Loan (Subsidized and Unsubsidized), the Federal Perkins Loan, the Parent Loan for Undergraduate Students (PLUS), and the Consolidation Loan Program. The funds for these loans are provided by private lenders (such as banks, credit unions and savings & loan associations), guaranteed by guaranty agencies, and reinsured (in other words, guaranteed against default) by the federal government.

Financial aid packages might be offered at several different types of institutions. It was assumed that each of these colleges and universities participates in the Direct Loan program. If these institutions participate in the Federal Family Education Loan (FFEL) program, the amounts provided for Direct Subsidized, Direct Unsubsidized, and Direct PLUS loans would be the same, but the names of the programs would change to federal Stafford Subsidized Loan, Stafford Unsubsidized Loan, and PLUS Loan.

Who in the Federal Family Education Loan Program (FFELP) Loan Process

Exchanging the right information with the right people is vital to a successful loan repayment experience and the start of a healthy credit record. A key to your financial success is keeping your lender or loan servicer updated on any changes in your contact information—if you move, transfer to a new school or change your phone number, contact your lender immediately.


The financial aid administrator is your on-campus source for information on student loans and other forms of financial help. This individual’s primary role is to guide students and parents through the financial aid process by affording guidance and assistance. More details: Financial aid administrator (FAA)


The federal government provides guidelines for the Federal Family Education Loan Program (FFELP), which is overseen by the U.S. Department of Education. Whether you (or your parents) receive a Direct or FFEL loan depends on which program the school you attend participates in. Most schools participate in one or the other, although some schools participate in both. Congress is considering a proposal that would eliminate the FFEL Program, beginning with the 2010–11 school year, and would have Stafford, PLUS and consolidation loans funded from the Direct Loan Program. For up-to-date information, please visit www.FederalStudentAid.ed.gov.


Credit bureaus maintain your credit history, which reflects how well you repay your student loans, credit cards, car loans or any other credit you may have. Based on your performance, credit bureaus give you a score that provides future creditors with information on whether or not you are considered a credit risk. Your credit history plays a big part in your future, because it is checked whenever you want to rent an apartment, buy a vehicle or apply for certain types of employment. Failure to pay back your student loan promptly can result in a poor credit rating. More details: Free Credit Report and Credit Reporting Agencies


An ombudsman resolves disputes from a neutral or impartial viewpoint, and can be beneficial if you cannot resolve a student loan problem by employing standard procedures. The Ombudsman’s office toll-free phone number is 877.557.2575; its Web site is: www.ombudsman.ed.gov.

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