Established in 1964, a Family Federal Education Loan (FFEL) was one of the first federal student loan programs in the U.S. It’s different than today’s Direct loans, as it allows private lenders to disburse the loans, rather than the Department of Education disbursing the loans directly.
How do you know if you have an FFEL Loan?
The FFEL loan programs were discontinued in 2010, though there are still borrowers who are paying on their loans today. Many of the programs set up for loan forgiveness and other programs, unfortunately, do not include borrowers who have the FFEL loan. Which puts many of these borrowers at a disadvantage.
To check if you have an FFEL loan, you’ll want to access your student loan records via your dashboard at StudentAid.gov. You can choose “Download My Aid Data” to access how your loan was distributed.
What are the biggest differences between FFEL and Direct loans?
For years, Direct and FFEL loans were distributed side by side with very few differences between them, other than the lending process itself.
However, with more student loan assistance programs being available, FFEL is oftentimes left out of them, These assistance programs include Public Service Loan Forgiveness, Borrower Defense to Repayment, and income-driven repayment programs.
Many borrowers may now be able to take steps to become eligible for these programs by consolidating their federal student loans. You should talk with a financial aid expert to determine what your best course of action is if you are currently paying on a FFEL loan.
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