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What are the differences between the Direct Loan program and the Federal Family Education Loan (FFEL) program?

April 26, 2017differences Education family Federal FFEL loan program

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What are the differences between the Direct Loan program and the Federal Family Education Loan (FFEL) program?

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The most important difference between Direct Loans and the FFEL program is the source of loan funds. While FFEL loans are funded by private lenders, the federal government provides the funds for Direct Loans. Other than the source of funds, the two programs are very similar, with a few minor differences in interest rates, fees and repayment options.