What are the primary differences between the Federal Direct Loan Program and the Federal Family Education Loan Program (FFELP)?
The primary difference is the source of the loan funding. Direct Loans come straight from the U.S. Department of Education using funds obtained from the U.S. Treasury. This program offers students one single source of contact since the loans are made, guaranteed and serviced by the U.S. Department of Education. In the Federal Family Education Loan Program (FFELP), the lender, guarantor, and servicer can involve any combination of banks and agencies across the country. It is often the case that the student’s lender will sell their loan to another lender or loan servicer. This can add complexity for students, especially in the event an error or problem in the processing of their loans should occur. The student and the school must first find out who is processing and servicing the loan to even begin to solve a problem. Under the Federal Direct Loan Program, there is a single point of contact for students and their school to turn to with any problems that might arise.
Related Questions
- What are the primary differences between the Federal Direct Loan Program and the Federal Family Education Loan Program (FFELP)?
- What are the differences between the Direct Loan Program and the Federal Family Education Loan Program (FFELP)?
- What are the primary differences between Direct Loans and the Federal Family Education Loan Program (FFELP)?
