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What is the difference between the Direct Loan (DL) Program and the Federal Family Education Loan Program (FFELP)?

April 26, 2017difference DL Education family Federal FFELP loan program

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What is the difference between the Direct Loan (DL) Program and the Federal Family Education Loan Program (FFELP)?

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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 FFEL Program, the lender, guarantor, and servicer can involve multiple points of contact for students. It is often the case that students’ lenders will sell their loans to other lenders or loan servicers. This can add complexity for students, especially in the event of an error or problem, in the processing of their loans. Under the Direct Loan Program, there is a single point of contact for students and their school to turn to with any problems that might arise.