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Whats the difference between Direct Stafford Loans and FFELP Stafford Loans?

April 26, 2017difference FFELP Loans Stafford

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Whats the difference between Direct Stafford Loans and FFELP Stafford Loans?

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The federal government backs all Stafford loans, and they all have identical requirements and guidelines for approval. Whether a Stafford loan is classified as a Direct Loan or a FFELP Loan depends solely on the lender. For Direct Loans, borrowers receive their funds directly from the federal government. FFELP Loans require the use of a third-party lender (a bank or a credit union, for example) to disburse the funds. The main difference that separates these two types of Stafford loans comes in considering the method of repayment of student loans. Each offers a specific advantage, depending on your goals for consolidation and repayment. To learn more about these advantages, please visit our section discussing student loan consolidation and repayment.