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To find out what type of federal government loan you have, visit the National Student Loan Data System (NSLDS). You can also click here to help you tell the difference between government and private loans.
What’s the difference between the two federal loan programs (FFEL and Direct)?
William D. Ford Direct loans are made directly from the Department of Education to students, without the involvement of a private lender. Prior to July 2010, there was also a federal Family Education Loan Program (FFEL), also known as the guaranteed loan program. These loans were made by private lenders and guaranteed by the government. Many of the terms and conditions for the FFEL and Direct loan programs are the same. However there are some differences in repayment options. There are still many FFEL loans in the system, but as of July 2010, no new FFEL loans will be made. More info.
Now that there is no longer a FFEL program, what should I do if I previously had a FFEL loan and need to get a new federal loan?
You will need to complete a new promissory note to receive loans under the Direct Loan Program. You should check with the financial aid office at your school for specific instructions.
What’s the difference between federal and private loans?
Federal loans, whether through a bank/private lender or the Department of Education, are funded and tightly regulated by the federal government. Private loans are not subsidized by the government, and therefore are not regulated as closely. Borrowers should generally maximize their federal loan options before resorting to private loans. Learn more.
Why are private loans more expensive than federal?
Banks and lenders – not Congress – set the interest rates, loan limits, terms, and conditions of private loans. They usually carry higher, variable interest rates, and lack the flexible repayment options of federal loans. More info.
Who is eligible to take out federal student loans?
Anyone who is enrolled in a degree, certificate, or other approved program at an eligible school and is a U.S. citizen or eligible non-citizen. In addition, borrowers must have a high school diploma, pass a test approved by the Department of Education or otherwise meet “ability to benefit” criteria. There is also a rule that students convicted under federal or state laws of sale or possession of illegal drugs cannot get federal student aid in certain cases. More info.
Guaranty agencies are state or private nonprofit agencies that administer the federal guaranteed loan program. The agencies insure federal student loans against default and pay off lenders when borrowers default. They also try to collect from borrowers. Guaranty agencies will still be around for a while even though the FFEL program was eliminated as of June 30, 2010. The agencies are still servicing and collecting on their existing FFEL loans.
What are the terms and conditions of Stafford loans?
Click here.
What are the terms and conditions of Perkins loans?
Click here.
What are the terms and conditions of PLUS loans?
Click here.
What are the terms and conditions of HEAL loans?
Click here.
Do I need good credit to borrow a student loan?
Except for PLUS loans, the government will not look at your credit in deciding whether you are eligible for a loan. Private loans are a different story—the interest rate you get will depend on your credit score. More info.
How do I know if I should consolidate?
Consolidation is used to reduce and simplify monthly payments by rolling multiple loans into one. However, it can also lengthen the period of repayment and therefore increase the total amount you will pay in interest over the life of the loan. Learn more about the pros and cons of consolidation.
Can I consolidate with the government more than once?
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