Federal Family Education Loan Program
Federal Family Education Loan Program
Families work hard to make ends meet. This is stretched even further when one family member is attending college. Federally funded programs created by Congress work to develop guaranteed education loans for students and their families. Since 1965, the Federal Family Education Loan Program, or FFEL, has provided low-interest loans to the tune of $567 billion.
Loans that can be administered by the FFELP program include Stafford loans, PLUS loans, and Federal Consolidation loans. These loans give assistance to students and parents to further their student’s education and socioeconomic status. It is part of the Free Application for Federal Student Aid, or FAFSA, and can be combined with other grants and awards to cover the total costs of a college education.
In many cases, there is an amount of money leftover when the financial aid package, the estimated family contribution, and the actual cost of attendance. In particular, the FFELP is geared towards filling that gap for families who would not otherwise be able to send their children to college.
Working together, the financial aid office of the school, the guarantor, and the U.S. Department of Education ensure that the student has their needs met in terms of supplies and expenses. Usually, a third party loan servicer will handle the collection of the loan, and send repayment booklets to the borrower.
The Guarantors of the loans will work with families to navigate the confusing world of student loans. The strict regulations placed on federal student loans can be confusing and overwhelming. The successful programs instituted by the guarantors as a whole have significantly lowered the number of loans transgressing into default status.
The loan servicer, though, may still decide to sell your loan to still another company, and transfer the responsibility for your loan to them as well. Be sure to read all mail associated with loans and repayment. Many loan servicing agencies will use the sale of debt to enable them to purchase higher principle balance loans from more likely-to-pay borrowers. Smaller loans will be dismissed to clear the way for larger ones.
In the case of a late payment, or missing payment, contact the lender immediately to explain. With the explanation of the missing payments, often the loan can stay in good standing on with the credit agencies, and the loan can be kept out of default.
Repayment terms for FFELP loans are as lenient as the federal loan guidelines. Students can be out of school for six months before the payments become due. Explanations of financial hardship can give the lender the opportunity to extend payments, reduce payments, or even forgive some. Take the proactive approach to any money borrowed, and reduce the risk of default on your valuable student loans.