Published November 2011. Financial aid and student loan rules change often, so some details may be out of date. Ask us about your situation.
The following are the two recent Federal Student and Parent Loan programs available to college students and parents of college students to help pay for college prior to July, 1, 2010. Both programs offered borrowers the same Student Loan interest rates (Parent loan interest rates were different) and loan limits and over time a borrower could have borrowed under FFELP or FDLP and possibly borrowed under BOTH programs.
FFELP – Federal Family Education Loan Program which allowed many banks and other private lending institutions to provide the Federal Student and Parent Loans.
FDLP-Federal Direct Loan Program allows the Federal Government to provide the Federal Student and Parent Loans.
ALL new borrowers after July 1, 2010, borrow directly from the Federal Government under the FDLP. Banks and other private lending institutions no longer provide the “guaranteed” Federal Student and Parent loans.
What this means to borrowers entering repayment of their student loans is at the very least, the borrower must know what type of loan(s) they have and under which program they borrowed.
Borrowers can find their Federal Loan information summary at www.nslds.ed.gov.
Once borrowers know their respective Federal Loan information, they should investigate possible deferment or forbearance options and most importantly must select a repayment option. There are a number of different federal student/parent loan repayment options available and the borrower should select the most cost-effective solution.
Within the repayment options are Loan Forgiveness programs which can be realized for certain select occupations, volunteer activities and military employment. These Loan Forgiveness programs have specific eligibility criteria and defined time lines that must be completed to receive some portions or in some cases all of the respective Federal Loans to be forgiven.
The complexity and flexibility of the Federal Student Loan Repayment programs is at a minimum confusing to borrowers and to many borrowers overwhelming when you factor in the current economic situation and the fact that student loan debt has now exceeded credit card debt in America! Let College Financing group’s team of experts guide you and devise the best repayment option for you and your budget.