How to get student loan forgiveness if you have a FFELP Loan

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The Federal Family Education Loan Program (FFELP) was one of the first student loan programs in the country, but it ended July 1, 2010. Because of this, you might run into issues if you have a FFELP Loan and you’re considering student loan forgiveness. Here’s how you can get student loan forgiveness if you have FFELP Loans.

What are FFEL loans?

FFELP was a loan program that allowed private lenders to disburse federal student loans. This is different from the William D. Ford Federal Direct Loan (Direct Loan) Program, where the U.S. Department of Education issues student loans directly to borrowers and has contracts with third-party loan servicers to collect federal student loans.

Even though the program no longer exists, FFEL borrowers are still making payments on their loans.

Do FFEL loans qualify for loan forgiveness?

FFELP was discontinued in 2010, but there are still borrowers who are repaying FFEL loans. If you’re looking for ways to get student loan forgiveness, your FFEL loans will hold you back.

That’s because FFEL loans don’t qualify for forgiveness — only Direct Loans do. If you want to qualify for forgiveness, you can consolidate your FFEL loans into a Direct Consolidation Loan. This moves your loans into the Direct Loan program, giving you all the benefits and securities of Direct Loans. From there, you can sign up for an income-driven repayment plan or Public Service Loan Forgiveness (PSLF), both of which forgive your remaining loan balances after a set repayment period.

While consolidating your loans gets you onto the forgiveness track, keep in mind that you’re starting from scratch. PSLF requires 120 qualifying monthly payments, which means you’ll be making payments for about 10 years before you’re eligible for forgiveness, while income-driven repayment plans can extend that timeline to 20 or 25 years.

Do FFEL loans qualify for coronavirus relief?

For the last year, millions of student loan borrowers have taken advantage of the suspended payments, interest rates and collections on federal student loans. But FFELP borrowers were left behind, leaving them to continue making payments even if they lost their job or couldn’t work through no fault of their own.

However, on March 30, 2021, the Department of Education extended COVID-19 relief measures to FFEL loans in default status. While FFEL loans in good standing are still not eligible, borrowers with defaulted loans can receive a refund for any wages garnished or voluntary payments made since March 13, 2020.

The bottom line

If you have FFELP Loans and are searching for student loan forgiveness, you’ll need to consolidate your loans through a Direct Consolidation Loan. However, think through the decision carefully. Consolidating your loans in order to qualify for a forgiveness program will reset your repayment period, so if you’ve already been making payments for 10 or 20 years, the potential for forgiveness may not be worth it.

For help with student loan repayment, you may instead want to consider refinancing your loans to pay them off sooner, get a lower interest rate or both. You’ll lose access to income-driven repayment plans and federal forbearance options, but you may be able to pay off your loans with fewer added costs.

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Written by
Dori Zinn
Contributing writer
Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy.
Edited by
Student loans editor