About 43 million Americans have student loans, which equaled about $1.62 trillion in outstanding loan amounts as of June 30, 2022. Many were Federal Family Education Loan Program (FFELP) Loans, which were federal loans available through June 2010.

FFEL loan balances have rapidly declined since the PSLF Waiver helped people consolidate FFELP loans into the Direct Loan program.

What are FFELP Loans?

FFEL loans are student loans that were originally made by private lenders but guaranteed by the federal government. Many of these loans were purchased by the U.S. Department of Education during the 2007-08 financial crisis, shortly before the program was discontinued on June 30, 2010.

Private lenders still hold some FFEL loans, while the Department of Education holds others. The three subcategories of FFEL loans are Stafford Loans, FFEL PLUS Loans and FFEL Consolidated Loans.

What’s the difference between FFEL and Direct Loans?

The main difference between FFEL and Direct Loans is that FFEL loans were often made by private lenders and guaranteed by the federal government. Direct Loans are originated and guaranteed by the government.

FFEL loans are not eligible for most income-driven repayment plans or loan forgiveness programs unless you refinance them into a Direct Consolidation Loan. Direct Loans are eligible for the four main types of income-driven repayment plans and the Public Service Loan Forgiveness (PSLF) program.

Are my loans FFEL loans?

If you have student loans that originated before 2010 and have never consolidated or refinanced those loans, there’s a good chance you have FFEL loans.

If you want to know which type of federal student loan you have, log in to the Federal Student Aid website or the National Student Loan Data System using your FSA ID. Your account will say what kind of loans you have.

Are FFELP loans eligible for student loan forgiveness?

If you have FFELP Loans, there are several ways to become eligible for loan forgiveness. Most FFEL borrowers are eligible for the Income-Based Repayment (IBR) Plan, where you pay 10 or 15 percent of your discretionary income for 20 or 25 years before the remaining loan balance is forgiven. The only exception is FFEL loans for parents, which do not qualify for this repayment plan.

Most types of FFEL loans can also be consolidated into a Direct Consolidation Loan. After you consolidate, you may become eligible for additional income-driven repayment plans that offer loan forgiveness after 20 or 25 years of repayment. You can repay a Direct Consolidation Loan using Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) or Income-Contingent Repayment (ICR).

Consolidating your FFEL loans also opens up access to Public Service Loan Forgiveness (PSLF), which forgives your remaining loan balance after 120 payments while working in a public service job.

While student loan forgiveness is largely based on income-based repayments or public service, the federal government plans 12 months between October 1, 2023, to September 30, 2024, where financially vulnerable borrowers are not penalized for missing monthly payments.

The bottom line

Although FFEL loans ended in 2010, you may still have one. FFEL loans can be consolidated into a Direct Loan, which you can do through your FSA account. The main benefit to switching to a Direct Loan is that these have more loan forgiveness protections like income-based repayment or Public Service Loan Forgiveness (PSLF), since they originate and are guaranteed by the federal government.

Frequently asked questions

  • Some FFEL loans are currently held by the U.S. Department of Education, but others are held by private lenders. To find out who holds and services your loans, log in to the Federal Student Aid website using your FSA ID.
  • You can consolidate FFEL loans into a Direct Consolidation Loan to pave the way for more repayment options and forgiveness plans. If you consolidate to enter an income-driven repayment plan, payments made before you consolidated may not count toward the required number of payments for loan forgiveness. That’s why it’s best to consolidate as soon as possible.
  • The only way to change your FFEL loan into a Direct Loan is to consolidate it into a Direct Consolidation Loan. If you want to consolidate your FFEL loans, log onto your FSA account and select which loans you want to consolidate.

    There is no cost to consolidate, and the process usually takes between 30 and 45 days from start to finish.