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What are FFELP student loans?

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Federal Family Education Loan Program (FFELP) Loans are federal student loans that were available through June 2010. These loans were originally funded by private companies, but most are currently owned by the U.S. Department of Education. In 2010, FFELP was replaced by the Direct Loan program that is still in use today.

While new loans are no longer being issued through the FFEL Program, many borrowers still have outstanding FFEL loans. Here’s what to know if you’re one of those borrowers.

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FFEL loans are student loans that were originally made by private lenders but guaranteed by the federal government.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.

Some FFEL loans are still held by private lenders, while others are held by the Department of Education. 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, while Direct Loans are both 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, as well as the Public Service Loan Forgiveness (PSLF) program.

Are my loans FFEL Loans?

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

How has the coronavirus affected FFEL loans?

When the COVID-19 pandemic began, the federal government took steps to help borrowers avoid defaulting on their student loans. This included a temporary interest rate of 0 percent on most federal student loans, as well as a payment pause. This special forbearance plan has been extended multiple times and is currently in place through Aug. 31, 2022.

Originally this relief applied only to Direct Loans. However, the U.S. Department of Education later extended relief to an estimated 1.4 million borrowers with FFEL loans that are in default. The move also suspended any collections activities on those defaulted loans and made relief retroactive to March 13, 2020.

However, if your FFEL loans are in good standing, you don’t qualify for the payment pause or temporary interest rate reduction.

How to get FFELP 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. Thanks to a temporary waiver, if you consolidate your loans and apply for PSLF before Oct. 31, 2022, any payments you made on your FFEL loans before consolidating (while working for an eligible employer) can be counted toward that 120-payment requirement.

FAQ about FFELP Loans

Are FFEL loans federal or private?

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.

Can I consolidate FFEL loans?

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.

Can I change my FFEL loan to a Direct Loan?

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.

Are FFEL loans covered by the CARES Act?

COVID-19 student loan relief applies to federally owned student loans, which can include FFEL loans. However, commercially held FFEL loans are not eligible for the 0 percent APR or payment pause unless they are currently in default.

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Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more.
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Student loans editor