What are Federal Family Education Loans?

Federal family education loans are available through a government-backed loan program commonly known as FFEL. Both students and parents have borrowing options.

Loans Available Through FFEL

Four different federal family education loans are available from three government programs. Subsidized and unsubsidized Stafford Loans are for students. PLUS loans are for parents of qualifying dependent students and require only that the parent have no adverse credit history or the ability to have a credit-worthy cosigner. Consolidation loans allow a student who has graduated or is no longer in school to have a single loan that pays off multiple student loans often at a lower monthly payment.

Benefits of Federal Family Loans

Federal family education loans provide flexible, competitive alternatives to private loans for financing undergraduate, graduate and vocational education.

Interest rates are set by the government and often are below market rates. Qualification requirements are less stringent because the loan, even though offered through private lenders, is government-backed. Application is through the online Free Application for Federal Student Aid, of FAFSA, system.

In the subsidized Stafford Loan, you have a six-month grace period after leaving school to begin repayment. During that time you owe neither interest nor principal. In the unsubsidized Stafford Loan program you owe interest only during the grace period.

If necessary, related to a number of potential hardships, lenders have the flexibility to negotiate repayment schedules as well.



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