| As part of any research when looking at your | | | | billion per calendar year in money to parents and as |
| student loan consolidation information alternatives you | | | | of July 1, 2006 professional and graduate students |
| need to consider the FFELP (Federal Family Education | | | | are also eligible for PLUS loans, providing dollars to |
| Loan Plan). | | | | parents to assist cover expenses they would |
| The FFELP is a Federal Government private lender | | | | frequently pay for anyway, the PLUS program |
| partnership scheme and umbrella program that | | | | commonly forms part of the total financial aid |
| includes both Stafford loans, PLUS loans and Perkins | | | | package today. |
| loans, setup by an Act of Congress in 1965, it began | | | | Chiefly, all the services need a FAFSA (Free |
| operation in 1966 and since this time over half a trillion | | | | Application for Student Aid) application to be filled |
| in money has been disbursed with over $50 billion | | | | out, the data provided forms the core information |
| alone in 2006. | | | | that allows loan officers to make their funding |
| Money for Stafford loans, PLUS loans and other | | | | decision, typically those decision makers are |
| FFELP loans are provided through a large national | | | | employed through the individual college at which the |
| network of credit unions, independent banks and | | | | student is accepted, the financial aid department will |
| other financial institutions, lenders will feel confident | | | | make a suggestion for a package based in part on |
| loaning dollars to what otherwise may be high credit | | | | the EFC (Expected Financial Contribution) of the |
| risks because the money is in the end guaranteed, at | | | | student and his or her parent(s), analyzing income |
| least in theory via the Federal Government, private | | | | they aim to supplement any unmet need with |
| guarantors could possibly get involved, however in | | | | combinations of subsidized and unsubsidized Stafford |
| the almost 5% of cases where the loan goes into | | | | loans and other sources. |
| default, guarantors then apply for funds to cover the | | | | Once the student and/or parent accepts the |
| loss with the Federal Government for at least a | | | | package the money is disbursed, in the main twice |
| partial reimbursement of any lost money. | | | | per year once each semester, ordinarily with the |
| Over 90% of the funds are directed by the two | | | | biggest share of the funds going directly from the |
| types of Stafford loan, unsubsidized & | | | | private lender to the school to pay for tuition and the |
| subsidized, in the second circumstance the Federal | | | | remainder is then provided to the student or parent, |
| government pays the interest on the loan accrued | | | | minus any charges, these fees may range up to 4% |
| whilst the student is in school and for a further six | | | | or more, several schemes will charge a 3% origination |
| months afterwards, unsubsidized loans requires the | | | | fee and a 1% insurance fee, which they assign to |
| borrower to be responsible for any interest, if the | | | | the requirements of the Federal government with |
| interest is deferred as it most often until after the | | | | fees as high as 8% not being unknown, it's important |
| grace period, it is then added to the primary total. | | | | to keep this information in mind when looking at any |
| The other major plan, the PLUS (Parent Loans for | | | | student loan consolidation information. |
| Undergraduate Students) loan plan, supplies over $8 | | | | |