| > | | | | as many of the views expressed are based more on |
| Although there are a variety of government student | | | | personal taste than objective criteria, but reading the |
| loans programs available today one important | | | | posts will quickly show you which side the poster |
| consideration which we examine here is whether or | | | | favors.There are however some more concrete |
| not you should take a FFELP loan or a direct loan. | | | | differences between the two types of loan. For |
| The Direct student loan program started | | | | example, because FFELP loans are both funded and |
| approximately 15 years ago and was intended to cut | | | | serviced by private financial institutions the |
| out the middle man so that, instead of involving | | | | organization with which you sign a promissory note |
| banks, credit unions and other private lenders, the | | | | might not be the organization to which you make |
| Federal government loans the money directly to | | | | repayments. It is a common practice these days for |
| students and parents.Direct loan programs overlap | | | | lenders to 'sell' loans on to other companies in much |
| the alternative which is called the FFELP, or Federal | | | | the same as most mortgage companies do.This is an |
| Family Education Loan Program, which is a program | | | | important consideration because you might have |
| designed to work through a network of private | | | | gone to the trouble of finding a lender you like, |
| lenders. Since direct loan programs duplicate in many | | | | choosing beyond simply the interest rate on the loan |
| ways the FFEL programs, it is important to decide | | | | and repayment terms and preferring their customer |
| which program you want. Both programs offer both | | | | service, only to find that your loan is sold on and you |
| Stafford and PLUS loans.The criteria for eligibility on | | | | are dealing with a company which you had previously |
| both programs is the same and they follow identical | | | | rejected. In the case of direct loans however, |
| need based guidelines, or have identical credit check | | | | because loans are not sold on by the Federal |
| requirements as those for non need based programs. | | | | government, this problem does not arise.Perhaps the |
| Since both programs essentially provide the same | | | | most important difference for the majority of |
| loan funding this raises the natural question of how to | | | | lenders however will be the difference in rates, |
| choose between them.To some degree the decision | | | | repayment terms and fees between the two. Here |
| involves choosing which of two providers you will | | | | you need to remember that while the interest rates |
| have to deal with. For example, although both will | | | | on Stafford and PLUS loans are officially fixed private |
| provide customer service personnel to answer any | | | | lenders do enjoy some flexibility in other areas.They |
| questions, in some cases you may find that private | | | | might or might not for example charge both |
| lenders will be more helpful and flexible while the | | | | origination and insurance fees, which are currently |
| government will be indifferent or more bureaucratic. | | | | assessed at 3% and 1%, according to Federal rules. |
| This will not always be the case of course and | | | | Though these charges will still be applied to your loan, |
| sometimes you will find that just the opposite is | | | | a private lender might agree to absorb these in order |
| true.One of the best ways to get a feel for the | | | | to get your business. They might as an example |
| service you are likely to receive from different | | | | choose to alter the dates on which interest charges |
| lenders is to read some of the Internet forums | | | | are calculated or to either extend a grace period or |
| dealing with the subject of student loans. Also with | | | | increase your repayment period.At the end of the |
| the tremendous growth of social networks in recent | | | | day the only way to discover just what is available is |
| years it has become much easier to find a diverse | | | | to shop around in much the same way as you would |
| set of opinions. Of course you do have to be careful | | | | if you were looking for any other kind of loan. |