Monday, January 9, 2012

What if I have a FFELP loan?

As part of the massive healthcare bill, the government discontinued funding for FFELP loans. Many of these loans were sold (at least once, and sometimes twice) from the original lender to a new servicer. These loans went into the Direct Loan program and are referred to as PUT loans. With these loans, there was mass confusion because of the breakdown of communication between the government and the borrower, as well as the fact that not all loans from a borrower became PUT loans.

If you still have a FFELP loan, and you only have FFELP loans, then as long as you have no problems, you have nothing to worry about. If you have a FFELP loan and a Direct Loan and/or a PUT loan, then you should really consider consolidating. You will have only one payment and will be able to track your loan payments better. For the first six months in 2012, the government is offering a special interest rate for people who fall into the category of having one or more FFELP loans and one or more Direct Loans/PUT loans. Contact your lender/servicer if you are interested in consolidating or go to loanconsolidation.ed.gov.

(As originally published in Metro Business College Arnold's January Newsletter.)

5 comments:

  1. The FFELP loan can be released through various bank, private lenders, or knowledge organizations. This mortgage has many eye-catching terms. It offers lower rates as compared to other loans.


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