Federal Family Education Loan
The
Federal Family Education Loan Program (FFELP) is a United States
Department of Education program that offers for private organizations
to market, originate and service federally guaranteed loans, like
Stafford and PLUS loans to students and their parents. FFELP is
commonly known as "Direct" or DL and a complement to the Federal Direct
Student Loan Program.
The private institutions
that take part in FFELP include non-profit as well as commercial
organizations. These can realize profits on these loans by collecting
initiation fees and with an interest margin.
While FFELP donors traditionally have set their interest rates to what
has been offered by the direct channels, there have been recent signals
that they may be competing on price.