So Direct Loans and FFELP Loans aren’t the same?

Many borrowers are confused by the difference between FFELP, Direct, and private loans.

Here is a basic breakdown:

Direct Loans: Loans that were disbursed directly from the government.  These loans were made exclusively as FFELP loans were phased out after July 1, 2010.  Direct Loan Program begin with DL (example DLUNST)

FFELP Loans: These are government backed loans but were disbursed from private banks.  This meant they had the same forbearance, deferments, etc as a disbursed loan from the government.  The main difference between these and Direct Loans are who disburses the loans (though they also affect some things such as PAYE where only Direct Loans are eligible.)  The FFELP program loans have distinctions such as UNSTFD (no DL shows its not a Direct Loan)

Private Loans:  These are loans from a 3rd party that the government has nothing to do with.  As a result you may or may not get a grace period and often times are not entitled to Paid Ahead status, deferment, forbearances, and payment plan options available through loans the federal government guarantees.

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