Student Loan Steve

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Have FFEL Student Loans?

Steve Witter

As you may have heard, there is lots of talk in Congress about some student loan forgiveness.

No one knows the details yet of how this would work or even it would happen, but my guess is they would not give it to people with FFEL loans since the government doesn’t own those loans like they do with Direct loans.

To give yourself the best shot of any loan forgiveness Congress may offer, it may make sense to switch over any FFEL loans have to the Direct loan program ASAP. This is because Congress may impose some sort of restrictions on the forgiveness that you needed to have had Direct Loans as of a certain date to be eligible.

How do I know if I have Direct, FFEL, or Private Loans?

  • If you login to your loan servicer, it should say Direct or FFEL in the name of the loan.

  • If not, you can log in to www.studentaid.gov. If it says Direct, you are all set; if it says FFEL, you will want to consider transferring those loans to the Direct Loan program.

What to do if you have FFEL Loans?

  • If you have FFEL Loans and want to switch them to the Direct program, you will need to consolidate them. To do that, you need to apply for Direct Loan Consolidation

  • If you have any Direct Loans already, be sure you DO NOT include them in this consolidation (only your FFEL loans).

Potential Consequences of Switching from FFEL to Direct

  • If you have any Direct Loans already, be sure you DO NOT include them in this consolidation (only your FFEL loans). Yes this is so important that I listed it twice!!!

  • You will have to apply for a new payment plan, so be careful to review the payment options available during your consolidation application.

  • If you have a long history of income-based payments on your FFEL and plan on the 20- or 25-year long term loan forgiveness, it might not make sense to do the consolidation. The reason being that you lose your payment history when you consolidate so that you will be back at the start of that 20- and 25-year forgiveness clock.

This can be a complicated decision and process so if you have any questions or want help, please let us know. We would love to discuss your student loans with you and see what is best for your situation.