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If your Stafford Loans do not come in the form of Direct Loans, the other option is the Federal Family Education Loan Program (FFELP). In this program the loan you receive is funded by private banks or lenders, however it is guaranteed by the Federal Government. This program is overseen by the U.S. department of Education.
The process for obtaining an FFELP Stafford Loan is almost identical to the Direct Loan process. The major difference for FFELP loans is that you will need to compare private lenders before making a decision.
This loan will be distributed through your college or university's financial aid department in two or more installments. Neither installment may total more than half of the overall Stafford Loan amount.
The funds will first be applied to tuition costs and on-campus housing fees if necessary. The remaining funds, if any, may be released to you to cover additional educational expenses and college financing.
|Jennifer Mathes, Ph.D.|