What Are FFELP Student Loans?
Government-backed FFELP student loans were discontinued in July 2010, but millions of borrowers are still repaying them.
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If you took out a federal student loan before July 2010, it’s probably a FFELP loan.
The Federal Family Education Loan Program, or FFELP, provided student loans to borrowers until July 1, 2010. FFELP loans were issued by private and state lenders but guaranteed by the federal government. That means if a borrower defaulted, the government would pay private companies an interest subsidy to make up for the loss.
The FFEL Program ended to make way for federal direct student loans. The government purchased some outstanding FFELP loans, but most are owned by a commercial lender or guaranty agency (like a state or non-profit private agency). As a result, there are two types of FFELP loans today:
Commercially-held FFELP loans. Held by a commercial lender or guaranty agency.
Federally-held FFELP loans. Also known as Education Department-held FFELP loans.
Borrowers with either type of FFELP loan may need to consolidate them into a Direct Consolidation loan to access some federal student loan repayment plans and forgiveness programs, like Public Service Loan Forgiveness.
Although the federal government ended the FFEL Program more than a decade ago, there are still about 7.29 million borrowers with outstanding FFELP loans totaling $165.4 billion, as of Dec. 31, 2024, according to the latest Education Department data.
All new federal student loans disbursed after June 30, 2010, are now from the Direct Loan Program.
» MORE: How to pay for college
How do I know if I have FFELP loans?
If you took out federal student loans for the 2009-2010 academic year or earlier, they are likely FFELP loans.
To check, log into your studentaid.gov account. Under the “Loan Breakdown” section of your dashboard, select “View Loans.” FFELP loans have “FFEL” at the start of the loan name.
Who owns my FFELP loans?
In your studentaid.gov account, go to the “My Loan Servicers” section. If your servicer name starts with “ED,” your FFELP loan is federally held. Otherwise, your FFELP loan is commercially held.
What are my repayment options for FFELP loans?
FFELP loans are generally eligible for these student loan repayment plans:
Standard repayment plan.
Graduated repayment plan.
Extended repayment plan.
Income-Based Repayment (IBR).
FFELP loans are also eligible for student loan deferment and forbearance.
You must consolidate your FFELP student loans into a federal Direct Consolidation Loan to access additional income-driven repayment plans, which may offer better terms for you:
Pay as You Earn (PAYE).
Income-Contingent Repayment (ICR).
Saving on a Valuable Education (SAVE). (This plan is currently closed to new enrollment.)
Are FFELP loans eligible for PSLF?
Only federal direct student loans are eligible for Public Service Loan Forgiveness (PSLF), which forgives your student debt after 10 years of working for a qualifying non-profit employer. If you have FFELP loans, you’ll need to consolidate them to be eligible for PSLF.
Can (or should) I consolidate my FFELP loan?
You can consolidate a FFELP loan in many cases — unless you already did a spousal consolidation. (You can split your spousal consolidation loan up again if you have active litigation or a legal judgment against you.)
If you are eligible to consolidate, there are generally still some trade-offs. Consolidating FFELP loans into a direct loan will cause any unpaid interest to capitalize and increase your principal loan balance. Consolidation may also wipe out any progress you’ve made toward income-driven payment forgiveness.
Consolidation keeps your loans in the federal system. Student loan refinance is a separate process that turns your federal loans into private loans, which causes you to permanently lose access to any federal loan repayment or forgiveness programs.
» COMPARE: Student loan consolation vs. refinancing
Navient finishes transferring FFELP loans to MOHELA
Navient, one of the main student loan servicers that once managed commercially-held FFELP loans, recently offloaded its private and FFELP student loan portfolio to the servicer MOHELA. The transfer wrapped up in October 2024.
Impacted borrowers should have received communication from Navient prior to their loans transferring to MOHELA, and a welcome letter from MOHELA after the transfer happened.
Not much has changed for affected borrowers. Their loan terms, interest rate, account number, repayment plan and autopay settings stayed the same after the transfer, according to Navient.
