| AwardYear: 1998-1999 EnterChapterNo: 10 EnterChapterTitle: Federal Family Education Loan Program SectionNumber: SectionTitle: Introduction PageNumbers: 1-2 Part B of Title IV of the Higher Education Act of 1965 (HEA), as amended, created the guaranteed student loan programs. The Higher Education Amendments of 1992 (P.L. 102-325) reauthorized the HEA and renamed the guaranteed student loan programs the Federal Family Education Loan (FFEL) Program, which now comprises Federal Stafford Loans (formerly Guaranteed Student Loans), Federal PLUS Loans, and Federal Consolidation Loans. The FFEL Program makes these long-term loans available to students attending institutions of higher education; vocational, technical, business, and trade schools; and some foreign schools. State or private nonprofit guaranty agencies insure FFELs, and these agencies are reimbursed by the federal government for all or part of the insurance claims they pay to lenders. The federal guaranty on a FFEL replaces the security (the collateral) usually required for a long-term consumer loan. Note that although all FFEL-related guaranty agency procedures and policies must accord with the federal requirements discussed in this chapter, individual guaranty agencies may have additional procedures and policies. To obtain specific information about a guaranty agency's policies and procedures, contact that agency. Appendix A of this chapter contains a list of guaranty agencies and their addresses and telephone numbers. The different types of FFELs serve different purposes: - Both undergraduate and graduate students can receive Stafford Loans. - Parents of dependent students can receive PLUS Loans. - Federal Consolidation Loans allow a borrower to combine several loans into one to facilitate repayment. The loans may be consolidated if the borrower meets certain conditions. (These conditions and the types of loans that may be consolidated are discussed in Section 5.) Specific information on how cohort default rates for prior fiscal years are used for eligibility determinations following a change in status for a school was not available at the time this Handbook went to print. The Department will issue further guidance on this topic at a later date in the form of Dear Colleague Letters. When issued, this up-to-date information will also be available on the SFA BBS. |