Government backed Loans

Guaranteed student loans are Federal or state funded loans for students looking to finance their college education. They are distinct from personal, private or alternative loans in that they are backed by government funds. Up until 2010, guaranteed loans were available through private lending institutions under the Federal Family Education Loan Program (FFELP). These loans were funded by the Federal government, and administered by approved private lending organizations. In effect, these loans were underwritten and guaranteed by the Federal government, ensuring that the private lender would assume no risk should the borrower ultimately default.

In 2010 the Federal Family Education Loan Program was discontinued, with all new loans being administered under the Direct Student Loan Program. All guaranteed student loans are now processed, and disbursed, directly through the U. S. Department of Education.

Federal Guaranteed Loans

With the canceling of the Federal Family Education Loan Program in 2010, all Federally guaranteed student loans reverted back to the U.S Department of Education. Federally funded student loans are now administered through the William D. Ford Federal Direct Loan Program . Federal education loans offer students a distinct advantage over private lender loans in that they offer more attractive interest rates, more flexible repayment plans, and require no collateral for approval.

There are four different types of student loans currently available from the U.S. Department of Education.