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Understanding Your Student Loans

It is important to understand the basics of student loans and the major types of loans available. The types of student loans you borrow will affect your eligibility for certain borrower protections and debt relief programs such as income-driven repayment plans and Public Service Loan Forgiveness.

Student Loan Basics

Private Loans Versus Federal Loans

Commercial or private loans are obtained through private institutions like schools, banks and state education authorities. Rates and terms can vary greatly based on the lender. It is important to note that private loans are never eligible for federal relief programs such as income-driven repayment plans and Public Service Loan Forgiveness.

To qualify for federal relief, you need to make sure you are taking out federal loans. Federal loans include Subsidized and Unsubsidized Stafford (now referred to as Direct Subsidized and Direct Unsubsidized), Grad PLUS and Perkins Loans. Parent PLUS Loans are federal loans available for parents to borrow to help pay for their dependent child to attend school.

Federal loans also come with borrower protections, such as fixed interest rates, and deferment and forbearance in times of hardship. Commercial loans are not required to provide any of these protections and generally do not.

FFEL and Federal Direct Loans

Federal student loans (like Stafford Loans and Grad PLUS Loans) may have originated from one of two major federal student lending programs: the Federal Family Education Loan (FFEL) Program or the Federal Direct Loan Program.

Federal student loans from the FFEL Program were issued by private banks and lending institutions like Sallie Mae but are still federal student loans because they are guaranteed by the government. Although Congress discontinued the FFEL Program in 2010, you may have FFEL Loans if you borrowed before then. Federal Direct Loans are federal student loans issued directly by the U.S. Department of Education.

It is important to know what types of loans you have in order to determine what you need to do to qualify for federal programs like income-driven repayment plans and Public Service Loan Forgiveness.

Keep Track of Your Student Loans

Every federal loan you have borrowed, along with its repayment status, is entered into the National Student Loan Data System. To see what types of federal loans you have:

  • Request a Personal Identification Number (PIN) from the Department of Education:

  • Use the PIN to look up your loans in the National Student Loan Data System:

If you borrowed commercial student loans, you can check their status by requesting a credit report at

Loan Consolidation

When you graduate, you may consolidate your federal student loans into a federal consolidation loan in order to repay on an extended schedule and reduce your payment amount. In the past, federal consolidation loans may have been obtained through FFEL lenders or through Federal Direct, so if you have a consolidation loan it may be from either program. Any federal consolidation loans after 2010 will be Federal Direct Consolidation Loans.

  • The Federal Direct Consolidation Loan application is available at the Direct Consolidation Loan website:

You can transfer your FFEL Loans into the Federal Direct Loan Program by consolidating them (FFEL Consolidation Loans are no longer available). If you already have consolidated your federal student loans into a FFEL Federal Consolidation Loan, you have the right to reconsolidate into a Federal Direct Consolidation Loan in order to take advantage of Public Service Loan Forgiveness.

However, be careful to not consolidate Federal Direct Loans on which you’ve already made qualifying payments toward Public Service Loan Forgiveness. The Department of Education has indicated that subsequently consolidating loans on which you’ve made qualifying payments will reset the qualifying payment count for those loans. 

To find out more about federal loans, including whether or not to conoslidate Parent PLUS and Perkins Loans, sign up for a free informational webinar or get a copy of our comprehensive ebook, Take Control of Your Future.