You did a good job preparing your kid for the real world, but then it hits you, that preparation will cost you the big ticket price of college, room and board. Maybe you shouldn't have prepared them so well, just kidding, but you should at least look into what the FFEL may be able to offer you, so that their Seattle college experience can be the best possible.
The Federal Family Education Loan Program (FFEL) is a public-private partnership created by Congress in 1965 to deliver and administer guaranteed education loans for students and their parents.
The FFEL provides the following types of guaranteed-insured loans:
- Stafford Loans - Subsidized Stafford loans are available to students who demonstrate financial need. The federal government pays the interest on these loans while the student is in school, during a six-month grace period after the student leaves school, and during authorized periods of loan deferment.
- Unsubsidized Stafford - Loans are available to students regardless of their financial need; however, the student is responsible for all interest that accrues on the loan.
- Plus Loans - Parents can borrow up to the total cost of their children's undergraduate education, less financial aid from other sources. Beginning July 1, 2006, graduate and professional students also may take out PLUS loans.
- Federal Consolidation Loans - Borrowers can consolidate their federal education loans into one loan with a single monthly payment and, depending on their outstanding loan balance, extend their repayment period.
The process begins when a student applies for financial aid by completing the Free Application for Federal Student Aid (FAFSA). Based on an analysis of the information provided on the FAFSA, the school that the student plans to attend assembles a financial-aid package for the student. The financial-aid package may include a combination of grants, scholarships, work-study and a recommended loan amount. The aid package is designed to cover a student's "unmet needs"; the difference between the amount that students and their families are expected to contribute toward their education and the cost of attending that school.
If the student accepts an award package that includes a FFEL loan, the student, with the help of the school's financial-aid office, selects a lender. The lender is willing to make the loan, despite the student's lack of employment, credit history or collateral, because a guarantor stands behind the loan. Behind the scenes, the school, lender, guarantor and U.S. Department of Education work together to ensure that the student is eligible to borrow the amount requested. A FFEL loan can be approved in a matter of minutes.