Federal Loans for Students –

Direct Loans and FFEL are the two biggest government loan programs. In fact, the FFELs are the guaranteed loans designed by private lenders. It means that the federal government compensates the lender while borrowers default, or fail to repay the student loan. Prior to getting reimbursed, the lenders are asked to make some efforts to gather the loans.
Though the FFEL program is actually federal, it is administered through private or state nonprofit companies called guaranty companies. Guaranty companies pay back the lenders while borrowers default, and are compensated by the Dept. of Educ. It provides a list of accessible state guaranty companies.
Then, Federal Direct Loans are created by the government to students, actually with the help of the college or other entity originating the loan. Also, lenders and guaranty companies are not engaged in the process.
Both of these federal loan programs are regulated by the U.S. Dept. of Educ. and Congress. The maximal rates of interest, and many of the significant terms of the federal loans are fixed by Congress, plus are similar in all programs. In addition, there are some important differences in accessible repayment plans for Direct and FFEL borrowers.
Stafford loans are made for professional, graduate and undergraduate students entered least half-time. The Federal Stafford Loans are designed to students via the FFEL and Direct Loan program. Direct Stafford and FFEL loans provide the same loan restrictions, deferment, plus cancellation rights. There are certain differences with regard to repayment plans. Also, Stafford loans can be subsidized and unsubsidized.