Federal Direct Loan Program
Federal Family Education Loan Program
The United States Department of Education awards contracts to private companies to manage FFEL loan. 90% of the loans are managed by four organizations:
These private companies make millions every year by capitalizing interest against students and their loans.
Life cycle of a loan
#1. You take out loans for college.
You apply for financial aid thru whichever school you intend to attend.
#2. You're enrolled and attending classes.
Your school status is listed as full-time so you're not required to make any payments.
#3. Congratulations you've graduated!
Once you graduate your school will schedule a meeting to perform exit counseling.
This is where the student chooses a repayment plan.
#4. Time to pay back on your loans;
How they make an impact on your loan balance.
Interest is money an individual pays for the use of borrowed funds. Interest that accumulates is based on the loan's unpaid principal balance and accrues on a student loan every single day,
even if the account is not in repayment.
Interest accrues every day from the date of disbursement; however, depending on your loan type or repayment plan, such as Income-Driven Repayment plans, you may not be liable to pay on the interest.
The Department of Education will pay the accrued interest on your subsidized loans when: