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Loan Forgiveness and FFELP

Started by ihuntdux, March 23, 2020, 07:37:39 pm

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ihuntdux

There has been a lot of discussion in recent months about forgiving federal student loan debt as an economic stimulus, outside of the standard forgiveness programs.

Even as recently as being introduced as a part of the Democrat's proposed bill in reaction to the coronavirus economic impact.

Under this type of forgiveness, will FFELP loans qualify for forgiveness or is it only Direct loans?

I have FFELP loans that I never consolidated to Direct because I do not work in a field that provides any forgiveness options.

If only Direct loans, could I consolidate now and be eligible if something like this is passed?

Thank you!

TheCollegeInvestor

If it's like everything else, it's likely going to start with FFEL loans owned by the Department of Education. Most FFEL loans are owned by private banks, but in 2008, some lenders sold their loans back to the Department of Education.

If you have an FFEL loan that's not owned by ED, I'd strongly encourage you to consolidate into a Direct Loan. Furthermore, most programs that will happen going forward will all be for Direct Loans.

ihuntdux

Thank you so much!

Is there a way to tell if the loan is currently owned by ED?

For example, I have a studentaid.gov account and the loans show up there in my online account, but I don't know if that means they are owned by ED or just that they are tracked there because the are FFEL loans. However, payments obviously go to my servicer, which is AES Success.

Thanks!

TheCollegeInvestor

On your old NSLDS form there was a way to see who owned the loan, but I don't think there is a way currently. I think your best bet is to call your loan servicer and as who the "loan holder" actually is - is it Department of Education (and as such, does it qualify), or is it a private bank or company?