Federal Family Education Loan Program

The Federal Family Education Loan Program (FFELP) is a United States Department of Education program that provides for private organizations to market, originate, and service federally guaranteed loans, such as Stafford and PLUS loans to students and their parents. FFELP is a complement to the Federal Direct Student Loan Program, colloquially known as "Direct" or DL. The private institutions that participate in FFELP include non-profit as well as commercial organizations. These can realize profits on these loans by collecting origination fees and with an interest margin. While FFELP providers traditionally have set their interest rates to what has been offered by the Direct channels, there have been recent indications that they may be competing on price. Funding for FFELP has decreased from just over $28 billion in 2006 to just under $4 billion budgeted for 2008.