Federal Family Education Loans

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

Purpose of this program:

To encourage lenders such as banks, credit unions, savings and loan associations, pension funds, insurance companies, and schools to make loans to vocational, undergraduate, and graduate students enrolled at eligible postsecondary institutions to help pay for educational expenses. The loans are insured by a State or private nonprofit guaranty agency and reinsured by the Federal government.

Possible uses and use restrictions...

To help defray costs of education at a participating school. Repayment on Federal Stafford loans begins six months after the student ceases to carry at least one-half the normal full-time academic workload. Repayment of principal and interest on PLUS loans generally begins within 60 days of disbursement of the last installment, repayment of a consolidation loan begins within 60 days after the proceeds of the loan have been used to discharge the liability of the borrower on the loans selected for consolidation. Deferments and forbearance of payment may be granted for certain authorized periods.

Who is eligible to apply...

Under the Federal Stafford Loan Program, any U.S. citizen, national, or person in the United States for other than a temporary purpose, who is enrolled or accepted for enrollment in a degree or certificate program on at least a half-time basis as an undergraduate, graduate, or professional student at a participating postsecondary school may apply. An otherwise eligible student is eligible for loans during a single 12-month period in which the student is enrolled in a non-degree/non-certificate course of study that the school has determined is necessary in order for the student to enroll in a program leading to a degree or certificate. Under the Federal PLUS program, parents may borrow for dependent students. Under the Federal Unsubsidized Stafford program, graduate or professional students, and independent undergraduate students may apply; under certain circumstances, a dependent undergraduate student may apply for an Federal Unsubsidized Stafford loan. Students who are enrolled at an eligible institution on at least a half time basis in a program that is required by a State for elementary or secondary teacher certification are also eligible for Federal Family Education Loan Program (FFELP) aid (Stafford, Unsubsidized Stafford and PLUS). Under the Federal Consolidation Loan Program, a borrower may have his or her Stafford, Unsubsidized Stafford, PLUS, Perkins (formerly NDSL), and Health Professions Student Loans consolidated, provided that the borrower is in a grace period or repayment status on all loans being consolidated, or is a delinquent or defaulted borrower who will reenter repayment through consolidation, and does not have another application for a consolidation loan pending. Married couples may consolidate eligible loans. Only U.S., citizens or nationals may receive a loan to attend eligible foreign postsecondary schools. A student that is presently enrolled at a participating institution must be maintaining satisfactory academic progress in the course of study he/she is pursuing. Also, the borrower may not owe a refund on any Title IV grant or be in default on any Title IV loan received for attendance at any school. The borrower must also file a statement of registration compliance (Selective Service). In order to receive a subsidized Stafford Loan, all borrowers must undergo a financial need analysis to determine eligibility for Federal interest and special allowance benefits. Unsubsidized Federal Stafford, PLUS, or Consolidation Loans are non-need based programs. A Stafford loan applicant who is an undergraduate student who attends a school that participates in the Pell Grant Program must receive a determination of his or her Pell Grant eligibility or ineligibility before the school may certify an application for a loan. If the applicant is determined to be eligible for a Pell Grant, the applicant must apply for a Pell Grant for the enrollment period before the institution may certify an application for a FFELP loan. An unsubsidized Stafford loan applicant must also receive a determination of need for a loan under the Stafford Loan Program and, if eligible, must apply for a Stafford loan prior to the school's certification of the Unsubsidized Stafford application.

Eligible Applicant Categories:
Eligible Functional Categories:

For the Federal Stafford Loan, Unsubsidized Stafford, and PLUS programs, the student will need certification of eligibility from the school, and may be required to supply documentation to verify the accuracy of data used in the Stafford Loan need analysis. This program is excluded from coverage under OMB Circular No. A-87.

Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.

About this section:

This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy. For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree, 3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible. Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they must satisfy.

Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs, the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.

How to apply...

Application Procedure:

Applications for the Federal Stafford Loan, Unsubsidized Stafford, and PLUS Loans are obtained from a participating lender, guaranty agency, or school. Consolidation loan applications are obtained from lenders. The borrower completes his or her portion of a Stafford, Unsubsidized Staffords, or PLUS loan application and submits it to the school. The school must certify that the student meets the eligibility requirements for the loan, including a certification that the student is enrolled, or accepted for enrollment as at least a half-time student, and that the student is making satisfactory progress. The school must also certify the type and amount of loan the student is eligible to receive. The lender then completes its portion of the application and forwards it to the guarantor for commitment. In some States, the guarantor issues the notice of guarantee prior to sending the application to the lender. This program is excluded from coverage under OMB Circular No. A-110.

Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.

Award Procedure:

If the lender agrees to make the loan, the application is forwarded to the guarantor for insurance. The lender disburses the proceeds of a Stafford, Unsubsidized Stafford, or PLUS Loan to the school or, if the student is attending a foreign school, directly to the borrower. Consolidation Loan proceeds are disbursed directly to the holders of the loans selected for consolidation. In most cases, a loan must be disbursed in more than one installment over the length of the period of enrollment for which the loan was intended, based on a disbursement schedule provided to the lender by the school on behalf of the borrower. This multiple disbursement requirement does not apply to Consolidation Loans. The borrower may be required to pay an insurance premium of up to one percent of the principal amount of a subsidized Stafford Loan, Unsubsidized Stafford, or PLUS Loan. The charging of the insurance premium and the amount is determined by the guarantor. In addition, for a subsidized Stafford, Unsubsidized Stafford, or PLUS Loan, the borrower is required to pay a three percent "origination fee" (on loans disbursed on or after July 1, 1994) which is used to help defray program costs. All of these fees are normally deducted proportionately from each disbursement of the loan proceeds.

Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check. Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office, or by an authorized county office. The assistance may pass through the initial applicant for further distribution by intermediate level applicants to groups or individuals in the private sector.

Deadlines and process...



Note: When available, this section indicates the deadlines for applications to the funding agency which will be stated in terms of the date(s) or between what dates the application should be received. When not available, applicants should contact the funding agency for deadline information.

Range of Approval/Disapproval Time


Preapplication Coordination

Information regarding application procedures may be obtained from lenders, schools, the U. S. Department of Education, States, or private guaranty agencies. This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under E.O. 12372.

Note: This section indicates whether any prior coordination or approval is required with governmental or nongovernmental units prior to the submission of a formal application to the federal funding agency.


Not applicable.

Note: In some cases, there are no provisions for appeal. Where applicable, this section discusses appeal procedures or allowable rework time for resubmission of applications to be processed by the funding agency. Appeal procedures vary with individual programs and are either listed in this section or applicants are referred to appeal procedures documented in the relevant Code of Federal Regulations (CFR).


Not applicable.

Note: In some instances, renewal procedures may be the same as for the application procedure, e.g., for projects of a non-continuing nature renewals will be treated as new, competing applications; for projects of an ongoing nature, renewals may be given annually.

Who can benefit...

Generally, for the Federal Stafford, Unsubsidized Stafford, and PLUS programs, any U.S. citizen, national, or person in the United States for other than a temporary purpose, who is enrolled or accepted for enrollment in a degree or certificate program on at least a half-time basis as an undergraduate, graduate, professional, or vocational student at a participating postsecondary school benefits. If a student is enrolled in a non-degree/noncertificate course of study, the student may be eligible for Stafford or Unsubsidized Stafford loans for one consecutive twelve-month period, if the school determines that the course of study is necessary in order for the student to enroll in a program leading to a degree or certificate. A student enrolled on at least a half-time basis in a program that is required by a State for a professional credential or certificate for employment as a teacher in an elementary or secondary school located in that State is eligible to receive aid under the Stafford Loan, Unsubsidized Stafford, and PLUS programs. Consolidation loan borrowers need not be enrolled in any school to be eligible.

About this section:

This section lists the ultimate beneficiaries of a program, the criteria they must satisfy and who specifically is not eligible. The applicant and beneficiary will generally be the same for programs that provide assistance directly from a Federal agency. However, financial assistance that passes through State or local governments will have different applicants and beneficiaries since the assistance is transmitted to private sector beneficiaries who are not obligated to request or apply for the assistance.

What types of assistance...

Guaranteed/Insured Loans

Programs in which the Federal government makes an arrangement to identify a lender against part or all of any defaults by those responsible for repayment of loans.

How much financial aid...

Range and Average of Financial Assistance

Varies depending on the type of loan.

Note: This section lists the representative range (smallest to largest) of the amount of financial assistance available. These figures are based upon funds awarded in the past fiscal year and the current fiscal year to date. Also indicated is an approximate average amount of awards which were made in the past and current fiscal years.


(Loan volume net of consolidations) FY 03 $68,726,000,000; FY 04 est $64,583,000,000; and FY 05 est $64,637,000,000. FFEL Consolidation volume: FY 03 $34,935,000,000; FY 04 est $25,605,000,000; and FY 05 est $22,048,000,000.

Note: The dollar amounts listed in this section represent obligations for the past fiscal year (PY), estimates for the current fiscal year (CY), and estimates for the budget fiscal year (BY) as reported by the Federal agencies. Obligations for non-financial assistance programs indicate the administrative expenses involved in the operation of a program.

Account Identification


Note: Note: This 11-digit budget account identification code represents the account which funds a particular program. This code should be consistent with the code given for the program area as specified in Appendix III of the Budget of the United States Government.

Examples of funded projects...

Not applicable.

About this section

This section indicates the different types of projects which have been funded in the past. Only projects funded under Project Grants or Direct Payments for Specified Use should be listed here. The examples give potential applicants an idea of the types of projects that may be accepted for funding. The agency should list at least five examples of the most recently funded projects.

Program accomplishments...

Over 9.6 million loans were made in fiscal year 2003.

Criteria for selecting proposals...

Not applicable.

Assistance considerations...

Length and Time Phasing of Assistance

Applicants may apply for a loan for any year of school. Repayment generally is made over a period of 10 years for Federal Stafford, and PLUS Loans, excluding periods of authorized deferment and forbearance but extended repayment plans are available. The repayment period for a Consolidation Loan depends on the amount of the loan and may be up to 30 years, exclusive of periods of authorized deferment and forbearance.

Formula and Matching Requirements


A formula may be based on population, per capita income, and other statistical factors. Applicants are informed whether there are any matching requirements to be met when participating in the cost of a project. In general, the matching share represents that portion of the project costs not borne by the Federal government. Attachment F of OMB Circular No. A-102 (Office of Management and Budget) sets forth the criteria and procedures for the evaluation of matching share requirements which may be cash or in-kind contributions made by State and local governments or other agencies, institutions, private organizations, or individuals to satisfy matching requirements of Federal grants or loans.

Cash contributions represent the grantees' cash outlay, including the outlay of money contributed to the grantee by other public agencies, institutions, private organizations, or individuals. When authorized by Federal regulation, Federal funds received from other grants may be considered as the grantees' cash contribution.

In-kind contributions represent the value of noncash contributions provided by the grantee, other public agencies and institutions, private organizations or individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically identifiable to the grant program. When authorized by Federal legislation, property purchased with Federal funds may be considered as grantees' in-kind contribution.

Maintenance of effort (MOE) is a requirement contained in certain legislation, regulations, or administrative policies stating that a grantee must maintain a specified level of financial effort in a specific area in order to receive Federal grant funds, and that the Federal grant funds may be used only to supplement, not supplant, the level of grantee funds.

Post assistance requirements...


Lenders submit quarterly reports of loans outstanding in order to receive interest benefits and special allowance payments. Guaranty agencies submit reports in order to receive reinsurance and administrative payments. Additional operational reports are required for specific purposes.

Note: This section indicates whether program reports, expenditure reports, cash reports or performance monitoring are required by the Federal funding agency, and specifies at what time intervals (monthly, annually, etc.) this must be accomplished.


Lenders, schools (except foreign schools), and guaranty agencies are subject to examination and program review by the Department of Education. Generally, program reviews are performed on a fiscal year basis. Participating schools must have an independent audit of all Stafford Loan Program transactions at least annually. Guaranty agencies must have independent financial and compliance audits annually. Guaranty agencies must conduct annual reviews of the ten largest loan volume lenders in their areas as well as schools with default rates above 20 percent that do not have a default management plan approved by the Secretary.

Note: This section discusses audits required by the Federal agency. The procedures and requirements for State and local governments and nonprofit entities are set forth in OMB Circular No. A-133. These requirements pertain to awards made within the respective State's fiscal year - not the Federal fiscal year, as some State and local governments may use the calendar year or other variation of time span designated as the fiscal year period, rather than that commonly known as the Federal fiscal year (from October 1st through September 30th).


Lenders must maintain records to support and identify loan transactions, interest billings, and/or special allowance. Guaranty agencies must maintain complete records to support and identify their activities. Federal regulations specify administrative and fiscal records required to be maintained by schools.

Note: This section indicates the record retention requirements and the type of records the Federal agency may require. Not included are the normally imposed requirements of the General Accounting Office. For programs falling under the purview of OMB Circular No. A-102, record retention is set forth in Attachment C. For other programs, record retention is governed by the funding agency's requirements.



Higher Education Act of 1965, Title IV, Part B, as amended.

Note: This section lists the legal authority upon which a program is based (acts, amendments to acts, Public Law numbers, titles, sections, Statute Codes, citations to the U.S. Code, Executive Orders, Presidential Reorganization Plans, and Memoranda from an agency head).

Regulations, Guidelines, And Literature

34 CFR 682.

Contact information...

Web Sites
Regional Or Local Office

See list of Regional Offices listed in Additional Contact Information - FMR Help. Each State with an operating guaranty agency maintains an office in its respective State. A list of guaranty agency addresses is available from the address below.

Note: This section lists the agency contact person, address and telephone number of the Federal Regional or Local Office(s) to be contacted for detailed information regarding a program such as: (1) current availability of funds and the likelihood of receiving assistance within a given period; (2) pre-application and application forms required; (3) whether a pre-application conference is recommended; (4) assistance available in preparation of applications; (5) whether funding decisions are made at the headquarters, regional or local level; (6) application renewal procedures (including continuations and supplementals) or appeal procedures for rejected applications; and (7) recently published program guidelines and material. However, for most federal programs, this section will instruct the reader to consult the so-called Appendix IV of the Catalog due to the large volume of Regional and Local Office Contacts for most agencies. This information is provided in Additional Contact Information (see below).

Headquarters Office

Office of Postsecondary Education, Department of Education, Washington, DC 20202. Telephone: (800) 433- 3243.

Note: This section lists names and addresses of the office at the headquarters level with direct operational responsibility for managing a program. A telephone number is provided in cases where a Regional or Local Office is not normally able to answer detailed inquiries concerning a program. Also listed are the name(s) and telephone number(s) of the information contact person(s) who can provide additional program information to applicants.

Additional Contact Information (Appendix IV)

Due to the large volume of regional and local office contacts for most agencies, full contact information is also provided separately here in a PDF format: