Private versus Federal Consolidation Loans – What’s the Difference?
by: Vanessa McHooley
A consolidation loan lets you combine your federal student loans into a single loan with one monthly payment. There are two programs available for consolidating student loans:
The Federal Family Education Loan (FFEL) Program, through which banks, secondary markets, credit unions, and other lenders provide the consolidation loan
The William D. Ford Federal Direct Loan (Direct Loan) Program, through which the federal government provides the consolidation loan
There are several differences between these programs, as outlined in the table below:
Lenders – Banks, secondary markets, and credit unions
Loans accepted – Can accept all eligible loans from eligible borrowers, but are not requir...