Key Industry Players

There can be a lot of overlap among the people and organizations connected to your federal student loans.

American Student Assistance® (ASA) can help you understand their differences.

Different Programs

Currently, there are 2 federal student loan programs—the Federal Family Education Loan Program (FFELP) and the William D. Ford Federal Direct Loan (DL) Program. Their biggest difference is:

  • Students borrow from a private lender with FFELP.
  • Students borrow directly from the U.S. Department of Education (ED) with DL.

As of July 1, 2010, all federal student loans now come directly from DL.

Here is a quick look at the key industry players for both programs:  

DL

ED

In this program:

  • The school facilitates the loan origination and disbursement process.
  • The loan funds are delivered by ED.
  • ED employs a servicer to provide customer service to DL borrowers.

FFELP

School

  • The financial aid office of the school you attended.
  • They facilitate the financial aid application process every year.
  • They determine your financial aid eligibility using standard federal (and sometimes institutional) formulas.

Lender

  • The financial institution or entity that provided funds to you or your parent for an educational loan.

Guarantor

  • A nonprofit organization.
  • They work with the U.S. Department of Education, lenders, servicers, and schools to ensure student loan borrowers successfully repay their loans.
  • ASA® is a guarantor.

Servicer

  • An organization that collects loan payments and provides customer service on behalf of your lender.
  • Your servicer assists you with questions about your bill and repaying your loan.
  • You must contact them with changes to any of your personal details—such as your name, address, Social Security number, or enrollment status.

Secondary Market

  • Organizations that buy loans from the lenders.
  • They provide lenders with the capital they need to originate new loans.
  • Your lender may sell your loan to the secondary market.

Collection Agency

  • A company that specializes in the collection of delinquent or defaulted loans. Lenders often hire a collection agency to recover loans.

You can find out which program your loans came from by accessing the U.S. Department of Education's National Student Loan Data System (NSLDS).

If you have questions about these organizations or encounter any difficulties repaying your loans, contact ASA. No matter which program originated your loan, we can help you.