FFELP Loans: What They Are and How to Get Them Forgiven

What is a FFELP loanFFELP Loan (FFELP)A student loan issued by a private lender but guaranteed by the federal government under the Federal Family Education Loan Program. No new FFELP loans have been made since 2010, but millions of borrowers still hold them.?FFELPFederal Family Education Loan Program (FFELP)The federal program that guaranteed student loans made by private lenders through 2010. Loans issued under this program are commonly called FFELP loans and are still held by millions of borrowers. vs. Direct LoansStill being issued?Forgiveness optionsIDR Adjustment deadlineConsolidating into Direct LoansFFELP loans and PSLFFFELP loans and income-driven repaymentDefaulted FFELP loans

FFELP loans are federal student loans — but they sit in a different bucket from the Direct Loans most borrowers have today. That bucket matters. It decides which forgiveness programs you qualify for, which repayment plans you can use, and whether you need to consolidate first.

What is a FFELP loan?

FFELP stands for the Federal Family Education Loan Program. Congress created it in 1965 and shut it down on July 1, 2010.

The money came from private banks, credit unions, and state agencies like Sallie Mae, Navient, and Nelnet — not directly from the U.S. Department of EducationU.S. Department of Education (ED)The federal agency that oversees federal student aid programs, issues regulations for federal student loans, and is the ultimate lender on Direct Loans.. The federal government guaranteed the loans, which is why they count as federal debt.

When you took out a FFELP loan, a private lender wrote you a check. If you defaulted, a guaranty agencyGuaranty AgencyA state or nonprofit agency that administers defaulted FFELP loans and acts on behalf of the federal government in collecting those debts. stepped in and paid the lender. The federal government then reimbursed the guaranty agency. You still owed the debt — it just moved through a longer chain of hands than a modern Direct LoanDirect LoanA federal student loan made directly by the U.S. Department of Education under the William D. Ford Federal Direct Loan Program. Most federal student loans issued since 2010 are Direct Loans. does.

FFELP includes several loan types:

• Subsidized Stafford Loans — need-based, government pays interest during school
• Unsubsidized Stafford Loans — not need-based, interest accrues during school
• FFEL PLUS Loans — for parents and graduate students
• FFEL Consolidation Loans — combine one or more FFEL loans into a single loan

The Health Care and Education Reconciliation Act of 2010 ended new FFELP originations. But roughly 9 million borrowers still carry FFELP debt, and those loans are still governed by the original FFELP rules unless the borrower consolidates out.

FFELP loans vs. Direct Loans: what's actually different

The loans feel similar. The rules aren’t.

Who owns the loan. The Department of Education owns every Direct Loan. FFELP loans are split: some are ED-held, and some are commercially held by a private lender. Which one you have controls what you qualify for.

Who services the loan. A smaller set of companies services FFELP loans than Direct Loans — AES, MOHELA, and Sloan handle performing loans; Default Resolution GroupDefault Resolution GroupThe office within Federal Student Aid that manages defaulted federal student loans, including collection activity, rehabilitation, and consolidation of defaulted debt., ECMCECMCEducational Credit Management Corporation, a nonprofit guaranty agency that manages defaulted FFELP loans and is frequently the opposing party in student loan bankruptcy litigation., and Trellis handle defaulted accounts. Many FFELP loans have moved servicers multiple times, which is why borrowers lose track of what they have.

Which forgiveness programs you qualify for. FFELP loans are not eligible for PSLF, the SAVE plan (while it existed), or most current IDR forgivenessIDR ForgivenessThe forgiveness of any remaining federal student loan balance after a borrower has completed 20 or 25 years of qualifying payments under an income-driven repayment plan, depending on the specific plan. pathways unless you consolidate them into a Direct Consolidation Loan first.

Which repayment plans you can use. Standard, Graduated, Extended, and Income-Based RepaymentIncome-Based Repayment (IBR)A federal income-driven repayment plan that caps monthly payments at 10% or 15% of discretionary income, depending on when the loans were taken out. Remaining debt is forgiven after 20 or 25 years of qualifying payments. (IBR). PAYEPay As You Earn (PAYE)A federal income-driven repayment plan that caps monthly payments at 10% of discretionary income and forgives remaining debt after 20 years. It is only available to borrowers who took out their first federal loans on or after October 1, 2007., ICR, and SAVESAVE Plan (SAVE)The Saving on a Valuable Education Plan, a federal income-driven repayment plan introduced in 2023 to replace REPAYE. Its implementation has been subject to ongoing litigation, and enrolled borrowers have faced court-ordered forbearance periods. are Direct Loans only.

DefaultDefaultThe status of a federal student loan after the borrower has failed to make required payments for 270 days. Default can trigger collection actions such as wage garnishment, tax refund offset, and damage to credit reports. resolution. FFELP loans in default go to a guaranty agency, not directly to ED. The rehabilitationRehabilitationA federal program for borrowers in default that requires nine voluntary, on-time monthly payments over ten months. After rehabilitation, the default is removed from credit reports and federal aid eligibility is restored. It is available once per loan. and consolidation paths look similar to Direct Loan default resolution, but the paperwork routes through different offices.

How to tell if you have a FFELP loan — and who services it

Log in to studentaid.gov and look at the loan type listed next to each loan. Anything starting with “FFEL” is FFELP. Anything starting with “Direct” is a Direct Loan.

One catch: studentaid.gov only shows ED-held loans. If your FFELP loan is commercially held, it won’t appear there. Check your credit report instead — the servicer and lender will be listed.

Beginning July 1, 2026, the Department of Education will send 90-day transition notices to borrowers moving between servicers. If you have a FFELP loan, expect a notice within the next two years.

Are FFELP loans still being issued?

No. The last FFELP loan was disbursed on June 30, 2010. Since then, every new federal student loan has been a Direct Loan.

The one exception people confuse: you can still take out a Direct Consolidation Loan that includes your old FFELP loans. That’s not a new FFELP loan — it’s a new Direct Loan that pays off and replaces your FFELP balances.

Can FFELP loans be forgiven?

Yes — but the path is narrower than for Direct Loans, and most forgiveness programs require consolidation first.

Here’s what’s available without consolidating:

• Teacher Loan ForgivenessTeacher Loan ForgivenessA federal program that can forgive up to $17,500 of Direct or FFELP loans for teachers who complete five consecutive years of full-time teaching at a low-income school or educational service agency. — up to $17,500 after five years of qualifying teaching
• IBR forgiveness at 25 years — the only income-driven plan FFELP loans qualify for on their own
• Total and Permanent Disability (TPDTotal and Permanent Disability Discharge (TPD)A federal loan discharge for borrowers who are totally and permanently disabled, as documented by the Department of Veterans Affairs, the Social Security Administration, or a physician's certification.) discharge — for borrowers who are permanently disabled
• Death dischargeDeath DischargeThe cancellation of federal student loans when the borrower dies. On a Parent PLUS Loan, the loan is also discharged if the student on whose behalf it was taken dies. — if the borrower dies
• Closed school dischargeClosed School DischargeA federal loan discharge available to borrowers whose school closed while they were enrolled or shortly after they withdrew, before they could complete their program of study. — if your school closed while you were enrolled or shortly after you withdrew
• False certification and unpaid refund discharges — for specific school misconduct
• Borrower Defense to RepaymentBorrower Defense to RepaymentA federal process for discharging Direct Loans when the school misled the borrower or engaged in misconduct related to the loan or the educational services it promised. — ED processes these differently for FFELP than for Direct Loans

Here’s what FFELP loans are not eligible for unless you consolidate into a Direct Loan first:

• Public Service Loan ForgivenessPublic Service Loan Forgiveness (PSLF)A federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments made while working full-time for a government or qualifying nonprofit employer. (PSLF)
• Any forgiveness tied to PAYE, SAVE, or ICRIncome-Contingent Repayment (ICR)The oldest federal income-driven repayment plan, with payments generally set at 20% of discretionary income or a fixed 12-year amount, whichever is lower. It is the only IDR plan available to Parent PLUS borrowers after consolidation.
• The faster 20-year IBR forgiveness timeline that Direct Loan borrowers get

The June 30, 2024 IDRIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments. Account Adjustment deadline has passed

If you consolidated before the deadline, you got the adjustment — your payment count reflects the combined FFELP and Direct history.

If you missed the deadline, consolidating today still gets you into the Direct Loan program — but you don’t get retroactive credit for past FFELP payments. Your payment count starts fresh from the consolidation date.

This is the reframe most old articles about FFELP forgiveness haven’t caught up with. In 2023 and early 2024, “consolidate your FFELP loans” meant “get credit for all those years you’ve already paid.” In 2026, it means “start a new payment count today so you have access to PSLF and the 2026-and-later IDR plans.”

That’s still often the right move — especially for borrowers pursuing PSLF, or for anyone who wants an income-driven plan that isn’t IBR. But the urgency is different than it was two years ago.

Consolidating FFELP loans into Direct Loans

Consolidation is the biggest decision a FFELP borrower makes. It unlocks PSLF eligibility, broader IDR access, and the newer repayment plans. It also replaces your old FFELP loans with a new Direct Consolidation Loan.

Why you’d consolidate:

• You want PSLF credit for current and future public service work
• You want an income-driven plan beyond IBR
• You want to move onto the RAP plan when it launches July 1, 2026
• You need to split a joint FFEL spousal loan

Why you wouldn’t:

• You’re close to 25-year IBR forgiveness and don’t want to reset the clock
• You have a low-interest FFELP Consolidation loan and no interest in PSLF or newer IDR
• You’re pursuing a FFELP-specific discharge (Teacher Loan Forgiveness, TPD, closed school) that consolidation could disqualify

There’s a short window between the consolidation application and the Direct Consolidation Loan’s creation. During that window, your FFELP payment history stops accruing toward FFELP-only forgiveness, and your new Direct Loan hasn’t started its clock. Plan accordingly if you’re mid-application.

The timing has a hard deadline. A Direct Consolidation Loan disbursing on or after July 1, 2026 loses access to every legacy repayment plan — RAP becomes your only repayment option and your only path to forgiveness. That pushes your forgiveness timeline from 25 years on IBR to 30 years on RAP. If you want to stay on IBR’s 25-year clock post-consolidation, the new loan has to disburse by June 30, 2026.

Related: Consolidating FFELP loans into Direct Loans

FFELP loans and PSLF

FFELP loans do not qualify for Public Service Loan Forgiveness on their own. Never have. That’s tripped up public servants who spent years assuming their FFELP payments counted — only to find out at certification time that they didn’t.

To pursue PSLF with FFELP loans, you must first consolidate them into a Direct Consolidation Loan. After consolidation, your 120 qualifying payments start over. Any PSLF-eligible work you did before consolidating doesn’t count — unless it was already credited under the pre-2024 one-time adjustment.

If you’re already working in public service and have FFELP loans, the calculation is:

1. How many PSLF-eligible years do I have in front of me?
2. Does consolidating now and restarting my payment count still get me to forgiveness before I leave?

For most public service borrowers with more than 10 years of work ahead of them, consolidating is still the right call. For borrowers planning to leave public service within a few years, consolidating may not be worth it.

Related: Public Service Loan Forgiveness

FFELP loans and income-driven repayment

Income-driven repayment on FFELP loans looks different from Direct Loan IDR.

What’s available to FFELP loans without consolidation: Income-Based Repayment (IBR) only. Payments are capped at 15% of discretionary incomeDiscretionary IncomeFor federal income-driven repayment plans, a borrower's adjusted gross income minus a set percentage of the federal poverty guideline for their family size. Monthly IDR payments are calculated as a percentage of this amount. if you borrowed before July 1, 2014 (the “original IBR” formula) or 10% if you borrowed on or after that date (the “new IBR” formula). Forgiveness comes at 25 years for original IBR and 20 years for new IBR.

What’s not available to FFELP loans: PAYE, ICR, and the SAVE plan. The Eighth Circuit vacated SAVE on March 10, 2026, and the Department has told SAVE borrowers to exit — but even before the vacatur, FFELP loans were never eligible. The same goes for the new Repayment Assistance Plan (RAP) launching July 1, 2026. If you want RAP, you’ll need to consolidate.

One catch on consolidating. If your Direct Consolidation Loan disburses on or after July 1, 2026, you lose access to IBR and every other legacy plan. RAP becomes your only repayment option — and your forgiveness timeline extends from 25 years on IBR to 30 years on RAP. If you want to keep IBR and its shorter clock, the new loan has to disburse by June 30, 2026.

SAVE, PAYE, and ICR are scheduled to phase out entirely by July 1, 2028. After that, the IDR landscape will be IBR and RAP. FFELP loans keep IBR. Everything else requires consolidation.

Related: The One-Time IDR Account Adjustment

Defaulted FFELP loans

A FFELP loan enters default at 270 days past due. Once it defaults, the loan transfers from your regular servicer to a guaranty agency — the private or state entity that originally guaranteed it.

The guaranty agency can garnish your wages administratively (without a court judgment), intercept your federal tax refund, and offset federal benefits like Social Security. It can also add up to 24.34% in collection fees to your balance.

You have three main paths out of FFELP default:

1. Loan rehabilitation — nine on-time monthly payments over ten months at a reasonable-and-affordable amount removes the default from your credit report. Available once per loan.
2. Consolidation — rolling the defaulted loan into a Direct Consolidation Loan resolves the default but leaves the mark on your credit report.
3. Repayment in full — possible but rare; settlements are sometimes negotiable.

The Fresh StartFresh StartA temporary federal initiative that allowed borrowers with defaulted federal student loans to return to good standing with a simple opt-in, restoring eligibility for aid and income-driven repayment. The enrollment period ended in 2024. program, which ran from 2023 through September 30, 2024, offered defaulted FFELP and Direct Loan borrowers a simplified path back to good standing. That window has closed. Rehabilitation and consolidation are now the only ways out.