Can anyone help with FFEL Loan Advice?

Does anyone in the group have FFEL loans? They are federal loans that were privately backed which puts them in a bit of a weird category. I’m unable to receive the Coronavirus relief and i assume if any mass forgiveness were given it would not apply to FFEL but I was able to apply to apply for Borrower Defense.

Essentially they require you consolidate if approved for the DTR. I recently received my mass denial letter along with everyone else as well and i’m trying to figure out my next steps.

What i’m debating is FFEL loans can be consolidated by the department of education essentially making a new loan that doesn’t fall into this weird category and are just Federal.

If I did that, would that make me ineligible to re-apply for the DTR? Which is essentially what I want to try doing again. If anyone has experience or can offer any help with this i’d really appreciate it!

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Hi @sleal0127,

You can consolidate your FFEL loans into a Direct Loan at anytime. It will not impact your ability to file for DTR at all.

The only consideration is that when you consolidate your FFEL loans into Direct Loans it will turn all of the outstanding interest on the FFEL loan into the principle of the new Direct Loan. It gets a little bit complicated, but there are some people in specific circumstances where that could pose a problem (if, for example, the interest was in the process of being waived you would want to wait until it had been waived before consolidating).

The moratorium on student is currently set to expire at the end of the year. We don’t know what will happen after that. In general, however, having Direct Loans will likely simplify your life no matter what is in store. If we ever get justice on DTR, everyone will need to consolidate into a Direct Loan anyway in order to process the cancellation. If there are future moratoriums or debt cancellations, having Direct Loans will make it more likely that they will apply to you and that you won’t have to jump through any extra hoops.

So if your only concern is filing another DTR, I’d say don’t be concerned about that at all. It doesn’t impact your ability to file a DTR.

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