Learn About the Loan Process
It's always best to do some preparing before making life changing decisions. So, you should learn about the loan process.
Here we will describe what takes place through the entire process and what roles they play.
Federal Government
The U.S. Department of Education (the Department) administers the
federal student loan programs. As noted below, it also
serves as the lender under certain loan programs.
Borrower
You or your parent—the person who receives the
student loan and is responsible for repaying the loan.
Lender
Who lends the money for your student loan. Most schools
have developed working relationships with single lenders
or multiple lenders ("preferred" lenders). Contact each school's financial
aid office or Web site for their preferred lender lists.
The following could be a lender:
Bank
Savings and loan association
School
Credit union
Pension fund
Insurance company
Consumer finance company
Federal government
Lenders own loans and receive borrower payments. Lenders frequently sell their loans to other parties. If this happens, you will be notified and you will be told who the new owner is.
Federal Government Continued...
