confused about loans!

[jregan]

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o.k., this might be completely stupid but I thought the federal government was my lender for stafford loans.Then I seen people asking who is the best lender for stafford loans. I have received federal stafford loans for a few semesters and I never chose a lender I just returned the acceptance letter to the school and did the promissory note, and loan entrance counseling, so what am I missing here? I also received a letter a few months ago stating that I could pay the interest that has acrued so far on my unsubsidized loans,does anyone know how long I have to pay that interest before it capitalizes? 😕

 

[ultimatekooda]

o.k., this might be completely stupid but I thought the federal government was my lender for stafford loans.Then I seen people asking who is the best lender for stafford loans. I have received federal stafford loans for a few semesters and I never chose a lender I just returned the acceptance letter to the school and did the promissory note, and loan entrance counseling, so what am I missing here? I also received a letter a few months ago stating that I could pay the interest that has acrued so far on my unsubsidized loans,does anyone know how long I have to pay that interest before it capitalizes? 😕

jregan,
I hope I have this figured out, because I'm new to all this as well, but I'm pretty sure there are 2 types of federal loan programs, and schools use one or the other:

(from the Sallie Mae website)
Federal education loans
Federal programs are the single largest source of education loans. The two primary programs are the Federal Family Education Loan Program (FFELP) and the William D. Ford Federal Direct Loan Program (FDLP). The loans available through these programs start with the same terms; with the FFELP, however, your bank, credit union, or school is the lender, and with the FDLP, the U.S. Department of Education is the lender.

I'm thinking your schools uses the FDLP program, like the school I'll be attending in the fall. We were never given a choice to choose a private lender. As for the interest question, I think it depends on when your loan capitalizes, like for most private lenders it's when repayment begins (ie, after school or residency and grace-period).

I could be totally wrong but this is how I understand it. Now if I could only figure out the best private lender for the money I need that the govt didn't give me...