It’s important to have a good idea as to who you may be working with in regards to your loan, so we’ve put together an essential list to help you:
Your School’s Financial Aid Office awards your financial aid and verifies your eligibility based on federal guidelines. According to these guidelines, the financial aid office also determines the loan amount you receive.
Your Lender provides your actual loan funds. Your school receives your loan funds from the Department of Education.
A Servicer is a company your lender may use to help administer and manage your loan(s). A servicer may assist with the disbursement of funds, collection of payments, and account maintenance. In many cases, the servicer may perform all communication regarding your loan(s).
The Guaranty Agency is a private or government nonprofit agency that oversees the loan process. If you default (fail to repay your loan according to the terms of the promissory note) on your federal loan, the guaranty agency reimburses the lender. You may be charged a fee of up to 1% of your loan balance to offset the cost of insuring your loan.
The Student Financial Assistance Ombudsman is available if you encounter a problem with your federal student loan that cannot be resolved through reasonable efforts with your lender, servicer, or guarantor.
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– Online Learning Tips Staff