The FFELP is a government-sponsored program that, through June 30, 2010, provided low interest loans to help students and their parents pay for education beyond high school. Under the program, loans (Federal Stafford, PLUS, and Consolidation Loans) were made through a public/private relationship involving borrowers, schools, lenders, TG, and the federal government; private lenders (such as local banks or credit unions) provided the money for the loans. TG reviewed loan applications and guaranteed the loans, the federal government subsidized and reinsured the loans, and borrowers repaid the loans. As a student loan guarantor, TG has guaranteed more than $74.2 billion in loans to more than 4.5 million student borrowers and their parents.
The Health Care and Education Reconciliation Act of 2010 eliminated new lending under the Federal Family Education Loan Program (FFELP) such that all Federal Stafford, PLUS, and Consolidation Loans first disbursed on or after July 1, 2010, must be made under the Federal Direct Loan Program (FDLP). FFELP loans disbursed prior to July 1, 2010, continue to be serviced according to the terms and conditions of the FFELP master promissory note the borrower signed when he or she obtained the loan.