The life of a FFELP loan begins with the borrower’s application and the school’s certification of the borrower’s eligibility. It ends when the loan is paid in full or, in certain circumstances, when the loan is discharged. The life of a Federal Stafford or PLUS loan spans three phases:
- Origination – The school certifies the applicant’s eligibility, and the lender approves the loan and applies for the guarantee.
- The Interim Period – The school and lender manage the loan while the borrower or student is in school, and during any grace period to which the borrower is entitled.
- Repayment – The lender maintains, or services, the loan from the time the borrower is to begin making payments on the loan until the loan is paid in full by the borrower or by the guarantor as a claim.
During these three phases, the school and lender each have responsibilities for ensuring that the loan is handled properly. The Common Manual provides detailed information concerning all phases of the life of a loan.
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