US Dept of Education

Participants in the Federal Student Aid Programs

Who’s who in the Stafford Loan Program

The US Federal Government plays a key role in education lending throughout the Federal Family Education Loan Program (FFELP). These loans are made by lenders. The federal government guarantees the loan in case of default. See also Guarantee Agency.

The Student is the person who borrows the money under the FFEL program guidelines.

The Financial Aid Office at Murdoch University works with you and your parents to determine eligibility based on federal guidelines for different types of financial aid such as scholarships, loans and more. The Financial Aid Office also certifies or approves your federal loan application and the amount you can borrow.

A Guarantee Agency verifies your eligibility for a particular federal loan program and provides the insurance for those loans. If you do not repay your loan, the guarantee agency will pay the lender with funds received from the federal government and collect the balance directly from you. Murdoch University has chosen to partner with ASA who have the biggest foreign university division and who have an established history of responding quickly to questions from US student studying in foreign countries.

A Lender actually provides the funds. The lender may be a bank or other financial institution. The lender sends the money to the university. This money is applied first to any balance due on your student account. Any excess funds are given to you. The lender may sell your loan to another party. When this happens you will be notified by the lender and the new loan holder.

The School / University determines and certifies student eligibility for FFEL loans, provides loan counseling for student borrowers, may deliver loan proceeds to students, reports enrolments and other information about FFEL program borrowers, and complies with US laws and regulations governing the FFEL program. The school / university act as a fiduciary in these matters and is accountable for its administration of the program.

A Servicer is a company contracted by a lender to handle administrative aspects of the loan such as collection of payments, correspondence with borrowers, address changes, loan status updates and more. It is important to know the name of your servicer since quite often all communication regarding your loan will be with the servicer.