Payment of federal student aid funds to the borrower by the school. Students generally receive their federal student aid in two or more disbursements.
Federal Direct Student Loans, also known as Direct Loans or FDLP loans, are funded from public capital originating with the United States Treasury. FDLP loans are distributed through a channel that begins with the U.S. Treasury Department and from there passes through the United States Department of Education, then to the college or university and then to the student.
According to the United States Department of Education, more than 6,000 colleges, universities, and technical schools participate in FFELP, which represents about 80% of all schools. FFELP lending represents 75% of all federal student loan volume.
In 2010, the Health Care Reform Act incorporated provisions on Education, which terminated the Federal Family Education Loan Appropriations after June 30, 2010. From that date on, all government-backed student loans have been issued through the Direct Loans program.