FISL or Federally Insured Student Loans, were loans that were originally insured by the Department of Education. These loans were available until June 1984, however they can still be part of a consolidation loan. The Federally Insured Student Loans are very similar to the Stafford Loans that are currently available now. However, the difference was that the Department of Education provided the loan guarantee to the lenders that were providing the loans. If there was a student that defaulted on these loans, the lender would than file a claim with the Department of Education requesting that the balance that was outstanding was due.
The Federally Insured Student Loans came before the Federal Family Education Loans or the FFEL program. The FFEL program gives loans to eligible students and parents of students. This program has Subsidized and Unsubsidized Federal Stafford Loans, Federal PLUS Loans and Subsidized and Unsubsidized Federal Consolidation Loans. The FISL program is no longer available and all loans now fall under the Direct Loan program instead. These loans are provided by private lenders, that include banks, credit unions and other financial institutions and the loans are backed by the government. The basic loan features are as follows:
Stafford Loans have the interest paid by the government while the student in in school and also during any time there is a grace period or deferment.
Unsubsidized Stafford Loans do not have the interest paid by the government while the student is in school and this also includes that the interest is not paid by the government during periods of deferment and grace periods as well.
PLUS Loans offer parents the ability to borrow to help pay for their student’s education. This can include dependent graduate and undergraduate students that they are paying the cost of the education for.
Consolidation Loans combine one or more federal loan together into one single loan to make a payment on.
With any of the loans, a student or parent needs to complete the loan application and the school will determine the amount of the loan and the financial need of the student or parent for the loan.