Thirty-nine percent of schools that participated in the Direct Loan Program in 2001-02 also participated in FFELP and provided a number of reasons for doing so. Some schools participated in FFELP, in addition to the Direct Loan Program, to provide PLUS loans to parents. Some financial aid officials reported that parents receive better terms for PLUS loans through FFELP. For 57 percent of schools that participated in both loan programs, maintaining relationships with lenders was an extremely or very important factor in influencing this decision. Through our site visits we learned that some schools do this to establish relationships with lenders in order to allow students access to alternative.
