<p>Is there a distinct advantage borrowing from your child's college via the "direct loan" program some offer vs. the local bank or the Fed Govt.</p>
<p>No there is not an advantage - actually quite the opposite - lenders are now offering all kinds of special incentive packages if you use their loan programs. These extra benefits means you don't pay origination fees, means you can get your interest rate lower, and even in some cases money credited to your balance.</p>
<p>Check around in your state for a non-profit lender - they usually offer the best programs because they have a lower cost of funds due to their nonprofit status.</p>
<p>Schools generally will determine if you have to use the Direct program versus selecting your own lender. So depending on which college you are going to you may not be able to select a lender.</p>
<p>One more thing - legally you are entitled to use any lender you want for your education loans regardless of what the school recommends - that is your right as a consumer and sometimes you may find you have to be forceful with a school to use the lender you want.</p>