Policy Frequently Asked Question: Preferred Lender List Requirements

Our school uses a preferred lender list. We always have had several lenders on the list and have placed the list on our Web site. Is that enough?

A school that uses a preferred lender list must post the list on its Web site, and must include the information in any publication or other communication in which it provides information regarding education loans. The school must provide the list to its current and prospective students and their families, and must update it annually.

If you have provided a preferred lender list on your school’s Web site in the past, assuming that each of the lenders you currently list still participates in the Federal Family Education Loan Program, you may need to add a few pieces of information to your list or update existing information. For example, federal requirements mandate that you disclose how your school chose the lenders that you include on the list, and provide comparative data about the benefits that each lender offers. If these lender benefits change, your annual update of the list should reflect those changes.

Your preferred lender list must include a statement that clearly states that your school permits its students and their families to use any FFELP lender, and that your school will not unduly delay the processing of a FFELP loan based on a student’s or parent’s choice of lender.

Other preferred lender requirements are in Common Manual subsection 4.4.A. USA Funds^® encourages your school to review those requirements and to ensure that your lender list information and your process for selecting and sharing are in line with the requirements.