Department Issues New Guidance On Affiliated Lenders And Preferred Lender Lists

Abstract: The student loan marketplace has "changed significantly" since the Department issued final regulations on preferred lender lists late last year. And those changes have caused the Department to reexamine its guidance on preferred lender lists, according to Diane Auer Jones, assistant secretary for postsecondary education, in Dear Colleague Letter GEN-08-06, which was released last Friday.

What’s changed? Because of the student loan credit crunch, some schools are having difficulty finding the required minimum of three lenders to include on their preferred lender list. Even schools that can offer three today are unsure whether they’ll be able to offer three in the future as more lenders continue to drop out of the FFEL program. These issues prompted the Department reinterpret some of its regulations on preferred lender lists in the following ways.

The original article was published on 05/12/08 in NASFAA’s Today’s News.