Many of you can cite chapter and verse of the pre-HEOA Dept.
of Education regulations regarding lender list disclosures (Attend the upcoming
SLA webinar
on the new HEOA legislation and its impact on lender lists to learn about
changes.) The pre-HEOA regulations require that schools with preferred lender lists "disclose to prospective borrowers,
as part of the list, the method and criteria used by the school in selecting
any lender that it recommends or suggests." This clearly provides a lot of latitude on how schools choose to disclose this information.
With the 2008-09 lender lists now up on school websites, I thought it would be useful to enumerate the elements of the process that lenders are choosing to disclose to increase the transparency of the process. Here is the information that we are finding that schools are providing about their process (this information will be updated so be sure to refer back to it often):
- Discuss the rationale for having
a lender list (e.g. Why have one in the first place?)
- East Tennessee State University provided the most common
rationale: "Borrowers frequently
ask for guidance in the selection of a FFELP lender. For this
reason, the University publishes an updated List of Preferred Lenders
early each spring."
- East Tennessee State University provided the most common
rationale: "Borrowers frequently
ask for guidance in the selection of a FFELP lender. For this
reason, the University publishes an updated List of Preferred Lenders
early each spring."
- Disclose the means used to
collect information from lenders (e.g., RFI, RFP, questionnaire)
- Provide a sample of the RFI
or the actual answers provided by the lenders.
- Northwestern
provides example of their 2006 RFI.
- Johns Hopkins provides their 2007-2008 Alternative Loan RFI
on their website.
- The Connecticut State University system provided their RFI for
student loan services on the web.
- Catholic University RFI
- Northwestern
provides example of their 2006 RFI.
- Indicate what members of the
community were included on the committee.
- East Tennessee State University had "representatives from the Office of Financial Aid, the Bursar/Financial Services Office, and the Office of Internal Audit" on their lender selection team.
- In some cases, the
Financial Aid Director has chosen not to be involved in the process (e.g.
Western
Illinois University indicated that "The Director of Financial
Aid did not serve on the committee.")
- Indicate the number of
lenders invited to participate and an explanation as to why these lenders
were chosen.
- Connecticut College indicated that 24 lenders had been
invited to participate and that 17 had responded by the
deadline.
- West Chester University indicated that they sent an RFI to
50 lenders based on their loan volume and got 10 responses.
- Connecticut College indicated that 24 lenders had been
invited to participate and that 17 had responded by the
deadline.
- Indicate the number of
lenders who responded to the proposal by the deadline (see #5 for
examples).
- Indicate the criteria
utilized to select lender, often listing them based on their importance
- Drexel University indicated that they determined the criteria based on surveys of students and parents.
- College for Financial Planning lists their criteria in this disclosure statement.
- Indicate the scoring or rating
system utilized to rate lender responses
- Indicate the frequency which
list is/will be evaluated.
- Indicate how the committee dealt with the frequent lender changes.
- Provide statement that borrower can choose any lender whether or not they are on the lender list.
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