Borrower's Choice of Lenders

    In response to recent inquiries, the Utah Higher Education Assistance Authority (UHEAA) is issuing this bulletin as a follow-up reminder to UHEAA Bulletin Volume 2001, Issue 36 which addressed preferred lender lists and a borrower's choice of lender.

    Regulations regarding the use of school preferred lender lists and a borrower's choice of lender may be found in 34 CFR 682.603(e).  This section specifies that, "A school may refuse to certify a Stafford or PLUS loan application ... provided ... the school does not engage in a pattern or practice that results in a denial of a borrower's access to Federal Family Education Loan (FFEL) loans because of the borrower's ... selection of a particular lender or guaranty agency."

    Schools may make available to borrowers a preferred lender list which includes lenders who have commonly made student loans at that school.  However, schools may not deny a borrower access to a FFEL loan because of a borrower's selection of a particular lender which does not appear on such a list.  Borrowers must be allowed to receive a FFEL loan through the eligible lender of their choice.

    Any questions related to this Bulletin should be directed to UHEAA Policy and Training at 801.321.7166 or by e-mail to mjohnson@utahsbr.edu.