Presentation on theme: "The School Panel Jackie Lewis, Missouri State University Al Hermsen, Wayne State University Keith Broadus, University of Missouri Associate Member Facilitators:"— Presentation transcript:
The School Panel Jackie Lewis, Missouri State University Al Hermsen, Wayne State University Keith Broadus, University of Missouri Associate Member Facilitators: Becky Davis, Great Lakes Mindy Hager, First Marblehead
Evaluating Alternatives 1)No List 2)Comprehensive/Historical List 3)3 rd Party List 4)Preferred Lender List
No List No information provided on private loans NO ONE at your institution provides any guidance Residence hall, Bursar, President No detail on types of loans International Past Due Balance Certification programs through Continuing Education
Google Private Student Loan
Comprehensive or Historical Comprehensive Lender List List of all private education lenders that provide private student loans (that are currently providing private loans) and cannot exclude any lender Historical Lender List List of all private education lenders that were used by students attending the institution within a defined time frame (last academic year, or last three to five years, etc.) and cannot exclude any lender -The DOE recommended that the school must have a process defined for when they review the lender list (i.e. annually, semi-annually or even monthly) Note: It is required for both comprehensive and historical lists, that you provide the Application Solicitation Disclosure (ASD) link for each lender and it is recommended that if you have an electronic lender list, that the ASD is provided electronically (i.e. on the list) as well.
True Historical List
3 rd Party list 3 rd Party Lender List Entity that maintains neutral, comprehensive list and institution ensures that the list is broad in scope, does not endorse any lender and lender does not pay to be placed on the list or pay the 3 rd party entity a fee based On loan volume generated Please note: The DOE recently shared that 3 rd Party Lender lists that rank the lenders compromises the neutrality of the list Also note – your institution is 100% liable for information linking from your website.
Private Lender Arrangement (PLA) As defined by HEA, a PLA exists when both of the following conditions occur: - A lender provides or issues education loans to students, or the families of the students, attending a covered institution; and -The covered institution or an institution-affiliated organization recommends, promotes, or endorses the education loan products of the lender You do not have to have a formal agreement with a lender to have a PLA. A PLA can include providing brochures in your lobby, listing some of the lenders who have lent to students at your institution on a website, verbally providing information on lenders, etc. [HEA §151(8); §601.2(b)]
Preferred Lender List
The Value Of A Preferred List Students and Families : Provides a starting point for families to begin researching private loans Makes it easier for families to make private loan decisions by having reliable information in one place Schools : Helping to Educate the uneducated This is a completely different process than anything other loan Allows faster, easier private loan processing Lender representative that will keep you updated and informed on product changes
Regulation Intention When we published the final regulations, we expressed our view that a preferred lender list can be an effective tool to help families looking for federal student loans to finance the costs of postsecondary education, when the list reflects the schools unbiased research to identify lenders providing the best combination of services and benefits to borrowers at that school. Additionally, by providing this information, schools may help students and their parents navigate the increasingly complex student loan landscape. Further, we believe that a borrowers choice of lender may be better informed by preferred lender lists and other consumer information on the federal student loan process, which play a useful role in assisting financial aid administrators in dealing with the large volume of requests for information and assistance, and in informing borrower choice. Dear Colleague Letter GEN posted May 8, 2008 Subject: School Use of a Preferred Lender List in the FFEL Program
Eight Step process to PLA What you are already doing…… 1. Publish your schools code of conduct Part of Program Participation Agreement 2. Publish a statement that students should exhaust all Federal aid(grants and loans) before borrowing from a private loan Of course!
Selection Requirements 3-6. Evaluate and choosing – Quantitative or Qualitative process List at least 2 unaffiliated lenders Publish your schools method of choosing lenders Publish the reasons why the lenders were selected Publish that your students have the right to choose any lender not just ones on your lender 7. Disclose rates, fees, loan cost, repayment terms, and eligibility criteria used by lenders by placing pdfs or linking to lenders ASD
Reporting Department of Education has yet to announce what this will look like – It could be ASDs from each lender youve selected – It could be a couple of statements as to why youve chosen a particular lender At the FSA Conference in December 2010, DOE stated that there is a good chance the Department of Education will not regulate this and schools may not ever have to report In a June Gail McLarnon indicated that they have not implemented the annual reporting requirement and it is uncertain when they will
University of Missouri – No List
Missouri State – PLA Provides a reliable resource for our students – Cuts down on students working with the mom & pop shops – Cuts down on loan scams Provides an opportunity to educate about loans Better insures a working relationship with the school – School is able to get the money for their students – Lender understands requirements of school so student receives their funding Better insures good customer service – For students, parents and school If the school receives bad service it is most likely the students and parents are being treated just as poorly, if not worse. Schools must be able to receive answers on behalf of students and parents and know what is going on, as it is the school who is first contacted with the where is my money questions. Lists can provide info students need that they may not know to ask or look for Can better compare lenders and their products
Summary A lender list can be an effective tool for guiding students and their families Reporting on PLA criteria does not appear as though it will be burdensome Any verbal or physical distribution of lender information creates a PLL (even if this information is shared by another office) Students and their families rely on you for guidance
Sources Federal Register, October 28,2009, 34 CFR 601 – Dear Colleague Letter 08-06, May – Gail McLarnon, Department of Education & Supporting Documentation received on June
Legal Disclaimer This information is not comprehensive and is based on review and interpretation of regulations. This document should not be construed to be legal advice.