11.09.09 | FFEL Lender of Last Resort
Did you know that a student who is otherwise eligible for a subsidized Stafford loan and, after not more than two rejections, who has been unable to find an FFEL lender willing to make such a loan, should contact the guaranty agency in his state of residence or the guaranty agency in the state in which his school is located?
The guaranty agency either must designate an eligible lender to serve as a lender of last resort (LLR) or must itself serve in that capacity and must respond to the student within 60 days. An LLR cannot make a loan that exceeds the borrower’s need, and it is not required to make a loan for an amount less than $200. The LLR, as with any other lender, may refuse to make the loan if the borrower fails to meet the lender’s credit standards. Each guaranty agency is required to develop rules and procedures for its LLR program.
So if you are having difficulty finding a FFEL lender to work with now you know you can flash your lender of last resort card!
The Student Loan Help blog is sponsored in part by:
