FFELP Preferred Lender List Requirements Checklist

Institutions are under no obligation to provide a Preferred Lender List (PLL). However, if you decide to develop a Preferred Lender List (PLL) the following rules must be followed:
  • Choose at least three unaffiliated lenders for your Federal Loans PLL and at least two unaffiliated lenders for your Private Loans PLL. Include details of any affiliations between the lenders on the list.
  • Select lenders that will give your student borrowers and their families the best options, do not select lenders that offer the institution some financial or other benefit to be placed on the PLL.
  • Disclose clearly and fully why your institution has entered into a preferred lender arrangement with each lender on the PLL, particularly with respect to terms and conditions or provisions that favor the borrower.
  • State clearly on your website and on all informational material a description of the maximum amount of federal grant and loan aid available to your student under Title IV , and include a statement that your institution is required to process the documents necessary to obtain a Federal Family Education Loan from an eligible lender the student selects.
  • Disclose the method and criteria you used for selecting the lenders including comparative information on:
      • payment of loan fees;
      • competitive interest rates or terms;
      • quality servicing; and
      • any other additional benefit for the borrower beyond the standard terms.
  • Include a prominent statement that the borrower DOES NOT HAVE TO USE A LENDER FROM THE PLL.
  • Maintain and update the PLL at least annually.

Keep in mind your institution may not select a lender for the borrower, deny the borrower their right to choose a lender or delay certification because the borrower chose a different lender.

The PLL is a tool for you to provide best lending options for your student borrowers and their families. The Department will develop a form that will outline the minimum amount of disclosures that need to be met on a PLL. HESC will provide more information on the requirements or setting up and maintaining a PLL as we receive it.