This bulletin describes the New York State Higher Education Services Corporation's (HESC) Lender-of-Last-Resort (LLR) Program. Detailed information is attached.

Here are highlights of the program:

Eligible Borrowers

A student/borrower is eligible for an LLR loan if he/she:

  • is enrolled in an eligible participating institution of higher education located in New York State;
  • is applying for a subsidized or unsubsidized Federal Stafford loan or Federal PLUS loan; and,
  • has received a denial from two lenders.

Application Procedures

The application process begins when the student/borrower provides HESC with (a) a letter requesting an LLR loan, and (b) notices from two lenders denying the student/borrower's loan requests. HESC will send the student/borrower an LLR Application and Master Promissory Note and a letter describing the application process. HESC's method of application will generally be the same as current procedures. Borrowers will be counseled before receiving an LLR loan.

Lender Participation

Several lenders have expressed interest in being part of a pool of lenders providing LLR loans. Any lenders interested in participating may call Mike Williams at (518) 473-9680; toll free at 1-866-431-HESC (1-866-431-4372) or by e-mail at mwilliams@hesc.org

If you have any questions regarding this bulletin, please contact the Office of Regulatory Compliance at 1-518-473-3986; toll free at 1-866-431-HESC (1-866-431-4372), press 6; or by e-mail at askpolicy@hesc.org