September 3, 2008

My school won’t certify my loan!

Posted in Misc at 9:39 AM by Joe From Boston

What do you do if your school won’t certify your FFELP loan?

Well, if they say they don’t want to work with the lender you chose, that’s illegal.  They are not allowed to refuse certification based on your lender of chose; if they do the Department of Education can fine them!

You probably remember the hullabaloo last year with the New York Attorney General suing schools who forced students into using preferred lender lists.  Those lists are illegal.  Schools can recommend lenders who provide good service, but cannot restrict you to a lender or lenders of their choosing.

Unfortunately, some still try to get away with it.

Section 432(m)(1)(B)(ii) of the Higher Education Act of 1965, (as ammended and extended) prohibits this. Furethermore, the Department of Education’s regulations 34 CFR 682.603(e) further limit when a financial aid administrator can refuse to certify a Stafford or PLUS loan… and this does not include the borrower’s selection of a particular lender or guaranty agency.

So quote the law to them – that’ll get them jumping!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: