Know your Rights When You Consolidate

Due to recent Changes in the Industry, the following provisions have been instituted by some reputable student loan lenders….

1. Revenue Sharing Prohibition

Colleges are not permitted to receive anything of "value" from any lending institution in exchange for any advantage sought by the lending institution. Lenders can no longer pay to get on school's preferred lender list.

2. Gift and Trip Prohibition

College employees are not permitted from taking anything of more than nominal value from ANY lending institution. ie. trips, for financial aid officers, and other college officials paid for by lenders.

3. Advisory Board Compensation Rules

College employees are not allowed to receive anything of value in exchange for serving on the advisory board of any lending institution.

4. Preferred Lender Guidelines

College preferred lending lists must be based solely on the best interests of the students or parents who may use the list without regard to financial interests of the college.

5. Preferred Lender Disclosure

On all preferred lender lists the college must clearly and fully disclose the criteria and process used to select preferred lenders. Students must also be told that they have the right and ability to select the lender of their choice regardless of the preferred lender list.

6. Loan Release Disclosure

No lender may appear on a preferred lender list if the lender has an agreement to sell its loans to another lender without disclosing this fact.  In addition, no lender may bargain to be a preferred lender without respect to a certain type of loan by providing benefits to a college as to another type of loan.

7. Call Center Prohibition

Colleges must ensure that employees of lenders never identify themselves to students as employees of the colleges. No employee of a lender may ever work in or provide staffing to a college financial aid office.