What is a Preferred Lender List?

May 28, 2009 – 12:28 pm

By definition a preferred lender list is a list of lenders that a college suggests its students consider when taking out federally guaranteed loans. Students who receive a “preferred lender” list from a school should remember that those lists are not legally binding. Borrowers can choose from any federally approved lender and may often find a better deal outside the list.
As some of you may recall a handful of lenders were sanctioned for deceptive loan practices a couple of years ago. Among other things, they were sharing a portion of their loan revenue with the school’s financial aid office, which is a clear code of conduct violation. These financial aid officers were guiding students toward loan products that would offer them kickbacks. Fortunately for students today these unethical practices have come to a halt.
Heavy fines were levied and the Sunshine Act was born. The Sunshine Act protects students and parents […]

Original post by dbonvie and studentloannews.org