Federal loan regulations require a school that participates in a preferred lender agreement to disclose their method of selecting the lenders included on their list of suggested lenders. Information below is provided to borrowers to disclose the method used to create Misericordia's Preferred Lender List.
According to Section 682.212 of the Federal Register, published by the Department of Education, "A school may, at its option, make available a list of recommended or suggested lenders, in print or any other medium or form, for use by the school's students or their parents, provided such list--
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Is not used to deny or otherwise impede a borrower's choice of lender
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Does not contain fewer than three lenders that are not affiliated with each other
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Does not include lenders that have offered, or have offered in response to a solicitation by the school, financial or other benefits to the school in exchange for inclusion on the list or any promise that a certain number of loan applications will be sent to the lender by the school or its students" (U.S. Department of Education, 2007).
A Preferred Lender List provides a comparison of selected lenders in relatively consistent terms, reducing confusion and assisting students and their families in making the best-informed borrowing decisions. We recommend that you research your options carefully when considering a private loan.
Steps Taken and Criteria Used to Select Lenders
Lenders are welcome to submit information on their products and services via a standard Request for Information (RFI) to the Student Financial Services Offices for each academic year. The questions included in the RFI address the following topics:
- Loan Fees
- Interest Rate Information
- Deferment Options
- Grace Period
- Past Due Balances
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- Repayment Terms and Options
- Up-Front Borrower Benefits
- Percentage of Borrowers Who Qualify for Benefits
- Borrowing Limits
- Eligibility Requirements
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Borrower Benefits Lenders are evaluated based of their offering of benefits to borrowers, such as competitive interest rates and terms, payment of origination fees on behalf of the borrower, availability of repayment options, and back-end borrower benefits (i.e. principal reduction, interest rate reduction, etc.)
Quality of Lender Products and Services Criteria used to evaluate each lender includes the following:
- Ease of application process
- Web-based application and services
- Timely and responsive processing of loans including resolving issues
- Consistent, timely, and accurate customer service
- Lenders practice to recommend students to maximize Federal financial aid first
- Lender Stability (Number of years in the student loan business, source of stability of the capital used, reputation, default rates)
With regulatory changes and market instability affecting lenders' decisions to remain in the student loan industry, it was important to select lenders who are reliable and will continue to service borrowers for future years.
Misericordia retains the right to maintain and alter it's preferred lender list at any time and to select lenders that consistently provide competitive products, along with responsible actions and policies that best serve our students.