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One-Lender Requirement [ISAC Rules, Section 2720.41]
In accordance with ISAC Administrative Rules, all of a borrower’s outstanding ISAC-guaranteed loans must be made by the same lender provided the lender agrees to make all types of FFELP loans to the borrower for which he/she is eligible. Once the borrower selects a lender for his/her initial ISAC-guaranteed loan, all subsequent loans for that borrower will be guaranteed to the original lender unless:
- The borrower’s outstanding loans have been sold to a subsequent lender; any new ISAC loans will be guaranteed to the new lender;
- The lender is declared insolvent, becomes unapproved by ISAC, or has withdrawn from participation in FFELP, the borrower must select a new lender for subsequent loans;
- ISAC is informed that the borrower has provided authorization to have subsequent loans issued by a different lender by indicating a new lender code on the Master Promissory Note (MPN); or
- The borrower’s outstanding loan(s) was made by a lender-of-last-resort, the borrower must select a new lender for subsequent loans.
A school may also act as an educational lender. In order to receive a guarantee from ISAC, an educational lender must agree to ISAC's one-lender policy. The educational lender must be the school at which the borrower is currently enrolled and an undergraduate borrower must have made a good faith effort to obtain a loan from a commerical lender pursuant to federal regulations (682.601).
One-Holder Requirement [ISAC Rules, Section 2720.42]
In accordance with ISAC Administrative Rules, all of a borrower’s outstanding ISAC-guaranteed loans (Federal Stafford, SLS, and PLUS) must be sold by a lender to the same holder. Any subsequent ISAC-guaranteed loan for the borrower must also be sold to the same holder no later than 90 days from the borrower’s last date of attendance or 180 days following the last disbursement, whichever occurs later. In the event of untimely notification to the lender of the borrower’s change in enrollment status, the subsequent loan must be sold no later than 45 days after the lender became aware of the change in enrollment. Or in the case of a late disbursement, the subsequent loan must be sold within 45 days following disbursement. Failure to sell the subsequent loan by the applicable deadline shall result in the loss of guarantee. However, a guarantee may be reinstated if the lender initiates the sale of the loan to the appropriate holder within 90 days of identifying the violation.
ISAC’s one-holder policy shall not apply if:
- the holder is declared insolvent, has terminated its agreement with ISAC, or has withdrawn from participation in FFELP; or
- the borrower has provided authorization to have subsequent loans sold to a different holder.
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