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All loans are made at the lender’s discretion. When a lender rejects a borrower’s request for a Federal Family Education Loan Program (FFELP) loan, the lender shall notify the borrower of the denial. Students who are unable to obtain loans from an eligible lender may qualify for the Lender-of-Last-Resort program.
Lender-of-Last-Resort (LLR) programs are authorized by the Higher Education Act [Section 428 (j)] and federal regulations to facilitate full access to postsecondary education for all eligible students. The principal guarantor for each state is responsible for developing rules and procedures for its LLR Program. Lenders wishing to serve as lenders-of-last-resort with ISAC are required to sign an addendum to their original Lender Agreement that includes the provisions of the Higher Education Act, as amended.
ISAC’s Lender-of-Last-Resort requirements can be found in ISAC Rules, Section 2720.40 (c). ISAC, within 60 days, will refer applicants to lenders-of-last-resort or will advise them that they do not meet the eligibility requirements. Additional information about this program can also be found in the section of the Common Manual concerning Lender Participation.
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