University of Tennessee

Recommended Lender Selection Philosophy

The Recommended lender list, created by higher education institutions, resulted from the need to address concerns of standardization, simplification, efficiency and cost reduction in the student loan process. The concept was to select lenders who could respond to these concerns in a manner that complimented the established loan processes of an institution. As the implementation of technology proliferates within institutions, the need to create a benchmark or standard has emerged into the lender lists of the current day.

At the University of Tennessee, the lender list remains a viable manner in which to utilize the strengths of the student loan lenders to the maximum benefit of the students and the University’s loan processes. The recommended lender selection philosophy at UT is vital to the University’s goal, as well as that of the Office of Financial Aid & Scholarships, of providing quality service and access for students and parents. As a result, the preferred lender selection philosophy developed by UT includes two main areas of concern, service and processing.

The level of quality service provided by a lender or loan servicer establishes the tone for the student’s borrowing experience. Service encompasses not only the period when the loan is processed, but also the period during which the loan is repayed by the student. Quality service and responsiveness to student and institutional concerns during the origination of a loan is a good indicator as to the service the student will experience in repayment. Likewise, poor service or lack of responsiveness to the student or the institution resulting in delays or confusion is usually evidence of frustrations the student will encounter during the life of the loan.

The University also has a responsibility to ensure the origination and delivery of loan funds is prompt, seamless and unencumbered for the student. To this end, lender efforts must compliment the established loan process of the institution, rather than the reverse. Additionally, every institution is unique and a lender must be flexible in its approach to the student loan process and willing to explore new avenues of technology to enhance service to students.

The University of Tennessee developed a list of qualifications for a lender to be considered for inclusion on UT’s Recommended Lender List. The list represents the elements that the University deems important to the effective origination and delivery of student loan proceeds to students and parents. The list is not all-inclusive and is intended to lay the groundwork for discussion and provide an outline of the expectations the University has for preferred lenders.

Recommended lender status is determined by the UT Lender Advisory Committee, which is comprised of UT Administrators, faculty, staff, and students through the use of an RFI (Request For Information) Proposal Process.

Recommended Lender Qualifications

Service

• Facilitate a single point of contact for the school

• Lender will not cross-market credit banking services internally or externally

• Lender will not participate in direct solicitation of parents and/or students

• Responsiveness to students, parents, and the school

• Proven record of quality service, for the lender and/or servicer, in the student loan industry

• Competitive borrower rewards and benefits

• Name recognition

Processing

• Utilize a Tennessee guarantee (TSAC)

• Electronic school certification process

• EFT of funds between the lender and school

• A current CommonLine participant for origination, response, changes, and EFT

• Lender will service loans, or if sold, single servicer for life of loan, preferably serviced in Tennessee

• All loans, federal and private, should be serviced at the same location with a single, combined statement

• Electronic or telephone PLUS pre-approval capabilities

• Conformance with our institutional procedures