What is Lender of Last Resort (LLR)?

LLR is a guarantor or lender that agrees to make Stafford or PLUS (both graduate and parent) loans to borrowers who are eligible under the program guidelines, but have been denied a conventional loan by at least 1 lender. Generally the guarantor is the LLR for its designated state(s); ASA is the LLR for Massachusetts and D.C.

What are the terms of a LLR loan?

For borrowers, the loans that they borrow under LLR have the same fees, terms, and conditions as a conventional Stafford or PLUS loan.

What is the minimum LLR loan amount that can be approved?

The minimum LLR loan amount that ASA will authorize $200.

Are all schools eligible to participate in LLR with ASA?

A school can receive a LLR loan from ASA if the school is:

• – Located in either Massachusetts or D.C
• – An eligible institution as determined by the Department of Education (ED), with an approved Program Participation Agreement (PPA)
• – Unable to find a lender willing to make conventional Stafford or PLUS loans to otherwise eligible borrowers

How does a borrower become eligible for a LLR loan from ASA?

An otherwise eligible Stafford or PLUS borrower becomes eligible for a LLR loan by being denied a conventional loan by at least 1 lender. PLUS borrowers rejected for credit reasons only are not considered eligible for a LLR loan. In addition, the borrower must be a resident of or be attending a school in either Massachusetts or D.C.

How does a borrower obtain a LLR loan from ASA?

If a borrower has attempted to obtain a conventional Stafford or PLUS loan through a lender and has been denied, the borrower must contact his or her school as soon as possible. The school may be able to assist the borrower in finding a conventional loan before proceeding with LLR.

If LLR is necessary, the borrower must provide the school with a copy of the denial (either e-mail or letter) and complete a new Master Promissory Note (MPN) with ASA’s LLR code.

What does my school need to do to process my LLR loan with ASA?

There are 2 options for schools to process LLR loans with ASA. The school may choose to process LLR loans individually or to become a designated LLR institution.

With the first option the school must submit all of the documents below to ASA:

• – An original Master Promissory Note (MPN) with ASA’s LLR code, completed in full by the borrower.
• – An original School Certification Form completed by the school’s financial aid administrator.
• – ASA’s LLR Cover Sheet, which will be provided to the school.

Or the school can choose to become a designated LLR institution which requires them to provide the following to ASA:

• – Written confirmation that 80% or more of the school’s eligible students and parents are unable to obtain conventional Stafford or PLUS loans.
• – Written confirmation that the school has made at least 3 attempts to locate lenders willing to make conventional Stafford or PLUS loans beyond the lenders which have previously lent to the school’s borrowers

With either option, the borrower must complete a new MPN and the school must certify the LLR loan. Once the loan is certified and approved, the borrower will receive a notice of guarantee and disclosure and the loan will be disbursed according to the school’s disbursement schedule.

When can a borrower expect the LLR loan funds?

Once ASA receives the required documentation, the loan(s) will be scheduled for disbursement. As a general rule, if all documents are complete and the preferred disbursement dates are not set in the future, the loan(s) could be disbursed in as few as 2, but no more than 8 business days, depending on the school’s disbursement schedule.

Who can a borrower call with questions about initiating a LLR loan?

A borrower must contact their school to begin the process of receiving a LLR loan. The school may be able to locate a lender willing to make a conventional loan before assisting the borrower with LLR.

Who can a borrower call with general questions about borrowing student loans?

A borrower can contact ASA’s Call Center at customersupport@amsa.com or 800.999.9080 and select Option 1. The Call Center’s normal hours of operation are Monday through Friday from 8:30 a.m. to 9:00 p.m. ET. Additional debt management information is also available at www.amsa.com.