N.Y. Education Law § 627: Standards for preferred lender lists

§ 627. Standards for preferred lender lists. A covered institution

that provides or makes available a preferred lender list must comply

with the following standards:

1. A preferred lender list must disclose the process by which the

covered institution selected lending institutions for such preferred

lender list, including, but not limited to, the method and criteria used

to choose the lending institutions and the relative importance of those

criteria;

2. A preferred lender list must state in the same font size and same

manner as the predominant text on the document that borrowers have the

right and ability to select the education loan provider of their choice,

are not required to use any of the lenders on such preferred lender

list, and will suffer no penalty for choosing a lender that is not on

such preferred lender list;

3. The covered institution's decision to include a lending institution

on any preferred lender list and the covered institution's decision as

to where on the preferred lender list the lending institution's name

appears shall be determined solely by consideration of the best

interests of the borrowers who may use such preferred lender list

without regard to the pecuniary interests of the covered institution;

4. The contents of any preferred lender list shall be reviewed and

updated no less than annually;

5. No lending institution shall be placed on a preferred lender list

unless such lending institution provides assurance to the covered

institution and to borrowers who take out loans from such lending

institution that the advertised benefits upon repayment will continue to

inure to the benefit of borrowers regardless of whether the lending

institution's loans are sold;

6. No lending institution that, to the covered institution's knowledge

after reasonable inquiry, has an agreement to sell its loans to another

unaffiliated lending institution shall be included on a preferred lender

list unless such agreement is disclosed therein in the same font size

and same manner as the predominant text on the document in which the

preferred lender list appears;

7. No lending institution shall be placed on a covered institution's

preferred lender lists or in favored placement on a covered

institution's preferred lender lists for a particular type of loan, in

exchange for benefits provided to the covered institution or to the

covered institution's students in connection with a different type of

loan.