Lender of Last Resort

The Missouri Department of Higher Education is committed to "Building Missouri's future . . . by degrees," and the MDHE's LLR program is one more crucial service for the state. As Missouri's state-designated FFELP guarantor, the MDHE has a Lender of Last Resort (LLR) program to assist Missouri students and schools in locating a student loan lender, if needed. (The MDHE's eligible lender list is still hundreds strong.)

Key points about Missouri's LLR program include:

• As Missouri's designated FFELP guarantor, only the MDHE may guarantee and make LLR loans within the state of Missouri. National guarantors may NOT. DCL 08-05 states, " . . . pursuant to section 428(j) and 34 CFR 682.401(c), the state designated guaranty agency is statutorily responsible for students attending the institutions in, and those students who are residents of, their designated state(s). Therefore, the designated guaranty agency for a state may make . . . LLR loans only to students attending an institution located in that state or to a resident of that state attending an institution in another state."

• From the borrower's perspective, the difference between normal FFELP loans and LLR loans is that the source of the funding may be different and that LLR loans may not have the fees subsidized. The borrower still has all of the same eligibility requirements and the same rights and responsibilities.

Also, any Missouri postsecondary institutions having trouble locating FFELP lenders for their borrowers must contact the MDHE to pursue "any institution-wide certification of the need for LLR loans" (DCL 08-05 page 2). In the past, LLR loans were to be available only at the borrower level, which meant that each and every borrower had to submit proof of their inability to find a FFELP lender. The institutional certification option makes the LLR program more accessible.

If you have any questions about the FFELP industry or the MDHE's LLR program or if borrowers at your institution have any difficulty locating a FFELP lender for the 2008-09 aid year, you may contact your MDHE client service representative or Shellee Kilbride. Copies of the Missouri LLR program may also be obtained by contacting the MDHE.