New York Codes, Rules and Regulations
Title 8 - EDUCATION DEPARTMENT
Chapter XX - Higher Education Services Corporation
Subchapter B - Federal Family Education Loan Program
Part 2103 - Lender Of Last Resort Program
Section 2103.4 - Application procedures

(a) After having submitted and been denied on two separate loan applications by two separate lenders, the student must provide the corporation with these loan denials, along with a letter requesting an LLR loan. If the student has a prior loan, one denial must be from the lender which made that loan. Upon receipt of the above from the student, the corporation will send the student an LLR loan application/promissory note.

(b) The student must complete the borrower section of the LLR application, sign the promissory note, retain the borrower copy of the LLR application/promissory note and forward the lender, school and NYSHESC copies of the LLR application/promissory note to the school.

(c) The school must complete the school certification section of the LLR application/promissory note, retain the school's copy, and return the lender and NYSHESC copies of the LLR loan application/promissory note to the student.

(d) The student must then send the lender and NYSHESC copies of the LLR loan application/promissory note to the corporation.

(e) Upon receipt of the completed LLR application/promissory note, the corporation or the lender will attempt to contact the student by telephone to complete pre-loan counseling. If the corporation is unable to contact the student, a letter will be sent advising the student that it is essential that he or she telephone the corporation within 15 days from the date of the letter to complete pre-loan counseling to avoid a delay in the processing of the LLR application. If no response is received from the student within 20 days, a second request letter will be sent.

(f) The corporation will hold the LLR application/promissory note until the 60th day following the expiration of the period of enrollment. If the student fails to respond by that date, the corporation will cancel the LLR application/promissory note. If the letter or letters are returned to the corporation as undeliverable, then the corporation will not process the loan application.

(g) After pre-loan counseling is complete, the student will be offered the opportunity to think about whether or not to take out the loan. The corporation will not process the application unless and until the student contacts the corporation to request processing of the application.

(h) If the loan is approved, the corporation will send the notice of loan guarantee and disclosure statement to the student and will send to the lender the notice of guarantee and the lender copy of the LLR application/promissory note.

(i) Loan proceeds approved by the lender may be disbursed to the school either by check or by electronic funds transfer.