The U.S. Department of Education has sent a letter to college financial-aid officers reminding them that they must certify student loans from all lenders, not just those on their “preferred lender” lists. “We have recently received a number of complaints from students, parents, and lenders participating in the Federal Family Education Loan (FFEL) Program,” the letter reads, that some institutions are not allowing borrowers to choose their lender. “From the information we have received,” it adds, “we understand that some schools have refused to certify a loan because of the lender the borrower has selected.”

The letter, which went out last week, warns colleges that they may face fines or “other administrative actions” if they refuse to certify loans because of a student’s choice of lender. It comes as the department is weighing proposed new regulations that would place strict limits on how colleges use their preferred-lender lists, and as state and federal officials have stepped up their scrutiny of deals between colleges and lenders. —Kelly Field