Everton plan on bringing in competition for Seamus Coleman this summer, which leaves Jonjoe Kenny on the outside looking in.
According to Sky Sports, Schalke lead Burnley and Crystal Palace in the race to sign the 22-year-old on loan for the upcoming season.
The England U-21 international, who is with the Three Lions for the U-21 Euros, made just nine Premier League appearances under Marco Silva and was unable to earn the starting job.
Any loan move agreed will be beneficial for all parties as Kenny is in need of valuable first-team experience and still has three years remaining on his current deal.
The youngster made his first-team debut in 2014 and has made 64 appearances for the club.
Kenny has previously enjoyed loan spells at Wigan and Oxford United and is said to be on £15k-a-week.