§ 681-A — Guaranteed student loans; special requirements

§ 681-a. Guaranteed student loans; special requirements. 1. As used in\nthis section:\n (a) "Federal guaranteed student loan program" shall mean the program\nof the United States government making low interest loans available to\nstudents or parents of students to pay for their cost of attending\npost-secondary institutions established under Title IV, Part B of the\nHigher Education Act of nineteen hundred sixty-five, as amended, or any\nsuccessor statute.\n (b) "Guaranteed student loan" shall mean a loan made by a lender to a\nstudent who is resident of and is attending an institution in this state\nor a parent of such a student under and pursuant to the federal\nguaranteed student loan program.\n (c) "Lender" shall mean a bank, savings and loan association, credit\nunion, pension fund, insurance company, school or state lending agency\nparticipating in such federal guaranteed student loan program.\n (d) "Guarantee agency" shall mean any state agency or not-for-profit\ncorporation which has entered into an agreement with the United States\nsecretary of education to guarantee loans made under the federal\nguaranteed student loan program and which guarantees loans made to\nresidents of this state attending institutions in this state.\n (e) "Institution" shall mean any post-secondary institution, including\na vocational school, participating in the federal guaranteed student\nloan program.\n 2. (a) Any individual, institution, lender or guarantee agency which\nshall provide a student with an application for a guaranteed student\nloan shall advise the student prior to his or her execution of such\napplication that it is for such a loan. Any application for such a loan\nprovided to a student shall contain, on its face in bold faced, sixteen\npoint size print, the following statement: "This is an application for a\nguaranteed student loan. The money loaned to you must be repaid by you\nin full, with interest, in accordance with the terms of the loan.\nFailure to repay the loan can adversely affect your credit and result in\nlegal action against you."\n 3. No institution shall accept from a student an application for a\nguaranteed student loan if the name of the lender is not prominently set\nforth in the application.\n 4. An institution shall not require a student to make an application\nfor a guaranteed student loan to a particular lender or otherwise select\nfor the student such lender. An institution may recommend a lender,\nhowever, in such case, at such time it shall deliver to the student a\nstatement supplied by the president as to the student's right and\nability to obtain such loan from other lenders and as to the insurance\npremiums charged by guarantee agencies on such loans.\n 5. The corporation, pursuant to its authority to coordinate the\nstate's administrative effort in student financial aid and loan programs\nwith those of other levels of government shall develop and maintain\nrecords of the guaranteed student loans made by lenders to students who\nare residents of the state attending institutions in this state which\nare guaranteed by guarantee agencies other than the corporation. It\nshall obtain and collect from other guarantee agencies, at such times\nand in such form as the president shall determine, information as to\nsuch guaranteed student loans which shall include the following: (i) the\nnumber and total dollar amount of such loans made during the period\nreported, shown by lender and by institution; (ii) the number and total\ndollar amount of loans made to students while attending institutions in\nthis state which were purchased in default during the period reported,\nshown by lender and by institution; and (iii) the current default rate\nfor such loans by lender and by institution.\n 6. Where a violation of this section by a guarantor or an institution\nother than a public institution of higher education is alleged to have\noccurred, the attorney general may apply in the name of the people of\nthe state of New York to the supreme court of the state of New York\nwithin the judicial district in which such violations are alleged to\nhave occurred, on notice of five days, for an order enjoining or\nrestraining commission or continuance of the alleged unlawful acts. In\nany such proceeding, the court may impose a civil penalty in an amount\nnot to exceed five thousand dollars. Enforcement of any violation by a\npublic institution shall be as otherwise authorized by law.\n