§ 1679 — Supplemental higher education loan financing program

New York § 1679

• Jurisdiction: New York
• Law PBA: Public Authorities
• Title 4: Dormitory Authority
• Art. 8: Miscellaneous Authorities

Text

§ 1679. Supplemental higher education loan financing program. 1. The\npurpose of the supplemental loan financing program is to make available\nto students attending public and independent sector institutions of\nhigher education financial assistance beyond the grants and loans\navailable from state, federal and private sources where such students\ndemonstrate remaining financial need.\n 2. In furtherance of its powers under this title with respect to the\nsupplemental higher education loan financing program, the authority is\nauthorized:\n (a) to receive and accept from any source loans, contributions or\ngrants for or in aid of a supplemental higher education loan financing\nprogram or any portion thereof and, when desirable, to use such funds,\nproperty or labor only for the purposes for which it was loaned,\ncontributed or granted;\n (b) to make education loans to participating institutions for higher\neducation, and require that the proceeds of such education loans be used\nfor making student loans, funding reserves, providing for capitalized\ninterest and paying other costs and fees involved in making student\nloans or issuing bonds;\n (c) to issue bonds not in excess of two hundred million dollars for\nthe purpose of making direct loans, education loans for the express\npurpose of providing student loans, and the purchasing, acquiring or\ntaking by assignment or otherwise of student loans, provided, however,\nthat each such sale of bonds shall be subject to the approval of the\npublic authorities control board;\n (d) to purchase student loans from participating institutions for\nhigher education under terms and conditions which require that such\nloans were originated after the effective date of this section in\ncontemplation of participation by such institutions for higher education\nin a supplemental higher education loan financing program of the\nauthority authorized by this section and in anticipation of the purchase\nof such loans by the authority, provided, however, that, prior to the\nsale of bonds any portion of the proceeds of which shall be used for the\npurchase, acquisition or taking by assignment or otherwise of student\nloans, the authority shall by resolution adopt specific guidelines\nsetting forth the terms and conditions upon which such purchases,\nacquisitions and taking by assignment or otherwise shall be made. No\nsuch resolution shall be adopted until at least forty-five days after\nthe delivery of a copy of such proposed guidelines to the governor, the\ntemporary president of the senate and the speaker of the assembly for\ncomment.\n 3. The authority shall adopt guidelines, subject to review by the\nadvisory committee, created pursuant to subdivision ten of this section,\nand consistent with federal law and regulations to the extent applicable\nwhich shall include but not be limited to: (a) eligibility criteria for\nmaking education loans and direct loans; (b) limitations upon the\nprincipal amounts and the terms of education loans and direct loans; (c)\nqualifications and characteristics of borrowers; and (d) procedures for\nallocating education loans among independent institutions and for\nallocating direct loans among students and parents of students attending\npublic institutions. Such guidelines shall also include such eligibility\nstandards for borrowers as the authority shall determine are necessary\nor desirable in order to effectuate the purposes of this section\nincluding the following: (a) each student shall have a certificate of\nenrollment or acceptance for enrollment at a specific participating\ninstitution for higher education; (b) each student or his or her parents\nshall satisfy such financial qualifications as the authority shall\nestablish to effectuate the purposes of this section; and (c) each\nstudent and his or her parents shall submit such information as may be\nrequired by the authority to his or her institution for higher\neducation. Such guidelines shall also establish specific criteria\ngoverning the making of direct loans, education loans and student loans,\nprovisions for default, the establishment of default reserve funds, the\npurchase of default insurance, the provision of debt service reserve\nfunds, and the furnishing by participating independent institutions for\nhigher education of such additional guarantees of, and security with\nrespect to, education loans, student loans or the bonds as the authority\nshall determine, all of such criteria to be established to assure the\nmarketability of the bonds and the adequacy of the security for the\nbonds.\n 4. The authority shall contract with financial institutions, the New\nYork state higher education services corporation established by the\nprovisions of section six hundred fifty-two of the education law or\nother qualified loan origination and servicing organizations, which may\nassist in pre-qualifying borrowers for student loans and direct loans\nand which may service and administer each student loan and direct loan\nand each institution's respective loan series portfolio. The fees or\ninterest costs of each student loan or direct loan shall include a\nportion, if necessary, to cover the applicable pro rata cost of such a\nservicing organization.\n 5. The maximum amount of a student loan or direct loan shall not\nexceed:\n (a) in the case of a borrower who is a student, the student's cost of\nattendance for the period of time for which the loan is made, minus the\nfollowing amounts applicable to such period of time:\n (1) the amount of grant which the student receives, or would receive\nhad the student made application, under the federal Pell Grant program\nauthorized under title IV, part A, of the "Higher Education Act of\n1965", as now or hereafter amended;\n (2) the maximum net loan proceeds which the student receives, or would\nreceive had the student made application, under the guaranteed student\nloan program as defined under (i) title IV, part B, of the "Higher\nEducation Act of 1965", as now or hereafter amended, and (ii) the\nregulations implementing such program promulgated at 34 Code of Federal\nRegulations, part 682, as now or hereafter amended;\n (3) the maximum net loan proceeds which the student's parents receive,\nor would receive had the student's parents made application, under the\nparent loan to undergraduate students program as defined under (i) title\nIV, part B, of the "Higher Education Act of 1965", as now or hereafter\namended, and (ii) the regulations implementing such program promulgated\nat 34 Code of Federal Regulations, part 683, as now or hereafter\namended;\n (4) the maximum net loan proceeds which the student receives, or would\nreceive had the student made application, under the auxiliary loan to\nassist students program as defined under title IV, part B, of the\n"Higher Education Act of 1965", as now or hereafter amended;\n (5) the maximum net loan proceeds which the student receives, or would\nreceive had the student made application, under the health education\nassistance loan program as defined under (i) title IV, part C, of the\n"Health Professions Educational Assistance Act of 1976", as now or\nhereafter amended, and (ii) the regulations implementing such program\npromulgated at 42 Code of Federal Regulations, part 60-C, as now or\nhereafter amended;\n (6) the amount of scholarships, grants or other nonrepayable\nassistance received from government agencies, educational institutions\nor private institutions or organizations;\n (7) except in the case of a student who is eligible for a loan under\nthe auxiliary loan to assist students program as defined under Title IV,\npart B, of the "Higher Education Act of 1965", as now or hereafter\namended, the expected family contribution computed pursuant to section\n428 of the "Higher Education Act of 1965", as now or hereafter amended\nwith respect to families in which the total adjusted gross income of all\nmembers of the family exceeds thirty thousand dollars; and\n (b) (1) in the case of a borrower who is a parent of an eligible\nstudent, the student's cost of attendance minus (i) the amounts\ndetermined pursuant to subparagraphs one, two and six of paragraph (a)\nof this subdivision; and (ii) the amount of loan which the student\nreceives pursuant to paragraph (a) of this subdivision;\n (2) the combined maximum loan amount of both parents shall not exceed\nthe maximum amount as determined under this paragraph.\n 6. Notwithstanding any other provisions contained in this title, but\npursuant to guidelines, the authority may commingle and pledge as\nsecurity for a series or issue of bonds, with the consent of all of the\ninstitutions for higher education which are participating in such series\nor issue, the student loan series portfolios and some or all future\nstudent loan series portfolios of such institutions for higher education\nprovided that student loan series portfolios and other security and\nmoneys set aside in any fund or funds pledged for any series of bonds or\nissue of bonds shall be held for the sole benefit of such series or\nissue separate and apart from student loan series portfolios and other\nsecurity and moneys pledged for any other series or issue of bonds of\nthe authority. Bonds may be issued in series under one or more\nresolutions in the discretion of the authority.\n 7. The authority shall require that education loans be used solely to\nmake student loans and that direct loans be used solely for the purpose\nof financing the cost of attendance at public institutions for higher\neducation. The authority shall require that independent institutions for\nhigher education shall require that each borrower under a student loan\nshall use the proceeds solely for such cost of attendance and that each\nsuch borrower shall so certify.\n 8. Any student otherwise eligible for a student loan or for a direct\nloan shall not be disqualified by reason of his or her being under the\nage of eighteen years and, for the purposes of applying for, receiving\nand repaying such a loan, any such student shall be deemed to have full\nlegal capacity to act; provided, however, that the signatures of both\nparents of an unemancipated applicant shall be required for the purpose\nof receiving such a loan unless the authority determines in accordance\nwith guidelines established by the board of the authority that unusual\nfamily circumstances preclude the availability of such signatures.\n 9. The authority may charge to and apportion among participating\ninstitutions of higher education and students or their parents or both\nits administrative and operating costs and expenses incurred in the\nexercise of the powers and duties conferred by this section.\n 10. There is hereby created an advisory committee on the supplemental\nhigher education loan financing program to the dormitory authority which\nshall consist of the chairman of the authority, who shall serve as the\nchairman of such committee, the commissioner of education, the\nchancellor of the state university of New York, the chancellor of the\ncity university of New York, the president of the higher education\nservices corporation, the chairman of the board of trustees of the\ncommission on independent colleges and universities, the president of\nthe New York state financial aid administrators association and an\nundergraduate student appointed by the governor who is in attendance at\na public or independent institution of higher education located in this\nstate. Such committee shall participate in the development of and review\nthe program guidelines to be established by the authority as required by\nthis section and may make recommendations on, comment upon and advise\nthe members of the board of the authority with respect to such\nguidelines. Each of the members of such committee may designate in\nwriting to the chairman of the committee a representative to serve on\nsuch committee in the place of such member. The members of the committee\nshall receive no compensation for their services, but shall be entitled\nto reimbursement by the dormitory authority for their actual and\nnecessary expenses incurred in the performance of their duties.\n 11. The authority shall report annually to the governor and the\nlegislature on or before February first concerning its findings,\nconclusions and recommendations with respect to the operation of the\nprogram provided for in this section.\n