§ 1679-A — Health education assistance loan financing program

§ 1679-a. Health education assistance loan financing program. 1. The\npurpose of the health education assistance loan financing program,\nhereafter referred to as the HEAL loan financing program, is to make\navailable to students attending public and independent institutions for\nhigher education financial assistance beyond the grants and loans\navailable from state, federal and private sources, other than\nsupplemental higher education loans pursuant to section sixteen hundred\nseventy-nine of this chapter, where such students demonstrate remaining\nfinancial need. Such program is created to encourage the participation\nof HEAL eligible institutions in conjunction with, but not in\nsubstitution for, the participation of financial or credit institutions\nin increasing the availability of HEAL loans to all eligible students.\nThe authority and institutions for higher education participating in\nsuch program shall to the extent practicable ensure that borrowers of\nsuch loans include individuals who are underrepresented or unrepresented\nin the health professions.\n 2. In furtherance of its powers under this title with respect to the\nHEAL loan financing program, the authority is authorized:\n (a) to receive and accept from any source loans, contributions or\ngrants for or in aid of the HEAL loan financing program or any portion\nthereof and, when desirable, to use such funds, property or labor only\nfor the purposes for which it was loaned, contributed or granted;\n (b) to make HEAL direct loans to students attending, and HEAL\neducation loans to participating independent institutions for higher\neducation, and require that the proceeds of HEAL education loans be used\nfor making HEAL student loans, funding reserves, providing for\ncapitalized interest and paying other costs and fees involved in making\nHEAL student loans or issuing bonds; and\n (c) to purchase HEAL student loans solely from participating\nindependent institutions for higher education under terms and conditions\nwhich require that such loans were originated after the effective date\nof this section in contemplation of participation by such institutions\nfor higher education in the HEAL loan financing program of the authority\nauthorized by this section and in anticipation of the purchase of such\nloans by the authority, provided, however, that prior to the sale of\nbonds any portion of the proceeds of which shall be used for the\npurchase, acquisition or taking by assignment or otherwise of HEAL\nstudent loans, the authority shall by resolution adopt specific\nguidelines setting forth the terms and conditions upon which such\npurchases, acquisitions and taking by assignment or otherwise shall be\nmade. No such resolution shall be adopted until at least forty-five days\nafter the delivery of a copy of such proposed guidelines to the\ngovernor, the temporary president of the senate and the speaker of the\nassembly for comment.\n (d) to sell HEAL direct loans, HEAL education loans and HEAL student\nloans purchased, acquired or taken by assignment or otherwise by the\nauthority to the extent necessary to assure the marketability of and\nadequacy of the security for the bonds of the authority.\n 3. The authority shall adopt guidelines, subject to review by the\nadvisory committee, created pursuant to subdivision ten of section\nsixteen hundred seventy-nine of this chapter, and consistent with\nfederal law and regulations to the extent applicable, which shall\ninclude but not be limited to: (a) eligibility criteria for making HEAL\neducation loans and HEAL direct loans; (b) limitations upon the\nprincipal amounts and the terms of HEAL education loans and HEAL direct\nloans; (c) qualifications and characteristics of borrowers; and (d)\nprocedures for allocating HEAL education loans among independent\ninstitutions and for allocating direct loans among 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 shall satisfy such\nfinancial qualifications as the authority shall establish to effectuate\nthe purposes of this section; and (c) each student shall submit such\ninformation as may be required by the authority to his or her\ninstitution for higher education. Such guidelines shall also establish\nspecific criteria governing the making of HEAL direct loans, HEAL\neducation loans and HEAL student loans, provisions for default, the\nestablishment of default reserve funds, the purchase of default\ninsurance, the provision of debt service reserve funds and the\nfurnishing by the participating independent institutions for higher\neducation of such additional guarantees of, and security with respect\nto, HEAL education loans, HEAL student loans or the bonds as the\nauthority shall determine, all of such criteria to be established to\nassure the marketability of the bonds and the adequacy of the security\nfor the bonds to finance fully federally insured HEAL direct loans, HEAL\neducation loans, and HEAL student loans.\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 HEAL student loans and HEAL\ndirect loans and which may service and administer each HEAL student loan\nand HEAL direct loan and each institution's respective HEAL loan series\nportfolio.\n 5. The maximum amount of a HEAL student loan or HEAL direct loan shall\nnot exceed the student's cost of attendance for the period of time for\nwhich the loan is made, minus the following amounts applicable to such\nperiod of time:\n (a) the maximum net loan proceeds which the student receives, or will\nreceive, under the guaranteed student loan program as defined under (i)\ntitle IV, part B, of the "Higher Education Act of 1965", as now or\nhereafter amended, and (ii) the regulations implementing such program\npromulgated at 34 Code of Federal Regulations, part 682, as now or\nhereafter amended;\n (b) the maximum net loan proceeds which the student's parents receive,\nor will receive, under the parent loan to undergraduate students program\nas defined under (i) title IV, part B, of the "Higher Education Act of\n1965", as now or hereafter amended, and (ii) the regulations\nimplementing such program promulgated at 34 Code of Federal Regulations,\npart 683, as now or hereafter amended;\n (c) the maximum net loan proceeds which the student receives, or will\nreceive, under the auxiliary loan to assist students program as defined\nunder (i) title IV, part B, of the "Higher Education Act of 1965", as\nnow or hereafter amended, and (ii) the regulations implementing such\nprogram promulgated at 34 Code of Federal Regulations, part 683, as now\nor hereafter amended;\n (d) the amount of scholarships, grants or other nonrepayable\nassistance received from government agencies, educational institutions\nor private institutions or organizations.\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 HEAL student loan series portfolios and some or all future\nHEAL student loan series portfolios of such institutions for higher\neducation provided that HEAL student loan series portfolios and other\nsecurity and moneys set aside in any fund or funds pledged for any\nseries of bonds or issue of bonds shall be held for the sole benefit of\nsuch series or issue separate and apart from HEAL student loan series\nportfolios and other security and moneys pledged for any other series or\nissue of bonds of the authority, and provided further that in no event\nshall HEAL student loan series portfolios be commingled with student\nloan series portfolios comprised of student loans made pursuant to the\nsupplemental higher education loan financing program authorized by\nsection sixteen hundred seventy-nine of this act or with any other loan\nportfolio. Bonds may be issued in series under one or more resolutions\nin the discretion of the authority.\n 7. The authority shall require that HEAL education loans be used\nsolely to make HEAL student loans and that HEAL direct loans be used\nsolely for the purpose of financing the cost of attendance at public\ninstitutions for higher education. The authority shall require that\nindependent institutions for higher education shall require that each\nborrower under a HEAL student loan shall use the proceeds solely for\nsuch cost of attendance and that each such borrower shall so certify.\n 8. Any student otherwise eligible for a HEAL student loan or for a\nHEAL direct loan shall not be disqualified by reason of his or her being\nunder the age of eighteen years and, for the purposes of applying for,\nreceiving and repaying such a loan, any such student shall be deemed to\nhave full legal capacity to act; provided, however, that the signatures\nof one parent of an unemancipated applicant shall be required for the\npurpose of receiving such a loan unless the authority determines in\naccordance with guidelines established by the board of the authority\nthat unusual family circumstances preclude the availability of such\nsignature.\n 9. The authority may charge to and apportion among participating\ninstitutions of higher education and students its administrative and\noperating costs and expenses incurred in the exercise of the powers and\nduties conferred by this section.\n 10. Bonds issued by the authority for the HEAL loan financing program\nshall be within the two hundred million dollar limitation set forth in\nparagraph (c) of subdivision two of section sixteen hundred seventy-nine\nof this chapter and each such issuance shall be subject to the approval\nof the public authorities control board.\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\nprograms provided for in this section.\n