261F.1 - DEFINITIONS.
261F.1 DEFINITIONS.
As used in this chapter, unless otherwise specified:
1. "Borrower" means a student attending a covered institution
in this state, or a parent or person in parental relation to such
student, who obtains an educational loan from a lending institution
to pay for or finance a student's higher education expenses.
2. "Covered institution" means any educational institution
that offers a postsecondary educational degree, certificate, or
program of study and receives any Tit. IV funds under the federal
Higher Education Act of 1965, as amended, or state funding or
assistance. "Covered institution" includes an authorized agent
of the educational institution, including an alumni association,
booster club, or other organization directly or indirectly associated
with or authorized by the institution or an employee of the
institution.
3. "Covered institution employee" means any employee, agent,
contract employee, director, officer, or trustee of a covered
institution.
4. "Educational loan" means any loan that is made, insured,
or guaranteed under Tit. IV of the federal Higher Education Act of
1965, as amended, directly to a borrower solely for educational
purposes, or any private educational loan.
5. "Gift" means any gratuity, favor, discount, entertainment,
hospitality, loan, or other item having a monetary value of more than
a de minimus amount. "Gift" includes a gift of services,
transportation, lodging, or meals, whether provided in kind, by
purchase of a ticket, payment in advance, or reimbursement after the
expense has been incurred. "Gift" does not include any of the
following:
a. Standard material, activities, or programs on issues
related to a loan, default aversion, default prevention, or financial
literacy.
b. Food or refreshments furnished to an officer, employee, or
agent of an institution as an integral part of a training session or
conference that is designed to contribute to the professional
development of the officer, employee, or agent of the institution.
c. Favorable terms, conditions, and borrower benefits on an
educational loan provided to a borrower employed by the covered
institution if such terms, conditions, or benefits are comparable to
those provided to all students of the institution.
d. Philanthropic contributions to a covered institution from
a lender, guarantor, or servicer of educational loans that are
unrelated to educational loans, provided, as applicable, that the
contributions are disclosed pursuant to section 261F.4, subsection 6.
e. State education grants, scholarships, or financial aid
funds administered under chapter 261.
f. Toll-free telephone numbers for use by covered
institutions or other toll-free telephone numbers open to the public
to obtain information about loans available under Tit. IV of the
federal Higher Education Act of 1965, as amended, or private
educational loans, or free data transmission service for use by a
covered institution to electronically submit applicant loan
processing information or student status confirmation data for loans
available under Tit. IV of the federal Higher Education Act of 1965.
g. A reduced origination fee.
h. A reduced interest rate.
i. Payment of federal default fees.
j. Purchase of a loan made by another lender at a premium.
k. Other benefits to a borrower under a repayment incentive
program that requires, at a minimum, one or more scheduled payments
to receive or retain the benefit or under a loan forgiveness program
for public service or other targeted purposes approved by the
attorney general, provided these benefits are not marketed to secure
loan applications or loan guarantees.
l. Items of nominal value to a covered institution, covered
institution employee, covered institution-affiliated organization, or
borrower that are offered as a form of generalized marketing or
advertising, or to create goodwill.
m. Items of value which are offered to a borrower or to a
covered institution employee that are also offered to the general
public.
n. Other services as identified and approved by the attorney
general through a public announcement, such as a notice on the
attorney general's internet site.
6. "Lender" or "lending institution" means a creditor as
defined in section 103 of the federal Truth in Lending Act, 15 U.S.C.
§ 1602.
7. "Postsecondary educational expenses" means any of the
expenses that are included as part of a student's cost of attendance
as defined in Tit. IV, part F, of the federal Higher Education Act of
1965, as amended.
8. "Preferred lender arrangement" means an arrangement or
agreement between a lender and a covered institution under which the
lender provides or otherwise issues educational loans to borrowers
and which relates to the covered institution recommending, promoting,
or endorsing the educational loan product of the lender.
"Preferred lender arrangement" does not include arrangements or
agreements with respect to loans under part D or E of Tit. IV of the
federal Higher Education Act of 1965, as amended.
9. "Preferred lender list" means a list of at least three
recommended or suggested, unaffiliated lending institutions that a
covered institution makes available for use, in print or any other
medium or form, by borrowers, prospective borrowers, or others.
10. "Private educational loan" means a private loan provided
by a lender that is not made, insured, or guaranteed under Tit. IV of
the federal Higher Education Act of 1965, as amended, and is issued
by a lender solely for postsecondary educational expenses to a
borrower, regardless of whether the loan involves enrollment
certification by the educational institution that the student for
which the loan is made attends. "Private educational loan" does
not include a private educational loan secured by a dwelling or under
an open-end credit plan. For purposes of this subsection,
"dwelling" and "open-end credit plan" have the meanings given
such terms in section 103 of the federal Truth in Lending Act, 15
U.S.C. § 1602.
11. "Revenue sharing arrangement" means an arrangement
between a covered institution and a lender in which the lender
provides or issues educational loans to persons attending the
institution or on behalf of persons attending the institution and the
covered institution recommends the lender or the educational loan
products of the lender, in exchange for which the lender pays a fee
or provides other material benefits, including revenue or profit
sharing, to the institution or officers, employees, or agents of the
institution. "Revenue sharing arrangement" does not include
arrangements related solely to products which are not educational
loans. Section History: Recent Form
2008 Acts, ch 1132, §3; 2009 Acts, ch 41, §106
Referred to in § 261F.4