§ 45-38.1-5.1 - Powers relative to education loan financing programs.
SECTION 45-38.1-5.1
§ 45-38.1-5.1 Powers relative to educationloan financing programs. – (a) The corporation has all the powers necessary or convenient to carry out andeffectuate the purposes and provisions of this chapter, including the followingpowers in addition to others granted by this chapter:
(1) To determine criteria and guidelines encompassing thetype of, and qualifications for, education loan financing programs and issuanceof bonds or notes by the corporation, including eligibility standards forborrowers that the corporation determines are necessary or desirable in orderto effectuate the purposes of this chapter;
(2) To establish specific criteria governing the eligibilityof institutions for higher education to participate in its programs and for themaking of corporation loans and education loans, the issuance of bonds ornotes by the corporation, provisions for default, the establishment of defaultreserve funds, the purchase of default insurance, the provision by theinstitutions of prudent debt service reserves, and the furnishing, byparticipating institutions for higher education and others, of additionalguarantees of the education loans, corporation loans, or bonds as thecorporation determines;
(3) To establish rules and regulations with respect tocorporation loans, education loans, and education loan series portfolios;
(4) To receive and accept from any source, loans,contributions, or grants for or in aid of a corporation education loanfinancing program, or any portion of it, and, when desirable, to use the funds,property, or labor only for the purposes for which it was loaned, contributed,or granted;
(5) To contract with guarantors, financial institutions, orother qualified loan origination and servicing organizations, which shallassist in prequalifying borrowers for education loans and service andadminister each education loan. The corporation may require that each borrowerbe charged a fee to defray the costs of origination, servicing, andadministration of education loans. The amount and method of collection of thefee shall be determined by the corporation. Participating institutions forhigher education may perform these acts if authorized by the corporation;
(6) To contract with a guarantor to provide security for thepayment of education loans through the issuance of insurance against default,or to provide a guarantee of payment covering all or a portion of eacheducation loan made by or on behalf of the corporation or by or on behalf of aninstitution for higher education from the proceeds of a corporation loan;
(7) To make corporation loans to participating institutionsfor higher education and require that the proceeds be used for making educationloans and paying costs and fees in connection with the loans;
(8) To charge and equitably apportion, among participatinginstitutions for higher education, its administrative costs and expensesincurred in the exercise of the powers and duties granted by this section;
(9) Notwithstanding any other provisions in this chapter, tocommingle and pledge as security for a series or issue of bonds, only with theconsent of all of the institutions for higher education which are participatingin the series or issue:
(i) The education loan series portfolios and some or allfuture education loan series portfolios of the institutions for highereducation; and
(ii) The loan funding deposits of the institutions; provided,that education loan series portfolios and other security and monies set asidein any fund or funds pledged for any series of bonds or issue of bonds are heldfor the sole benefit of the series or issues, separate and apart from educationloan series portfolios and other security and monies pledged for any otherseries or issue of bonds of the corporation. Bonds may be issued in seriesunder one or more resolutions or trust agreements in the discretion of thecorporation;
(10) To examine records and financial reports ofparticipating institutions for higher education, and to examine records andfinancial reports of any person, organization, or institution retained undersubsections (a)(5) or (a)(6);
(11) To do all things necessary or convenient to carry outthe purposes of this chapter.
(b) In carrying out the purposes of this chapter, thecorporation may issue bonds, the proceeds of which are loaned to two (2) ormore participating institutions for higher education or for any combination ofparticipating institutions for higher education and, thereupon, all otherprovisions of this chapter apply to and for the benefit of the corporation andthe participants in the joint program or programs. Any joint participationrequires the express approval of all participants.
(c) The corporation shall require that corporation loans beused solely for the purpose of education loans and in an amount not to exceedthe total cost of attendance, as defined by the corporation, less other formsof student assistance that the corporation may determine. The corporation shallrequire that institutions for higher education insist that each borrower underan education loan use the proceeds solely for educational purposes and purposesreasonably related to education, and that each borrower shall so certify.
(d) Whenever refunding bonds are issued to refund bonds, theproceeds of which were used to make corporation loans, the corporation mayreduce or increase the amount it is owed by the institution for highereducation which had received corporation loans from the proceeds of therefunded bonds. The institutions for higher education may reduce or increasethe amount of interest being paid on education loans which the institution hasmade pursuant to the corporation loans from the proceeds of the refunded bonds.