53B-13-111 - Loans or purchase of obligations -- Rules -- Options -- Repayment of federally insured loans.
53B-13-111. Loans or purchase of obligations -- Rules -- Options -- Repayment offederally insured loans.
(1) The board may purchase obligations from lenders or make loans to eligibleborrowers, out of money available to the board for loans. The board shall promulgate rules fordetermining the needs of the respective borrowers for loans and for the purpose of making loansor purchasing obligations. The amount of an obligation purchased by the board or of a loan madeby the board to an eligible borrower, whether enrolled or to be enrolled in a private institution ora tax-supported public institution, is determined by the board upon the basis of substantiallysimilar standards and guides set forth in the board's rules. The board, in determining the needs ofeligible borrowers for guaranteed loans, may consider the amount of assistance available to thestudents.
(2) When the board purchases an obligation or makes a loan, and again immediatelybefore a repayment schedule on the loan or obligation is signed by the borrower, the board shallcause a written statement to be delivered to the borrower describing in detail whether an optionexists and, if so, who may exercise the option, under what conditions the option may beexercised, and what options are available relating to the following:
(a) the term of the loan;
(b) the repayment period on the loan;
(c) an extension of the term or repayment period on the loan and the conditions ofrepayment under the extension;
(d) a deferment or forbearance on the repayment of the loan or on interest accruing on theloan, whether interest is to be paid during the deferment or forbearance, and the terms ofrepayment after the deferment or forbearance;
(e) the period of time between installment payments on the loan and whether graduatedor unequal installment payments may be made;
(f) the minimum annual payment on the loan, and if more than one loan is taken from theboard or if the borrower takes or has taken an educational loan from another source, theavailability of consolidation, transfer, or assignment of the loans and the minimum annualpayment on the aggregate of the loans;
(g) the granting of an interview before or at the time the borrower signs a repaymentschedule; and
(h) the revision or renegotiation of the repayment schedule on the loan after repaymenthas commenced, or if other educational loans from the board or another source are taken after therepayment has commenced.
(3) On obligations purchased or loans made by the board which are federally insuredloans, the board may establish variable repayment schedules conforming to the need anddocumented income levels of borrowers, if the schedules are not inconsistent with federal laws,rules, or regulations governing the insured loans. A borrower making payments on a loan mayrequest and be granted a revised repayment term or schedule based upon the established variablerepayment schedules.
Enacted by Chapter 167, 1987 General Session