N.Y. Education Law § 630: Penalties

§ 630. Penalties. 1. If after providing notice and an opportunity for

a hearing the department determines that a covered institution or

lending institution has violated any terms or provisions of this

article, then the covered institution or lending institution may be

liable for a civil penalty. Regardless of the department's determination

that a covered institution or lending institution is liable for a single

violation or a series of violations under this article, the maximum

penalty shall not exceed fifty thousand dollars. In taking action

against a covered institution or lending institution, consideration

shall be given to the nature and severity of violations of this article.

2. If after providing notice and an opportunity for a hearing the

department determines that a covered institution employee has violated

any terms or provisions of this article, then the covered institution

employee may be liable for a civil penalty. Regardless of the

department's determination that a covered institution employee is liable

for a single violation or a series of violations under this article, the

maximum penalty shall not exceed seven thousand five hundred dollars. In

taking action against a covered institution employee, consideration

shall be given to the nature and severity of violations of this article.

3. If after providing notice and an opportunity for a hearing the

department determines that a lending institution has violated a term or

provision of this article, such lending institution shall not be placed

or remain on any covered institution's preferred lender list unless

notice of such violation is provided to all potential borrowers of the

covered institution.

4. Nothing in this section shall prohibit the department from reaching

a settlement agreement with a covered institution, covered institution

employee or lending institution in order to effectuate the purposes of

this section. Provided, however, if such settlement agreement is reached

with a covered institution or lending institution, the department shall

provide notice of such action to all potential borrowers in a form and

manner prescribed by the department.

5. The department shall deposit the funds generated from this section

into the student lending education account, created by section

ninety-seven-hhhh of the state finance law. Such funds shall be given to

covered institutions upon application to the department for the purposes

of:

a. Educating borrowers and potential borrowers on the educational loan

process, including, but not limited to, available educational loan

options, understanding rates and terms of student loans, managing costs

and credit responsibilities, student loan repayment and loan

consolidation; and

b. Reimbursing borrowers from inflated educational loan prices caused

by revenue sharing agreements between such covered institution and a

lending institution.