N.Y. Public Authorities Law § 1679-a: Health education assistance loan financing program

§ 1679-a. Health education assistance loan financing program. 1. The

purpose of the health education assistance loan financing program,

hereafter referred to as the HEAL loan financing program, is to make

available to students attending public and independent institutions for

higher education financial assistance beyond the grants and loans

available from state, federal and private sources, other than

supplemental higher education loans pursuant to section sixteen hundred

seventy-nine of this chapter, where such students demonstrate remaining

financial need. Such program is created to encourage the participation

of HEAL eligible institutions in conjunction with, but not in

substitution for, the participation of financial or credit institutions

in increasing the availability of HEAL loans to all eligible students.

The authority and institutions for higher education participating in

such program shall to the extent practicable ensure that borrowers of

such loans include individuals who are underrepresented or unrepresented

in the health professions.

2. In furtherance of its powers under this title with respect to the

HEAL loan financing program, the authority is authorized:

(a) to receive and accept from any source loans, contributions or

grants for or in aid of the HEAL loan financing program or any portion

thereof and, when desirable, to use such funds, property or labor only

for the purposes for which it was loaned, contributed or granted;

(b) to make HEAL direct loans to students attending, and HEAL

education loans to participating independent institutions for higher

education, and require that the proceeds of HEAL education loans be used

for making HEAL student loans, funding reserves, providing for

capitalized interest and paying other costs and fees involved in making

HEAL student loans or issuing bonds; and

(c) to purchase HEAL student loans solely from participating

independent institutions for higher education under terms and conditions

which require that such loans were originated after the effective date

of this section in contemplation of participation by such institutions

for higher education in the HEAL loan financing program of the authority

authorized by this section and in anticipation of the purchase of such

loans by the authority, provided, however, that prior to the sale of

bonds any portion of the proceeds of which shall be used for the

purchase, acquisition or taking by assignment or otherwise of HEAL

student loans, the authority shall by resolution adopt specific

guidelines setting forth the terms and conditions upon which such

purchases, acquisitions and taking by assignment or otherwise shall be

made. No such resolution shall be adopted until at least forty-five days

after the delivery of a copy of such proposed guidelines to the

governor, the temporary president of the senate and the speaker of the

assembly for comment.

(d) to sell HEAL direct loans, HEAL education loans and HEAL student

loans purchased, acquired or taken by assignment or otherwise by the

authority to the extent necessary to assure the marketability of and

adequacy of the security for the bonds of the authority.

3. The authority shall adopt guidelines, subject to review by the

advisory committee, created pursuant to subdivision ten of section

sixteen hundred seventy-nine of this chapter, and consistent with

federal law and regulations to the extent applicable, which shall

include but not be limited to: (a) eligibility criteria for making HEAL

education loans and HEAL direct loans; (b) limitations upon the

principal amounts and the terms of HEAL education loans and HEAL direct

loans; (c) qualifications and characteristics of borrowers; and (d)

procedures for allocating HEAL education loans among independent

institutions and for allocating direct loans among students attending

public institutions. Such guidelines shall also include such eligibility

standards for borrowers as the authority shall determine are necessary

or desirable in order to effectuate the purposes of this section

including the following: (a) each student shall have a certificate of

enrollment or acceptance for enrollment at a specific participating

institution for higher education; (b) each student shall satisfy such

financial qualifications as the authority shall establish to effectuate

the purposes of this section; and (c) each student shall submit such

information as may be required by the authority to his or her

institution for higher education. Such guidelines shall also establish

specific criteria governing the making of HEAL direct loans, HEAL

education loans and HEAL student loans, provisions for default, the

establishment of default reserve funds, the purchase of default

insurance, the provision of debt service reserve funds and the

furnishing by the participating independent institutions for higher

education of such additional guarantees of, and security with respect

to, HEAL education loans, HEAL student loans or the bonds as the

authority shall determine, all of such criteria to be established to

assure the marketability of the bonds and the adequacy of the security

for the bonds to finance fully federally insured HEAL direct loans, HEAL

education loans, and HEAL student loans.

4. The authority shall contract with financial institutions, the New

York state higher education services corporation established by the

provisions of section six hundred fifty-two of the education law or

other qualified loan origination and servicing organizations, which may

assist in pre-qualifying borrowers for HEAL student loans and HEAL

direct loans and which may service and administer each HEAL student loan

and HEAL direct loan and each institution's respective HEAL loan series

portfolio.

5. The maximum amount of a HEAL student loan or HEAL direct loan shall

not exceed the student's cost of attendance for the period of time for

which the loan is made, minus the following amounts applicable to such

period of time:

(a) the maximum net loan proceeds which the student receives, or will

receive, under the guaranteed student loan program as defined under (i)

title IV, part B, of the "Higher Education Act of 1965", as now or

hereafter amended, and (ii) the regulations implementing such program

promulgated at 34 Code of Federal Regulations, part 682, as now or

hereafter amended;

(b) the maximum net loan proceeds which the student's parents receive,

or will receive, under the parent loan to undergraduate students program

as defined under (i) title IV, part B, of the "Higher Education Act of

1965", as now or hereafter amended, and (ii) the regulations

implementing such program promulgated at 34 Code of Federal Regulations,

part 683, as now or hereafter amended;

(c) the maximum net loan proceeds which the student receives, or will

receive, under the auxiliary loan to assist students program as defined

under (i) title IV, part B, of the "Higher Education Act of 1965", as

now or hereafter amended, and (ii) the regulations implementing such

program promulgated at 34 Code of Federal Regulations, part 683, as now

or hereafter amended;

(d) the amount of scholarships, grants or other nonrepayable

assistance received from government agencies, educational institutions

or private institutions or organizations.

6. Notwithstanding any other provisions contained in this title, but

pursuant to guidelines, the authority may commingle and pledge as

security for a series or issue of bonds, with the consent of all of the

institutions for higher education which are participating in such series

or issue, the HEAL student loan series portfolios and some or all future

HEAL student loan series portfolios of such institutions for higher

education provided that HEAL student loan series portfolios and other

security and moneys set aside in any fund or funds pledged for any

series of bonds or issue of bonds shall be held for the sole benefit of

such series or issue separate and apart from HEAL student loan series

portfolios and other security and moneys pledged for any other series or

issue of bonds of the authority, and provided further that in no event

shall HEAL student loan series portfolios be commingled with student

loan series portfolios comprised of student loans made pursuant to the

supplemental higher education loan financing program authorized by

section sixteen hundred seventy-nine of this act or with any other loan

portfolio. Bonds may be issued in series under one or more resolutions

in the discretion of the authority.

7. The authority shall require that HEAL education loans be used

solely to make HEAL student loans and that HEAL direct loans be used

solely for the purpose of financing the cost of attendance at public

institutions for higher education. The authority shall require that

independent institutions for higher education shall require that each

borrower under a HEAL student loan shall use the proceeds solely for

such cost of attendance and that each such borrower shall so certify.

8. Any student otherwise eligible for a HEAL student loan or for a

HEAL direct loan shall not be disqualified by reason of his or her being

under the age of eighteen years and, for the purposes of applying for,

receiving and repaying such a loan, any such student shall be deemed to

have full legal capacity to act; provided, however, that the signatures

of one parent of an unemancipated applicant shall be required for the

purpose of receiving such a loan unless the authority determines in

accordance with guidelines established by the board of the authority

that unusual family circumstances preclude the availability of such

signature.

9. The authority may charge to and apportion among participating

institutions of higher education and students its administrative and

operating costs and expenses incurred in the exercise of the powers and

duties conferred by this section.

10. Bonds issued by the authority for the HEAL loan financing program

shall be within the two hundred million dollar limitation set forth in

paragraph (c) of subdivision two of section sixteen hundred seventy-nine

of this chapter and each such issuance shall be subject to the approval

of the public authorities control board.

11. The authority shall report annually to the governor and the

legislature on or before February first concerning its findings,

conclusions and recommendations with respect to the operation of the

programs provided for in this section.