N.Y. State Finance Law § 78-a: New York higher education loan program variable rate default reserve fund

§ 78-a. New York higher education loan program variable rate default

reserve fund. 1. There is hereby created and established in the sole

custody of the state comptroller a special fund to be known as the New

York higher education loan program variable rate default reserve fund

which shall be for the exclusive benefit of the holders of variable rate

education loans originated pursuant to the New York higher education

loan program codified in part V of article fourteen of the education

law, other than variable rate education loans described in subdivision

six of section two thousand four hundred five-a of the public

authorities law.

2. Amounts held in this fund shall not be, or be deemed, funds of the

state or funds under the management of the state or the higher education

services corporation. The obligations of the fund shall not be, or be

deemed, the debts or obligations of the state and the state shall not

be, or be deemed, in any way obligated to: any holder of any such

education loan; any holder of bonds issued pursuant to the public

authorities law for the purposes of the New York higher education loan

program; any fiduciary or provider of any credit facility, liquidity

facility or interest rate exchange agreement with respect to such bonds;

or any other creditor of this fund.

3. Such fund shall consist of all moneys received by the higher

education services corporation pursuant to paragraph (b) of subdivision

seven of section six hundred ninety-two of the education law, in

connection with variable rate education loans made under part V of

article fourteen of the education law, other than variable rate

education loans described in subdivision six of section two thousand

four hundred five-a of the public authorities law. The state

comptroller, at the request of the higher education services

corporation, shall establish accounts within the fund and priorities of

payment from such accounts and shall invest the fund in compliance with

applicable state laws concerning the investment of public funds. Moneys

in the fund shall be segregated from all other funds kept by the state

comptroller and shall not be used for any other purpose beyond those set

forth in part V of article fourteen of the education law or in this

section.

4. The state comptroller shall make payments from the fund in amounts

and at times required by the higher education services corporation

pursuant to part V of article fourteen of the education law.

Notwithstanding subdivision one of this section, upon certification by

the State of New York mortgage agency that a variable rate education

loan described in subdivision three of this section has been acquired by

the agency or has become subject to the agreement of the agency to

acquire such education loan, the state comptroller shall make transfers

from the monies in the variable rate New York higher education loan

program default reserve fund to the corporation for deposit into the

state of New York mortgage agency New York higher education loan program

default reserve fund created by subdivision six of section two thousand

four hundred five-a of the public authorities law in amounts certified

by the agency and the corporation as properly allocable to such

education loan.