{"data":{"id":"us-ky/krs-164a.010","jurisdiction":"us-ky","citation":"KRS 164A.010","heading":"Findings -- Determinations -- Intent.","body":"The General Assembly of the Commonwealth of Kentucky hereby makes the following\nfindings and determinations and promulgates the following statements of legislative\nintent:\n(1) That the attainment by every citizen of his or her educational goals will inure to the\ngeneral welfare, well-being, and productivity of the Commonwealth. Accordingly, it\nis hereby determined and declared that providing higher education assistance to\nneedy, qualified students is in the best interest of the Commonwealth and\nconstitutes the implementation of a public purpose of statewide import of the\nCommonwealth.\n(2) Pursuant to KRS 164.740 to 164.764, the Kentucky Higher Education Assistance\nAuthority has heretofore been created and has rendered valuable and material\nservices to the Co mmonwealth and its citizens in the effectuation of the public\npolicy stated in the foregoing subsection. Pursuant to said cited statutory authority,\nthe Kentucky Higher Education Assistance Authority is legally authorized to make\nand to guarantee student l oans, and is eligible to reinsure student loans with the\nUnited States of America pursuant to the Higher Education Act of 1965, as\namended. The United States Secretary of Education has been authorized to enter\ninto insurance or reinsurance agreements with the Kentucky Higher Education\nAssistance Authority, and other lending institutions in the Commonwealth pursuant\nto which insured student loans have been made possible for the benefit, welfare, and\nwell-being and for the future benefit of citizens, resident s and inhabitants of the\nCommonwealth.\n(3) The 1976 amendments (P.L. 94-482) to the Higher Education Act of 1965 (P.L. 89 -\n329), provided incentives for states to establish and implement programs of student\nloan insurance by providing federal reinsurance of  any losses due to the death,\ndisability, bankruptcy or default of the borrower. The education amendments of\n1976 (P.L. 94 -482) offered further incentives to states to establish insured student\nloan programs including the payment of certain administrative expenses to a state\nagency, the payment of interest on student loans directly by the federal government\nwhile qualified students are pursuing a course of education at an eligible institution,\nthe payment of special allowances to holders of state insured st udent loans and the\nreimbursement of costs of collection to state student loan insurance agencies in the\nevent of defaults. The Omnibus Budget Reconciliation Act of 1993 (P.L. 103 -66)\nfurther amended the Higher Education Act of 1965 by reducing the rate of insurance\npayable to holders of insured student loans first disbursed on or after October 1,\n1993, to ninety -eight percent (98%) of losses resulting from the default of the\nborrower, and reduced the federal reimbursements to the guarantee agency to a\nmaximum of ninety -eight percent (98%) of the principal and interest amount on\ndefaulted insured student loans, with further reductions to eighty -eight percent\n(88%) and seventy-eight percent (78%) when the amount of reinsurance claims paid\nin any one (1) year exceeds five percent (5%) and nine percent (9%), respectively,\nof insured student loan amounts in repayment as of the end of the preceding federal\nfiscal year.\n(4) The General Assembly hereby determines and declares that in order to continue the\nInsured St udent Loan Program in Kentucky, to enable eligible lenders including\nbanks and trust companies and the Kentucky Higher Education Assistance\nAuthority to be able to continue to make student loans available to qualified\nstudents and to ensure that the Common wealth of Kentucky shall not lose the\nbenefits of the Insured Student Loan Program, it is necessary that there be created a\nbody corporate and politic to act as a financing agency, and to assure that a\nsecondary market for insured student loans be created and maintained. The actions\nand duties of such body corporate and politic to be carried out in such manner so as\nto assure that any student loans acquired by such entity have the benefit of state\ninsurance with federal reinsurance to the end that the asset s of the Commonwealth\nbe not committed to such purposes.","path":["KRS Chapter 164A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=4529","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:19Z","sha256":"bd4efd3b6172fbedaa1b7eadccaa276e4a758ec4ce89375194d23282cfa7aa13","source_id":"us-ky","stale":false,"prev":"us-ky/krs-164.993","next":"us-ky/krs-164a.011"},"notice":"GroundRules: Original legal text. Not legal advice."}