{"data":{"id":"us-ky/krs-164a.240","jurisdiction":"us-ky","citation":"KRS 164A.240","heading":"\"Eligible borrower\" defined -- Additional student loans permitted --","body":"Garnishment -- Administrative regulations -- Bonds to finance loans --\nMaximum annual loan amount.\n(1) (a) As used in this section, the term \"eligible borrower\" means a student, a former\nstudent, or the parent of a dependent student or former student, who\ndemonstrates an intention and capacity to repay an educational loan and meets\nthe loan criteria established by the promulgation of administrative regulations\nby the corporation.\n(b) Notwithstanding KRS 164A.020, with respect to any educational loan made or\nfinanced under this section, and any bonds or notes of the corporation to\nfinance educational loans under this section, as used in KRS 164A.010 to\n164A.240, the term:\n1. \"Disposable pay\" means the amount remaining of a borrower's\nemployment earnings after the deduction of all amounts withheld as\nrequired by law;\n2. \"Eligible institution\" shall be deemed to include any educational\ninstitution approved by the corporation;\n3. \"Eligible lender\" shall be deemed to include any financial institution\napproved by the corporation; and\n4. \"Insured student loan\" or \"student loan\" shall be deemed to include any\neducational loan.\n(2) (a) In addition to the authority granted by KRS 164A.01 0 to 164A.240, the\ncorporation is authorized to:\n1. Establish, finance, and operate educational loan programs deemed\nnecessary by the Kentucky Higher Education Assistance Authority to\nmake or cause to be made educational loans to meet the financial needs\nof eligible borrowers;\n2. Exercise any of its powers with respect to educational loans pursuant to\nKRS 164A.010 to KRS 164A.240; and\n3. Establish an administrative garnishment process for the collection of\ndefaulted educational loans and promulgate regulations pursuant to KRS\nChapter 13A pertaining to the process. The process shall begin no\nsooner than one hundred eighty (180) days after the borrower fails to\nmake payments on the debt that has been due and owing. The process\nshall limit garnishment to no mor e than ten percent (10%) of the\ndisposable pay of the defaulted borrower and ensure that the borrower's\ndue process rights are protected.\n(b) The corporation may, in connection with the program, enter into agreements\nwith loan servicing organizations, guar antors, insurers, financial institutions,\neligible lenders, and eligible institutions. The educational loan programs may\nprovide for either the making of educational loans to eligible institutions and\nthe relending to eligible borrowers or the making and p urchasing of\neducational loans by the corporation.\n(3) The corporation may promulgate administrative regulations to implement the\nprovisions of KRS 164A.010 to 164A.240.\n(4) The corporation may finance the educational loan programs through the issuance of\nits bonds or notes subject to the provisions set forth in KRS 164A.010 to 164A.240,\nexcept that KRS 164A.080(3) shall not apply to any loans and KRS 164A.160 shall\nnot apply to any bonds or notes issued to fund loans a uthorized in this section. The\nproceeds of the bonds or notes used for the educational loan programs may be\ncommingled with the proceeds of bonds or notes financing insured student loans as\ndefined by KRS 164A.020. The bonds or notes issued under the provi sions of this\nsubsection shall be special and limited obligations, payable solely and only from the\nreceipts pledged and shall not constitute an indebtedness or liability of the\nCommonwealth or a pledge of the faith and credit of the Commonwealth.\n(5) The corporation may establish reserve funds or replacement funds in connection\nwith the issuance of bonds and notes for educational loan purposes as determined to\nbe necessary by the board to enable the corporation to accomplish its proper public\npurposes.\n(6) (a) The maximum annual loan amount shall not exceed:\n1. The costs incurred by the eligible borrower related to attendance less\nother financial aid, as certified by the eligible institution;\n2. The repayment amount of loans to fund the borrower's cost; or\n3. A lesser amount established by the board.\n(b) The loan proceeds shall be used by the eligible borrower solely for these\npurposes.\n(7) The corporation may issue taxable bonds or notes for the financing of any program\nauthorized by this chapter.\n(8) The Kentucky Higher Education Assistance Authority shall provide the services as\nthe corporation may require to efficiently carry out the purposes of this section.\n(9) A person under the age of eighteen (18) years shall be deemed to have full capacity\nto act an d shall have all rights, powers, privileges, and obligations of a person of\nfull age for the purpose of applying for, receiving, and repaying educational loans\nauthorized pursuant to this section. Notwithstanding any other statute to the\ncontrary, a repaym ent obligation imposed by this section shall not be voidable by\nreason of the age of the recipient at the time of receiving the educational loan.\n(10) The corporation shall establish the interest rates and other terms and conditions for\neducational loans i n a manner that it determines is financially sound. No provision\nof any other law of the Commonwealth of Kentucky that limits the rate or amount\nof interest payable on a loan shall apply to an educational loan authorized by this\nsection.\n(11) A loan made pursuant to this section shall be governed by Kentucky law.\n(12) KRS 164.774 and 131.565 are applicable to loans made pursuant to this section.","path":["KRS Chapter 164A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=48589","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:19Z","sha256":"38d24f5ac3ffbd8cc76bbc74b352263dd7a4b4a2ef75a5ad83fab58fbec98e10","source_id":"us-ky","stale":false,"prev":"us-ky/krs-164a.230","next":"us-ky/krs-164a.250"},"notice":"GroundRules: Original legal text. Not legal advice."}