Section 1679. Supplemental higher education loan financing program

1. The
  purpose of the supplemental loan financing program is to make  available
  to  students  attending  public  and  independent sector institutions of
  higher education  financial  assistance  beyond  the  grants  and  loans
  available  from  state,  federal and private sources where such students
  demonstrate remaining financial need.
    2. In furtherance of its powers under this title with respect  to  the
  supplemental  higher  education loan financing program, the authority is
  authorized:
    (a) to receive and accept from  any  source  loans,  contributions  or
  grants  for  or in aid of a supplemental higher education 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 education loans to participating institutions  for  higher
  education, and require that the proceeds of such education loans be used
  for  making  student  loans, funding reserves, providing for capitalized
  interest and paying other costs and  fees  involved  in  making  student
  loans or issuing bonds;
    (c)  to  issue  bonds not in excess of two hundred million dollars for
  the purpose of making direct loans,  education  loans  for  the  express
  purpose  of  providing  student  loans, and the purchasing, acquiring or
  taking by assignment or otherwise of student loans,  provided,  however,
  that  each  such  sale  of bonds shall be subject to the approval of the
  public authorities control board;
    (d) to purchase student  loans  from  participating  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  a  supplemental  higher  education  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 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.
    3. The authority shall adopt guidelines,  subject  to  review  by  the
  advisory committee, created pursuant to subdivision ten of this section,
  and consistent with federal law and regulations to the extent applicable
  which  shall include but not be limited to: (a) eligibility criteria for
  making education loans  and  direct  loans;  (b)  limitations  upon  the
  principal amounts and the terms of education loans and direct loans; (c)
  qualifications  and characteristics of borrowers; and (d) procedures for
  allocating  education  loans  among  independent  institutions  and  for
  allocating direct loans among students and parents of 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 or his or her parents
  shall  satisfy  such  financial  qualifications  as  the authority shall
  establish to effectuate the purposes  of  this  section;  and  (c)  each

  student  and  his or her parents 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 direct loans, education loans and 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 participating independent institutions for
  higher education of such additional guarantees  of,  and  security  with
  respect to, education loans, 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.
    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 student loans and direct loans
  and which may service and administer each student loan and  direct  loan
  and  each  institution's  respective  loan series portfolio. The fees or
  interest costs of each student loan  or  direct  loan  shall  include  a
  portion,  if  necessary, to cover the applicable pro rata cost of such a
  servicing organization.
    5. The maximum amount of a student  loan  or  direct  loan  shall  not
  exceed:
    (a)  in the case of a borrower who is a student, 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:
    (1)  the  amount of grant which the student receives, or would receive
  had the student made application, under the federal Pell  Grant  program
  authorized  under  title  IV,  part  A,  of the "Higher Education Act of
  1965", as now or hereafter amended;
    (2) the maximum net loan proceeds which the student receives, or would
  receive had the student made application, 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;
    (3) the maximum net loan proceeds which the student's parents receive,
  or would receive had the student's parents made application,  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;
    (4) the maximum net loan proceeds which the student receives, or would
  receive had the student made application, under the  auxiliary  loan  to
  assist  students  program  as  defined  under  title  IV, part B, of the
  "Higher Education Act of 1965", as now or hereafter amended;
    (5) the maximum net loan proceeds which the student receives, or would
  receive had the student made application,  under  the  health  education
  assistance  loan  program  as defined under (i) title IV, part C, of the
  "Health Professions Educational Assistance  Act  of  1976",  as  now  or
  hereafter  amended,  and  (ii) the regulations implementing such program
  promulgated at 42 Code of Federal Regulations,  part  60-C,  as  now  or
  hereafter amended;
    (6)   the   amount  of  scholarships,  grants  or  other  nonrepayable
  assistance received from government agencies,  educational  institutions
  or private institutions or organizations;

    (7)  except  in the case of a student who is eligible for a loan under
  the auxiliary loan to assist students program as defined under Title IV,
  part B, of the "Higher Education Act  of  1965",  as  now  or  hereafter
  amended,  the  expected family contribution computed pursuant to section
  428  of  the "Higher Education Act of 1965", as now or hereafter amended
  with respect to families in which the total adjusted gross income of all
  members of the family exceeds thirty thousand dollars; and
    (b) (1) in the case of a borrower who  is  a  parent  of  an  eligible
  student,  the  student's  cost  of  attendance  minus  (i)  the  amounts
  determined pursuant to subparagraphs one, two and six of  paragraph  (a)
  of  this  subdivision;  and  (ii)  the  amount of loan which the student
  receives pursuant to paragraph (a) of this subdivision;
    (2) the combined maximum loan amount of both parents shall not  exceed
  the maximum amount as determined under this paragraph.
    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 student loan series portfolios  and  some  or  all  future
  student loan series portfolios of such institutions for higher education
  provided  that  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 student loan series portfolios and other
  security and moneys pledged for any other series or issue  of  bonds  of
  the  authority.  Bonds  may  be  issued  in  series  under  one  or more
  resolutions in the discretion of the authority.
    7. The authority shall require that education loans be used solely  to
  make  student loans and that 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 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 student loan or for a 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 both
  parents 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 signatures.
    9.  The  authority  may  charge  to  and apportion among participating
  institutions of higher education and students or their parents  or  both
  its  administrative  and  operating  costs  and expenses incurred in the
  exercise of the powers and duties conferred by this section.
    10. There is hereby created an advisory committee on the  supplemental
  higher education loan financing program to the dormitory authority which
  shall  consist  of the chairman of the authority, who shall serve as the
  chairman  of  such  committee,  the  commissioner  of   education,   the
  chancellor  of  the  state university of New York, the chancellor of the
  city university of New York,  the  president  of  the  higher  education
  services  corporation,  the  chairman  of  the  board of trustees of the
  commission on independent colleges and universities,  the  president  of
  the  New  York  state  financial  aid  administrators association and an
  undergraduate student appointed by the governor who is in attendance  at
  a  public or independent institution of higher education located in this

  state. Such committee shall participate in the development of and review
  the program guidelines to be established by the authority as required by
  this section and may make recommendations on, comment  upon  and  advise
  the  members  of  the  board  of  the  authority  with  respect  to such
  guidelines. Each of the members  of  such  committee  may  designate  in
  writing  to  the  chairman of the committee a representative to serve on
  such committee in the place of such member. The members of the committee
  shall receive no compensation for their services, but shall be  entitled
  to  reimbursement  by  the  dormitory  authority  for  their  actual and
  necessary expenses incurred in the performance of their duties.
    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
  program provided for in this section.