TITLE 45

Towns and cities

CHAPTER 45-38.1

Health And Educational Building Corporation

SECTION 45-38.1-5.1



   § 45-38.1-5.1  Powers relative to education

loan financing programs. –

(a) The corporation has all the powers necessary or convenient to carry out and

effectuate the purposes and provisions of this chapter, including the following

powers in addition to others granted by this chapter:



   (1) To determine criteria and guidelines encompassing the

type of, and qualifications for, education loan financing programs and issuance

of bonds or notes by the corporation, including eligibility standards for

borrowers that the corporation determines are necessary or desirable in order

to effectuate the purposes of this chapter;



   (2) To establish specific criteria governing the eligibility

of institutions for higher education to participate in its programs and for the

making of corporation loans and education loans, the issuance of bonds or

notes by the corporation, provisions for default, the establishment of default

reserve funds, the purchase of default insurance, the provision by the

institutions of prudent debt service reserves, and the furnishing, by

participating institutions for higher education and others, of additional

guarantees of the education loans, corporation loans, or bonds as the

corporation determines;



   (3) To establish rules and regulations with respect to

corporation loans, education loans, and education loan series portfolios;



   (4) To receive and accept from any source, loans,

contributions, or grants for or in aid of a corporation education loan

financing program, or any portion of it, and, when desirable, to use the funds,

property, or labor only for the purposes for which it was loaned, contributed,

or granted;



   (5) To contract with guarantors, financial institutions, or

other qualified loan origination and servicing organizations, which shall

assist in prequalifying borrowers for education loans and service and

administer each education loan. The corporation may require that each borrower

be charged a fee to defray the costs of origination, servicing, and

administration of education loans. The amount and method of collection of the

fee shall be determined by the corporation. Participating institutions for

higher education may perform these acts if authorized by the corporation;



   (6) To contract with a guarantor to provide security for the

payment of education loans through the issuance of insurance against default,

or to provide a guarantee of payment covering all or a portion of each

education loan made by or on behalf of the corporation or by or on behalf of an

institution for higher education from the proceeds of a corporation loan;



   (7) To make corporation loans to participating institutions

for higher education and require that the proceeds be used for making education

loans and paying costs and fees in connection with the loans;



   (8) To charge and equitably apportion, among participating

institutions for higher education, its administrative costs and expenses

incurred in the exercise of the powers and duties granted by this section;



   (9) Notwithstanding any other provisions in this chapter, to

commingle and pledge as security for a series or issue of bonds, only with the

consent of all of the institutions for higher education which are participating

in the series or issue:



   (i) The education loan series portfolios and some or all

future education loan series portfolios of the institutions for higher

education; and



   (ii) The loan funding deposits of the institutions; provided,

that education loan series portfolios and other security and monies set aside

in any fund or funds pledged for any series of bonds or issue of bonds are held

for the sole benefit of the series or issues, separate and apart from education

loan series portfolios and other security and monies pledged for any other

series or issue of bonds of the corporation. Bonds may be issued in series

under one or more resolutions or trust agreements in the discretion of the

corporation;



   (10) To examine records and financial reports of

participating institutions for higher education, and to examine records and

financial reports of any person, organization, or institution retained under

subsections (a)(5) or (a)(6);



   (11) To do all things necessary or convenient to carry out

the purposes of this chapter.



   (b) In carrying out the purposes of this chapter, the

corporation may issue bonds, the proceeds of which are loaned to two (2) or

more participating institutions for higher education or for any combination of

participating institutions for higher education and, thereupon, all other

provisions of this chapter apply to and for the benefit of the corporation and

the participants in the joint program or programs. Any joint participation

requires the express approval of all participants.



   (c) The corporation shall require that corporation loans be

used solely for the purpose of education loans and in an amount not to exceed

the total cost of attendance, as defined by the corporation, less other forms

of student assistance that the corporation may determine. The corporation shall

require that institutions for higher education insist that each borrower under

an education loan use the proceeds solely for educational purposes and purposes

reasonably related to education, and that each borrower shall so certify.



   (d) Whenever refunding bonds are issued to refund bonds, the

proceeds of which were used to make corporation loans, the corporation may

reduce or increase the amount it is owed by the institution for higher

education which had received corporation loans from the proceeds of the

refunded bonds. The institutions for higher education may reduce or increase

the amount of interest being paid on education loans which the institution has

made pursuant to the corporation loans from the proceeds of the refunded bonds.



History of Section.

(P.L. 1982, ch. 301, § 3; P.L. 1991, ch. 292, § 1; P.L. 2000, ch.

184, § 1.)