_______________________________________________
SUBSTITUTE
HOUSE BILL 1587
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Passed
Legislature - 1993 Regular Session
State
of Washington 53rd Legislature 1993
Regular Session
By
Read
first time 03/01/93.
Helping single parents obtain a higher education.
AN ACT Relating to higher education; and
amending RCW 28B.15.820.
BE
IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1.
RCW 28B.15.820 and 1985 c 390 s 35 are each amended to read as follows:
(1) Each institution of higher education shall
deposit two and one-half percent of revenues collected from tuition and
services and activities fees in an institutional long-term loan fund which is
hereby created and which shall be held locally. Moneys in such fund shall be
used to make guaranteed loans to eligible students except as provided for in
subsection (10) of this section.
(2) An "eligible student" for the
purposes of this section is a student registered for at least six credit hours
or the equivalent, who is eligible for resident tuition and fee rates as
defined in RCW 28B.15.012 through 28B.15.015, and who is a "needy
student" as defined in RCW 28B.10.802.
(3) The amount of the loans made under
subsection (1) of this section shall not exceed the demonstrated financial need
of the student. Each institution shall establish loan terms and conditions
which shall be consistent with the terms of the guaranteed loan program
established by 20 U.S. Code Section 1071 et seq., as now or hereafter amended.
All loans made shall be guaranteed by the Washington student loan guaranty
association or its successor agency. Institutions are hereby granted full
authority to operate as an eligible lender under the guaranteed loan program.
(4) Before approving a guaranteed loan, each
institution shall analyze the ability of the student to repay the loan based on
factors which include, but are not limited to, the student's accumulated total
education loan burdens and the employment opportunities and average starting
salary characteristics of the student's chosen fields of study. The institution
shall counsel the student on the advisability of acquiring additional debt, and
on the availability of other forms of financial aid.
(5) Each institution is responsible for
collection of loans made under subsection (1) of this section and shall
exercise due diligence in such collection, maintaining all necessary records to
insure that maximum repayments are made. Institutions shall cooperate with
other lenders and the Washington student loan guaranty association, or its
successor agency, in the coordinated collection of guaranteed loans, and shall
assure that the guarantability of the loans is not violated. Collection and
servicing of loans under subsection (1) of this section shall be performed by
entities approved for such servicing by the Washington student loan guaranty
association or its successor agency: PROVIDED, That institutions be permitted
to perform such servicing if specifically recognized to do so by the Washington
student loan guaranty association or its successor agency. Collection and
servicing of loans made by community colleges under subsection (1) of this
section shall be coordinated by the state board for community and technical
colleges ((education)) and shall be conducted under procedures
adopted by such state board.
(6) Receipts from payment of interest or
principal or any other subsidies to which institutions as lenders are entitled,
which are paid by or on behalf of borrowers of funds under subsection (1) of
this section, shall be deposited in each institution's general local fund and
shall be used to cover the costs of making the loans under subsection (1) of
this section and maintaining necessary records and making collections under
subsection (5) of this section: PROVIDED, That such costs shall not exceed
five percent of aggregate outstanding loan ((principle)) principal.
Institutions shall maintain accurate records of such costs, and all receipts
beyond those necessary to pay such costs, shall be used for the support of the
institution's operating budget.
(7) The boards of regents of the state
universities, the boards of trustees of the regional universities and The
Evergreen State College, and the state board for community and technical
colleges ((education)), on behalf of the community colleges,
shall each adopt necessary rules and regulations to implement this section.
(8) Lending activities under this section shall
be directed toward students who would not normally have access to educational
loans from private financial institutions in Washington state, and maximum use
shall be made of secondary markets in the support of loan consolidation.
(9) Short-term interim loans, not to exceed one
hundred twenty days, may be made from the institutional long-term loan fund to
students eligible for guaranteed student loans and whose receipt of such loans
is pending. Such short-term loans shall not be subject to the guarantee
restrictions or the constraints of federal law imposed by subsection (3) of
this section. No such loan shall be made to any student who is known by the
institution to be in default or delinquent in the payment of any outstanding
student loan.
(10) Any moneys deposited in the institutional
long-term loan fund ((which)) that are not used in making long or
short term loans ((or transferred to institutional operating budgets))
may be used by the institution for locally-administered financial aid programs
for needy students, such as need-based institutional employment programs or
need-based tuition and fee waiver programs. These funds shall be used in
addition to and not to replace institutional funds which would otherwise
support these locally-administered financial aid programs. First priority
in the use of these funds shall be given to needy students who have accumulated
excessive educational loan burdens. An excessive educational loan burden is a
burden that will be difficult to repay given employment opportunities and
average starting salaries in the student's chosen fields of study. Second
priority in the use of these funds shall be given to needy single parents, to
assist these students with their educational expenses, including expenses
associated with child care and transportation.
