1748.E AAS 4/13/93 S2908.1
EHB 1748 - S COMM AMD
By Committee on Higher Education
ADOPTED 4/13/93
Strike everything after the enacting clause and insert the following:
"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 subsections (9) and (10) of this section.
(2) With the exception of subsection (9) of this section, 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. Twenty percent of the total institutional long-term loan fund shall be used for the sole purpose of long-term loans repayable by the borrower and twenty percent of the institutional long-term loan fund shall be used for the sole purpose of short-term loans repayable by the borrower.
(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. 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)) year, 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)) enrolled
in the institution. 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. A short-term loan may be made only if the
institution has ample evidence that the student has the capability of repaying
the loan within the time frame specified by the institution for repayment.
(10) Any moneys deposited in the institutional long-term loan fund which 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. 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."
EHB 1748 - S COMM AMD
By Committee on Higher Education
ADOPTED 4/13/93
On page 1, line 1 of the title, after "aid;" strike the remainder of the title and insert "and amending RCW 28B.15.820."
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