§ 681-a. Guaranteed student loans; special requirements. 1. As used in
this section:

(a) "Federal guaranteed student loan program" shall mean the program
of the United States government making low interest loans available to
students or parents of students to pay for their cost of attending
post-secondary institutions established under Title IV, Part B of the
Higher Education Act of nineteen hundred sixty-five, as amended, or any
successor statute.

(b) "Guaranteed student loan" shall mean a loan made by a lender to a
student who is resident of and is attending an institution in this state
or a parent of such a student under and pursuant to the federal
guaranteed student loan program.

(c) "Lender" shall mean a bank, savings and loan association, credit
union, pension fund, insurance company, school or state lending agency
participating in such federal guaranteed student loan program.

(d) "Guarantee agency" shall mean any state agency or not-for-profit
corporation which has entered into an agreement with the United States
secretary of education to guarantee loans made under the federal
guaranteed student loan program and which guarantees loans made to
residents of this state attending institutions in this state.

(e) "Institution" shall mean any post-secondary institution, including
a vocational school, participating in the federal guaranteed student
loan program.

2. (a) Any individual, institution, lender or guarantee agency which
shall provide a student with an application for a guaranteed student
loan shall advise the student prior to his or her execution of such
application that it is for such a loan. Any application for such a loan
provided to a student shall contain, on its face in bold faced, sixteen
point size print, the following statement: "This is an application for a
guaranteed student loan. The money loaned to you must be repaid by you
in full, with interest, in accordance with the terms of the loan.
Failure to repay the loan can adversely affect your credit and result in
legal action against you."

3. No institution shall accept from a student an application for a
guaranteed student loan if the name of the lender is not prominently set
forth in the application.

4. An institution shall not require a student to make an application
for a guaranteed student loan to a particular lender or otherwise select
for the student such lender. An institution may recommend a lender,
however, in such case, at such time it shall deliver to the student a
statement supplied by the president as to the student's right and
ability to obtain such loan from other lenders and as to the insurance
premiums charged by guarantee agencies on such loans.

5. The corporation, pursuant to its authority to coordinate the
state's administrative effort in student financial aid and loan programs
with those of other levels of government shall develop and maintain
records of the guaranteed student loans made by lenders to students who
are residents of the state attending institutions in this state which
are guaranteed by guarantee agencies other than the corporation. It
shall obtain and collect from other guarantee agencies, at such times
and in such form as the president shall determine, information as to
such guaranteed student loans which shall include the following: (i) the
number and total dollar amount of such loans made during the period
reported, shown by lender and by institution; (ii) the number and total
dollar amount of loans made to students while attending institutions in
this state which were purchased in default during the period reported,
shown by lender and by institution; and (iii) the current default rate
for such loans by lender and by institution.

6. Where a violation of this section by a guarantor or an institution
other than a public institution of higher education is alleged to have
occurred, the attorney general may apply in the name of the people of
the state of New York to the supreme court of the state of New York
within the judicial district in which such violations are alleged to
have occurred, on notice of five days, for an order enjoining or
restraining commission or continuance of the alleged unlawful acts. In
any such proceeding, the court may impose a civil penalty in an amount
not to exceed five thousand dollars. Enforcement of any violation by a
public institution shall be as otherwise authorized by law.