§ 693. Repayment of loans. 1. Terms of repayment. The terms of
repayment of education loans made under this program shall be
established in rules and regulations promulgated by the corporation
subject to the approval of the state of New York mortgage agency or
other public benefit corporation authorized to issue bonds under the
public authorities law for purposes of this program with respect to
loans that are expected to be financed by such entity.

2. Grace period. The terms of any grace period for education loans
made under this program shall be established in rules and regulations
promulgated by the corporation subject to the approval of the state of
New York mortgage agency or other public benefit corporation authorized
to issue bonds under the public authorities law for purposes of this
program with respect to loans that are expected to be financed by such
entity. Notwithstanding, the grace period established shall be no less
than six months.

3. Forbearance and deferments. Education loans made under this program
shall be eligible for in-school and military deferments pursuant to
rules and regulations promulgated by the corporation, or pursuant to
such additional deferments and/or forbearance as offered by an eligible
lender, in each case, subject to the approval of the state of New York
mortgage agency, or other authorized public benefit corporation
authorized to issue bonds under the public authorities law for purposes
of this program, with respect to loans that are expected to be financed
by such entity. Upon the assignment of a defaulted education loan made
under this program for collection as described in subdivision five of
this section, the borrower shall no longer be eligible for any
forbearance or deferments while such loan remains in default.

4. Delinquency. A borrower shall be considered delinquent on an
education loan under this program after thirty days of non-payment. The
holder shall notify the corporation promptly after the first day of
delinquency and the corporation shall undertake actions to return the
borrower to repayment pursuant to rules and regulations established by
the corporation. Such actions shall include, but not be limited to,
attempts at: (i) locating and contacting the borrower and/or co-signer,
as applicable, regarding the delinquent status of their loan; (ii)
explaining the account history and clarifying any discrepancies; (iii)
counseling the borrower and/or co-signer, as applicable, regarding all
available repayment options, inducing deferments, and any public
assistance available to them; (iv) providing the borrower and/or
co-signer, as applicable, with documentation in connection with their
loan or loans; (v) informing the borrower and/or co-signer, as
applicable, of the consequences of default; and (vi) any other
assistance that would prevent a default by a borrower.

5. Default. Any education loan under this program that is delinquent
for one hundred eighty days shall be deemed in default. Upon default,
the holder shall file a claim with the corporation and, if applicable,
the state of New York mortgage agency, for payment from the New York
education loan program variable rate default reserve fund, the New York
education loan program fixed rate default reserve fund, or the state of
New York mortgage agency New York education loan program default reserve
fund, as described in subdivision seven of section six hundred ninety
two of the education law, as applicable, pursuant to regulations
promulgated by the corporation. Upon receipt of a claim, the corporation
shall notify the borrower that their loan is being assigned to the
corporation for collection. The lender, or holder shall be paid one
hundred percent of the outstanding principal, and of the capitalized and
unpaid accrued interest. Upon such payment, this amount shall be the
principal owed by the borrower.

All collection payments received by the corporation from a borrower,
or on behalf of borrowers, in default on loans made under this program,
except collection fees shall be deposited into a designated account
within the New York higher education loan program variable rate default
reserve fund, New York higher education loan program fixed rate default
reserve fund, or the state of New York mortgage agency New York higher
education loan program default reserve fund, as applicable.

6. Collection fee. The corporation shall assess a collection fee, in
an amount to be determined by the corporation at least annually, on all
defaulted education loans under this program. This fee shall be retained
by the corporation for the administration of the program. The aggregate
annual revenue generated by such fee shall not exceed the actual costs
incurred by the corporation, in the preceding year, in collecting a
defaulted loan under this program on which the corporation has paid a
claim, except in the initial year for which such fee shall not exceed
the fee charged by the corporation for the collection of defaulted loans
under the federal family education loan program. Any amounts in excess
of actual cost shall be used to reduce the fee charged in the subsequent
year.

7. Administrative wage garnishment. (a) Notwithstanding any provision
of law to the contrary, the corporation shall be entitled to garnish the
disposable pay of an individual to collect the amount owed by the
individual, if such individual fails to make required voluntary payments
under a repayment agreement with the corporation, provided that:

(i) The amount deducted for any pay period does not exceed fifteen
percent of disposable pay. However, the amount deducted for any period
may exceed fifteen percent with the written consent of the individual;

(ii) Prior to garnishment the individual shall have been given thirty
days written notice to the individual's last known address advising such
individual of the nature of the obligation, amount of the loan
obligation, the corporation's intent to garnish and an explanation of
the individual's rights under this section including the right to
inspect and copy records relating to the debt;

(iii) The individual shall have been given an opportunity within the
aforementioned thirty days to enter into a written repayment agreement
with the corporation to avoid garnishment of wages;

(iv) The individual shall have been provided an opportunity for a
hearing pursuant to the requirements of paragraph (f) of this
subdivision.

(b) The individual's employer shall pay to the corporation amounts as
directed in the withholding order and shall be liable for failure to
comply with said order. The corporation may sue an employer in a court
of competent jurisdiction to recover from such employer the amount the
employer fails to withhold from the individual's wages following receipt
of the order of withholding with interest thereon plus attorneys' fees
and costs;

(c) The notice of withholding served upon the employer shall contain
only such information as is necessary for the employer to comply with
the withholding order.

(d) No amount may be deducted from the wages of an individual who has
been involuntarily separated from employment and has not been
continuously employed for twelve months. An individual must prove that
separation from employment was involuntary. Separation due to
incarceration shall not qualify as involuntary separation.

(e) An employer may not discharge from employment, take disciplinary
action against or refuse to employ an individual by reason of the fact
that such individual's wages are subject to an order of withholding.
Such individual may take action against said employer in a court of
competent jurisdiction for reinstatement, back pay or such further
relief as may be just and necessary.

(f) A hearing as described in subparagraph (iv) of paragraph (a) of
this subdivision shall be provided prior to an order of withholding if
the individual submits a written request for a hearing on or before the
fifteenth day following the notice described in subparagraph (ii) of
paragraph (a) of this subdivision in accordance with procedures set
forth by the corporation. If an individual fails to submit a written
request in the time frame provided, the corporation shall still provide
a hearing upon receipt of a written request, but such hearing need not
be provided prior to an order of withholding being issued to the
employer. The hearing shall not be conducted by a party under the
supervision or control of the corporation except that nothing shall
prohibit the corporation from appointing an administrative law judge. A
hearing decision shall be issued no later than sixty days after the
filing of the petition requesting the hearing.

(g) For purposes of this section "disposable pay" shall mean that part
of the compensation of any individual from an employer remaining after
deduction of amounts required to be withheld by law.

(h) All funds received through administrative wage garnishment shall
be deposited into a designated account within the New York higher
education loan program variable rate default reserve fund, the New York
higher education loan program fixed rate default reserve fund, or the
state of New York mortgage agency New York higher education loan program
default reserve fund, as applicable.

8. New York state tax offset. The corporation shall be entitled to
receive credits of New York state tax overpayments pursuant to section
one hundred seventy-one-d and paragraph three of subdivision (e) of
section six hundred ninety-seven of the tax law with respect to
defaulted education loans under this program. All funds, or credits,
received through such tax offsets shall be deposited into a designated
account within the New York higher education loan program variable rate
default reserve fund, the New York higher education loan program fixed
rate default reserve fund, or the state of New York mortgage agency New
York higher education loan program default reserve fund, as applicable.

9. Data share. The corporation shall be entitled to receive data from
the New York state department of taxation and finance pursuant to
section one hundred seventy-one-a and paragraph three of subdivision (e)
of section six hundred ninety-seven of the tax law with respect to
defaulted education loans under this program.

10. Statute of limitation. Notwithstanding any provision of law to the
contrary, there shall be no statute of limitations to bring suit or
otherwise collect an education loan under this program. Judgments in
favor of the corporation under this program shall not expire and there
shall be no statute of limitations upon which to enforce or collect said
judgment.

11. Capacity of minors. Any person otherwise qualifying for an
education loan under this program 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 person shall
be deemed to have full legal capacity to act. The corporation, in
collecting education loans under this program, shall not be subject to a
defense raised by any borrower based on a claim of infancy.

12. Usury. Notwithstanding any provision of law to the contrary the
rate or amount of interest or fees payable on education loans made under
this program shall not exceed twenty-five per centum per annum or its
equivalent rate for a longer or shorter period.

13. Death and disability discharge. Upon the death of a student, for
the funding of whose higher education expenses an education loan was
made, the education loan made under this program shall be deemed
discharged. If such a student becomes totally and permanently disabled,
the education loan under this program shall be deemed discharged. A
total or permanent disability shall mean a condition of an individual
who is unable to work and earn money because of an injury or illness
that is expected to continue indefinitely or result in death. The holder
of such discharged education loans shall be paid the outstanding
principal, capitalized and unpaid accrued interest due from the New York
higher education loan program variable rate default reserve fund, the
New York higher education loan program fixed rate default reserve fund,
or the state of New York mortgage agency New York higher education loan
program default reserve fund, as applicable.

14. Bankruptcy. Education loans under this program shall be considered
non-dischargeable pursuant to section 523(a)(8) of the U.S. Bankruptcy
Code.

15. Notwithstanding any other provision of law, other than section one
thousand six hundred eighty two and section two thousand four hundred
five-a of the public authorities law, a security interest in education
loans shall be perfected only by the filing of a financing statement in
the manner provided under section 9-310 of the uniform commercial code,
and shall attach and be assigned priority in the manner provided under
the uniform commercial code with respect to security interests perfected
by such a filing, and a description of collateral consisting of
education loans in any financing statement shall be conclusively deemed
to be legally sufficient if it refers to records identifying such loans
retained by the corporation, provided that any such security interest
shall be subject to any applicable lien under section two thousand four
hundred five-a of the public authorities law. The owner of any education
loan shall advise the corporation of any sale or assignment of such loan
at the time and in the manner required by the corporation.

16. Notwithstanding any other provision of law, any eligible public
college or public career education institution is hereby authorized to
enter into one or more agreements with the corporation and any entity
authorized to finance education loans pursuant to the public authorities
law providing for the participation of such college or career education
institution in the program and to perform or contract the performance of
its obligations under any such agreement. Such obligations may include
without limitation the payment obligations described in this title.