§ 1679. Supplemental higher education loan financing program. 1. The
purpose of the supplemental loan financing program is to make available
to students attending public and independent sector institutions of
higher education financial assistance beyond the grants and loans
available from state, federal and private sources where such students
demonstrate remaining financial need.

2. In furtherance of its powers under this title with respect to the
supplemental higher education loan financing program, the authority is
authorized:

(a) to receive and accept from any source loans, contributions or
grants for or in aid of a supplemental higher education loan financing
program or any portion thereof and, when desirable, to use such funds,
property or labor only for the purposes for which it was loaned,
contributed or granted;

(b) to make education loans to participating institutions for higher
education, and require that the proceeds of such education loans be used
for making student loans, funding reserves, providing for capitalized
interest and paying other costs and fees involved in making student
loans or issuing bonds;

(c) to issue bonds not in excess of two hundred million dollars for
the purpose of making direct loans, education loans for the express
purpose of providing student loans, and the purchasing, acquiring or
taking by assignment or otherwise of student loans, provided, however,
that each such sale of bonds shall be subject to the approval of the
public authorities control board;

(d) to purchase student loans from participating institutions for
higher education under terms and conditions which require that such
loans were originated after the effective date of this section in
contemplation of participation by such institutions for higher education
in a supplemental higher education loan financing program of the
authority authorized by this section and in anticipation of the purchase
of such loans by the authority, provided, however, that, prior to the
sale of bonds any portion of the proceeds of which shall be used for the
purchase, acquisition or taking by assignment or otherwise of student
loans, the authority shall by resolution adopt specific guidelines
setting forth the terms and conditions upon which such purchases,
acquisitions and taking by assignment or otherwise shall be made. No
such resolution shall be adopted until at least forty-five days after
the delivery of a copy of such proposed guidelines to the governor, the
temporary president of the senate and the speaker of the assembly for
comment.

3. The authority shall adopt guidelines, subject to review by the
advisory committee, created pursuant to subdivision ten of this section,
and consistent with federal law and regulations to the extent applicable
which shall include but not be limited to: (a) eligibility criteria for
making education loans and direct loans; (b) limitations upon the
principal amounts and the terms of education loans and direct loans; (c)
qualifications and characteristics of borrowers; and (d) procedures for
allocating education loans among independent institutions and for
allocating direct loans among students and parents of students attending
public institutions. Such guidelines shall also include such eligibility
standards for borrowers as the authority shall determine are necessary
or desirable in order to effectuate the purposes of this section
including the following: (a) each student shall have a certificate of
enrollment or acceptance for enrollment at a specific participating
institution for higher education; (b) each student or his or her parents
shall satisfy such financial qualifications as the authority shall
establish to effectuate the purposes of this section; and (c) each
student and his or her parents shall submit such information as may be
required by the authority to his or her institution for higher
education. Such guidelines shall also establish specific criteria
governing the making of direct loans, education loans and student loans,
provisions for default, the establishment of default reserve funds, the
purchase of default insurance, the provision of debt service reserve
funds, and the furnishing by participating independent institutions for
higher education of such additional guarantees of, and security with
respect to, education loans, student loans or the bonds as the authority
shall determine, all of such criteria to be established to assure the
marketability of the bonds and the adequacy of the security for the
bonds.

4. The authority shall contract with financial institutions, the New
York state higher education services corporation established by the
provisions of section six hundred fifty-two of the education law or
other qualified loan origination and servicing organizations, which may
assist in pre-qualifying borrowers for student loans and direct loans
and which may service and administer each student loan and direct loan
and each institution's respective loan series portfolio. The fees or
interest costs of each student loan or direct loan shall include a
portion, if necessary, to cover the applicable pro rata cost of such a
servicing organization.

5. The maximum amount of a student loan or direct loan shall not
exceed:

(a) in the case of a borrower who is a student, the student's cost of
attendance for the period of time for which the loan is made, minus the
following amounts applicable to such period of time:

(1) the amount of grant which the student receives, or would receive
had the student made application, under the federal Pell Grant program
authorized under title IV, part A, of the "Higher Education Act of
1965", as now or hereafter amended;

(2) the maximum net loan proceeds which the student receives, or would
receive had the student made application, under the guaranteed student
loan program as defined under (i) title IV, part B, of the "Higher
Education Act of 1965", as now or hereafter amended, and (ii) the
regulations implementing such program promulgated at 34 Code of Federal
Regulations, part 682, as now or hereafter amended;

(3) the maximum net loan proceeds which the student's parents receive,
or would receive had the student's parents made application, under the
parent loan to undergraduate students program as defined under (i) title
IV, part B, of the "Higher Education Act of 1965", as now or hereafter
amended, and (ii) the regulations implementing such program promulgated
at 34 Code of Federal Regulations, part 683, as now or hereafter
amended;

(4) the maximum net loan proceeds which the student receives, or would
receive had the student made application, under the auxiliary loan to
assist students program as defined under title IV, part B, of the
"Higher Education Act of 1965", as now or hereafter amended;

(5) the maximum net loan proceeds which the student receives, or would
receive had the student made application, under the health education
assistance loan program as defined under (i) title IV, part C, of the
"Health Professions Educational Assistance Act of 1976", as now or
hereafter amended, and (ii) the regulations implementing such program
promulgated at 42 Code of Federal Regulations, part 60-C, as now or
hereafter amended;

(6) the amount of scholarships, grants or other nonrepayable
assistance received from government agencies, educational institutions
or private institutions or organizations;

(7) except in the case of a student who is eligible for a loan under
the auxiliary loan to assist students program as defined under Title IV,
part B, of the "Higher Education Act of 1965", as now or hereafter
amended, the expected family contribution computed pursuant to section
428 of the "Higher Education Act of 1965", as now or hereafter amended
with respect to families in which the total adjusted gross income of all
members of the family exceeds thirty thousand dollars; and

(b) (1) in the case of a borrower who is a parent of an eligible
student, the student's cost of attendance minus (i) the amounts
determined pursuant to subparagraphs one, two and six of paragraph (a)
of this subdivision; and (ii) the amount of loan which the student
receives pursuant to paragraph (a) of this subdivision;

(2) the combined maximum loan amount of both parents shall not exceed
the maximum amount as determined under this paragraph.

6. Notwithstanding any other provisions contained in this title, but
pursuant to guidelines, the authority may commingle and pledge as
security for a series or issue of bonds, with the consent of all of the
institutions for higher education which are participating in such series
or issue, the student loan series portfolios and some or all future
student loan series portfolios of such institutions for higher education
provided that student loan series portfolios and other security and
moneys set aside in any fund or funds pledged for any series of bonds or
issue of bonds shall be held for the sole benefit of such series or
issue separate and apart from student loan series portfolios and other
security and moneys pledged for any other series or issue of bonds of
the authority. Bonds may be issued in series under one or more
resolutions in the discretion of the authority.

7. The authority shall require that education loans be used solely to
make student loans and that direct loans be used solely for the purpose
of financing the cost of attendance at public institutions for higher
education. The authority shall require that independent institutions for
higher education shall require that each borrower under a student loan
shall use the proceeds solely for such cost of attendance and that each
such borrower shall so certify.

8. Any student otherwise eligible for a student loan or for a direct
loan 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 student shall be deemed to have full
legal capacity to act; provided, however, that the signatures of both
parents of an unemancipated applicant shall be required for the purpose
of receiving such a loan unless the authority determines in accordance
with guidelines established by the board of the authority that unusual
family circumstances preclude the availability of such signatures.

9. The authority may charge to and apportion among participating
institutions of higher education and students or their parents or both
its administrative and operating costs and expenses incurred in the
exercise of the powers and duties conferred by this section.

10. There is hereby created an advisory committee on the supplemental
higher education loan financing program to the dormitory authority which
shall consist of the chairman of the authority, who shall serve as the
chairman of such committee, the commissioner of education, the
chancellor of the state university of New York, the chancellor of the
city university of New York, the president of the higher education
services corporation, the chairman of the board of trustees of the
commission on independent colleges and universities, the president of
the New York state financial aid administrators association and an
undergraduate student appointed by the governor who is in attendance at
a public or independent institution of higher education located in this
state. Such committee shall participate in the development of and review
the program guidelines to be established by the authority as required by
this section and may make recommendations on, comment upon and advise
the members of the board of the authority with respect to such
guidelines. Each of the members of such committee may designate in
writing to the chairman of the committee a representative to serve on
such committee in the place of such member. The members of the committee
shall receive no compensation for their services, but shall be entitled
to reimbursement by the dormitory authority for their actual and
necessary expenses incurred in the performance of their duties.

11. The authority shall report annually to the governor and the
legislature on or before February first concerning its findings,
conclusions and recommendations with respect to the operation of the
program provided for in this section.