2023 New York Laws › EDN - Education › Title 1 - General Provisions › Article 14 - New York State Higher Education Services Corporation › Part 3 - Student Loans › 681-A - Guaranteed Student Loans; Special Requirements.

§ 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.