2023 New York Laws › PBA - Public Authorities › Article 8 - Miscellaneous Authorities › Title 17 - State of New York Mortgage Agency Act › Part 1 › 2405-A - Education Loans.

§  2405-a.  Education  loans.  (1)  For  purposes of this section, the
following words and terms shall have the following  meaning  unless  the
context shall indicate another or different meaning or intent:
(a)  "Corporation"  shall  mean  the  New  York state higher education
services corporation.
(b) "Education Loan" shall mean: (i) a New York higher education  loan
program  loan  made  pursuant  to  part  v  of  article  fourteen of the
education law; or (ii) a loan under Part B of Title  IV  of  the  Higher
Education  Act of nineteen hundred sixty-five, as amended, including but
not  limited  to  a  loan  described  in  subdivision  ten  of   section
twenty-four  hundred two of this part; provided, that the borrower shall
be required to apply the net proceeds of such loans to pay the student's
costs of post-secondary education or to repay one  or  more  such  loans
incurred for such purpose.
(2)  In  addition  to  the  powers of the agency pursuant to the other
sections of this title, the agency shall have power:
(a) To enter into one or more agreements with the corporation  and  to
perform  or  contract  for  the performance of its obligations under any
such agreement;
(b) To make and contract to  make  and  to  acquire  and  contract  to
acquire  education  loans  and to enter into advance commitments for the
purchase of said education loans;
(c) Subject to any  agreement  with  bondholders  or  noteholders,  to
invest  moneys  of  the agency not required for immediate use, including
proceeds from the sale of any bonds or notes, in education loans;
(d) To make and execute  contracts  for  the  marketing,  origination,
servicing,   collection,   administration,   guarantee,   securing,  and
financing of education  loans  originated  or  acquired  by  the  agency
pursuant  to  this  title,  and  to pay the reasonable value of services
rendered to the agency pursuant to those contracts;
(e) Subject to any  agreement  with  bondholders  or  noteholders,  to
renegotiate  or  refinance  any education loan that has been acquired by
the agency or which the agency has committed  to  purchase  that  is  in
default;  to  waive  any  default  or consent to the modification of the
terms or any such  education  loan;  to  forgive  all  or  part  of  any
indebtedness;  and  to  commence  any action or proceeding to protect or
enforce any right conferred upon it with respect to any  such  education
loan by law, loan agreement, contract or other agreement;
(f)  To  prescribe  standards  and  criteria  for  the  origination of
education loans to be eligible for acquisition by  the  agency  and  for
education loans purchased by the agency;
(g)  Subject to any agreement with bondholders or noteholders, to sell
any education loans made or acquired by the agency at public or  private
sale  and  at such price or prices and on such terms as the agency shall
determine;
(h) To establish, revise from time to time, charge  and  collect  such
premiums   or   fees   in   connection  with  education  loans  and  its
participation in the New York  higher  education  loan  program  as  the
agency shall determine; and
(i)  Subject  to  any  agreement  with  bondholders or noteholders, to
invest moneys pledged to secure bonds issued for the corporate  purposes
authorized by this section not required for immediate use in investments
authorized  for  investment of state funds under section ninety-eight or
ninety-eight-a of the state finance law.
(3) The agency shall have the power and is hereby authorized from time
to time to issue its bonds and notes pursuant to  section  two  thousand
four  hundred six of this title for the corporate purposes authorized by
this section, including without limitation for the purposes of financing

and refinancing education loans and of  refunding  any  bonds  or  notes
issued for such purpose.
(4)  Each  lender  or  service  provider who makes a representation or
warranty to the agency with respect to an education loan shall be liable
to the agency for any damages suffered by the agency by  reason  of  the
untruth  of  such  representation or the breach of such warranty and, in
the event that any representation shall prove to be untrue when made  or
in the event of any breach of warranty, such person shall, at the option
of  the  agency, repurchase the education loan for the price provided in
the applicable financing agreement, as the agency may determine.
(5) It is the intent of the legislature that any pledge by the  agency
of  education  loans or of earnings, revenues or other moneys receivable
from any source, including without limitation default  payments  by  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, with respect
to education loans financed by the agency, shall be  valid  and  binding
from  the  time  when the pledge is made. The education loans, earnings,
revenues or other moneys so  pledged  and  thereafter  received  by  the
agency  or  its agent, including without limitation the higher education
services corporation or any education loan servicer,  shall  immediately
be  subject  to  the  lien  of such pledge without any physical delivery
thereof or further act, and the lien of any such pledge shall  be  valid
and  binding  as  against all parties having claims of any kind in tort,
contract or otherwise against the agency or its agent, including without
limitation the higher education services corporation  or  any  education
loan servicer, irrespective of whether such parties have notice thereof.
Neither  the  resolution  nor  any other instrument by which a pledge is
created need be recorded.
(6) The state of New York mortgage agency New  York  higher  education
loan  program  default  reserve  fund.  (a)  There is hereby created and
established in the sole custody of the state of New York mortgage agency
a special fund to be known as the state of New York mortgage agency  New
York  higher  education loan program default reserve fund which shall be
for the exclusive benefit of the holders of  education  loans  that  the
agency  has  acquired,  or  agreed to acquire, under the New York higher
education loan program, codified in part V of article  fourteen  of  the
education law.
(b) Amounts held in this fund shall not be, or be deemed, funds of the
state  or  funds  under  the management of the state, the agency, or the
corporation. The obligations of such fund shall not be,  or  be  deemed,
the  debts or obligations of the state and the state shall not be, or be
deemed, in any way obligated to: any holder of any such education  loan;
any holder of bonds issued pursuant to section two thousand four hundred
six  of  this  part for the corporate purposes authorized in section two
thousand five-a of this article; any fiduciary or provider of any credit
facility, liquidity facility or interest rate  exchange  agreement  with
respect to such bonds; or any other creditor of this fund.
(c)  Such fund shall consist of: (i) all moneys received by the higher
education services corporation pursuant to paragraph (b) of  subdivision
seven  of  section  six  hundred  ninety-two  of  the  education law, in
connection with education loans that the agency has acquired  or  agreed
to  acquire  under  the New York higher education loan program education
loans; (ii) any transfers  from  the  New  York  higher  education  loan
program   variable   rate   default  reserve  fund  created  by  section
seventy-eight-a of the state finance law or from  the  New  York  higher
education  loan  program  fixed  rate  default  reserve  fund created by

section  seventy-eight-b  of  the  state  finance  law;  and  (iii)  any
appropriation payment or transfer to the agency for such purpose.
(d) The agency shall establish accounts within the fund and priorities
of  payment  from such accounts and shall invest the fund in investments
authorized for investment of state funds under section  ninety-eight  or
ninety-eight-a of the state finance law.
(e) This fund, including all sub-accounts thereof, shall be segregated
from  all  other  funds kept by the agency and shall not be used for any
other purpose beyond those set forth in part V of  article  fourteen  of
the education law or in this section. The agency shall utilize monies in
the fund solely to pay the outstanding principal, capitalized and unpaid
accrued  interest  on defaulted education loans described in paragraph a
of this subdivision.
(f) Nothing contained in this section shall prevent the agency, or the
corporation, from receiving grants, gifts or bequests for  the  purposes
of  this fund and depositing them into the fund according to law, rules,
or regulations.
(g) The agency shall make payments from the monies  in  this  fund  in
amounts  and at times required pursuant to part V of article fourteen of
the education law.