2013 Indiana Code
TITLE 21. HIGHER EDUCATION
ARTICLE 16. EARN INDIANA PROGRAM; STUDENT LOANS; LEGAL CAPACITY TO CONTRACT FOR STUDENT LOANS
CHAPTER 5. SECONDARY MARKET FOR GUARANTEED STUDENT LOANS
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IC 21-16-5
Chapter 5. Secondary Market for Guaranteed Student Loans
IC 21-16-5-1
Secondary market for guaranteed student loans; establishment of
corporation
Sec. 1. The governor may request, on behalf of the state, the
establishment of a private nonprofit corporation, with a bipartisan
board of directors, to serve as a secondary market for education
loans. If a private nonprofit corporation is established, the governor
may designate the corporation to:
(1) serve as the secondary market for education loans; and
(2) act as an eligible lender under a federal program.
The corporation must satisfy the conditions imposed by sections 3
through 10 of this chapter, and its articles of incorporation must
provide that upon the corporation's liquidation, any surplus funds
must be paid to the state.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-2
Public hearing; notice
Sec. 2. Before designation by the governor under section 1 of this
chapter, the corporation shall conduct a public hearing to give all
interested parties an opportunity to review and comment upon the
bylaws and method of operation of the corporation. Notice of this
hearing must be given at least fourteen (14) days before the hearing
in the manner set out in IC 5-14-1.5-5(b).
As added by P.L.2-2007, SEC.257.
IC 21-16-5-3
Powers of corporation; articles of incorporation
Sec. 3. (a) The corporation must, under its articles of
incorporation, limit its powers to those described in subsection (b).
(b) The corporation may:
(1) borrow money;
(2) purchase, sell, and retire education loans, if the loans are not
in default status;
(3) provide incentive services and payments, including the
payment of premiums for the purchase of education loans and
the payment of an origination fee, to assist lending institutions
that provide education loans;
(4) loan funds to lending institutions if:
(A) the lending institution agrees to use the funds to
originate education loans of an amount equal to the loan
made by the corporation over a period agreeable to the
corporation and to grant the corporation the right of first
refusal to purchase those education loans;
(B) the lending institution agrees to use education loans or
government securities as collateral for the loan; and
(C) the corporation has, in response to its written request,
received written authorization from the governor to exercise
the power described in this subdivision;
(5) make direct loans to or for the benefit of an education loan
borrower or to consolidate all or a part of the borrower's
outstanding education loans into one (1) loan;
(6) operate a secondary market for postsecondary education
finance instruments, including tuition certificates and education
savings certificates sold by or offered through lending
institutions or postsecondary educational institutions;
(7) provide financial literacy and educational tools to students,
their families, and Indiana colleges and universities with respect
to responsibly financing the costs of higher education; and
(8) do all other things that are necessary or incidental to
performing the functions listed in subdivisions (1) through (7).
As added by P.L.2-2007, SEC.257. Amended by P.L.132-2013,
SEC.4.
IC 21-16-5-4
Annual report; annual public hearing
Sec. 4. The corporation shall submit an annual report to the
governor, which must include detailed information on the structure,
operation, and financial status of the corporation. The corporation
shall conduct an annual public hearing to receive comment from
interested parties regarding the report. Notice of the hearing must be
given at least fourteen (14) days before the hearing in accordance
with IC 5-14-1.5-5(b).
As added by P.L.2-2007, SEC.257.
IC 21-16-5-5
Changes in directors and bylaws
Sec. 5. The corporation shall provide in its articles of
incorporation that changes in the composition of its directors or in its
bylaws are subject to the approval of the governor.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-6
Annual audit
Sec. 6. The corporation is subject to an annual audit by the state
board of accounts. The corporation shall bear the full costs of this
audit.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-7
Board of directors; executive session
Sec. 7. The board of directors of the corporation may meet in
executive session to do any of the following:
(1) Discuss negotiating strategies with respect to financing
arrangements or proposals, in addition to those items listed in
IC 5-14-1.5-6.1.
(2) Discuss, prepare bids for, or respond to proposals or
arrangements for raising capital or acquiring assets.
(3) Discuss and prepare competitive marketing strategies.
(4) Engage in strategic planning.
As added by P.L.2-2007, SEC.257. Amended by P.L.132-2013,
SEC.5.
IC 21-16-5-8
Repealed
(Repealed by P.L.132-2013, SEC.6.)
IC 21-16-5-9
Benefits of guaranty
Sec. 9. The corporation and its transferees and pledgees, so long
as they are eligible lenders under a federal program, are entitled to
the benefits of any guaranty given by the commission under
IC 21-16-4 or any successor to the commission with respect to
education loans owned or held by the corporation, its transferees, or
its pledgees, as long as the corporation, its transferees, or its pledgees
are eligible lenders or holders of education loans under the rules
adopted under IC 4-22-2 by the commission or a successor to the
commission.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-10
Grants; approval by the budget agency
Sec. 10. Notwithstanding any other law, the corporation may not
make grants for any purpose without approval by the budget agency
and the governor after review by the budget committee.
As added by P.L.2-2007, SEC.257. Amended by P.L.132-2013,
SEC.7.
IC 21-16-5-11
Debts incurred
Sec. 11. Debts incurred by the corporation under authority of this
chapter do not represent or constitute a debt of the state of Indiana
within the meaning of the provisions of the statutes of Indiana or the
Constitution of the State of Indiana.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-12
Principal and interest on bonds
Sec. 12. The principal of and the interest on bonds and notes
issued by the corporation under this chapter are exempt from taxation
of every kind by the state and by the municipalities and other
political subdivisions of the state, except taxes imposed under
IC 6-4.1.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-13
Investment of funds
Sec. 13. All:
(1) banks;
(2) bankers;
(3) trust companies;
(4) savings banks and institutions;
(5) building and loan associations;
(6) saving and loan associations;
(7) investment companies;
(8) insurance companies and associations; and
(9) executors, administrators, guardians, trustees, and other
fiduciaries;
may legally invest any sinking funds, money, or other funds that
belong to them or are within their control in any bonds or notes
issued under this chapter.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-14
Termination of the designation
Sec. 14. The designation by the governor under section 1 of this
chapter remains in effect until the general assembly provides by law
for termination of the designation.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-15
Immunity for officers and directors
Sec. 15. Except for an act of fraud or intentional misconduct, an
officer or director of the corporation is not individually liable for an
act or omission regarding the exercise or performance of that
person's duty to the corporation.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-16
Security interest in education loans
Sec. 16. Notwithstanding IC 26-1-9.1-310(a), a security interest
in education loans is perfected by:
(1) possession under IC 26-1-9.1-313; or
(2) filing a financing statement in the office of the secretary of
state under IC 26-1-9.1-501.
As added by P.L.2-2007, SEC.257.
IC 21-16-5-17
Repealed
(Repealed by P.L.132-2013, SEC.8.)
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