2006 New York Code - 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.