2006 New York Code - Interest And Special Allowances On Loans.

 
    §  682.  Interest  and special allowances on loans. 1. Notwithstanding
  the provisions of section 5-501 of the general obligations  law  or  any
  other  provision  of  law, no loan made or guaranteed by the corporation
  shall bear interest at a rate in excess of the  rate  specified  by  the
  applicable   provisions   of   the   federal   student   aid   programs.
  Notwithstanding any other provision of law to the contrary,  a  borrower
  of  any  loan  made  or  guaranteed  by  the corporation may elect, upon
  approval of the lending institution pursuant to  rules  and  regulations
  promulgated  by the board, to defer the payment of any interest which is
  payable during  his  term  of  attendance  or  during  certain  eligible
  deferment periods and to capitalize that amount as part of the principal
  to  be repaid as agreed, or upon graduation, withdrawal or completion of
  deferment period.
    2. In the case of loans made by the corporation, there shall  be  paid
  to  the corporation from the state treasury annually a sum sufficient to
  pay the amount of all of the interest payable  pursuant  to  subdivision
  one  of  this  section,  on  behalf and for the account of the borrower,
  during the period during which the borrower is  regularly  pursuing  the
  college  or  vocational institution program for which such loan was made
  and not less than nine nor more than twelve months thereafter, and in no
  instance to exceed the  termination  of  a  semester  during  which  the
  borrower  ceases  to  be  a resident of the state of New York; provided,
  however, that such interest shall not be payable from the state treasury
  to the corporation on behalf of student borrowers who  are  eligible  to
  have  such  interest  payable on their behalf by the United States. Upon
  the borrower's completion of  such  college  or  vocational  institution
  program,  or  upon  the earlier termination thereof prior to completion,
  whichever occurs first, such interest accruing not less  than  nine  nor
  more  than  twelve  months  thereafter on such loan shall be paid by the
  borrower directly, except that in the case of a borrower who  ceases  to
  be  a  resident of the state of New York, any and all interest, accruing
  subsequent to the termination of a semester during  which  the  borrower
  ceases  to  be a resident of the state of New York, shall be paid by the
  borrower.
    3. In the case of loans guaranteed by the corporation, there shall  be
  paid  to  the  corporation  from  the  state  treasury  annually  a  sum
  sufficient to pay the amount of all of the interest payable pursuant  to
  subdivision  one  of  this section, on behalf and for the account of the
  borrower, by the corporation during the period during which the borrower
  is regularly pursuing his college or vocational institution program  and
  not  less  than  nine  nor more than twelve months thereafter; provided,
  however, that such interest shall not be payable from the state treasury
  to the corporation on behalf of student borrowers who are  (i)  eligible
  to  have  such interest payable on their behalf by the United States, or
  (ii) ineligible to have such interest payable on  their  behalf  by  the
  United  States  because  the  annual  income  of  his family exceeds the
  maximum specified by applicable provisions  of  the  federal  guaranteed
  loan  program.  In  the  event  that  the state does not pay all of such
  interest because the annual income of the borrower's  family  makes  him
  ineligible  to  have  such  interest  paid  on  his behalf by the United
  States, the corporation shall pay, from an amount  annually  apportioned
  to  the  corporation  from  the  state  treasury,  four-sevenths  of the
  interest payable pursuant to subdivision one of this section  on  behalf
  and  for  the  account of such a borrower during the period in which the
  borrower is regularly pursuing his  college  or  vocational  institution
  program and not less than nine nor more than twelve months thereafter if
  such  borrower's  family  has  an adjusted income, as computed under the
  federal guaranteed loan program, of less than thirty  thousand  dollars.
  Upon the borrower's completion of such college or vocational institution
  program  or  upon  the  earlier termination thereof prior to completion,
  whichever occurs first, such interest accruing not less  than  nine  nor
  more  than  twelve  months  thereafter on such loan shall be paid by the
  borrower directly.
    4. Whenever the secretary of health and human services of  the  United
  States,  or  the  secretary of education of the United States, under the
  provisions of the Emergency Insured Student Loan Act  of  1969,  or  any
  amendment   thereto,  shall  determine  and  prescribe  that  a  special
  allowance shall be paid by the  United  States  to  each  holder  of  an
  eligible  loan or loans made, guaranteed or insured under the provisions
  of Title IV, Part B of the Higher Education Act of 1965  of  the  United
  States,  as  amended,  during  any  period  on  and  after August first,
  nineteen hundred sixty-nine and prior to July  first,  nineteen  hundred
  seventy-one  or any date to which the payment of such special allowances
  shall be extended, there shall be paid to the corporation from the state
  treasury annually a sum sufficient to pay the amount of any such special
  allowance to each holder of an eligible loan or loans in addition to the
  interest thereon, provided, however, that such special allowances  shall
  not  be  payable  from the state treasury to lenders who are eligible to
  have such special allowances payable to them by the United States.   The
  special  allowance  payable  by  the corporation from the state treasury
  shall not exceed: (i) five per centum per annum for  loans  made  before
  July  first,  nineteen  hundred  eighty-one;  or (ii) ten per centum per
  annum for loans made on or after July first, nineteen eighty-one.