Texas Education Code - Section 53B.47. Guaranteed Student Loans And Alternate Education Loans; Bonds For The Purchase Of Education Loan Notes
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§ 53B.47. GUARANTEED STUDENT LOANS AND ALTERNATE
EDUCATION LOANS; BONDS FOR THE PURCHASE OF EDUCATION LOAN
NOTES. (a) An authority may, upon approval of the city or cities
which created the same, issue revenue bonds or otherwise borrow
money to obtain funds to purchase or to make guaranteed student
loans. Revenue bonds issued for such purpose shall be issued in
accordance with and with the effect provided in this chapter. Such
bonds shall be payable from and secured by a pledge of revenues
derived from or by reason of the ownership of guaranteed student
loans and investment income after deduction of such expenses of
operating the loan program as may be specified by the bond
resolution or trust indenture.
(b) An authority may cause money to be expended to make or
purchase for its account guaranteed student loans that are
guaranteed by the Texas Guaranteed Student Loan Corporation or that
are executed by or on behalf of students who:
(1) are residents of this state; or
(2) have been admitted to attend an accredited
institution within this state.
(c) The authority shall contract with a nonprofit
corporation, organized under the laws of this state, whereby such
corporation will provide the reports and other information required
for continued participation in the federally guaranteed loan
program provided by the Higher Education Act of 1965, as amended.
(d) The authority, as a municipal corporation of the state,
is charged with a portion of the responsibility of the state to
provide educational opportunities in keeping with all applicable
state and federal laws. Nothing in this section shall be construed
as a prohibition against establishing policies to limit the
purchase of guaranteed student loans to guaranteed student loans
executed by students attending school in a certain geographical
area or by students who are residents of the area.
(e) In addition to establishing an authority under the
provisions of this chapter, the governing body of a city or cities
may request a qualified nonprofit corporation to exercise the
powers enumerated and provided in this section for and on its
behalf. If the qualified nonprofit corporation agrees to exercise
such powers, the directors of such corporation shall thereafter be
appointed by and be subject to removal by the governing body of the
city or cities, and except as provided in this section, Sections
53B.14, 53B.15, 53B.31, 53B.32, 53B.38, and 53B.41 through 53B.43
apply to and govern such corporation, its procedures, and bonds.
Notwithstanding the provisions of Section 53B.42, a qualified
nonprofit corporation which has been requested to exercise the
powers enumerated and requested in this section may invest or cause
a trustee or custodian on behalf of such qualified nonprofit
corporation to invest its funds, including the proceeds of any
bonds, notes, or other obligations issued by such qualified
nonprofit corporation and any monies which are pledged to the
payment thereof, in:
(1) certificates of deposit or other time or demand
accounts of banks and savings and loan associations which are
insured by the Federal Deposit Insurance Corporation, provided the
amount of any certificate of deposit in excess of that covered by
such insurance must be secured by a first and prior pledge of
government obligations having a market value of not less than 100
percent of the excess unless a nationally recognized rating agency
has given the senior securities of the bank issuing the certificate
of deposit the highest or next to the highest investment rating
available;
(2) repurchase agreements;
(3) guaranteed student loans and alternative
education loans; or
(4) a security issued by another nonprofit corporation
acting under this section.
(f) A nonprofit corporation, whether acting at the request
of a city or cities under Subsection (e) or acting as a servicer or
administrator for another corporation that purchases guaranteed
student loans, or that on its own behalf issues securities or
otherwise obtains funds to purchase or make guaranteed student
loans or alternative education loans, may:
(1) exercise the powers granted by the Texas
Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
Texas Civil Statutes);
(2) service loans purchased or made from its funds or
contract with another person to service the loans;
(3) grant a security interest in a trust estate
securing its securities; and
(4) make investments as authorized by Subsection (e).
(g) A security interest in a trust estate granted under
Subsection (f)(3) is attached and perfected at the time the
security interest is executed and delivered by the nonprofit
corporation. The security interest grants to the secured party a
first prior perfected security interest in the trust estate for the
benefit of the secured party without regard to the location of the
assets that constitute the trust estate.
(h) An alternative education loan may be made under this
section only by a qualified alternative education loan lender. An
alternative education loan may not be in an amount in excess of the
difference between the cost of attendance and the amount of other
student assistance to the student, other than loans under Section
428B(a)(1), Higher Education Act of 1965 (20 U.S.C. Section 1078-2)
(relating to parent loans), for which the student borrower may be
eligible. An alternative education loan covered by this subsection
is subject to Chapter 342, Finance Code, as applicable, except
that:
(1) the maximum interest rate on the loan may not
exceed the rate permitted under Subchapter A, Chapter 303, Finance
Code; and
(2) application and origination fees may be agreed to
by the parties and assessed at the inception of the loan, provided
that if any such fees constitute additional interest under
applicable law, the effective rate of interest agreed to over the
stated term of the loan may not exceed the rate allowed by
Subchapter A, Chapter 303, Finance Code, and accrued unpaid
interest may be added to unpaid principal at the beginning of the
agreed repayment period at the borrower's option and in accordance
with the terms of the agreement for purposes of determining the
total principal amount due at the inception of the repayment
period.
(i) An authority or nonprofit corporation making education
loans under this section is exempt from the licensing requirements
of Chapter 342, Finance Code.
Added by Acts 2005, 79th Leg., ch. 641, § 2, eff. Sept. 1, 2005.
Section: 53B.38 53B.39 53B.40 53B.41 53B.42 53B.43 53B.45 53B.47 160.01 160.02 160.03 160.04 160.05 160.06 160.07
Last modified: August 10, 2007
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