Section 173.110

Title XI EDUCATION AND LIBRARIES

Chapter 173

Effective - 28 Aug 1994   

  173.110.  Department may guarantee student loans — subrogation — charges for guarantee — lender of last resort loans, origination — amount guaranteed, limit. — 1.  The department is authorized to issue certificates of guarantee covering student loans by eligible lenders which meet the requirements of sections 173.095 to 173.180 and the regulations of the board adopted hereunder to eligible borrowers, and to pay from the fund to an eligible lender the amount established by federal law in the event the student defaults.  Upon payment of the loss the department shall be subrogated to all the rights of the eligible lender.

  2.  The department shall charge for each guaranteed loan a special loan insurance premium established by federal law which shall be paid to the department by the borrower.  Amounts so received shall be used by the department to pay the costs of administering the program and to guarantee student loans.

  3.  The department is authorized to originate loans, including lender of last resort loans.  All moneys to originate loans, including lender of last resort loans, shall be paid from a fund established for that purpose, including the lender of last resort revolving fund created under section 173.187.

  4.  The total outstanding guaranteed loans shall at no time exceed an amount which, according to sound actuarial judgment as determined by the state auditor, can be guaranteed by the fund.

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(L. 1967 1st Ex. Sess. p. 894 § 3, A.L. 1978 H.B. 891, A.L. 1981 H.B. 326, A.L. 1994 S.B. 583)