Proposed Revisions to 505 - Guaranteed Student Loan Program

Statutory authority:

            Section 20-26-1101 through 1107, Montana Codes Annotated.

Board policy:

            1.  The Montana Guaranteed Student Loan Program is established within the Office of the Commissioner of Higher Education (MGSLP)The guarantee agency will be organized under the Office of the Commissioner of Higher Education and will be and is responsible for the administration of the federal Family Education Loan Program, formerly known as the Guaranteed Student Loan program.  Staff will be employed by the Commissioner and funded through revenues generated by the program.  The agency MGSLPwill retainhas the following activities responsibilities:  regulation and compliance, lender promotion, school and student liaison and other duties necessary or appropriate for the efficient administration of the Guaranteed Studentfederal Family Education Loan program.

            2.  The guarantee agency will request the Office of Education to terminate all contractual agreements under the Federally Insured Student Loan program as of the effective date of the Guaranteed Student Loan program.

            3.  The Board of Regents will form a nonprofit foundation for the purpose of establishing a secondary market.  The board of directors of the nonprofit foundation will be composed of eleven members.  The membership method of selection and appointment will be set forth in the Articles of Incorporation of the nonprofit foundation.  The nonprofit corporation will request the Governor to designate that corporation as the single nonprofit agency in the state defined in Section 435 (g)(1)(D) of Title IV, Part B of the Higher Education Act of 1965 as amended.

            42.  The MGSLP state agencymay will contract negotiated fees with a nonprofit servicer for the activities necessary or appropriate to administer the student loan program described in the Request for Proposal.  The activities will include but not be limited to loan processing, claim processing and collections.

            5.  The nonprofit corporation may establish a line of credit with a lending institution to provide start-up funds necessary to implement the guarantee program.  The funds will be made available to the guarantee agency and will be repaid in full when the Guaranteed Student Loan program becomes self supporting.  The amount of credit shall not exceed $100,000.

 

 History:

                Item 26-012-R0180, Montana Guaranteed Student Loan Program, January 7, 1980.

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