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SENATE FLOOR VERSION
March 26, 2024
ENGROSSED HOUSE
BILL NO. 3459 By: Moore of the House
and
Rader of the Senate
An Act relating to the Oklahoma Student Loan Act;
amending 70 O.S. 2021, Section 695.2, which relates
to definitions; modifying de finition; amending 70
O.S. 2021, Section 695.3, which relates to the
authority of Governor and issuance of bonds;
modifying requirements; amending 70 O.S. 2021,
Section 695.5, which relates to the Student Loan
Fund; authorizing use of funds for provision o f
loans; amending 70 O.S. 2021, Section 695.6, which
relates to payments of loan money; modifying
requirement; amending 70 O.S. 2021, Section 695.7,
which relates to procedures of the Student Loan
Authority; modifying procedures; amending 70 O.S.
2021, Section 695.17, which relates to the authority
to make loans from the Student Loan Fund; modifying
to whom loans may be made; amending 70 O.S. 2021,
Section 695.18, which relates to supplemental loan
program for qualified students; modifying definition;
modifying due diligence to collect; modifying when
interest shall be paid on loans; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 70 O.S. 2021, Section 695.2, is
amended to read as follows:
Section 695.2 As used in the Oklahoma Student Loan Act:
1. "Authority" means the Oklahoma Student Loan Authority;
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2. "Participating institution " means any educational
institution, public or private, including junior colleges and
vocational-technical schools, which qualifies as an eligible
institution for the federal insured loan program under the Federal
Higher Education Act of 1965, as amended, and participating in
student loan programs under the Oklahoma Student Loan Act;
3. "Qualified person" means a person who is eligible for a
student loan insured by the United States under the Oklahoma Student
Loan Act; and
4. "Bond" or "Bonds" means revenue bonds and notes issued by
the Authority.
SECTION 2. AMENDATORY 7 0 O.S. 2021, Section 695.3, is
amended to read as follows:
Section 695.3 The Governor is hereby authorized to accept
beneficial interest on behalf of the State of Oklahoma in an express
trust which shall be an agency of the state for the specific object
and purpose of providing student loan funds pursuant to requirements
of any appropriate federal agency to qualified persons as provided
herein. Said state trust shall be entitled the Oklahoma Student
Loan Authority. The Authority shall be created in accor dance with
the provisions of Title 60 of the Oklahoma Statutes, Section 176 et
seq. of Title 60 of the Oklahoma Statutes. It shall issue bonds or
other obligations from time to time for and on behalf of the State
of Oklahoma as such funds are needed to un derwrite loans insured by
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the United States to qualified persons at participating institutions
as provided herein. Bonds issued by the Authority, or interest
thereon, shall be paid through funds received by the Authority as
provided in Section 695.7 of th is title.
All bonds issued under the Oklahoma Student Loan Act are legal
and authorized investments for banks, savings banks, trust
companies, savings and loan associations, insurance companies,
credit unions, fiduciaries, trustees and guardians, and for t he
State of Oklahoma and any of its political subdivisions,
departments, institutions and agencies. When accompanied by all
unmatured coupons appurtenant thereto, the bonds are sufficient
security for all deposits of state funds and of all funds of any
board in control at the par value of the bond. The bonds and the
income therefrom are free from taxation within this state.
SECTION 3. AMENDATORY 70 O.S. 2021, Section 695.5, is
amended to read as follows:
Section 695.5 There shall be created in the Authority the
"Student Loan Fund". The Authority may use the Student Loan Fund to
purchase loans insured by the United States made to qualified
persons at participating institutions , provide loans under the
Oklahoma Student Loan Act, and such other expenses as may be
appropriate in connection herewith.
SECTION 4. AMENDATORY 70 O.S. 2021, Section 695.6, is
amended to read as follows:
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Section 695.6 The amount of any loan to a qualified person
shall be determined acc ording to regulations promulgated by the
Student Loan Authority. No payment shall be made to any qualified
person until he has executed a note , insured by the United States
and payable to a fund which shall be created to be known as the
"Student Loan Sinking Fund", for the full amount of the loan and
interest thereon. For the purpose of the Oklahoma Student Loan Act,
Section 695.1 et seq. of this title, a qualified person has the
capacity to contract and is bound by any contract executed by him;
the defense that he was a minor at the time he executed a note is
not available to him in any action arising on his note. Payments to
qualified persons executing notes may be made annually,
semiannually, or for each semester as determined by the Authority.
The rate of interest charged the student shall not exceed the
maximum authorized by federal regulations be determined by the
Student Loan Authority . Disbursements may be made to a
participating institution pursuant to a contract between the
Authority and the pa rticipating institution executed under the
Oklahoma Student Loan Act.
SECTION 5. AMENDATORY 70 O.S. 2021, Section 695.7, is
amended to read as follows:
Section 695.7 A. The Authority shall accumulate individual
loan applications from the several participating institutions and
shall submit these applications to the appropriate federally
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approved guarantor for approval and insurance. The Authority may
fix deadlines for the receipt of applications relative to each
academic term.
B. The Authority may disburse to each of the participating
institutions funds sufficient only to enable payments to those
participating students whose loans have been approved and insured.
Any funds not so disbursed shall be returned to the Authority by the
participating institution. The Authority may also disburse loan
funds directly to participating students and t hrough institutional
officials.
C. The Authority shall collect interest payments and interest
subsidies paid on behalf of the qualified person b y the United
States and shall also collect all interest and principal payments
made by the student under the terms of his obligation to the Student
Loan Fund. When any person who has received a loan fails to make
payments due in accordance with an execute d note, the Authority may
declare the full amount of remaining principal and interest due and
payable immediately. In the event of default of payment, the
Authority shall undertake collection and, in the event of failure to
collect on a guaranteed loan after such reasonable efforts as are
prescribed by federal regulations, shall file a claim for payment
under the terms of the federal insurance.
D. The Authority is authorized to designate the president of
each participating institution, or an official of t he institution
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designated by the president, as a representative for the purpose of
facilitating and processing loan applications, disbursement and
delivery of loan funds to participating students and the receipt of
executed notes and payments thereon by pa rticipating students. The
Authority may promulgate such rules and regulations as shall be
deemed necessary and proper to carry out the duties imposed upon the
Authority and any institutional representative under the provisions
of the Oklahoma Student Loan Act.
SECTION 6. AMENDATORY 70 O.S. 2021, Section 695.17, is
amended to read as follows :
Section 695.17 The Oklahoma Student Loan Authority and the
Oklahoma State Regents for Higher Education functioning as the
fiscal agent for the Authority in the administration of the Oklahoma
Student Loan Act (Chapter 125, Oklahoma Session Laws 1972; 70 O.S.
Supp. 1975, Sections 695.1 to 695.16) shall have authority to make
loans to qualified students persons under provisions of said act if
the loans are insured or coinsured by the United States under either
Title IV-A or Title IV-B of the Higher Educatio n Act of 1965, as
amended the Oklahoma Student Loan Act .
SECTION 7. AMENDATORY 70 O.S. 2021, Section 695.18, is
amended to read as follows:
Section 695.18 The Oklahoma Student Loan Authority shall
establish and operate a supplemental loan program for qualified
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students who are not eligible for loans under the federally insured
student loan program, pursuant to the following :
A. "Qualified students” person" shall be those students
enrolled in collegiate education a participating institution or a
biological or adoptive parent of such student who have completed
federal needs analysis and require additional financial assistance
as certified by the institution of enrollment but are ineligible for
a Guaranteed Student Loan sufficient to meet that need, provided
that in no instance shall a supplemental loan be made to any student
whose family income, if dependent, or whose personal income, if
independent, exceeded Eighty Thousand Dollars ($80,000.00), or the
income limitation as adjusted pu rsuant to this subsection, in the
previous tax year meets the eligibility requirements set by the
Oklahoma Student Loan Authority . Beginning with the fiscal year
ending June 30, 2002, the Authority shall prescribe a cost -of-living
adjustment to the income limitation provided in this section. The
adjustment shall be based on the maximum percentage increase, if
any, not to exceed the previous year 's Consumer Price Index for All
Urban Consumers (CPI -U) as prepared by the United States Bureau of
Labor Statistics.
B. The Authority may enter into agreements with the
Commissioners of the Land Office for funding this loan program or
may obtain funding th rough authorized procedures as provided for in
the Oklahoma Student Loan Act.
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C. The Authority may enter into agreements with the State
Guarantee Agency or any nationally recognized guarantor approved by
the United States Secretary of Education for the in surance of such
loans.
D. The Authority shall collect its loans when due; and, in the
event of a possible defa ult after due diligence has been performed
to collect on a guaranteed loan , a claim shall be filed with the
State Guarantee Agency for collection under the insurance program,
which guarantor shall pay the claim for the Authority, following
which it shall take whatever action may be necessary to collect from
the borrower in order to assure that the State of Oklahoma will not
suffer any loss in conne ction with default payments; and if
insurance of the loan is with a nationally recognized guarantor, the
same procedure shall apply.
E. The Authority shall establish the rate of interest to be
paid on loans, which shall be paid by the borrowers to the Aut hority
on a quarterly basis , which rate shall be as modest as possible for
the benefit of the student but shall be at sufficient level to
assure repayment of the debt incurred to underwrite the loans and
expenses incurred by the Authority in administration of the program.
F. The Authority shall promulgate rules as may be necessary and
appropriate for the full and effective administration of the loan
program provided for in the Oklahoma Student Loan Act, and it shall
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be the sole state agency for providing l oans to eligible persons
under the federal and state student loan programs.
G. As in the case of other trust agencies, the State of
Oklahoma is not obligated to support with state -appropriated funds
the loan program provided for in the Oklahoma Student Lo an Act.
SECTION 8. This act shall become effective November 1, 2024.
COMMITTEE REPORT BY: COMM ITTEE ON EDUCATION
March 26, 2024 - DO PASS