SENATE BILL NO. 228 February 2, 1999, Introduced by Senators GOUGEON, HOFFMAN, GOSCHKA, NORTH, BENNETT, SHUGARS, BULLARD, ROGERS and JAYE and referred to the Committee on Appropriations. A bill to amend 1975 PA 222, entitled "Higher education loan authority act," by amending sections 4a and 12 (MCL 390.1154a and 390.1162), sec- tion 4a as added by 1989 PA 96 and section 12 as amended by 1987 PA 206. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 4a. (1) In addition to the powers enumerated in 2 section 4, the authority may loan money to students or parents of 3 students who are residents of this state to assist them to pay 4 for the cost of the student's attendance at a degree-granting 5 college or university located in this state. The authority shall 6 promulgate rules under the administrative procedures act of 1969, 7Act No. 306 of the Public Acts of 1969, being sections 24.201 to824.328 of the Michigan Compiled Laws1969 PA 306, MCL 24.201 TO 01403'99 i DAM 2 1 24.328, to establish payment and repayment terms for the loans 2 authorized under this section. 3 (2) IF A STUDENT IS SUBJECT TO A COURT ORDER DENYING FEDERAL 4 BENEFITS AS DESCRIBED IN SECTION 421 OF PART D OF THE CONTROLLED 5 SUBSTANCES ACT, TITLE II OF THE COMPREHENSIVE DRUG ABUSE PREVEN- 6 TION AND CONTROL ACT OF 1970, PUBLIC LAW 91-513, 21 U.S.C. 862, 7 THE STUDENT IS INELIGIBLE FOR A LOAN UNDER THIS SECTION, AND THE 8 STUDENT'S PARENTS ARE INELIGIBLE FOR A LOAN UNDER THIS SECTION TO 9 THE EXTENT THAT THE LOAN IS TO BE USED TO PAY FOR THE EDUCATIONAL 10 EXPENSES OF THAT STUDENT, FOR THE DURATION OF THE COURT ORDER. 11 Sec. 12. (1)TheUNLESS THE STUDENT OR THE PARENTS OF A 12 STUDENT ARE INELIGIBLE UNDER SUBSECTION (4) OR (5), THE authority 13 may makeloans to studentsA LOAN TO A STUDENT enrolled or to 14 be enrolled in AN eligibleinstitutionsINSTITUTION or to the 15 parents ofstudentsA STUDENT out ofmoneysMONEY available 16 to the authority for loans. The authority shall promulgate rules 17 for determining the needs ofthe respective studentsA STUDENT 18 and parents ofstudentsA STUDENT forloansA LOAN and for 19 the purpose of making loans. The amount of a loan made by the 20 authority to a student or parent of a student, whether the stu- 21 dent is enrolled or is to be enrolled in a private institution or 22 a tax-supported public institution, shall be determined by the 23 authority upon the basis of substantially similar standards and 24 guides for any authority loan program set forth in the 25 authority's rules. The authority, in determining the needs of 26studentsA STUDENT or parents ofstudentsA STUDENT for 01403'99 i 3 1 loans, may consider the amount of assistance available to the 2studentsSTUDENT. 3 (2) At the time the authority makes a loan, and again when a 4 repayment schedule on the loan is provided to the borrower, the 5 authority shall describe in detail whether an option exists, and 6 if so, who may exercise the option, under what conditions the 7 option may be exercised, and what options are available relating 8 to all of the following: 9 (a) The term of the loan. 10 (b) The repayment period on the loan. 11 (c) An extension of the term or repayment period on the loan 12 and the conditions of repayment under the extension. 13 (d) A deferment or forbearance on the repayment of the loan 14 or on interest accruing on the loan, whether interest is to be 15 paid during the deferment or forbearance, and the terms of repay- 16 ment after the deferment or forbearance. 17 (e) The period of time between installment payments on the 18 loan and whether graduated or unequal installment payments may be 19 made. 20 (f) The minimum annual payment on the loan, and if more than 21 1 loan is taken from the authority or if the borrower takes or 22 has taken an educational loan from another source, the availabil- 23 ity of consolidation, transfer, or assignment of the loans and 24 the minimum annual payment on the aggregate of the loans. 25 (g) The availability of loan counseling to answer questions 26 relating to repayment options. 01403'99 i 4 1 (h) The revision or renegotiation of the repayment schedule 2 on the loan after repayment has commenced, or if other 3 educational loans from the authority or another source are taken 4 after the repayment has commenced. 5 (3) On loans made by the authoritywhichTHAT are feder- 6 ally reinsured loans, the authority may establish variable repay- 7 ment schedules conforming to the need and documented income 8 levels of borrowers, if the schedules are not inconsistent with 9 the federal laws, rules, or regulations governing the reinsured 10 loans. A borrower making payments on a loan may request and be 11 granted a revised repayment term or schedule based upon the 12 established variable repayment schedules. 13 (4) IF A STUDENT IS SUBJECT TO A COURT ORDER DENYING FEDERAL 14 BENEFITS AS DESCRIBED IN SECTION 421 OF PART D OF THE CONTROLLED 15 SUBSTANCES ACT, TITLE II OF THE COMPREHENSIVE DRUG ABUSE PREVEN- 16 TION AND CONTROL ACT OF 1970, PUBLIC LAW 91-513, 21 U.S.C. 862, 17 THE STUDENT IS INELIGIBLE FOR A LOAN UNDER THIS SECTION, AND THE 18 STUDENT'S PARENTS ARE INELIGIBLE FOR A LOAN UNDER THIS SECTION TO 19 THE EXTENT THAT THE LOAN IS TO BE USED TO PAY FOR THE EDUCATIONAL 20 EXPENSES OF THAT STUDENT, FOR THE DURATION OF THE COURT ORDER. 21 (5) IF A PARENT OF A STUDENT IS SUBJECT TO A COURT ORDER 22 DENYING FEDERAL BENEFITS AS DESCRIBED IN SECTION 421 OF PART D OF 23 THE CONTROLLED SUBSTANCES ACT, TITLE II OF THE COMPREHENSIVE DRUG 24 ABUSE PREVENTION AND CONTROL ACT OF 1970, PUBLIC LAW 91-513, 21 25 U.S.C. 862, THE PARENT AND THE PARENT'S SPOUSE ARE INELIGIBLE FOR 26 A LOAN UNDER THIS SECTION FOR THE DURATION OF THE COURT ORDER. 01403'99 i Final page. 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