1 STATE OF OKLAHOMA
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2 2nd Session of the 59th Legislature (2024)
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3 HOUSE BILL 3459 By: Moore
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6 AS INTRODUCED
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7 An Act relating to the Oklahoma Student Loan Act;
7 amending 70 O.S. 2021, Section 695.2, which relates
8 to definitions; modifying definition; amending 70
8 O.S. 2021, Section 695.3, which relates to the
9 authority of Governor and issuance of bonds;
9 modifying requirements; amending 70 O.S. 2021,
10 Section 695.5, which relates to the Student Loan
10 Fund; authorizing use of funds for provision of
11 loans; amending 70 O.S. 2021, Section 695.6, which
11 relates to payments of loan money; modifying
12 requirement; amending 70 O.S. 2021, Section 695.7,
12 which relates to procedures of the Student Loan
13 Authority; modifying procedures; amending 70 O.S.
13 2021, Section 695.17, which relates to the authority
14 to make loans from the Student Loan Fund; modifying
14 to whom loans may be made; amending 70 O.S. 2021,
15 Section 695.18, which relates to supplemental loan
15 program for qualified students; modifying definition
16 of qualified person; modifying due diligence to
16 collect; modifying when interest shall be paid on
17 loans; and providing an effective date.
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20 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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21 SECTION 1. AMENDATORY 70 O.S. 2021, Section 695.2, is
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22 amended to read as follows:
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23 Section 695.2 As used in the Oklahoma Student Loan Act:
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24 1. "Authority" means the Oklahoma Student Loan Authority;
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 1 2. "Participating institution" means any educational
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2 institution, public or private, including junior colleges and
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3 vocational-technical schools, which qualifies as an eligible
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4 institution for the federal insured loan program under the Federal
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5 Higher Education Act of 1965, as amended, and participating in
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6 student loan programs under the Oklahoma Student Loan Act;
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7 3. "Qualified person" means a person who is eligible for a
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8 student loan insured by the United States under the Oklahoma Student
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9 Loan Act; and
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10 4. "Bond" or "Bonds" means revenue bonds and notes issued by
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11 the Authority.
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12 SECTION 2. AMENDATORY 70 O.S. 2021, Section 695.3, is
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13 amended to read as follows:
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14 Section 695.3 The Governor is hereby authorized to accept
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15 beneficial interest on behalf of the State of Oklahoma in an express
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16 trust which shall be an agency of the state for the specific object
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17 and purpose of providing student loan funds pursuant to requirements
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18 of any appropriate federal agency to qualified persons as provided
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19 herein. Said state trust shall be entitled the Oklahoma Student
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20 Loan Authority. The Authority shall be created in accordance with
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21 the provisions of Section 176 et seq. of Title 60 of the Oklahoma
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22 Statutes. It shall issue bonds or other obligations from time to
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23 time for and on behalf of the State of Oklahoma as such funds are
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24 needed to underwrite loans insured by the United States to qualified
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 1 persons at participating institutions as provided herein. Bonds
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2 issued by the Authority, or interest thereon, shall be paid through
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3 funds received by the Authority as provided in Section 695.7 of this
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4 title.
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5 All bonds issued under the Oklahoma Student Loan Act are legal
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6 and authorized investments for banks, savings banks, trust
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7 companies, savings and loan associations, insurance companies,
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8 credit unions, fiduciaries, trustees and guardians, and for the
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9 State of Oklahoma and any of its political subdivisions,
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10 departments, institutions and agencies. When accompanied by all
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11 unmatured coupons appurtenant thereto, the bonds are sufficient
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12 security for all deposits of state funds and of all funds of any
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13 board in control at the par value of the bond. The bonds and the
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14 income therefrom are free from taxation within this state.
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15 SECTION 3. AMENDATORY 70 O.S. 2021, Section 695.5, is
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16 amended to read as follows:
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17 Section 695.5 There shall be created in the Authority the
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18 "Student Loan Fund". The Authority may use the Student Loan Fund to
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19 purchase loans insured by the United States made to qualified
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20 persons at participating institutions, provide loans under the
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21 Oklahoma Student Loan Act, and such other expenses as may be
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22 appropriate in connection herewith.
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23 SECTION 4. AMENDATORY 70 O.S. 2021, Section 695.6, is
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24 amended to read as follows:
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 1 Section 695.6 The amount of any loan to a qualified person
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2 shall be determined according to regulations promulgated by the
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3 Student Loan Authority. No payment shall be made to any qualified
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4 person until he has executed a note, insured by the United States
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5 and payable to a fund which shall be created to be known as the
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6 "Student Loan Sinking Fund", for the full amount of the loan and
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7 interest thereon. For the purpose of the Oklahoma Student Loan Act,
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8 Section 695.1 et seq. of this title, a qualified person has the
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9 capacity to contract and is bound by any contract executed by him;
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10 the defense that he was a minor at the time he executed a note is
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11 not available to him in any action arising on his note. Payments to
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12 qualified persons executing notes may be made annually,
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13 semiannually, or for each semester as determined by the Authority.
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14 The rate of interest charged the student shall not exceed the
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15 maximum authorized by federal regulations be determined by the
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16 Student Loan Authority. Disbursements may be made to a
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17 participating institution pursuant to a contract between the
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18 Authority and the participating institution executed under the
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19 Oklahoma Student Loan Act.
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20 SECTION 5. AMENDATORY 70 O.S. 2021, Section 695.7, is
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21 amended to read as follows:
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22 Section 695.7 A. The Authority shall accumulate individual
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23 loan applications from the several participating institutions and
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24 shall submit these applications to the appropriate federally
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 1 approved guarantor for approval and insurance. The Authority may
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2 fix deadlines for the receipt of applications relative to each
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3 academic term.
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4 B. The Authority may disburse to each of the participating
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5 institutions funds sufficient only to enable payments to those
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6 participating students whose loans have been approved and insured.
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7 Any funds not so disbursed shall be returned to the Authority by the
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8 participating institution. The Authority may also disburse loan
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9 funds directly to participating students and through institutional
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10 officials.
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11 C. The Authority shall collect interest payments and interest
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12 subsidies paid on behalf of the qualified person by the United
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13 States and shall also collect all interest and principal payments
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14 made by the student under the terms of his obligation to the Student
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15 Loan Fund. When any person who has received a loan fails to make
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16 payments due in accordance with an executed note, the Authority may
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17 declare the full amount of remaining principal and interest due and
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18 payable immediately. In the event of default of payment, the
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19 Authority shall undertake collection and, in the event of failure to
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20 collect on a guaranteed loan after such reasonable efforts as are
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21 prescribed by federal regulations, shall file a claim for payment
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22 under the terms of the federal insurance.
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23 D. The Authority is authorized to designate the president of
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24 each participating institution, or an official of the institution
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 1 designated by the president, as a representative for the purpose of
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2 facilitating and processing loan applications, disbursement and
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3 delivery of loan funds to participating students and the receipt of
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4 executed notes and payments thereon by participating students. The
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5 Authority may promulgate such rules and regulations as shall be
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6 deemed necessary and proper to carry out the duties imposed upon the
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7 Authority and any institutional representative under the provisions
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8 of the Oklahoma Student Loan Act.
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9 SECTION 6. AMENDATORY 70 O.S. 2021, Section 695.17, is
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10 amended to read as follows:
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11 Section 695.17 The Oklahoma Student Loan Authority and the
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12 Oklahoma State Regents for Higher Education functioning as the
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13 fiscal agent for the Authority in the administration of the Oklahoma
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14 Student Loan Act (Chapter 125, Oklahoma Session Laws 1972; 70 O.S.
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15 Supp. 1975, Sections 695.1 to 695.16) shall have authority to make
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16 loans to qualified students persons under provisions of said act if
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17 the loans are insured or coinsured by the United States under either
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18 Title IV-A or Title IV-B of the Higher Education Act of 1965, as
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19 amended the Oklahoma Student Loan Act.
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20 SECTION 7. AMENDATORY 70 O.S. 2021, Section 695.18, is
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21 amended to read as follows:
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22 Section 695.18 The Oklahoma Student Loan Authority shall
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23 establish and operate a supplemental loan program for qualified
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 1 students who are not eligible for loans under the federally insured
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2 student loan program, pursuant to the following:
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3 A. "Qualified students person" shall be those students enrolled
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4 in collegiate education a participating institution or a biological
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5 or adoptive parent of such student who have completed federal needs
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6 analysis and require additional financial assistance as certified by
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7 the institution of enrollment but are ineligible for a Guaranteed
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8 Student Loan sufficient to meet that need, provided that in no
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9 instance shall a supplemental loan be made to any student whose
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10 family income, if dependent, or whose personal income, if
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11 independent, exceeded Eighty Thousand Dollars ($80,000.00), or the
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12 income limitation as adjusted pursuant to this subsection, in the
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13 previous tax year meets the eligibility requirements set by the
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14 Oklahoma Student Loan Authority. Beginning with the fiscal year
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15 ending June 30, 2002, the Authority shall prescribe a cost-of-living
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16 adjustment to the income limitation provided in this section. The
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17 adjustment shall be based on the maximum percentage increase, if
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18 any, not to exceed the previous year's Consumer Price Index for All
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19 Urban Consumers (CPI-U) as prepared by the United States Bureau of
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20 Labor Statistics.
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21 B. The Authority may enter into agreements with the
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22 Commissioners of the Land Office for funding this loan program or
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23 may obtain funding through authorized procedures as provided for in
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24 the Oklahoma Student Loan Act.
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 1 C. The Authority may enter into agreements with the State
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2 Guarantee Agency or any nationally recognized guarantor approved by
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3 the United States Secretary of Education for the insurance of such
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4 loans.
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5 D. The Authority shall collect its loans when due; and, in the
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6 event of a possible default after due diligence has been performed
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7 to collect on a guaranteed loan, a claim shall be filed with the
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8 State Guarantee Agency for collection under the insurance program,
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9 which guarantor shall pay the claim for the Authority, following
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10 which it shall take whatever action may be necessary to collect from
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11 the borrower in order to assure that the State of Oklahoma will not
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12 suffer any loss in connection with default payments; and if
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13 insurance of the loan is with a nationally recognized guarantor, the
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14 same procedure shall apply.
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15 E. The Authority shall establish the rate of interest to be
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16 paid on loans, which shall be paid by the borrowers to the Authority
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17 on a quarterly basis, which rate shall be as modest as possible for
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18 the benefit of the student but shall be at sufficient level to
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19 assure repayment of the debt incurred to underwrite the loans and
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20 expenses incurred by the Authority in administration of the program.
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21 F. The Authority shall promulgate rules as may be necessary and
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22 appropriate for the full and effective administration of the loan
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23 program provided for in the Oklahoma Student Loan Act, and it shall
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 1 be the sole state agency for providing loans to eligible persons
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2 under the federal and state student loan programs.
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3 G. As in the case of other trust agencies, the State of
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4 Oklahoma is not obligated to support with state-appropriated funds
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5 the loan program provided for in the Oklahoma Student Loan Act.
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6 SECTION 8. This act shall become effective November 1, 2024.
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8 59-2-8832 MJ 12/12/23
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