Bill Text: IA SF440 | 2011-2012 | 84th General Assembly | Introduced
Bill Title: A bill for an act relating to the powers and duties of the college student aid commission in administering certain federal postsecondary financial aid initiatives. (Formerly SSB 1021.)
Spectrum: Committee Bill
Status: (Engrossed - Dead) 2011-12-31 - END OF 2011 ACTIONS [SF440 Detail]
Download: Iowa-2011-SF440-Introduced.html
Senate
File
440
-
Introduced
SENATE
FILE
440
BY
COMMITTEE
ON
EDUCATION
(SUCCESSOR
TO
SSB
1021)
A
BILL
FOR
An
Act
relating
to
the
powers
and
duties
of
the
college
1
student
aid
commission
in
administering
certain
federal
2
postsecondary
financial
aid
initiatives.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
Section
261.36,
Code
2011,
is
amended
to
read
as
1
follows:
2
261.36
Powers
and
duties
of
commission
.
3
1.
The
commission
shall
have
necessary
powers
to
carry
out
4
its
purposes
and
duties
under
this
division
,
including
but
not
5
limited
to
the
power
to
do
the
following
:
6
1.
a.
Sue
and
be
sued
in
its
own
name.
7
2.
b.
Incur
and
discharge
debts
including
the
payment
of
8
any
defaulted
loan
obligations
which
have
been
guaranteed
by
9
the
commission.
10
3.
c.
Make
and
execute
agreements,
contracts
,
and
other
11
instruments
with
any
public
or
private
person
or
agency
12
including
the
United
States
secretary
of
education.
The
13
commission
shall
also
have
the
power
to
enter
into
any
14
agreements
with
the
United
States
secretary
of
education
or
15
other
federal
agency
as
are
necessary
to
provide
programs
and
16
services
administered
pursuant
to
this
chapter
to
current
and
17
future
Iowa
postsecondary
students,
to
the
students’
school
18
counselors,
parents,
and
guardians,
and
to
the
elementary,
19
secondary,
and
postsecondary
institutions
the
students
attend.
20
4.
d.
Guarantee
loans
made
by
eligible
lenders
to
eligible
21
borrowers
who
are,
or
whose
children
are,
enrolled
or
will
22
be
enrolled
at
eligible
institutions
as
at
least
half-time
23
students
as
defined
by
the
commission.
24
5.
e.
Approve
educational
institutions
as
eligible
25
institutions
upon
their
meeting
if
and
when
the
institutions
26
meet
the
requirements
established
by
the
commission.
27
6.
f.
Approve
financial
or
credit
institutions,
insurance
28
companies
,
or
other
lenders
as
eligible
lenders
upon
29
their
meeting
if
and
when
such
entities
meet
the
standards
30
established
by
the
commission
for
making
guaranteed
loans.
31
7.
g.
Accept
appropriations,
gifts,
grants,
loans
or
other
32
aid
from
public
or
private
persons
or
agencies
including
the
33
United
States
secretary
of
education.
34
8.
h.
Implement
various
means
of
encouraging
maximum
lender
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participation
in
the
Iowa
guaranteed
loan
program.
1
i.
Administer
the
college
access
initiative
authorized
by
20
2
U.S.C.
§
1092e,
or
its
successor
program.
3
j.
Administer
the
gaining
early
awareness
and
readiness
for
4
undergraduate
programs
initiative
authorized
by
20
U.S.C.
§
5
1070a
–
21
through
1070a
–
28,
or
its
successor
program.
6
2.
The
duties
of
the
commission
under
this
division
shall
7
be
as
follows:
8
a.
To
review
the
Iowa
guaranteed
loan
program.
9
b.
To
review
and
make
disposition
of
all
applications
for
10
the
guarantee
of
student
loans.
11
c.
To
collect
an
insurance
premium
of
not
more
than
the
12
amount
authorized
by
the
Higher
Education
Act
of
1965.
The
13
premium
shall
be
collected
by
the
lender
upon
the
disbursement
14
of
the
loan
and
shall
be
remitted
promptly
to
the
commission.
15
d.
To
enter
into
any
agreements
with
the
United
States
16
secretary
of
education
necessary
for
purposes
of
receiving
full
17
benefit
of
the
state
program
incentives
offered
pursuant
to
the
18
Higher
Education
Act
of
1965.
19
e.
To
adopt
rules
pursuant
to
chapter
17A
to
implement
the
20
provisions
of
this
division,
including
establishing
standards
21
for
educational
institutions,
lenders,
and
individuals
to
22
become
eligible
institutions,
eligible
lenders,
and
eligible
23
borrowers.
Notwithstanding
any
contrary
provisions
in
chapter
24
537,
the
rules
and
standards
established
shall
be
consistent
25
with
the
requirements
provided
in
the
Higher
Education
Act
of
26
1965.
The
commission
shall
expend
all
property
and
moneys
27
belonging
to
the
agency
operating
account
to
execute
the
28
commission’s
powers
and
duties
under
this
chapter.
29
f.
To
reimburse
eligible
lenders
for
the
amount
authorized
30
by
the
Higher
Education
Act
of
1965
on
defaulted
loans
31
guaranteed
by
the
commission
upon
receipt
of
written
notice
32
of
the
default
accompanied
by
evidence
that
the
lender
has
33
exercised
the
required
degree
of
diligence
in
efforts
to
34
collect
the
loan.
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g.
To
establish
an
effective
system
for
the
collection
of
1
delinquent
loans,
including
the
adoption
of
an
agreement
with
2
the
department
of
administrative
services
to
set
off
against
3
a
defaulter’s
income
tax
refund
or
rebate
the
amount
that
is
4
due
because
of
a
default
on
a
guaranteed
student
or
parental
5
loan
made
under
this
division.
The
commission
shall
adopt
6
rules
under
chapter
17A
necessary
to
assist
the
department
of
7
administrative
services
in
the
implementation
of
the
student
8
loan
setoff
program
as
established
under
section
8A.504.
9
The
commission
shall
apply
administrative
wage
garnishment
10
procedures
authorized
under
the
Higher
Education
Act
of
1965
11
for
all
delinquent
loans,
including
loans
authorized
under
12
section
261.38,
when
a
defaulter
who
is
financially
capable
of
13
paying
fails
to
voluntarily
enter
into
a
reasonable
payment
14
agreement.
In
no
case
shall
the
commission
garnish
more
than
15
the
amount
authorized
by
federal
law
for
all
loans
being
16
collected
by
the
commission,
including
those
authorized
under
17
section
261.38.
18
h.
To
develop
and
provide
information,
forms,
publications,
19
internet-based
resources,
and
other
educational
services
to
20
eligible
lenders,
postsecondary
institutions,
elementary
21
and
secondary
schools,
students,
parents,
education
loan
22
borrowers,
and
the
general
public.
The
commission,
as
it
deems
23
necessary,
shall
provide
applicants
with
information
about
the
24
past
default
rates
of
borrowers,
enrollment,
and
placement
25
statistics
by
postsecondary
institutions.
26
i.
To
develop
all
forms
necessary
to
the
proper
27
administration
of
the
guaranteed
student
loan
program.
28
j.
To
report
annually
to
the
governor
and
the
general
29
assembly
on
the
status
of
the
guaranteed
student
loan
program.
30
k.
To
implement
all
possible
assistance
to
eligible
31
lenders
for
the
purpose
of
easing
the
workload
entailed
in
32
participation
in
the
guaranteed
student
loan
program.
33
l.
To
develop
and
implement
programs
and
other
initiatives
34
or
services
necessary
to
perform
duties
that
include
but
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are
not
limited
to
postsecondary
student
aid
outreach,
1
financial
literacy
education,
career
planning,
postsecondary
2
student
aid
program
compliance
assistance
and
training,
3
postsecondary
student
aid
program
monitoring
and
compliance
4
review
of
eligible
lenders
and
eligible
institutions,
default
5
prevention,
default
aversion,
and
defaulted
federal
student
6
loan
collection.
7
m.
To
conduct
college
access
initiative
activities
as
8
required
by
20
U.S.C.
§
1092e,
including
but
not
limited
to
9
providing
publications,
programs,
training,
and
internet-based
10
resources
for
the
public
relating
to
college
planning,
career
11
preparation,
and
paying
for
college.
12
n.
To
develop
and
implement
all
policies
and
procedures
13
necessary
to
the
proper
administration
of
the
guaranteed
14
student
loan
program
and
any
other
program
or
activity
related
15
to
postsecondary
financial
aid
that
the
commission
administers
16
or
conducts.
17
Sec.
2.
Section
261.38,
subsections
1
and
2,
Code
2011,
are
18
amended
to
read
as
follows:
19
1.
The
commission
shall
establish
a
loan
reserve
account
and
20
an
agency
operating
account
as
authorized
by
the
federal
Higher
21
Education
Act
of
1965.
The
commission
shall
credit
to
these
22
accounts
all
moneys
provided
for
the
state
student
guaranteed
23
loan
program
by
the
United
States,
the
state
of
Iowa,
or
any
of
24
their
agencies,
departments
,
or
instrumentalities,
as
well
as
25
any
funds
accruing
to
the
program
which
are
not
required
for
26
current
administrative
expenses.
The
commission
may
expend
27
moneys
in
the
loan
reserve
and
agency
operating
accounts
as
28
authorized
by
the
federal
Higher
Education
Act
of
1965.
The
29
commission
shall
expend
all
property
and
moneys
belonging
to
30
the
agency
operating
account
to
execute
the
commission’s
powers
31
and
duties
under
this
chapter.
32
2.
The
payment
of
any
funds
for
the
default
on
a
guaranteed
33
student
loan
shall
be
solely
from
the
loan
reserve
and
agency
34
operating
accounts
account
.
The
general
assembly
shall
not
be
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obligated
to
appropriate
any
moneys
to
pay
for
any
defaults
or
1
to
appropriate
any
moneys
to
be
credited
to
the
loan
reserve
2
account.
The
commission
shall
not
give
or
lend
the
credit
of
3
the
state
of
Iowa.
4
Sec.
3.
Section
261.39,
unnumbered
paragraph
1,
Code
2011,
5
is
amended
by
striking
the
unnumbered
paragraph.
6
Sec.
4.
Section
261.41,
Code
2011,
is
amended
to
read
as
7
follows:
8
261.41
Account
dissolved
——
balance
to
general
fund.
9
1.
The
loan
program
and
the
loan
reserve
account
established
10
by
this
division
shall
not
be
dissolved
until
all
either
of
the
11
following
applies:
12
a.
All
guaranteed
loans
have
been
repaid
by
the
borrower
or,
13
if
in
default,
by
the
commission.
14
b.
The
commission
is
directed
by
the
United
States
secretary
15
of
education
to
dispose
of
the
program
and
account.
16
2.
Upon
dissolution
of
the
loan
program,
all
the
property
17
and
moneys
of
the
program
and
in
belonging
to
the
loan
reserve
18
account
not
owed
to
the
federal
government
shall
be
transferred
19
to
the
state
general
fund
are
the
property
of
the
United
States
20
secretary
of
education
under
20
U.S.C.
§
1072(a)(3)
.
21
Sec.
5.
REPEAL.
Section
261.37,
Code
2011,
is
repealed.
22
EXPLANATION
23
This
bill
amends
the
Code
division
that
provides
for
the
24
guaranteed
loan
program
administered
by
the
college
student
25
aid
commission.
The
bill
modifies
the
commission’s
powers
26
and
duties
in
response
to
recent
changes
made
in
the
federal
27
government’s
student
financial
aid
initiatives.
28
The
bill
authorizes
the
commission
to
enter
into
any
29
agreements
with
the
United
States
secretary
of
education
or
30
other
federal
agency
that
are
necessary
to
provide
education
31
programs
and
services
to
current
and
future
Iowa
postsecondary
32
students
and
their
counselors,
parents
and
guardians,
and
to
33
elementary,
secondary,
and
postsecondary
institutions.
The
34
bill
also
specifically
authorizes
the
commission
to
administer
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the
college
access
initiative
and
the
gaining
early
awareness
1
and
readiness
for
undergraduate
programs
authorized
under
2
federal
law.
3
The
bill
requires
the
commission
to
develop
and
provide
4
information,
materials,
and
services
to
eligible
lenders,
5
postsecondary
institutions,
elementary
and
secondary
schools,
6
students,
parents,
education
loan
borrowers,
and
the
general
7
public;
to
develop
and
implement
programs,
initiatives
and
8
services
relating
to
postsecondary
student
aid
outreach,
9
financial
literacy
education,
career
planning,
student
aid
10
program
compliance
assistance
and
training,
program
monitoring
11
and
compliance
review,
default
prevention,
default
aversion,
12
and
defaulted
federal
student
loan
collection;
and
to
conduct
13
college
access
initiative
activities
as
required
under
federal
14
law.
15
The
bill
modifies
and
transfers
the
language
of
Code
section
16
261.37,
relating
to
the
duties
of
the
commission
to
Code
17
section
261.36,
relating
to
the
powers
of
the
commission.
The
18
bill
specifies
that
the
payment
of
funds
for
the
default
on
a
19
guaranteed
student
loan
shall
be
solely
from
the
commission’s
20
loan
reserve
account
and
eliminates
the
option
of
paying
the
21
funds
from
the
agency
operating
account.
22
The
bill
requires
the
commission
to
expend
property
and
23
moneys
belonging
to
the
agency
operating
account
to
execute
the
24
commission’s
powers
and
duties.
25
Currently,
the
student
loan
program
and
the
loan
reserve
26
account
can
only
be
dissolved
if
all
guaranteed
loans
have
been
27
repaid
by
the
borrower
or,
if
in
default,
by
the
commission.
28
The
bill
adds
that
the
program
and
the
account
may
also
be
29
dissolved
if
the
United
States
secretary
of
education
directs
30
the
commission
to
dispose
of
the
program
and
account.
Upon
31
dissolution,
the
bill
states
that
the
property
and
moneys
32
belonging
to
the
loan
reserve
account
are
the
property
of
the
33
United
States
secretary
of
education.
34
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