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(a) On or after June 1 of each loan year, the corporation will set the interest rates that will apply, for the next 12-month period beginning July 1 of that calendar year and ending June 30 of the subsequent calendar year to an education loan that is authorized under state law and that provides postsecondary educational financial assistance through the federal guaranteed student loan program or postsecondary educational supplemental financial assistance.
(b) The interest rates set under (a) of this section will be based on the bond equivalent rate of 91-day United States Treasury bills auctioned at the final auction held before June 1 of the loan year plus up to 2.8 percent.
(c) In setting interest rates in accordance with (b) of this section, the corporation will take into consideration the commission's and corporation's costs, during the preceding fiscal year, of administering loans of the state education loan programs that are pledged as security for the corporation's bonds. Amounts that the corporation may determine to be costs include payments for salaries, service agreements, supplies, direct and indirect costs of operation, and other costs considered appropriate by the corporation. The corporation will not include as costs amounts recovered by a loan origination fee or through payments received from the United States Department of Education as a result of claims paid on a loan guaranty.
(d) In setting interest rates in accordance with (b) of this section, the corporation may set a lower rate for those loans that have a lower cost of administration due to
(1) the borrower's election of a cost-effective repayment method made available by the commission;
(2) a good faith payment history, demonstrated by the borrower having made all loan payments when due and in full for the initial 48 months of repayment;
(3) the borrower's attendance at an institution in the state or physically residing within state geographic boundaries and legal jurisdiction; or
(4) for those loans that are guaranteed by the United States government, subsidies paid to the corporation and commission for administering the loans.
(e) A loan origination fee deducted from the disbursement of a loan under AS 14.43.170 - 14.43.175 (Alaska Supplemental Education Loan Program) to offset losses incurred as a result of death, disability, default, or bankruptcy of a borrower may not exceed five percent of the total education loan amount.
History: Eff. 3/1/2002, Register 161; am 11/20/2005, Register 176
Authority: AS 14.42.150
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The Alaska Administrative Code was automatically converted to HTML from a plain text format. Every effort has been made to ensure its accuracy, but neither Touch N' Go Systems nor the Law Offices of James B. Gottstein can be held responsible for any possible errors. This version of the Alaska Administrative Code is current through June, 2006.
If it is critical that the precise terms of the Alaska Administrative Code be known, it is recommended that more formal sources be consulted. Recent editions of the Alaska Administrative Journal may be obtained from the Alaska Lieutenant Governor's Office on the world wide web. If any errors are found, please e-mail Touch N' Go systems at E-mail. We hope you find this information useful. Copyright 2006. Touch N' Go Systems, Inc. All Rights Reserved.
Last modified 7/05/2006