Chapter 187a - Connecticut Student Loan Foundation

Sec. 10a-201. (Formerly Sec. 10-358). Purpose of corporation. There is hereby created a nonprofit corporation which shall be known as the Connecticut Student Loan Foundation, and shall be a subsidiary of the Connecticut Health and Educational Facilities Authority. The purpose of said corporation shall be to improve educational opportunity and promote repayment of loans. Improving educational opportunity shall include, but not be limited to, the following: (1) Guaranteeing loans for persons to assist them in meeting the expenses of education, including alternative loans and loans that are governed by Title IV, Part B of the Higher Education Act of 1965, as from time to time amended; (2) lending funds or acquiring loans made to persons to assist them in meeting the expenses of education, including alternative loans and loans that are governed by Title IV, Part B of the Higher Education Act of 1965, as from time to time amended; and (3) providing appropriate services incident to the administration of programs which are established to improve educational opportunities, all in accordance with the provisions of this chapter. Said corporation shall be exempt from all requirements of chapter 602.

(February, 1965, P.A. 491, S. 1; 1967, P.A. 3, S. 1; 1969, P.A. 660, S. 1; P.A. 79-416, S. 1, 4; P.A. 80-226, S. 1; P.A. 84-390, S. 1, 4; P.A. 87-306, S. 1; P.A. 94-180, S. 14, 17; 94-245, S. 38, 46; P.A. 96-256, S. 182, 209; P.A. 04-225, S. 1; P.A. 07-109, S. 1; P.A. 14-217, S. 41.)

History: 1967 act substituted Student Loan Foundation for Foundation for Financial Assistance to Higher Education and exempted Foundation from requirements of chapter 600; 1969 act deleted “higher” in description of educational opportunities, substituted “eligible institutions” for “colleges” and “postsecondary” for “higher” education; P.A. 79-416 included under provisions nonresidents who attend or plan to attend eligible institutions in the state; P.A. 80-226 required Foundation to provide services incident to administration and repayment of loans; Sec. 10-358 transferred to Sec. 10a-201 in 1983 pursuant to reorganization of higher education system; P.A. 84-390 simplified language of requirements for loan eligibility and extended eligibility to those who receive loans from an eligible lender transacting business in this state; P.A. 87-306 inserted Subdiv. and Subpara. designations and provided that improving educational opportunity includes guaranteeing loans to residents attending or planning to attend out-of-state institutions, lending funds to assist persons in meeting the expenses of postsecondary education, and providing services to administer the programs to improve educational opportunities, rather than services for loan administration and repayment, provided that an eligible lender need not be one who transacts business in the state and made technical changes; P.A. 94-180 expanded the purpose of the corporation to include the promotion of repayment of loans, effective July 1, 1994; P.A. 94-245 amended Subdiv. (3) to add acquiring loans, effective June 2, 1994; P.A. 96-256 replaced reference to Ch. 600 with Ch. 602, effective January 1, 1997; P.A. 04-225 deleted former Subdiv. (1) re guaranteeing loans to persons who are attending or plan to attend eligible institutions in or outside the state or who receive loans made by an eligible lender, redesignated existing Subdivs. (2), (3) and (4) as new Subdivs. (1), (2) and (3), and eliminated reference to “postsecondary” in said Subdivs. (1) and (2), effective July 1, 2004; P.A. 07-109 amended Subdivs. (1) and (2) to add provisions re alternative loans, effective July 1, 2007; P.A. 14-217 added provision re corporation to be a subsidiary of the Connecticut Health and Educational Facilities Authority, effective July 1, 2014.

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Sec. 10a-202. (Formerly Sec. 10-359). Definitions. As used in this chapter, the following terms shall have the following meanings:

(1) “Corporation” means the Connecticut Student Loan Foundation that is a subsidiary of the Connecticut Health and Educational Facilities Authority as provided in section 10a-203a;

(2) “Board” means the board of directors of the Connecticut Student Loan Foundation, as provided in section 10a-203a;

(3) “Connecticut Health and Educational Facilities Authority” means the authority established pursuant to section 10a-179;

(4) “Eligible institution” means “eligible institution”, as defined in Title IV, Part B of the Higher Education Act of 1965;

(5) “An institution of higher education” means “institution of higher education”, as defined in Title IV, Part B of the Higher Education Act of 1965;

(6) “Title IV, Part B of the Higher Education Act of 1965” means the applicable provisions of Title IV, Part B of the Higher Education Act of 1965, as amended, and the regulations promulgated thereunder and as the same may from time to time be amended;

(7) “Eligible lender” means “eligible lender”, as defined in Title IV, Part B of the Higher Education Act of 1965, where applicable.

(February, 1965, P.A. 491, S. 2; 1967, P.A. 3, S. 2; 1969, P.A. 660, S. 2; P.A. 84-390, S. 2, 4; P.A. 85-613, S. 25, 154; P.A. 87-306, S. 2; P.A. 05-184, S. 1; P.A. 14-217, S. 42.)

History: 1967 act substituted Student Loan Foundation for Foundation for Financial Assistance to Higher Education; 1969 act replaced definition of “college” in Subsec. (c) with definition of “eligible institution” and added Subsecs. (d) and (e) defining “institution of higher education” and “vocational school”; Sec. 10-359 transferred to Sec. 10a-202 in 1983 pursuant to 1983 reorganization of higher education; P.A. 84-390 added Subsec. (f) defining “eligible lender or lender”; P.A. 85-613 made technical changes; P.A. 87-306 redefined “eligible institution”, “institution of higher education” and “eligible lender” in Subsecs. (c), (d) and (f) to give them the same definitions as in the Higher Education Act of 1965 and substituted a definition for “Title IV, Part B of the Higher Education Act of 1965” for the definition of “vocational school” in Subsec. (e); P.A. 05-184 amended Subsec. (f) to make federal definition of “eligible lender” apply only where applicable, effective July 1, 2005; P.A. 14-217 redesignated existing Subdivs. (a) and (b) as Subdivs. (1) and (2), redefined “corporation” in Subdiv. (1) as a subsidiary of the Connecticut Health and Educational Facilities Authority, added reference to Sec. 10a-203a in Subdiv. (2), added new Subdiv. (3) re definition of “Connecticut Health and Educational Facilities Authority” and redesignated existing Subdivs. (c) to (f) as Subdivs. (4) to (7), effective July 1, 2014.

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Sec. 10a-203. (Formerly Sec. 10-360). Board of directors. Section 10a-203 is repealed, effective July 1, 2014.

(February, 1965, P.A. 491, S. 3; 1967, P.A. 3, S. 3, 4; 1969, P.A. 660, S. 3; P.A. 73-180, S. 1, 2, 4; P.A. 74-157, S. 1–3; P.A. 77-573, S. 24, 30; P.A. 83-587, S. 24, 96; P.A. 84-381, S. 1, 12; P.A. 85-302, S. 1, 3; 85-492, S. 1, 2; P.A. 87-74, S. 1, 2; 87-306, S. 3; P.A. 92-126, S. 45, 48; P.A. 93-201, S. 1, 24; P.A. 00-220, S. 27, 43; P.A. 01-173, S. 40, 67; P.A. 05-184, S. 2; P.A. 06-196, S. 79; P.A. 07-109, S. 6; P.A. 08-116, S. 6; 08-149, S. 1; P.A. 11-48, S. 285; P.A. 14-217, S. 259.)

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Sec. 10a-203a. Corporation as subsidiary of Connecticut Health and Educational Facilities Authority. Board of directors. (a) The Connecticut Student Loan Foundation is constituted as a subsidiary of the Connecticut Health and Educational Facilities Authority. The Connecticut Student Loan Foundation shall have all the privileges, immunities, tax exemptions and other exemptions of the Connecticut Health and Educational Facilities Authority and may exercise the powers granted pursuant to this chapter, which shall be deemed and held to be the performance of an essential public and government function. The Connecticut Student Loan Foundation shall be subject to suit and liability solely from the assets, revenues and resources of the Connecticut Student Loan Foundation and without recourse to the general funds, revenues, resources or any other assets of the Connecticut Health and Educational Facilities Authority or any other subsidiary of the Connecticut Health and Educational Facilities Authority.

(b) (1) On and after July 1, 2014, the board of directors of the Connecticut Higher Education Supplemental Loan Authority, appointed in accordance with section 10a-179a, shall also serve as the board of directors for the Connecticut Student Loan Foundation. Any member of the Connecticut Student Loan Foundation board may be removed by the board of directors of the Connecticut Health and Educational Facilities Authority for misfeasance, malfeasance or neglect of duty. Each member of the Connecticut Student Loan Foundation board, before entering upon his or her duties, shall take and subscribe the oath or affirmation required by section 1 of article eleventh of the State Constitution. A record of each such oath shall be filed in the office of the Secretary of the State.

(2) The chairperson of the board of directors of the Connecticut Higher Education Supplemental Loan Authority shall serve as the chairperson of the Connecticut Student Loan Foundation board of directors. The Connecticut Student Loan Foundation board shall annually elect one of its members as vice-chairperson. The Connecticut Student Loan Foundation board may appoint an executive director, who shall be an employee of the Connecticut Health and Educational Facilities Authority or of the Connecticut Higher Education Supplemental Loan Authority, and who shall serve at the pleasure of the Connecticut Student Loan Foundation board. The executive director shall supervise the administrative affairs and technical activities of the Connecticut Student Loan Foundation in accordance with the directives of the board. The executive director shall keep a record of all proceedings and shall be custodian of all books, documents and papers filed with the Connecticut Student Loan Foundation and of its minute book and its official seal.

(3) Directors shall receive no compensation for their services, but shall be reimbursed for expenses actually and necessarily incurred by them in the performance of their duties under this section.

(4) The board of directors shall adopt bylaws for the Connecticut Student Loan Foundation and provide for the holding of regular and special meetings. A majority of the directors shall constitute a quorum for the transaction of any business and, unless a greater number is required by the bylaws of the Connecticut Student Loan Foundation, the act of a majority of the directors present at any meeting shall be deemed the act of the board.

(5) The board of directors may elect an executive committee of not fewer than five members who, in intervals between meetings of the board, may transact such business of the Connecticut Student Loan Foundation as the board may from time to time authorize.

(c) The provisions of section 1-125, subsection (e) of section 10a-185 and this subsection shall apply to any officer, director, designee or employee of the Connecticut Higher Education Supplemental Loan Authority or of the Connecticut Health and Educational Facilities Authority appointed as a member, director or officer of the Connecticut Student Loan Foundation and to an employee of the Connecticut Health and Educational Facilities Authority who is an authorized officer of the authority. Any such persons so appointed shall not be personally liable for the debts, obligations or liabilities of the Connecticut Student Loan Foundation as provided in said section 1-125. The Connecticut Student Loan Foundation shall and the Connecticut Health and Educational Facilities Authority may provide for the indemnification to protect, save harmless and indemnify such officer, director, designee or employee as provided by said section 1-125.

(d) The Connecticut Health and Educational Facilities Authority or the Connecticut Student Loan Foundation may take such actions as are necessary to comply with the provisions of the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, to qualify and maintain any such subsidiary as a corporation exempt from taxation under said Internal Revenue Code.

(P.A. 14-217, S. 39.)

History: P.A. 14-217 effective July 1, 2014.

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Sec. 10a-204. (Formerly Sec. 10-361). Powers of board. The board of directors shall have the following powers:

(1) To lend money or guarantee the loan of money, and to acquire and sell loans, upon such terms and conditions as the board may prescribe, within the limitations contained in this chapter and in Title IV, Part B of the Higher Education Act of 1965, where applicable, to assist persons in meeting the expenses of education; provided no such person shall receive any loan or loans in excess of such amounts as the board may authorize or amounts which are in conformance with Title IV, Part B of the Higher Education Act of 1965, where applicable. The board may procure a policy or policies of group life insurance to insure the repayment of loans made or guaranteed by the corporation in the event of the death of an individual to whom a loan is made or guaranteed hereunder. The board may charge any person receiving a loan under the provisions of this subsection an amount deemed reasonable by the board but in no event shall such amount exceed the amount provided by the provisions of Title IV, Part B of the Higher Education Act of 1965, where applicable.

(2) To take, hold and administer, on behalf of the corporation and for any of its purposes, real property, personal property and moneys, or any interest therein, and the income therefrom, either absolutely or in trust, for any purpose of the corporation. The board of directors may acquire property or moneys for such purpose by purchase or lease and by the acceptance of gifts, grants, bequests, devises or loans; provided no obligation of the corporation shall be a debt of the state, and the corporation shall have no power to make its debts payable out of any moneys except those of the corporation.

(3) To enter into contracts with institutions of higher education, eligible lenders, nonprofit organizations or other legal entities providing for the origination, administration, servicing, custody, collection and guarantee of loans, investment agreements, agreements in connection with credit facilities, interest rate exchange agreements and such other contracts and agreements including, but not limited to, such contracts and agreements with financial consultants, underwriters, counsel and technical specialists and other professionals as the board of directors shall deem necessary or desirable to the performance of its duties and the execution of its powers under this section.

(4) To sue and be sued in the name of the corporation. Process in any action or proceeding may be served upon the Secretary of the State, as agent for the corporation, in the manner provided by subsection (b) of section 33-663.

(5) To create and operate the affairs of the corporation through a subsidiary or division, the dominant purpose of which shall be to carry out one or more of the purposes and provisions of this chapter.

(6) To adopt rules and regulations, not inconsistent with Title IV, Part B of the Higher Education Act of 1965, where applicable, governing the qualifications, including financial need, and application for and the granting, administration and terms of loans, financed, serviced, made or guaranteed by the corporation, and governing any other matters relating to the activities of the corporation.

(7) To issue bonds, notes or other obligations of the corporation, the interest on which, if so designated by resolution of the corporation, shall be includable in the gross income of the holder or holders thereof for federal and state income tax purposes, to fund and refund the same, to provide for the rights of the holders thereof and to secure the same, or to cause a subsidiary to exercise such powers, all in accordance with section 10a-217.

(8) To perform such other acts as may be necessary or appropriate to carry out effectively the objects and purposes of the corporation, as specified in this chapter or in Title IV, Part B of the Higher Education Act of 1965, where applicable.

(9) To distribute excess corporation funds to the Connecticut Health and Educational Facilities Authority or any subsidiary of said authority for the purpose of such recipient's provision of financial assistance to qualified students attending institutions of higher education or enrolled in postsecondary education programs, including, without limitation, loans, scholarships or grants and financial literacy education.

(February, 1965, P.A. 491, S. 4; 1967, P.A. 3, S. 5, 6; 1969, P.A. 660, S. 4, 5; P.A. 79-416, S. 2, 4; P.A. 81-10, S. 1, 2; P.A. 84-381, S. 2, 12; 84-390, S. 3, 4; P.A. 85-613, S. 26, 154; P.A. 87-306, S. 4; P.A. 94-180, S. 15, 17; 94-245, S. 39, 46; P.A. 96-271, S. 156, 254; P.A. 01-102, S. 1, 2, 7; P.A. 05-184, S. 3; P.A. 07-109, S. 2, 3; P.A. 14-217, S. 43; P.A. 22-41, S. 4.)

History: 1967 act substituted “at any one time have a total loan balance outstanding” for “receive a total” in Subsec. (a) and substituted “terms” for “repayment” and made technical grammatical change for clarity in Subsec. (e); 1969 act substituted “eligible institutions” for “colleges” in Subsec. (a), clarified loan limit to include “other amounts ... in conformance with applicable federal laws and regulations”, and added provision allowing charge of one-half of 1% per year on loans to be segregated and used for administration of chapter and amended Subsec. (b) re state guarantee of loans when appropriations are insufficient to repay loans under Sec. 10-363(c); P.A. 79-416 amended Subsec. (a) to allow loans to nonresidents who attend or plan to attend eligible institutions; P.A. 81-10 required Connecticut Student Loan Foundation to develop programs consistent with applicable federal law and regulations, increased maximum loan to an individual for any school year from $1,500 to $2,500, raised limit of total outstanding balance from $7,500 to $12,500 per person and increased interest per annum from one-half of 1% to 1% in Subsec. (a); Sec. 10-361 transferred to Sec. 10a-204 in 1983 pursuant to reorganization of higher education system; P.A. 84-381 amended Subsec. (e) adding provisions re adoption of a policy to make loan checks copayable to the borrower and institution and re procedures for any refund which the borrower may be eligible to receive; P.A. 84-390 simplified language of requirements for loan eligibility and extended eligibility to those who receive loans from an eligible lender who transacts business in this state; P.A. 85-613 made technical changes; P.A. 87-306 amended Subsec. (a) to give the board the power to lend money, to delete the specific loan and loan balance limits, to delete provisions re part-time students, to delete the provision that 1% of the loan may be used for administration and substituted that it be an amount deemed reasonable by the board; amended Subsec. (c) to include the power to enter into contracts with eligible lenders and other legal entities and provide that the contracts may provide for loan servicing; added new Subsec. (e) re power to create a subsidiary and renumbered the remaining Subsecs.; deleted provisions in new Subsec. (f) re issuance of loan checks copayable to the borrower and the institution and substituted the Higher Education Act, where applicable for “law”; in Subsec. (g) added the Higher Education Act; and made technical changes; P.A. 94-180 replaced alphabetic with numeric Subdiv. indicators and amended Subdiv. (5) to remove requirement that the state treasurer certify that the Internal Revenue Service has determined that the corporation is not eligible for tax-exempt status before the board can create and operate the corporation through a subsidiary or division, effective July 1, 1994; P.A. 94-245 amended Subsec. (a) to add authority to acquire and sell loans, amended Subsec. (c) to expand the authority to enter into contracts and agreements with additional persons and for additional purposes, inserted new Subsec. (g) concerning the issuance of bonds, notes or other obligations and relettered the former Subsec. as (h), effective June 2, 1994; P.A. 96-271 amended Subdiv. (4) to replace reference to Sec. 33-297 with Sec. 33-663, effective January 1, 1997; P.A. 01-102 amended Subdiv. (1) to add reference to loans upon such terms and conditions as “any rating agency or underwriter” may prescribe and to make technical changes and amended Subdiv. (8) to make a technical change, effective June 6, 2001; P.A. 05-184 amended Subdiv. (1) by removing language re rating agency or underwriter, amended Subdiv. (2) by removing exception re insufficient state appropriations, amended Subdiv. (3) by changing the institutions with which the board may contract with to include those providing for the custody of loans and substituting those providing interest rate exchange agreements for those providing agreements to modify interest fluctuation and amended Subdiv. (6) by adding loans that are financed or serviced by the corporation, effective July 1, 2005; P.A. 07-109 made a technical change in Subdiv. (5) and amended Subdiv. (7) to add language re designation by resolution and re exercise of powers by subsidiary, effective July 1, 2007; P.A. 14-217 added Subdiv. (9) re distribution of excess funds to the Connecticut Health and Educational Facilities Authority, effective July 1, 2014; P.A. 22-41 amended Subdiv. (9) by adding “or enrolled in postsecondary education programs”.

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Sec. 10a-204a. Establishment of loan or award program to utilize excess foundation funds. Section 10a-204a is repealed, effective July 1, 2005.

(P.A. 84-381, S. 3, 12; P.A. 05-184, S. 9.)

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Sec. 10a-204b. Issuance of bonds. (a) The Connecticut Student Loan Foundation, a nonprofit corporation is authorized from time to time to issue, or to cause a subsidiary created pursuant to subdivision (5) of section 10a-204 to issue, bonds, notes or other obligations in such principal amounts as in the opinion of the corporation shall be necessary to provide sufficient funds for carrying out the purposes set forth in subdivisions (2) and (3) of section 10a-201 including the payment, funding or refunding of the principal of, or interest or redemption premiums on, any bonds, notes or other obligations issued by it, or by such a subsidiary, whether the bonds, notes or other obligations or interest to be funded or refunded have or have not become due, the establishment of reserves to secure such bonds, notes or other obligations and all other expenditures of the corporation, or of such subsidiary, incident to and necessary or convenient to carry out the purposes set forth in subdivisions (2) and (3) of section 10a-201.

(b) (1) Except as may be otherwise expressly provided by this section or by any resolution adopted by the corporation authorizing the issuance of bonds, notes or other obligations every issue of bonds, notes or other obligations shall be general obligations of the corporation payable out of any moneys or revenues of the corporation subject only to any agreements with the holders of particular bonds, notes or other obligations pledging any particular moneys or revenues, or any specific pool of loans acquired by, the corporation. Any such bonds, notes or other obligations may be additionally secured by a pledge of any grant or contributions from any department, agency or instrumentality of the United States or person or a pledge or assignment of any moneys, income or revenues of the corporation or payable to the corporation from any source.

(2) Except as may be otherwise expressly provided by this section or by any resolution adopted by a subsidiary created pursuant to subdivision (5) of section 10a-204 authorizing the issuance of bonds, notes or other obligations, every issue of bonds, notes or other obligations shall be general obligations of the subsidiary payable out of any moneys or revenues of the subsidiary subject only to any agreements with the holders of particular bonds, notes or other obligations pledging any particular moneys or revenues, or any specific pool of loans acquired by the subsidiary. Any such bonds, notes or other obligations may be additionally secured by a pledge of any grant or contributions from any department, agency or instrumentality of the United States or person or a pledge or assignment of any moneys, income or revenues of the subsidiary or payable to the subsidiary from any source.

(c) Notwithstanding any provision of the general statutes, any bonds, notes or other obligations issued by the corporation or by a subsidiary created pursuant to subdivision (5) of section 10a-204 pursuant to this section shall be fully negotiable within the meaning and for all purposes of title 42a, whether or not the form and character so qualify under the terms thereof, subject only to the provisions of the authorizing resolution. Any such bonds are hereby made securities in which public officers and public bodies of the state and its political subdivisions, all insurance companies, credit unions, savings and loan associations, investment companies, banking associations, trust companies, executors, administrators, trustees and other fiduciaries and pension, profit-sharing and retirement funds may properly and legally invest funds, including capital in their control or belonging to them, and are hereby made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or other obligations of the state is now or may hereafter be authorized by law.

(d) Bonds, notes or other obligations of the corporation shall be authorized by resolution of the corporation. Bonds, notes and other obligations of a subsidiary created pursuant to subdivision (5) of section 10a-204 shall be authorized by resolution of the subsidiary. Such bonds, notes and other obligations may be issued in one or more series and shall bear such date or dates, mature at such time or times, in the case of any such note, or any renewal of any such note, not exceeding five years from the date of the original issue of such notes, and, in the case of bonds, not exceeding forty years from the date of the original issue of such bonds bear interest at such rate or rates, be in such denomination or denominations, be in such form, either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be executed in such manner, be payable from such sources in such medium of payment at such place or places within or without this state, and be subject to such terms of redemption, with or without premium, as the applicable authorizing resolution or resolutions may provide. Any such resolution may delegate to the president of the issuer, acting solely or in combination with any one or more directors, the power to determine any details of the bonds, notes or other obligations authorized by the resolution and to award such bonds, notes or other obligations to purchasers.

(e) Bonds, notes or other obligations of the corporation may be sold at public or private sale at such price or prices as the corporation shall determine. Bonds, notes or other obligations of a subsidiary created pursuant to subdivision (5) of section 10a-204 may be sold at public or private sale at such price or prices as the subsidiary shall determine.

(f) Bonds, notes or other obligations of the corporation may be refunded and renewed from time to time as may be determined by resolution of the corporation and bonds, notes or other obligations of a subsidiary created pursuant to subdivision (5) of section 10a-204 may be refunded and renewed from time to time as may be determined by resolution of the subsidiary, provided any such refunding or renewal shall be in conformity with any rights of the holders of the affected bonds, notes or other obligations.

(g) Bonds, notes or other obligations of the corporation issued under the provisions of this section shall not be deemed to constitute a debt or liability of the state or of any political subdivision of the state other than the corporation or a pledge of the faith and credit of the state or of any such political subdivision, and shall not constitute bonds or notes issued or guaranteed by the state within the meaning of section 3-21 but shall be payable solely from the funds provided for under this section. Bonds, notes or other obligations of a subsidiary created pursuant to subdivision (5) of section 10a-204 issued under the provisions of this section shall not be deemed to constitute a debt or liability of the state or of any political subdivision of the state or a pledge of the faith and credit of the state or of any such political subdivision and shall not constitute bonds or notes issued or guaranteed by the state within the meaning of section 3-21 but shall be payable solely from the funds provided for under this section. All such bonds, notes or other obligations shall contain on the face thereof a statement to the effect that neither the state of Connecticut nor any political subdivision of the state shall be obligated to pay the same, that such bonds, notes or other obligations and the interest on such bonds, notes or other obligations shall be payable by the issuer solely from revenues or other funds of the issuer pledged therefor and that neither the faith and credit nor the taxing power of the state of Connecticut or of any political subdivision of the state is pledged to the payment of the principal of or the interest on such bonds, notes or other obligations.

(h) Any resolution or resolutions authorizing the issuance of bonds, notes or other obligations may contain provisions, except as expressly limited in this section and except as otherwise limited by existing agreements with the holders of bonds, notes or other obligations, which shall be a part of the contract with the holders thereof, as to the following: (1) The pledging and assignment of all or any part of the moneys received by or payable to the issuer, (A) in payment of loans and interest thereon, (B) as guarantee or insurance payments with respect to loans and interest thereon, or (C) otherwise with respect to loans and interest thereon and other moneys received by or payable to the issuer, to secure the payment of any bonds, notes or other obligations or any issues thereof and the interest thereon; (2) the pledging and assignment of all or any part of the assets of the issuer including, but not limited to, loans and the rights to receive payments pursuant to and enforce contracts with respect to loans and interest thereon, to secure the payment of principal and interest on any bonds, notes or other obligations or of any issue thereof; (3) the use and disposition of the gross income from, and the payments of principal received by or payable to the issuer on, loans held by or on behalf of the issuer; (4) the establishment of reserves or sinking funds, the making of charges and fees to provide for the same, and the regulation and disposition thereof; (5) limitations on the purpose to which the proceeds of sale of bonds, notes or other obligations may be applied and pledging such proceeds to secure the payment of the bonds, notes or other obligations, or of any issues thereof and the interest thereon; (6) limitations on the issuance of additional bonds, notes or other obligations, the terms upon which additional bonds, notes or other obligations may be issued and secured and the refunding or purchase of outstanding bonds, notes or other obligations of the issuer; (7) the procedure, if any, by which the terms of any contract with the holders of any bonds, notes or other obligations of the issuer may be amended or abrogated, the amount of bonds, notes or other obligations the holders of which must consent thereto, and the manner in which such consent may be given; (8) limitations on the amount of moneys to be expended by the issuer for operating, administrative or other expenses of the issuer; (9) the vesting in a trustee or trustees of such property, rights, powers and duties in trust as the issuer may determine, which may include any or all of the rights, powers and duties of any trustee appointed by the holders of any bonds, notes or other obligations and limiting or abrogating the right of the holders of any bonds, notes or other obligations of the issuer to appoint a trustee under this chapter or limiting the rights, powers and duties of such trustee; (10) a trust agreement by and between the issuer and a corporate trustee which may be any trust company or bank having the powers of a trust company within or without the state, which agreement may provide for the pledging or assigning of any assets or income from assets to which or in which the issuer has any rights or interests, and may further provide for such other rights and remedies exercisable by the trustee as may be proper for the protection of the holders of any bonds, notes or other obligations of the issuer and not otherwise in violation of law, which agreement may provide for the restriction of the rights and remedies of any individual holder of bonds, notes or other obligations of the issuer and which agreement may contain any further provisions which are reasonable and proper to delineate further the respective rights, duties, safeguards, responsibilities and liabilities of the issuer, of individual and collective holders of bonds, notes and other obligations of the issuer and the trustee and may further provide that all expenses incurred in carrying out the provisions of such trust agreement may be treated as a part of the cost of operation of the issuer; (11) covenants to do or refrain from doing such acts and things as may be necessary or convenient or desirable in order to better secure any bonds, notes or other obligations of the issuer, or which, in the discretion of the issuer, will tend to make any bonds, notes or other obligations to be issued more marketable notwithstanding that such covenants, acts or things may not be enumerated herein; (12) the satisfaction of federal requirements; and (13) any other matters of like or different character, which in any way affect the security or protection of the bonds, notes or other obligations.

(i) Any pledge made by the corporation or by any subsidiary created pursuant to subdivision (5) of section 10a-204 of income, revenues or other property to secure bonds, notes or other obligations of the corporation or to secure bonds, notes or other obligations of such a subsidiary shall be valid and binding from the time the pledge is made. The income, revenue or other property so pledged and thereafter received by or on behalf of the corporation or of the subsidiary, as applicable, shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the corporation or against the subsidiary, as applicable, irrespective of whether such parties have notice thereof. Any such lien shall have priority over all other liens, including, without limitation, the lien of any person who in the ordinary course of business furnishes services or materials to the corporation or to the subsidiary, as applicable. Notwithstanding any provision of the general statutes, neither possession nor the filing of any financing or continuation statement or other instrument shall be necessary with respect to any such income, revenues or other property to establish or evidence the lien of any such pledge with respect thereto. Neither this section, nor any resolution authorizing bonds, notes or other obligations, nor any trust agreement nor any other instrument by which such a pledge is created need be recorded. Any pledge or lien described by this subsection shall be conclusively deemed to be a pledge or lien described by subdivision (14) of subsection (d) of section 42a-9-109, notwithstanding that the corporation is not, and that any such subsidiary shall not be, either a political subdivision or an agency of the state.

(j) The corporation or any subsidiary created pursuant to subdivision (5) of section 10a-204 is authorized and empowered to obtain from any department, agency or instrumentality of the United States any insurance or guarantee as to, or of or for the payment or repayment of, interest or principal, or both, or any part thereof, on any loans, or on any bonds, notes or other obligations issued by the corporation or by the subsidiary, as applicable, pursuant to the provisions of this section and, notwithstanding any other provisions of this chapter, to enter into any agreement, contract or any other instrument whatsoever with respect to any such insurance or guarantee or with respect to the origination, servicing, collection and administration of loans, except to the extent that such action would in any way impair or interfere with the ability of the corporation or of the subsidiary, as applicable, to perform and fulfill the terms of any agreement made with the holders of its bonds, notes or other obligations of the corporation or subsidiary.

(k) None of the members of the board of directors of the corporation, or the members of the board of directors of the subsidiary created pursuant to subdivision (5) of section 10a-204 or any person executing bonds, notes or other obligations issued pursuant to this section shall be liable personally on such bonds, notes or other obligations by reason of the issuance thereof. Any resolution authorizing the issuance of bonds, notes or other obligations may provide for the indemnification by the issuer of the members of the board of directors of the corporation or the members of the board of directors of such a subsidiary and of any such person executing such bonds, notes or other obligations with respect to such bonds, notes or other obligations and the issuance thereof.

(l) The corporation and any subsidiary created pursuant to subdivision (5) of section 10a-204 shall have power to purchase, hold and resell bonds, notes or other obligations of the corporation or of any such subsidiary out of any funds available therefor. The issuer of such bonds, notes or other obligations may hold, cancel or resell such bonds, notes or other obligations subject to and in accordance with agreements with holders of its bonds, notes and other obligations.

(m) All moneys received by or on behalf of the corporation or by or on behalf of a subsidiary created pursuant to subdivision (5) of section 10a-204, as applicable, pursuant to or subject to the pledge of any resolution or trust agreement authorized by this section, whether as proceeds from the sale of bonds or as revenues, shall be deemed to be trust funds to be held and applied solely as provided in such resolution or trust agreement. Subject to the provisions of any resolution authorizing the issuance of bonds, notes or other obligations, any such moneys may be invested in the Connecticut Short-Term Investment Fund and in such other investments and investment agreements as may be approved by resolution of the issuer. The issuer shall fund borrower fee reductions, interest rate reductions, rebates, loan forgiveness or other borrower benefits allowable under the programs authorized by this chapter in an aggregate annual amount at least equal to the net reduction in program financing cost achieved by the issuer in each year through the issuance of private activity bonds, as defined in section 32-140, taking into account any federal loan program terms and any federal loan program or tax requirements resulting from such financing. Any officer with whom, or any bank or trust company with which, such moneys shall be deposited shall act as trustee of such moneys and shall hold and apply the same for the purposes hereof, subject to such regulations as this chapter and the resolution authorizing the bonds of any issue or the trust agreement securing such bonds may provide.

(n) Any holder of bonds, notes or other obligations issued under the provisions of this section or any of the coupons appertaining thereto, and the trustee or trustees under any trust agreement, except to the extent the rights herein given may be restricted by any resolution authorizing the issuance of, or any such trust agreement securing, such bonds, notes or other obligations, may, either at law or in equity, by suit, action, mandamus or other proceedings, protect and enforce any and all rights under the laws of the state or granted hereunder or under such resolution or trust agreement, and may enforce and compel the performance of all duties required by this section or by such resolution or trust agreement to be performed by the issuer or by any officer, employee or agent of the issuer, including the appointment of a receiver to administer any loans or other pledged assets and revenues.

(o) The corporation and any subsidiary created pursuant to subdivision (5) of section 10a-204 is authorized and empowered, from time to time, to issue bonds, notes or other obligations the interest on which, if so designated by resolution of the issuer, shall be includable in the gross income of the holder or holders of such bonds, notes or other obligations under the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and in the same manner that interest on bills, bonds, notes or other obligations of the United States is includable in the gross income of the holder or holders thereof under said Internal Revenue Code; the state hereby consents to such inclusion only for the bonds, notes and other obligations of the corporation or such a subsidiary, as applicable, authorized by this section.

(p) In connection with, or incidental to, the issuance or carrying of bonds, notes or other obligations, or acquisition or carrying of any investment or program of investment, the corporation or any subsidiary created pursuant to subdivision (5) of section 10a-204 may enter into any contract with any financial institution having a rating of at least “A”, or into any contract secured by security so rated, which the issuer determines to be necessary or appropriate to place the obligation or investment of the issuer, as represented by the bonds, notes or other obligations, investment or program of investment and the contract or contracts, in whole or in part, on the interest rate cash flow or other basis desired by the issuer.

(q) In connection with, or incidental to, the issuance or carrying of bonds, notes or other obligations or entering into any of the contracts or agreements referred to in subsection (p) of this section, the corporation or any subsidiary created pursuant to subdivision (5) of section 10a-204 may enter into credit enhancement or liquidity agreements, with payment, interest rate, security, default, remedy and other terms and conditions as the issuer determines.

(r) The state covenants with the purchasers and all other subsequent owners and transferees of bonds, notes or other obligations issued by the corporation or by any subsidiary created pursuant to subdivision (5) of section 10a-204 pursuant to this section, in consideration of the acceptance of and payment for the bonds, notes or other obligations, until the bonds, notes or other obligations, together with the interest thereon, with interest on any unpaid installment of interest and all costs and expenses in connection with any action or proceeding on behalf of the owners, are fully met and discharged or unless expressly permitted or otherwise authorized by the terms of each contract and agreement made or entered into by or on behalf of the issuer with or for the benefit of such owners, that the state: (1) Will not create or cause to be created any lien or charge on the assets or revenues pledged to secure such bonds, notes or other obligations, other than a lien or pledge created thereon pursuant to this section; (2) will not in any way impair the rights, exemptions or remedies of the owners; and (3) will not limit, modify, rescind, repeal or otherwise alter the rights or obligations of the issuer to take such action as may be necessary to fulfill the terms of the resolution authorizing the issuance of the bonds, notes or other obligations; provided nothing in this section shall preclude the state from exercising its power, through a change in law, to limit, modify, rescind, repeal or otherwise alter this chapter if and when adequate provision shall be made by law for the protection of the holders of outstanding bonds, notes or other obligations, pursuant to the resolution under which the bonds, notes or other obligations are issued. The state further covenants with the purchasers and all subsequent owners and transferees of bonds, notes or other obligations issued by the corporation or by such a subsidiary pursuant to this section, in consideration of the acceptance of and payment for the bonds, notes or other obligations that, notwithstanding any provision of title 12, the bonds, notes or other obligations shall be free at all times from taxes levied by any municipality or political subdivision or special district having taxing powers of the state, and the principal and interest of any bonds, notes or other obligations issued under the provisions of this section, the transfer of such bonds, notes or other obligations and the income from such bonds, notes or other obligations, including any profit on the sale or transfer of such bonds, notes or other obligations, shall at all times be exempt from any taxation by the state or under its authority, except for estate or succession taxes. The issuer is authorized to include covenants of the state provided for in this subsection, as a contract of the state, in any agreement with the owners of any bonds, notes or other obligations, in any credit facility or reimbursement agreement with respect to the bonds, notes or other obligations and in any agreement authorized by subsection (p) or (q) of this section.

(s) The provisions of this section shall be deemed to provide a complete, additional and alternative method for the actions and the things authorized thereby and shall be regarded as supplemental and additional to powers granted by other laws; the issuance of bonds, notes or other obligations under the provisions of this section need not comply with the requirements of any law applicable to the issuance of bonds, notes or other obligations. This section, being necessary for the welfare of the state and its inhabitants, shall be liberally construed to affect its purpose. None of the powers granted to the corporation or to any subsidiary created pursuant to subdivision (5) of section 10a-204 under the provisions of this section shall be subject to the supervision or regulation or require the approval or consent of any municipality or political subdivision or any department, division, commission, board, body, bureau, official or agency thereof or of the state, and the exercise thereof shall not cause the corporation or any such subsidiary to be construed to be an agency within the scope of chapter 54 or a department, institution or agency of the state.

(t) Notwithstanding the provisions of subsections (a) to (s), inclusive, of this section, any subsidiary created by a corporation pursuant to subdivision (5) of section 10a-204 may issue bonds, notes or other obligations to refund corporation bonds if approved by resolution of the subsidiary, and the corporation may issue bonds, notes or other obligations to refund subsidiary bonds, if approved by resolution of the corporation. No bond, note or other obligation issued by any such subsidiary shall constitute a debt or liability of the corporation, except as may be designated by resolution of the corporation, or of any other subsidiary created pursuant to subdivision (5) of section 10a-204 except as may be designated by resolution of such other subsidiary. No bond, note or other obligation of the corporation shall constitute a debt or liability of a subsidiary, except as may be designated by resolution of such subsidiary. Any subsidiary created for the purpose of financing student loans originated pursuant to Title IV, Part B of the Higher Education Act of 1965, as from time to time amended, through the issuance of bonds, notes or other obligations that bear interest that may be excludable from the gross income of the holder or holders of such bonds, notes or other obligations under the provisions of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall be conclusively deemed to have been organized at the request of the state for purposes of Section 150(d)(2) of said Internal Revenue Code.

(u) Notwithstanding the provisions of this section, no subsidiary created pursuant to subdivision (5) of section 10a-204, other than a nonprofit subsidiary, shall be authorized to issue bonds, notes or other obligations pursuant to this section, provided this subsection shall not be deemed to preclude the incurrence of debt, other than through the public issuance of bonds, notes or obligations, by a for-profit subsidiary to provide sufficient funds for carrying out the provisions of subdivision (3) of section 10a-201.

(P.A. 94-245, S. 40, 46; P.A. 01-102, S. 3, 4, 7; May Sp. Sess. P.A. 04-2, S. 65; P.A. 05-184, S. 4; P.A. 06-196, S. 80; P.A. 07-109, S. 4.)

History: P.A. 94-245 effective June 2, 1994, (Revisor's note: The references in Subsec. (a) to “Title 4 Part B of the Higher Education Act of 1965” were changed editorially by the Revisors to “Title IV, Part B....” for consistency with other statutory references); P.A. 01-102 amended Subsec. (a) to remove language specifying that board's authority relates to loans originating “pursuant to Title IV, Part B of the Higher Education Act of 1965, 20 USC 1071 et seq.” and amended Subsec. (r) to make technical changes, effective June 6, 2001; May Sp. Sess. P.A. 04-2 amended Subsec. (i) to specify that pledges made by the corporation governed by subsection are those to secure bonds, notes or other obligations of the corporation, added provision re priority of liens and provided that pledge or lien described by subsection shall be conclusively deemed a pledge or lien described by Sec. 42a-9-109(d)(14), effective May 12, 2004, and applicable to any pledge, lien or security interest of the corporation in existence on October 1, 2003, or created after that date; P.A. 05-184 amended Subsec. (a) by substituting references to Subsecs. (3) and (4) with references to Subdivs. (2) and (3) of Sec. 10a-201, amended Subsec. (b) by eliminating language re the limitation in the subsection and by adding references to assignment and payable to the corporation, made technical changes in Subsecs. (c), (g), (o), (p), (q), (r) and (s), amended Subsec. (d) by increasing from 30 to 40 years the period from the original issue of the bonds, amended Subsec. (h) by redesignating existing clauses (i) to (xiii) as Subdivs. (1) to (13) and by permitting resolutions to contain provisions concerning moneys payable to the corporation and the assignment of assets of the corporation, amended Subsec. (m) by including moneys received on behalf of the corporation or subject to the pledge of resolution or trust agreement, amended Subsec. (p) by replacing a rating of at least AA with a rating of at least A, and amended Subsec. (r) by redesignating existing clauses (i) to (iii) as Subdivs. (1) to (3), effective July 1, 2005; P.A. 06-196 made a technical change in Subsec. (c), effective June 7, 2006; P.A. 07-109 amended Subsecs. (a), (e), (o) and (s) to add language re subsidiary, amended Subsec. (b) to make technical changes, designate existing language as Subdiv. (1) and add Subdiv. (2) re subsidiary, amended Subsecs. (c), (d), (f), (g) and (i) to (l) to make technical changes and add language re subsidiary, amended Subsec. (h) to replace “corporation” with “issuer” and make technical changes, amended Subsec. (m) to add language re subsidiary and re borrower benefits, amended Subsec. (n) to replace “corporation” with “issuer” and add language re pledged assets and revenues, amended Subsecs. (p) and (q) to replace “corporation” with “issuer” and add language re subsidiary, amended Subsec. (r) to make technical changes, replace “corporation” with “issuer”, and add language re subsidiary and re subsequent owners and transferees, added Subsec. (t) re issuance and character of bonds, notes or other obligations and added Subsec. (u) limiting or prohibiting certain subsidiaries from issuing bonds, notes or other obligations, effective July 1, 2007.

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Sec. 10a-205. (Formerly Sec. 10-362). Maximum interest on loans. Maintenance of funds. (a) Any loan made or guaranteed by the corporation shall bear simple interest at a rate not in excess of the rate provided in Title IV, Part B of the Higher Education Act of 1965, where applicable. Loans not governed by Title IV, Part B of said act shall bear simple interest at a rate that is in compliance with state or federal consumer lending laws, where appropriate. Such loans may bear an interest rate that is in accordance with the rate that may be charged by an institution of higher education that offers loans pursuant to subdivision (8) of section 37-9.

(b) In the case of loans made by the corporation, the rate of simple interest charged to the borrower and the term of the loan shall be at the discretion of the board but shall not exceed the rate or term provided by the provisions of Title IV, Part B of the Higher Education Act of 1965, where applicable. Loans not governed by Title IV, Part B of said act shall bear simple interest at a rate and shall have a term that is in compliance with state or federal consumer lending laws, where appropriate. Such loans may bear an interest rate that is in accordance with the rate that may be charged by an institution of higher education that offers loans pursuant to subdivision (8) of section 37-9.

(c) The corporation shall at all times maintain its funds in accordance with the requirements set forth in Title IV, Part B of the Higher Education Act of 1965, where applicable.

(February, 1965, P.A. 491, S. 5; 1967, P.A. 3, S. 7, 8, 9; 1969, P.A. 660, S. 6; P.A. 87-306, S. 5; P.A. 90-129, S. 1, 4; P.A. 05-184, S. 5.)

History: 1967 act amended Subsec. (b) to increase maximum interest from 3% to 6%, amended Subsec. (c) to delete provisions re payment by corporation of one-half of interest and additional interest determined by board on behalf of the borrower, and amended Subsec. (d) to clarify what funds constitute guarantee reserve fund; 1969 act amended Subsecs. (a) to (c) to increase interest rate limit from 6% to 7% or to higher rate if necessary to conform with federal laws or regulations; Sec. 10-362 transferred to Sec. 10a-205 in 1983 pursuant to reorganization of higher education system; P.A. 87-306 provided that the rate of simple interest in Subsecs. (a) and (b) and the term of the loan in Subsec. (b) not be in excess of the rate or term provided in the Higher Education Act of 1965, where applicable; deleted Subsec. (c) re when the borrower shall pay the interest accruing on a loan guaranteed by the corporation and renumbered the remaining Subsec. accordingly; P.A. 90-129 changed the name of the guarantee reserve fund to the restricted fund; P.A. 05-184 added language re loans not governed by Title IV, Part B of the Higher Education Act of 1965, in Subsecs. (a) and (b) and replaced former provisions of Subsec. (c) re restricted fund with requirement that funds be maintained in accordance with Title IV, Part B of the Higher Education Act of 1965, where applicable, effective July 1, 2005.

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Sec. 10a-206. (Formerly Sec. 10-363). Repayment of loans. (a) The terms and conditions of any loan made or guaranteed by the corporation in accordance with the provisions of Title IV, Part B of the Higher Education Act of 1965 shall be governed by the provisions of Title IV, Part B of the Higher Education Act of 1965. The terms and conditions of any other loan made, guaranteed or serviced by the corporation shall be determined by the board in a manner consistent with the provisions of this chapter.

(b) Notwithstanding anything to the contrary provided in this section, the corporation may make or guarantee a loan under terms and conditions with respect to repayment which are more lenient or more restrictive as to the borrower than those prescribed by this section if the board determines that such action on its part conforms to Title IV, Part B of the Higher Education Act of 1965, where applicable.

(February, 1965, P.A. 491, S. 6; 1967, P.A. 3, S. 10; 1969, P.A. 660, S. 7; P.A. 73-180, S. 3, 4; P.A. 79-416, S. 3, 4; 79-430, S. 1, 2; P.A. 81-13, S. 1, 2; P.A. 87-306, S. 6; P.A. 01-102, S. 5, 7; P.A. 05-184, S. 6; P.A. 06-196, S. 81.)

History: 1967 act amended Subsec. (a) to change initial date for commencement of repayment when program terminated from three to nine months after termination, to replace requirement that person who becomes nonresident begin repayment after three months with provision that repayment commences at same time as if residency were retained and revised repayment schedule and amounts of loans involved, amended Subsec. (b) to prohibit denial of $1,000 loan in cases of demonstrated need, and amended Subsec. (d) to specify that regulations made by corporation itself determine assumption of part of debt by corporation and made subsection specifically applicable to borrowers qualifying for interest benefits under Federal Higher Education Act of l965; 1969 act replaced provisions in Subsec. (a) detailing repayment schedules ranging from 4 to 10 years based on amount of loan with more general statement and required minimum yearly payments of at least $360 or the balance due, deleted former Subsec. (b) re uses to which loans required to be put, relettering remaining subsections accordingly, deleted special provisions re medical students and persons on active duty in armed forces (formerly in former Subsec. (c)) and deleted provisions limiting 10% repayment by corporations of tuition and academic fees and provisions allowing 20% repayment (formerly in former Subsec. (d)); P.A. 73-180 clarified applicability of criteria re federal interest benefits in Subsec. (c); P.A. 79-416 limited 10% repayments in Subsec. (c) to borrowers who are residents at the time of application; P.A. 79-430 changed Subsec. (c) so that 10% repayment made to borrower at close of repayment period rather than to lending institution, effective with respect to loans applied for for academic periods on or after July 1, 1979; P.A. 81-13 amended Subsec. (b) authorizing the Connecticut Student Loan Foundation to modify terms of repayment for loans, if such modifications conform with applicable federal laws and regulations; Sec. 10-363 transferred to Sec. 10a-206 in 1983 pursuant to reorganization of higher education system; P.A. 87-306 amended Subsec. (a) to replace the specific requirements for the terms and conditions of loans with a reference to the provisions of the Higher Education Act of 1965 for loans made or guaranteed in accordance with that act and with terms and conditions determined by the board for loans made, guaranteed or serviced by the corporation; P.A. 01-102 amended Subsec. (b) to replace general reference to federal laws and regulations with specific reference to the Higher Education Act of 1965 and to eliminate provision allowing more lenient or restrictive terms or conditions if the board determines that the action is justified by special circumstances and is consistent with the general objectives of the corporation, effective June 6, 2001; P.A. 05-184 deleted former Subsec. (c) re loan forgiveness for an obsolete loan program for which loans were applied for before July 1, 1979, effective July 1, 2005; P.A. 06-196 made a technical change in Subsec. (b), effective June 7, 2006.

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Sec. 10a-206a. Borrower in default on loan to have amount in default applied as reduction of any amount payable by the state to such borrower. Certain exceptions. Upon notification to the Comptroller by the Connecticut Student Loan Foundation that any borrower under this chapter is in default on one or more installments of a loan made or guaranteed by the corporation under this chapter, including any interest related thereto, the Comptroller shall withhold any order upon the Treasurer for payment of any amount payable by the state to such borrower, unless the amount so payable is reduced by the amount of such indebtedness, provided any such amount payable by the state shall not be so reduced if (1) such amount payable is a payment of salary or wages, or any payment in lieu of or in addition to such salary or wages, to a state employee, (2) such taxes, penalties and interest have been fixed by the Commissioner of Revenue Services pursuant to a request within the time allowed under title 12 to correct the amount thereof, or (3) such taxes, penalties and interest have been determined by said commissioner to be due and such determination is the subject of an appeal pending before any court in this state. The Comptroller shall promptly notify the corporation of any payment reduced under the provisions of this section and shall promptly forward the amount of said reduction to the Connecticut Student Loan Foundation.

(P.A. 85-423, S. 2, 3; P.A. 86-403, S. 21, 132; P.A. 96-180, S. 16, 166; P.A. 00-220, S. 28, 43.)

History: P.A. 86-403 made technical changes; P.A. 96-180 made a technical change in Subdiv. (2) to specifically name Commissioner of Revenue Services, effective June 3, 1996; P.A. 00-220 added requirement for the Comptroller to promptly forward the amount of any payment reduction to the Connecticut Student Loan Foundation, effective July 1, 2000.

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Sec. 10a-207. (Formerly Sec. 10-364). Disability of minority not to disqualify for loan. Any person otherwise qualifying for a loan made or guaranteed by the corporation shall not be disqualified by reason of his being under the age of eighteen years and for the purpose of applying for, receiving and repaying such a loan any such person shall be deemed to have full legal capacity to act and shall have all the rights, powers, privileges and obligations of a person of full age, with respect thereto.

(February, 1965, P.A. 491, S. 7; 1967, P.A. 3, S. 11; 1972, P.A. 127, S. 11.)

History: 1967 act simplified language for clarity; 1972 act changed age of majority from 21 to 18; Sec. 10-364 transferred to Sec. 10a-207 in 1983 pursuant to reorganization of higher education system.

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Sec. 10a-208. (Formerly Sec. 10-365). Contributions to corporation. Notwithstanding the provisions of any general statute or special act or the provisions of any certificate of incorporation, charter or other articles of organization, all domestic corporations or associations organized for the purpose of carrying on business in this state and any person are hereby authorized to make contributions to the Connecticut Student Loan Foundation and such contributions shall be allowed as deductions in computing the net taxable income of any such person, corporation or association for purposes of any income or franchise tax imposed by the state.

(February, 1965, P.A. 491, S. 8; 1967, P.A. 3, S. 12.)

History: 1967 act substituted Connecticut Student Loan Foundation for Connecticut Foundation for Assistance to Higher Education; Sec. 10-365 transferred to Sec. 10a-208 in 1983 pursuant to reorganization of higher education system.

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Sec. 10a-209. (Formerly Sec. 10-366). Tax exemption. The property, income, obligations and activities of the Connecticut Student Loan Foundation shall be exempt from all taxes and assessments by the state or any political subdivision thereof.

(February, 1965, P.A. 491, S. 9; 1967, P.A. 3, S. 13.)

History: 1967 act substituted Connecticut Student Loan Foundation for Connecticut Foundation for Assistance to Higher Education; Sec. 10-366 transferred to Sec. 10a-209 in 1983 pursuant to reorganization of higher education system.

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Sec. 10a-210. (Formerly Sec. 10-367). Annual report; content. Review of operating budget. (a) The corporation shall make an annual report, on or before December thirty-first for the fiscal year ending September thirtieth, of its condition to the Governor, as provided in section 4-60, to the Board of Regents for Higher Education and to the General Assembly. The report shall include, in addition to the corporation's financial statement, a copy of the report that the corporation submits annually to the United States Department of Education.

(b) The board shall review, at least once during each calendar quarter, the actual operating budget of the corporation to ensure that revenues and expenditures are remaining within annual budget projections.

(February, 1965, P.A. 491, S. 10; 1969, P.A. 660, S. 8; P.A. 77-124; 77-573, S. 24, 30; P.A. 83-587, S. 25, 96; P.A. 84-381, S. 4, 12; P.A. 85-302, S. 2, 3; P.A. 00-220, S. 29, 43; P.A. 05-184, S. 7; P.A. 11-48, S. 285.)

History: 1969 act changed report deadline from July first to September first; P.A. 77-124 deleted provision making corporation subject to banking commissioner, although not deemed a banking organization; P.A. 77-573 replaced commission for higher education with board of higher education; Sec. 10-367 transferred to Sec. 10a-210 in 1983 pursuant to reorganization of higher education system; P.A. 83-587 replaced board of higher education with board of governors in Subsec. (a); P.A. 84-381 amended Subsec. (a) to require that annual report include a statement of the financial condition and a description of the organization and to delete requirement that reports be made to general assembly only in odd-numbered years, added new Subsec. (b) re review of operating budget, added new Subsec. (c) re review of default rates and relettered former Subsec. (b) as Subsec. (d); P.A. 85-302 deleted former Subsec. (c) authorizing removal of lenders from loan guaranty eligibility list for excessive default rates, relettering former Subsec. (d) accordingly; P.A. 00-220 amended Subsec. (a) to change the date for the annual report, effective July 1, 2000; P.A. 05-184 amended Subsec. (a) by substituting requirement re including as part of the annual report a copy of the report submitted to the United States Department of Education for requirement re including a description of the organization, amended Subsec. (b) by adding reference to revenues and deleted former Subsec. (c) re administration of loans made before July 1, 1965, effective July 1, 2005; pursuant to P.A. 11-48, “Board of Governors of Higher Education” was changed editorially by the Revisors to “Board of Regents for Higher Education” in Subsec. (a), effective July 1, 2011.

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Sec. 10a-211. (Formerly Sec. 10-368). Termination of corporation. The corporation and its corporate existence shall continue until terminated by law upon a finding that there no longer exists any need for such a corporation; provided no such law shall take effect as long as the corporation shall have bonds, notes or other obligations outstanding. For the purpose of this section, any appropriation or advance made to the corporation by the state, which has not been repaid, shall not be deemed to be an outstanding obligation of the corporation. Upon the dissolution of the corporation or the cessation of its activities, all the assets, property and moneys of such corporation shall be paid over, upon dissolution, to the respective undergraduate scholarship funds of higher educational institutions located in Connecticut, gifts to which are deductible or exempt from income, estate and succession taxation as more specifically described in Sections 170(c)(2), 501(c)(3) and 2055(a)(2) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and section 12-347, in such proportions as a majority of the board shall in its absolute discretion determine.

(February, 1965, P.A. 491, S. 11; P.A. 89-211, S. 18; P.A. 05-184, S. 8; P.A. 06-196, S. 82.)

History: Sec. 10-368 transferred to Sec. 10a-211 in 1983 pursuant to reorganization of higher education system; P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 05-211 added references to bonds and to assets and eliminated provision requiring that upon dissolution all assets, property and moneys shall be vested in the General Fund, effective July 1, 2005; P.A. 06-196 made technical changes, effective June 7, 2006.

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Sec. 10a-212. (Formerly Sec. 10-368a). False statement or misrepresentation. Financial information. (a) Any person who, by means of an intentionally false statement or misrepresentation, obtains, or attempts to obtain, or aids or abets any person to obtain, any loan or guaranty thereof under the provisions of this chapter, shall be fined not more than two hundred dollars or imprisoned not more than six months or both.

(b) The corporation may require such financial information as it deems necessary to substantiate the information contained in the application for assistance under this chapter. No provision of the general statutes shall be construed as prohibiting the disclosure, to the corporation or to a lender of any student loan guaranteed by the corporation, of the names or addresses of students or former students who received such loans.

(1967, P.A. 3, S. 14; P.A. 80-481.)

History: P.A. 80-481 divided section into subsections and added provision re disclosure of names or addresses of former recipients of loans; Sec. 10-368a transferred to Sec. 10a-212 in 1983 pursuant to reorganization of higher education system.

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Secs. 10a-213 to 10a-215. (Formerly Secs. 10-368b to 10-368d). Unrestricted and restricted funds. Bond issue. General obligation bonds. Sections 10a-213 to 10a-215, inclusive, are repealed, effective July 1, 2005.

(1967, P.A. 3, S. 15–17; P.A. 75-423, S. 1, 2; P.A. 77-614, S. 19, 610; P.A. 78-236, S. 5, 20; S.A. 79-95, S. 106, 109; S.A. 80-41, S. 62, 68; P.A. 90-129, S. 2–4; P.A. 94-245, S. 15, 46; P.A. 05-184, S. 9.)

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Sec. 10a-216. (Formerly Sec. 10-368e). Student Loan Foundation to succeed to rights and duties. The Connecticut Student Loan Foundation shall succeed to all the powers, rights, duties and obligations pertaining, on March 31, 1967, to the Connecticut Foundation for Financial Assistance to Higher Education.

(1967, P.A. 3, S. 18.)

History: Sec. 10-368e transferred to Sec. 10a-216 in 1983 pursuant to reorganization of higher education system.

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Secs. 10a-217 to 10a-220. Reserved for future use.

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