Kentucky Administrative Regulations
Title 11 - KENTUCKY HIGHER EDUCATION ASSISTANCE AUTHORITY
Chapter 3 - Kentucky Loan Program
Section 11 KAR 3:055 - Obtaining and repaying a loan
Universal Citation: 11 KY Admin Regs Service 3:055
Current through Register Vol. 51, No. 3, September 1, 2024
RELATES TO: KRS 164.744(1), 164.748(1), (3), (14), 164.753(2), 164.766
NECESSITY, FUNCTION, AND CONFORMITY: KRS 164.744(1) empowers the authority to insure loans to students, provided that the loans meet the criteria of the federal Act. Pub.L. 102-325, enacted July 23, 1992, reauthorized the federal Act and made substantial changes in the insured student loan programs. This administrative regulation is necessary to prescribe the process for obtaining an authority insured student loan.
Section 1.
(1) Federal Stafford Loan and Federal SLS
Loan Application. Generally, to obtain a subsidized or unsubsidized federal
Stafford loan or a federal SLS loan insured by the authority, a student shall
complete an application. The form of the application may vary depending upon
the method of applying (e.g., electronic application process, combined
application and note, or separate application and note). The student shall
complete his or her portion of the application by providing at least the
following information:
(a) The student's
name, address, and Social Security number;
(b) The student's citizenship
status;
(c) The student's
enrollment status;
(d) Information
on the status of any outstanding student loan indebtedness, including, but not
limited to, a certification that the student does not owe repayment of a
student grant and is not in default on a student loan;
(e) A certification that the loan proceeds
will be used exclusively to meet the cost of attendance at the participating
institution listed on the application; and
(f) Additional information necessary to
demonstrate that the student meets the eligibility requirements set forth in
Sections 1 and 5(1) of
11 KAR
3:015.
(2) Federal PLUS Loan program application.
Generally, to obtain a federal PLUS loan insured by the authority, an
individual shall complete an application. If the loan is to be made to the
student's parent(s), both the student and the parent(s) shall complete the
application before submitting it to the participating institution. The form of
the application may vary depending upon the method of applying (e.g.,
electronic application process, combined application and note, or separate
application and note). The borrower and a student on whose behalf the loan is
sought shall provide at least the following information:
(a) Name, address, and Social Security number
of both the borrower and student on whose behalf the loan is sought;
(b) The citizenship status of both the
borrower and student on whose behalf the loan is sought;
(c) The student's enrollment
status;
(d) Information on the
status of any outstanding student loan indebtedness of both the borrower and
student on whose behalf the loan is sought, including, but not limited to, a
certification that neither the borrower nor the student on whose behalf the
loan is sought owes repayment of a student grant or is in default on a student
loan;
(e) A certification that the
loan proceeds will be used exclusively to meet the cost of attendance at the
participating institution listed on the application; and
(f) Additional information necessary to
demonstrate that both the borrower and the student on whose behalf the loan is
sought meet the eligibility requirements set forth in Sections 1 and 5(2) of
11 KAR
3:015.
(3) Federal Consolidation Loan program
application. Generally, to obtain a federal Consolidation loan insured by the
authority, an applicant shall complete an application, and submit it first to a
participating lender holding at least one (1) of the applicant's eligible loans
selected for consolidation. If all of the participating lenders holding the
applicant's loans selected for consolidation decline to make a federal
Consolidation loan to the applicant, then the applicant may submit the
application to any other participating lender. The applicant shall provide at
least the following information:
(a) The
applicant's name, address, and Social Security number;
(b) Information on the status of any
outstanding student loan indebtedness, including, but not limited to, a
certification that the applicant does not owe repayment of a student grant and
is not in default on a student loan;
(c) Additional information necessary to
demonstrate that the applicant meets the eligibility requirements set forth in
Section 11 of
11 KAR
3:015.
(4) Applications are available through
participating institutions and participating lenders. Applications are also
available at the offices of the authority, located in Frankfort, Kentucky,
during regular business hours (8 a.m. to 4:30 p.m. Monday through
Friday).
(5) The applicant shall
submit the completed application form for a federal Stafford loan, federal SLS
loan, or a federal PLUS loan to the participating institution for
certification, and, after the institution certifies the application, the
application shall be submitted to a participating lender of the applicant's
choice. If the participating institution transmits its data to the authority
electronically, the applicant shall submit the completed application form
directly to a participating lender of the applicant's choice.
(6) If the participating lender declines to
make the loan, the participating lender shall notify the applicant and shall
provide to the applicant any disclosure of adverse action that may be required
by federal or state laws, including, but not limited to, the Equal Credit
Opportunity Act (15 U.S.C.
1691, et seq.). If the participating lender
decides to make the loan, the lender may obtain a loan guarantee from the
authority not in excess of the applicable loan maximum set forth in
11 KAR
3:035 only if the applicant qualifies as an eligible
borrower pursuant to
11 KAR
3:015.
(7)
In addition to an application, an eligible borrower shall execute a promissory
note approved by the secretary in order to obtain any authority insured student
loan. The promissory note may be contained in the application, or may be a
separate form. The terms and conditions of the promissory note may vary, based
upon the type of loan sought. The promissory note and supplemental disclosure
and loan guarantee notices shall constitute evidence of the loan, and shall
state directly or by reference to applicable laws and administrative
regulations the borrower's rights and responsibilities. Generally, the borrower
shall agree to:
(a) Comply with
administrative regulations promulgated by the secretary and the authority;
and
(b) Repay the full amount of
the loan principal, collection costs chargeable to the borrower, any interest
not payable by the secretary, and any other charges authorized pursuant to
11
KAR 3:045; and
(c) Inform the holder of the loan of any
change in the borrower's name or address, and, with respect to a federal
Stafford loan, any change of enrollment status.
STATUTORY AUTHORITY: KRS 13A.100(1), 164.746(6), 164.748(4), 34 C.F.R. 682.401(b)(10)(ii)
Disclaimer: These regulations may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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