Bill 2783

                    Current Status

Bill Number:               2783
Ratification Number:       281
Act Number                 195
Introducing Body:          House
Subject:                   State Education Assistance Act

(A195, R281, H2783)

AN ACT TO AMEND SECTION 59-115-20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE STATE EDUCATION ASSISTANCE ACT, SO AS TO REVISE THE DEFINITION OF "STUDENTS" FOR PURPOSES OF THE ACT THEREBY MAKING ANY QUALIFYING STUDENT RATHER THAN ONLY QUALIFYING RESIDENTS OF SOUTH CAROLINA ELIGIBLE FOR STUDENT LOANS.

Be it enacted by the General Assembly of the State of South Carolina:

Findings

SECTION 1. For purposes of this act, the General Assembly makes the following findings of fact:

(A) The State Education Assistance Authority is a body politic and corporate and a public instrumentality of the State of South Carolina, created by Act 433 of 1971, and codified as Chapter 115, Title 59 of the 1976 Code, hereinafter referred to as the Enabling Act.

(B) The Authority consists of the members of the State Budget and Control Board of South Carolina who, by reason of their offices, constitute the membership of the Authority.

(C) The Authority was created in order to provide a means of making loans in order to enable students, as this term is defined in the Enabling Act, to attend eligible institutions as this term is defined in the Enabling Act. This program of the Authority is administered by a nonprofit corporation sponsored by the South Carolina Bankers Association and incorporated under the name of South Carolina Student Loan Corporation.

(D) The purposes, inter alia, of the Authority and its contractual agent, the Corporation, are to provide financing for a program for the making and purchasing of insured loans to qualified students or to the qualifying parent of these students evidenced by one or more promissory notes, this program being referred to as the Guaranteed Student Loan Program. The payment of principal of and interest on these loans is insured by the Authority and reinsured by the Commissioner of Education of the United States under the Higher Education Act of 1965, as amended, hereinafter referred to as the Federal Act.

(E) Certain changes to the Guaranteed Student Loan Program have been brought about by Public Law 99-498, the most recent amendment to the Federal Act.

(F) The Federal Act now requires that all guaranty agencies shall guarantee loans for students attending qualifying institutions in the State, whether or not the students are residents of the State.

(G) Currently the Enabling Act authorizes the Authority to guarantee loans only for residents of South Carolina.

(H) The Authority relies in major part upon administrative cost allowances from the United States Department of Education to operate the Guaranteed Student Loan Program and receives no appropriations from the General Assembly for the program.

(I) The Federal Act will continue making these administrative cost allowances only to guaranty agencies which guarantee loans for all eligible students attending qualifying institutions in their states.

(J) The Authority's Guaranteed Student Loan Program continues to serve a valid public purpose and that the Enabling Act should be amended in order to permit the continued operation of the Authority as a Guaranty Agency and to permit it to continue these operations without resort to state appropriations for these operations.

Definitions revised

SECTION 2. Items (6) and (7) of Section 59-115-20 of the 1976 Code are amended to read:

"(6) 'Student' means any qualifying student in attendance at any eligible institution.

(7) 'Student loans' means loans made to students for the purpose of enabling them to attend eligible institutions."

Time effective

SECTION 3. This act takes effect upon approval by the Governor.