94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB2152


 
Introduced 11/2/2005, by Sen. Martin A. Sandoval
 
SYNOPSIS AS INTRODUCED:
 		













New Act











    Creates the School-As-Lender Contracts Prohibition Act. Prohibits a public university in Illinois that offers graduate courses from entering into a school-as-lender contract with a private lending institution, but allows the university to maintain its Direct Loan Programs. Provides that any university that violates the Act shall forfeit $8.91 of State funding for every $100 loaned to the university through a school-as-lender contract.
















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FISCAL NOTE ACT MAY APPLY
















 


 


A BILL FOR









 











SB2152

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    AN ACT concerning education.

 
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    Be it enacted by the People of the State of Illinois,
 
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represented in the General Assembly:


 
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    Section 1. Short title. This Act may be cited as the 
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School-As-Lender Contract Prohibition Act.
 
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    Section 5. Purpose. The purpose of this Act is to provide 
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protection to public university students and taxpayers from 
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lending institutions whose purpose is to exploit federal 
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interest rate loopholes.
 
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    Section 10. Definitions. In this Act:
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    "Board" means the Board of Higher Education.
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    "Direct Loan Programs" means those programs maintained by a 
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public university in Illinois that are offered through the U.S. 
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Department of Education.
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    "School-as-lender contract" means an exclusive contract 
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entered into between a university and a private lending 
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institution, wherein the lending institution provides the 
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university with loan money to serve its graduate students, 
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which allows the university to become its own lender, and, in 
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return, the private lending institution is granted exclusive 
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lending rights to the rest of the university's student 
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population.
 
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    Section 15. School-as-lender contracts prohibited. A 
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public university in Illinois that offers graduate courses may 
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not enter into a school-as-lender contract; however, the 
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university may maintain its Direct Loan Programs.
 
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    Section 20. Rulemaking. The Board of Higher Education has 
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the authority to adopt all rules necessary to implement and 
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administer the provisions this Act.
 
 


 






SB2152
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    Section 25. Civil penalty. Any university that violates any 
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provision of this Act, any rule adopted by the Board, or any 
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order of the Board pursuant to this Act is liable for a civil 
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penalty in which for every $100 loaned to a university through 
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a school-as-lender contract, that university shall forfeit 
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$8.91 in State funding.  The Board shall provide for an 
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administrative proceeding in which the civil penalty may be 
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imposed.