§ 6-81-124 - Student loan funds. - Arkansas Statutes

6-81-124. Student loan funds.

(a) All proceeds derived from a particular obligation under the provisions of this subchapter shall be deposited in a fund to be known as the proceeds fund which shall be maintained in such bank or banks as shall be determined by the Arkansas Student Loan Authority, and funds deposited in the fund shall be expended only on approval of the authority.

(b) A separate and distinct proceeds fund shall be maintained for each different obligation issued by the authority.

(c) Funds credited to a proceeds fund may be used for any or all of the following purposes:

(1) The payment of the necessary expenses, including, without limitation, the costs of issuing the authority's obligations, incurred by the authority in carrying out its responsibilities under this subchapter;

(2) The establishment of a debt service reserve account to secure the payment of obligations;

(3) The making of guaranteed educational loans to qualified borrowers, so long as the authority does not compete with participating private lending institutions in the making of guaranteed educational loans;

(4) The purchase, either directly or acting through a bank with trust powers for its account, of guaranteed educational loan notes executed after March 30, 1977, by qualified borrowers; and

(5) The acquisition of an investment contract or contracts or any other investments permitted under an indenture of the authority securing its obligations. However, the income from the contract, contracts, or investments, after payment of the obligations and all expenses associated therewith, shall be used by the authority to assist in carrying out its purposes under this subchapter.