Chapter 3351-2 Instructional Grants

3351-2-01 Part-time student instructional grants.

(A) Intent and authority

(1) It is the intent of the Ohio student aid commission in promulgating this rule to establish and administer a part-time student instructional grant program which will provide financial assistance to eligible students who are enrolled in "eligible institutions of higher education" for part-time rather than full-time study.

(2) This rule is adopted under authority conferred upon the Ohio student aid commission by Am. Sub. H. B. No. 152, Section 84.08.

(B) Definitions

(1) Part-time student

A "part-time student" is a student who is enrolled in an "eligible institution of higher education" for not more than eleven credit hours per quarter or semester.

(2) Eligible institution of higher education

(a) An "eligible institution of higher education" is:

(i) An accredited Ohio public-assisted institution of higher education;

(ii) An accredited privately sponsored non-profit institution of higher education which holds a "Certificate of Authorization" issued pursuant to Chapter 1713. of the Revised Code;

(iii) An accredited hospital school of nursing which holds a "certificate of authorization" issued pursuant to Chapter 1713. of the Revised Code;

(iv) An accredited proprietary school which holds a "Certificate of Registration" and program authorization from the state board of proprietary school registration to award an associate degree or which holds a "Certificate of Authorization" issued pursuant to Chapter 1713. of the Revised Code to award a bachelor's degree.

(b) In the 1993-1994 academic year, "eligible institutions of higher education" shall include public assisted two- and four-year institutions only.

(3) Ohio resident

An "Ohio resident" is a student who meets the requirements of Ohio Board of regents' rule 3333-1-10 of the Administrative Code. Verification of Ohio residency for these purposes shall be made by the student's institution of higher education. Institutions shall provide students with a fair and adequate opportunity to present proof of Ohio residency.

(4) Displaced homemaker

A "Displaced homemaker" is a person who has not worked full-time in the labor force for approximately five years or more and has been a homemaker (i.e., has provided unpaid services to family members) during the term of unemployment.

(5) Academic year

For these purposes, an academic year is a period of instruction which begins at the start of the fall term and ends at the close of the summer term.

(C) Allocating funds to institutions

(1) Each year, the Ohio student aid commission shall allocate appropriated funds to each eligible institution of higher education. These allocations shall be calculated on the basis of the following formula:

Step 1: Part-time undergraduate head count divided by total undergraduate head count equals institutional part-time percentage.

Step 2: Institutional part-time percentage times the number of need-based federal and/or state grants recipients -- as designated by the Ohio student aid commission -- equals the institution's part-time need factor.

Step 3: Institution's part-time need factor divided by the aggregate part-time need factor for all "eligible institutions of higher education" equals institution's part-time share.

Step 4: Institution's part-time share times total program appropriation equals institution's part-time student instructional grant program allocation for the academic year.

(2) The Ohio student aid commission shall determine the source and academic year designation of the head count and need-based grant recipient data which are used in the allocation formula.

(3) Each participating institution shall receive its calculated allotment in two or three equal disbursements, depending on the academic calendar of the institution. Institutions with quarter calendars shall receive three disbursements; institutions with semester calendars shall receive two disbursements.

(4) In order to receive its allocation each year, each participating institution shall certify in writing its intent to comply with all program rules and regulations.

(D) Student eligibility requirements

(1) To be considered for a part-time instructional grant, a "part-time student" must meet each of the following eligibility requirements:

(a) The student must have financial need as determined by the financial aid office of the student's institution of higher education. When determining financial need, the institution shall give special consideration to students who are single-heads-of-household or displaced homemakers.

(b) The student must be enrolled in an undergraduate curriculum which leads to an associate or baccalaureate degree.

(c) The student must be an "Ohio resident."

(E) Awarding grants

(1) A part-time instructional grant shall not exceed the student's cost of tuition for the academic year.

(2) A part-time instructional grant shall not exceed the amount which the student would have received from the Ohio instructional grant program in each term of the award year had the student been enrolled for full-time study. Ohio instructional grant eligibility for these purposes may be calculated by the college financial aid administrator on the basis of data which is collected for other purposes.

(3) A part-time instructional grant may not be used to supplant educational assistance provided by a student's employer.

(4) A part-time instructional grant may not be used to supplant other sources of non-adjustable financial aid, such as scholarships or tuition waivers, which are restricted to the student's tuition charges.

(5) Provided that a student's award is in compliance with the parameters established in sections (E)(1) to (E)(4)of this rule, the amount of the student's award for each term of the award year shall be determined by the institution.

(6) A part-time student instructional grant awarded to a student who discontinues enrollment prior to the completion of a quarter or semester shall be adjusted in accordance with the institution's tuition refund policy.

(F) Institutional refunds and reporting responsibility

(1) No later than sixty days following the close of the summer term of each academic year, participating institutions shall report to the Ohio student aid commission on students who received part-time instructional grant benefits and the amount of any unused funds. The form of this report shall be prescribed by the commission.

(2) Part-time student instructional grant funds which are not used by the institution in the academic year for which the funds are provided shall be retained by the institution for use in the next academic year. The institution's allocation for the next academic year shall be reduced by this amount.

Eff 9-27-93 (Emer.); 7-15-94
Rule promulgated under: RC Chapter 119.
Rule authorized by: Section 84.08 (Am. Sub. H.B. No. 152, 120th General Assembly)
Rule amplifies: Section 84.08 (Am. Sub. H.B. No. 152, 120th General Assembly)

3351-2-02 Ohio instructional grant program.

(A) Authority

This rule is adopted under authority conferred upon the Ohio student aid commission by section 3333.12 of the Revised Code.

(B) Definitions

(1) Academic year

For "Ohio Instructional Grant" purposes, "Academic year" is defined as the instructional period which begins in July and ends in June.

(2) Appropriate progress

In working toward an associate degree, bachelor's degree or nursing diploma, the student must maintain a grade-point average or other standard of achievement considered by the institution to be satisfactory progress toward the degree sought by the student. A student placed on academic probation and attending classes as prescribed by the institution on a full-time basis shall be considered to be making appropriate progress.

(3) Default rate

"Default rate" is the cohort default rate determined by the United States secretary of education pursuant to federal law.

(4) Dependents

(a) In the case of a "dependent" applicant, "dependents" is defined for "Ohio Instructional Grant" purposes as the total number of people in the following categories:

(i) Children, including the applicant, who receive more than half their support from the applicant's parents, guardians or other "supportive economic entity" at the time the "grant application" is filed.

(ii) Other people (excluding the applicant's parents, guardians or other "economic supportive entity") who reside with and receive more than half of their support from the applicant's parents, guardians or other "economic supportive entity" at the time the "grant application" is filed and who will continue to receive this support between July first and June thirtieth of the "academic year" for which the "grant application" is filed.

(b) In the case of a "self-supporting applicant," "dependents" is defined for "Ohio Instructional Grant" purposes as the total number of people in the following categories:

(i) Children who receive more than half their support from the applicant (and spouse) at the time the "grant application" is filed.

(ii) Other people (excluding the applicant (and spouse) who reside with and receive more than half of their support from the applicant (and spouse) at the time the "grant application" is filed and who will continue to receive this support between July first and June thirtieth of the "academic year" for which the "grant application" is filed.

(5) Eligible institution

(a) An "eligible institution" is:

(i) An accredited Ohio or Pennsylvania public-assisted institution of higher education, or;

(ii) An accredited Ohio privately sponsored non-profit institution of higher education which holds a "Certificate of Authorization" issued by the Ohio board of regents or a Pennsylvania privately sponsored non-profit institution of higher education which is comparably authorized by the state of Pennsylvania, or;

(iii) An accredited hospital school of nursing which holds a "Certificate of Authorization" issued by the Ohio board of regents or a Pennsylvania hospital school of nursing comparably approved by the state of Pennsylvania, or;

(iv) An accredited proprietary school which holds a "Certificate of Registration" issued by the state board of proprietary school registration to award an associate degree or which holds a "Certificate of Authorization" issued by the Ohio board of regents to award a bachelor's degree.

(b) To be considered an eligible institution for "Ohio Instructional Grant" purposes, an institution must seek and secure accreditation from an approved professional accrediting association within whose jurisdiction the institution falls. Approved accrediting associations are those recognized by the "Council on Postsecondary Accreditation" including the accrediting commission of the "Association of Independent Colleges and Schools."

(6) Federal law

For these purposes, "Federal law" means the "Higher Education Amendments of 1986," 101 Stat. 1278, 1408, 20 U.S.C. 1085 , as amended.

(7) Full-time student

A "full-time student" is a student who is enrolled in a degree-granting curriculum at an "eligible institution" for not less than twelve credit hours per quarter, semester or term.

(8) Grant application

"Grant application" is defined as the process by which "Ohio Instructional Grant" eligibility data and demographic data are collected from the student and family for processing by the Ohio student aid commission. This process may entail the completion of a program-specific application form administered by the commission or the completion of a non-program-specific application form administered by another state, federal or private agency. If a non-program-specific application form is used, applicants are required to authorize the release of eligibility and demographic data to the commission. Under no circumstances shall an applicant be required to pay a fee to apply for "Ohio Instructional Grant" benefits. A new application must be filed each year.

(9) Instructional charges

"Instructional charges" include the instructional and general fees of an eligible state-assisted institution of higher education, the tuition fee of an eligible privately sponsored institution of higher education or hospital school of nursing and any fee of a privately sponsored institution of higher education or hospital school of nursing which is comparable in purpose to the general fee of state-assisted institutions of higher education. The "Ohio Instructional Grant" may be used to pay the "Instructional charges" of an "eligible institution" when a student is engaged in study outside the eligible institution provided that the outside courses are an integral part of the academic program of the "eligible institution" at which the student is pursuing the academic degree.

(10) Ohio resident

Each "eligible institution" shall determine the residency status of students for "Ohio Instructional Grant" purposes in accordance with rule 3333-1-10 of the Administrative Code. Each"eligible institution" shall provide individual students with a fair and adequate opportunity to present proof of their Ohio residency for purposes of this rule. Institutions of higher education may require the submission of affidavits and other documentary evidence which it may deem necessary to a full and complete determination of Ohio residency.

(11) OIG income

(a) As used to determine the eligibility of a dependent applicant for "Ohio Instructional Grant" purposes, "OIG income" is defined as the adjusted gross income of the parents or guardians or other "supportive economic entity" plus the adjusted gross income of the applicant (and spouse) as reported on a federal income tax return which is filed for the calendar year which immediately precedes the year in which the "grant application" is filed plus untaxed income and benefits (as prescribed by the commission) received by the parents, guardians or other "supportive economic entity" and the applicant (and spouse) in the calendar year which immediately precedes the year in which the "grant application" is filed minus the summer earnings of the applicant. If a federal income tax return is not filed for the year immediately preceding the year in which the grant application if filed, total gross earnings shall be used in the calculation of "OIG income."

(b) As used to determine the eligibility of a self-supporting applicant for "Ohio Instructional Grant" purposes, "OIG Income" is defined as the adjusted gross income of the applicant and applicant's spouse as reported on a federal income tax return which is filed for the calendar year which immediately precedes the year in which the grant application is filed plus untaxed income and benefits (as prescribed by the commission) received by the applicant and the applicant's spouse in the calendar year which immediately precedes the year in which the "grant application" is filed.

(c) If reported income falls below a standard established by the Ohio student aid commission for these purposes, the commission shall establish a formula to determine the means by which the applicant's family maintained itself and translate this data into "OIG income."

(12) OIG tables-of-grants

"OIG tables-of-grants" are numeric tables which determine the specific grant award for each eligible "Ohio Instructional Grant" applicant. Within these tables, each applicant's grant eligibility is based on the "OIG income" and the number of "dependents" in the applicant's family. The "OIG tables-of-grants" are enacted into law each biennium by the Ohio general assembly.

(13) Supportive economic entity

For "Ohio Instructional Grant" purposes, the "supportive economic entity" is any person, persons or entity other than the applicant's spouse, who (that) has been or will be the principal contributor to the applicant's economic support during any part of the calendar year which immediately precedes the year in which the "grant application" is filed, the year in which the "grant application" is filed or the year immediately following the year in which the "grant application" is filed. In most cases, the parents or guardians of a dependent grant applicant will be designated as the "supportive economic entity." In the case of a self-supporting student, the applicant (and spouse) will be designated as the "supportive economic entity."

(14) Support status

(a) "Support status" is the classification which determines if the applicant's "OIG income" shall consist of income received by the applicant (and spouse) and his or her parents or income received by the applicant (and spouse) only. There are two "support status" classifications for "Ohio Instructional Grant" purposes; these are "dependent" and "self-supporting." In the case of a dependent applicant, "OIG income" shall consist of income received by the applicant (and spouse) and his or her parents, guardians or other "supportive economic entity." In the case of a "self-supporting" applicant, "OIG Income" shall consist of income received by the applicant (and spouse) only.

(b) Starting in January of 1994, the "support status" of each "Ohio Instructional Grant" applicant shall be determined on the basis of criteria developed by the United States department of education for Title IV federal financial aid programs. However, the Ohio student aid commission may modify the federal criteria or implement optional criteria for the "Ohio Instructional Grant" program.

(C) Eligibility requirements

To be eligible for an "Ohio Instructional Grant" an applicant must meet the following requirements:

(1) Be an "Ohio resident."

(2) Be enrolled as a "full-time student" in an "eligible institution." The full-time requirement shall be waived if the student is enrolled in the final term of study prior to receiving a degree or if a student who is otherwise eligible for an "Ohio Instructional Grant" is unable to enroll for full-time study because of a disability. Documented evidence of a student's disability shall be required by the commission. Grant benefits shall be prorated when the full-time requirement is waived.

(3) Make "appropriate progress" toward an eligible associate degree, bachelor's degree or nursing diploma. A student who has previously received a bachelor's degree is not eligible to receive "Ohio Instructional Grant" benefits.

(4) Not be enrolled in a course of study leading to a degree in religion or theology or other field of preparation for a religious profession unless the course of study leads to an accredited bachelor of arts, bachelor of science or associate of arts degree.

(5) Be in compliance with section 3345.32 of the Revised Code regarding selective service registration.

(6) If incarcerated in a penal institution, be eligible for parole within five years from the date on which the "grant application" is filed.

(6) Have a combination of "OIG income" and "dependents" which falls within the eligible range of the appropriate "OIG table-of-grants."

(D) Application deadlines

If a commission-administered, program-specific application is used, the "Ohio Instructional Grant" application deadline shall be a postmark of October first of each year. If a non-program- specific application is used, the "Ohio INSTRUCTIONAL Grant" application deadline shall be a filing date of October first of each year. If the commission determines that additional award commitments can be made after the October first deadline, the deadline may be extended.

(E) Influence of loan default rates on institutional eligibility

(1) Except as provided in paragraph (E)(2) of this rule, no grant shall be made to any student who is enrolled during the 1994-1995 school year or any school year thereafter in an institution with a "default rate" equal to or greater than forty per cent for each of the preceding two years.

(2) The provisions of paragraph (E)(1) of this rule shall not apply in the following cases:

(a) The student is enrolled in an institution which appeals its loss of federal financial aid to the United States secretary of education and the secretary determines that, after recalculation, the institution's "default rate" is lower than forth per cent for one or both of the previous two years.

(b) The student is enrolled in an institution which appeals its loss of federal financial aid to the United States secretary of education and the secretary finds that due to mitigating circumstances the institution may continue to participate in federal financial aid programs.

(c) The student previously received "Ohio Instructional Grant" benefits.

(F) Determination of grant eligibility

The Ohio student aid commission shall determine each applicant's eligibility to receive "Ohio Instructional Grant" benefits on the basis of information provided on the "grant application." If the applicant meets all non-financial eligibility requirements and the "OIG income" is below the relevant income limit in the appropriate "OIG table-of-grants," the applicant's specific grant eligibility shall be determined by referencing the relevant column and row in the appropriate "OIG table-of-grants." Some applicants will have zero eligibility within these tables.

(G) Notification of eligibility

After determining the applicant's "Ohio Instructional Grant" eligibility, the Ohio student aid commission shall issue an official eligibility notice to the applicant. The eligibility notice shall be mailed to the applicant within thirty days from the receipt of complete eligibility data. If the applicant is eligible to receive a grant, the eligibility notice will show the grant amount for the "academic year" for which the "grant application" is filed. If the applicant is not eligible to receive a grant, the eligibility notice will state the reason why the applicant is not eligible.

(H) Eligibility changes

A student's "Ohio Instructional Grant" eligibility may be adjusted on the basis of corrected data or a change in family income or other data which directly affects the student's eligibility status. If a non-program-specific "grant application" is used, such changes and corrections must be communicated to the appropriate agency for transmission to the commission. If a commission-administered, program-specific "grant application" is used, such changes must be communicated directly to the commission in a form prescribed by the commission. Changes and corrections must be received by the commission no later than November thirtieth of the academic year for which the "grant application" is filed.

(I) Appeals

Grant applicants may appeal to the commission for an administrative review of their "Ohio Instructional Grant" eligibility status. Appeals must be made in writing. The form of these appeals shall be prescribed by the commission. All appeals will be considered within the context of prevailing administrative code and commission regulations. Appeals must be received by the commission no later than November thirtieth of the academic year for which the "grant application" is filed.

(J) Awarding grants if funds are inadequate

If adequate funds are not available to make awards to all eligible applicants, preference shall be given on the basis of "OIG Income" beginning with the lowest category of "OIG Income" and proceeding upward to the highest category of "OIG Income."

(K) Influence of other awards

If a student receives other awards, loans or scholarships which are non-adjustable, meet the total instructional and general fees of the institution and cannot be applied to other educational expenses, the student is not eligible to receive an "Ohio Instructional Grant." If a portion of the student's instructional and general fees remains unpaid after the non-adjustable aid is applied, and the remaining fees are less than the student's "Ohio Instructional Grant" for the quarter or semester, the "Ohio Instructional Grant" shall be reduced accordingly.

(L) Transferring a grant

A student who has received an "Ohio Instructional Grant" may transfer the grant from the first "eligible institution" which requests payment of grant benefits to another "eligible institution." To transfer a grant, the student must complete a "student transfer form" and submit the completed form to the Ohio student aid commission prior to the start of classes in the transfer term. Transferring an "Ohio Instructional Grant" may result in an increase or a decrease in the student's grant amount.

(M) Time limit on grant eligibility

A student is eligible to receive "Ohio Instructional Grant" benefits for no more than fifteen quarters or ten semesters or the equivalent.

(N) Institutional request for payment of grant benefits

(1) Following the first day of classes in the fall quarter, semester or term, each "eligible institution" shall request from the commission payment of "Ohio Instructional Grant" benefits for each grant recipient. Each payment request shall include the grant recipient's social security number, the amount requested for each term of the "academic year" and the total amount requested for the "academic year." The payment request for each term of the "academic year" may not exceed, but may be less than, one-third of the student's total grant for the "academic year" in the case of institutions with quarter calendars or one-half of the student's total grant for the "academic year" in the case of institutions with semester calendars. The form and timetable of these payment requests shall be prescribed by the commission.

(2) Following the first day of classes in the winter and spring quarters or second semester, each "eligible institution" shall notify the Ohio student aid commission of students who are not eligible to receive grant benefits in these terms. "Ohio Instructional Grant" funds shall not be disbursed to the institution for these students in these terms. The form and timetable of these notifications shall be prescribed by the commission.

(O) Institutional certification of grant eligibility

Following the first day of classes in each quarter or semester of the "academic year," each "eligible institution" shall certify to the commission that all program eligibility requirements have been met by all grant recipients for whom grant benefits have been requested by the institution. The form and timetable of this certification shall be prescribed by the commission.

(P) Payment of grant benefits

(1) Following each institution's request for payment of grant benefits and certification of grant eligibility in the fall quarter or semester, the commission shall disburse "Ohio Instructional Grant" funds to the institution for the summer and fall quarters or semesters.

(2) Following each institution's certification of grant eligibility in the winter and spring quarters or spring semester, the commission shall disburse "Ohio Instructional Grant" funds to the institution for these terms.

(Q) Refunds

If a grant recipient withdraws or otherwise becomes ineligible for grant benefits during a quarter or semester, the grant shall be reduced in accordance with a formula prescribed by the commission. A grant reduction of this type may require a prorated refund from the institution to the commission.

(R) Application of grant benefits

"Ohio Instructional Grant" benefits shall be applied to the grant recipient's instructional and general fee charges by the institution. "Ohio Instructional Grant" benefits may not be used for other purposes. Grant benefits for each term of enrollment shall not exceed one-half of the student's maximum eligibility in the case of semester institutions or one-third in the case of quarter institutions.

(S) Exchange of eligibility information

When appropriate, the Ohio student aid commission shall exchange information about a student's Ohio Instructional Grant" eligibility and eligibility for other financial aid programs with "eligible institutions" and with any agency or subcontractor which administers a non-program-specific "Ohio Instructional Grant" application.

(T) Justification for collection and distribution of data

(1) The following information is required to determine an applicant's eligibility for "Ohio Instructional Grant" benefits:

(a) Parents' adjusted gross income for the calendar year immediately preceding the year in which the "grant application" is filed or an estimate of the parents' adjusted gross income for the calendar year in which the "grant application" is filed;

(b) Parents' earned income for the calendar year which immediately precedes the year in which the "grant application" is filed or an estimate of the parents' earned income for the calendar year in which the "grant application" is filed;

(c) Parents' untaxed income and benefits for the calendar year which immediately precedes the year in which the "grant application" is filed or an estimate of the parents' untaxed income and benefits for the calendar year in which the "grant application" is filed;

(d) Number of dependents of the parents;

(e) Applicant's (and spouse's) adjusted gross income for the calendar year which immediately precedes the year in which the "grant application" is filed or an estimate of the applicant's (and spouse's) adjusted gross income for the calendar year in which the "grant application" is filed;

(f) Applicant's (and spouse's) earned income for the calendar year which immediately precedes the year in which the "grant application" is filed or an estimate of the applicant's (and spouse's) earned income for the calendar year in which the "grant application" is filed;

(g) Applicant's (and spouse's) untaxed income and benefits for the calendar year immediately preceding the year in which the "grant application" is filed or an estimate of the applicant's (and spouse's) untaxed income and benefits for the year in which the "grant application" is filed;

(h) Number of dependents of the applicant (and spouse);

(i) Applicant's state of residence;

(j) Parents' state of residence;

(k) Applicant's college choice(s);

(l) Applicant's enrollment status;

(m) Applicant's academic program;

(n) Applicant's support status;

(o) Applicant's age;

(p) Applicant's marital status;

(q) Parent's marital status;

(r) Applicant's citizenship status;

(s) Applicant's year in college.

(2) The following information is required in the grant notification process:

(a) Applicant's first name;

(b) Applicant's last name;

(c) Applicant's middle name;

(d) Applicant's mailing address;

(e) Applicant's telephone number.

(U) Release of information

Information maintained by the commission to determine grant eligibility shall be released directly to the applicant upon receipt of a written request from the applicant. Except as specified in paragraph (S) of this rule, no information from an applicant's file will be released to parties other than the applicant without a signed and notarized request from the applicant or a person holding power of attorney for the applicant.

(V) Non-discrimination

It is the intent of the Ohio student aid commission to award "Ohio Instructional Grant" benefits to students who enroll in "eligible institutions" in which there is no discrimination among students on the basis of race, gender, religion, national origin or sexual orientation.

(W) Audits

The commission shall conduct audits to determine the validity of eligibility information reported by students and parents and to ensure compliance with commission rules and regulations by participating colleges and universities. When appropriate, adjustments, as determined by the commission, shall be made in cases where eligibility data have been reported incorrectly. "Eligible institutions" which fail to comply with commission rules or regulations in the administration of the "Ohio Instructional Grant Program" shall be fully liable for the unauthorized use of grant funds.

Eff 10-14-94
Rule promulgated under: RC Chapter 119.
Rule authorized by: Am. Sub. H.B. No. 152, 120th General Assembly
Rule amplifies: RC 3333.12
Appendix A
Ohio Student Loan Commission
POLICIES AND PROCEDURES MANUAL"
The key to success in the management of the loan programs administered by the Ohio Student Loan Commission is communication; lenders, borrowers and schools must all function in accordance within a common set of rules. We are confident that this Policy and Procedure Manual will effectively communicate the rules, regulations and guidelines adopted by the Commission. This manual represents a substantial investment of time and effort on the part of the Commission staff, and we are pleased to provide it to you.
This manual replaces all existing policies, procedures and directives from the Ohio Student Loan Commission. The format is such that we expect to be able to keep the various sections up-to-date in spite of frequent regulatory revision, providing us all with the tools needed to administer this ever more complex program. Sincerely yours, Robert P. Zeigler Executive Director
The Ohio Student Loan Commission is the state agency authorized to implement federal laws for the purpose of making available to residents and qualified nonresidents, improved opportunities for education, and improving the general health and welfare by raising the educational levels of such residents and qualified nonresidents by guaranteeing loans made to persons who are attending or plan to attend eligible institutions of education and their parents, when such loans are made to assist such persons and their parents in meeting their expenses of education. The following Ohio Student Loan Commission Policies and Procedures Manual is promulgated in compliance with The Higher Education Act of 1965, 79 Stat. 1219, 20 U.S.C. 1071 ; The Higher Education Amendments of 1968, 82 Stat. 1020, 20 U.S.C. 1087 ; Act of August 3, 1968, 82 Stat. 634, 20 U.S.C. 1071 ; The Education Amendments of 1972, 86 Stat. 235, 20 U.S.C. 1071 ; The Education Amendments of 1980, 94 Stat. 1424, 20 U.S.C. 1071 ( 20 U.S.C. 1078-2 ), as amended.
CONTENTS
REVISED CODE CHAPTER 3351: STUDENT ASSISTANCE
APPENDICES TO CHAPTER 3351
1 INTRODUCTION
2 BASIC STEPS OF THE STUDENT LOAN
3 APPLICATION PROCESSING
4 ORIGINAL NOTE AND DISBURSEMENT
5 DEFERMENTS AND FORBEARANCES
6 REPAYMENT
7 FEDERAL INTEREST BILLING AND SPECIAL ALLOWANCE
8 COLLECTION -- LENDER DUE DILIGENCE
9 COLLECTION ASSISTANCE
10 GUARANTEE PAYMENT
11 AFTER DEFAULT
12 STUDENT LOAN MARKETING ASSOCIATION (SALLIE MAE)
13 PLUS PROGRAM
14 DEFINITIONS
15 EXHIBITS (SAMPLES OF FORMS)
16 INTERNAL PROCEDURE
Section 3351.05 (Ohio student loan commission; definitions.)
There is hereby created the Ohio student loan commission for the purposes of making available to residents and qualified nonresidents, improved opportunities for education, and improving the general health and welfare by raising the educational levels of such residents and qualified nonresidents by guaranteeing loans made to persons who are attending or plan to attend eligible institutions of education and their parents, when such loans are made to assist such persons and their parents in meeting their expenses of education in accordance with sections 3351.05 to 3351.14 of the Revised Code.
(See "Appendix 1" for an overview of the role of the Ohio student loan commission in administering the guaranteed loan program.)
As used in sections 3351.05 to 3351.14 of the Revised Code:
(A) "Education" includes university, college, vocational, and technical education as well as post-secondary education.
(B) "Resident" includes all persons attending eligible Ohio educational institutions.
(C) "Qualified nonresident" means a person attending an eligible educational institution outside Ohio who has applied for a loan under sections 3351.05 to 3351.14 of the Revised Code if he or any co-maker of the loan maintains an account with an approved Ohio lender.
(D) "Parent" means the parent of an undergraduate dependent student as defined by regulations of the secretary of education adopted in accordance with the "Education Amendments of 1980," 94 Stat. 1424, 20 U.S.C. 1078-2 , as amended.
(See "Appendix 14" for a complete set of definitions related to the guaranteed loan program.)
129 v 1538 (Eff 10-27-61); 132 v S 245 (Eff 7-2-67); 133 v S39 (Eff 5-21-69); 135 v H 207 (Eff 6-1-73); 137 v H 152 (Eff 5-20-77; 138 v H 363. Eff 6-7-79.
Section 3351.06 Membership and organization.
The ohio student loan commission shall be composed of nine members, to be appointed by the governor with the advice and consent of the senate. Two members of the commission shall be representatives of institutions of higher education, one member shall be a representative of secondary schools, and three members shall be representatives of approved lenders. Terms of office shall be for three years, commencing on the eleventh day of February and ending on the tenth day of February, except that upon expiration of the three terms ending February 11, 1974, the new terms which succeed them shall commence on February 12, 1974 and end on February 10, 1977. Each member shall hold office from the date of his appointment until the end of the term for which he was appointed. Any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall hold office for the remainder of such term. Any member shall continue in office subsequent to the expiration date of his term until his successor takes office, or until a period of sixty days has elapsed, whichever occurs first.
The governor shall designate the chairman of the commission. The commission shall elect, from its own members each year, a vice chairman and such other officers as it deems necessary. Members of the commission shall receive no compensation for their services but shall be reimbursed for their necessary expenses actually incurred in the conduct of the business of the commission.
The commission shall provide for the holding of regular and special meetings. A majority of the commissioners shall constitute a quorum for the transaction of any business and the approval of a quorum is necessary to undertake any act of the commission.
The commission shall adopt rules for the conduct of the commission and may appoint such officers and employees as necessary and may fix their compensation and prescribe their duties.
(See "Appendix 1" for a history of the Ohio student loan commission.)
129 v 1538 (Eff 10-27-61); 130 v 784 (Eff 9-2-63); 131 v 848 (Eff 8-24-65); 132 v S 245 (Eff 7-2-67); 135 v S 131. Eff 8-21-73.
Section 3351.07 Powers and duties .
(A) The Ohio student loan commission may:
(1) Guarantee the loan of money, subject to section 3351.08 of the Revised Code and upon such other terms and conditions as the commission may prescribe, to persons and parents of persons attending or planning to attend eligible intitutions to assist them in meeting educational expenses;
(See "Appendices 1 and 13" for overviews of the terms and conditions for receiving guaranteed loans.)
(2) Reject or take, hold, and administer, on behalf of the commission 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 commission. The commission may invest its funds in any investments in which funds of the public employees retirement system may be invested pursuant to section 145.11 of the Revised Code. The commission may acquire property or moneys for its purposes by the acceptance of gifts, grants, bequests, devises, or loans; provided, that no obligation of the commission shall be a debt of the state, and the commission shall have no power to make its debts payable out of moneys except those of the commission.
(3) Enter into such contracts as may be desirable with eligible educational institutions, upon such terms as may be agreed upon between the commission and the institution, to provide for the administration by such institution of any loan or loan plan guaranteed by the commission, including applications therefor and repayment thereof;
(See "Appendices 1, 2, 3, 4, 5, 13, and 15" for explanations of the procedures and forms educational institutions should use to administer the guaranteed loan program.)
(4) Enter into contracts with any approved lender, upon such terms as may be agreed upon between the commission and the approved lender, to provide for the administration by such approved lender of any loan or loan plan guaranteed by the commission including applications therefor and terms and repayment thereof and to establish the conditions for payment by the commission to the approved lender of the guarantee on any loan.
(See "Appendices 1, 2, 3, 4, 5, 6, 7, 13, and 15" for explanations of the procedures and forms that lenders must use to administer loans guaranteed by the Ohio student loan commission.)
A loan shall be defaulted when, after the expiration of a prescribed period of nonpayment and reasonable collection efforts, the approved lender makes application to the commission for payment on the loan stating that such loan is in default in accordance with the terms of the federal law, contract, or regulations of the commission, executed under this division. In accordance with the "Higher Education Amendments of 1968," 82 Stat. 1020, 20 U.S.C. 1087 , as amended, if a borrower dies, becomes permanently and totally disabled, or is adjudged bankrupt, the commission shall discharge the borrower's liability on his debt by repaying the unpaid principal and interest due thereon.
(See "Appendices 1, 2, 8, 9, 10, 11, and 15" for explanations of the collection procedures lenders are required to carry out, the conditions which constitute default, and the claims procedures that must be followed when default occurs.)
(5) Sue and be sued in the name of the commission;
(6) Collect loans guaranteed by the commission on which the commission has met its guarantee obligations. The commission may, if it prefers, employ a private collection agency or agencies for the purpose of collecting loans on which it has met its guarantee obligations.
(See "Appendix 11" for an overview of the collection procedures the Ohio student loan commission follows to collect loans on which it has met its guarantee obligations.)
(7) Adopt rules, not inconsistent with sections 3351.05 to 3351.14 of the Revised Code, governing the guarantee of loans made by the commission, and governing any other matters relating to the activities of the commission;
(8) Perform such other acts as may be necessary or appropriate to carry out effectively the objects and purposes of the commission.
(B) The Ohio student loan commission for the purposes of sections 3351.05 to 3351.14 of the Revised Code, shall:
(1) Prescribe the academic status required for a resident or qualified nonresident in order for him or his parent to obtain guarantee of a loan;
(See "Appendix 1" for the academic status requirements that must be met before the Ohio Student loan commission will guarantee a loan.)
(2) Approve eligible institutions in which students must be enrolled or accepted for enrollment in order for him or his parent to be eligible for guaranteed loans.
(See "Appendix 1" for the procedures an educational institution must follow to become eligible to participate in the guaranteed loan program.)
(C) For the purposes of Chapter 3351. of the Revised Code, "approved lender" means any bank as defined in section 1101.01 of the Revised Code, any domestic building and loan association as defined in section 1151.01 of the Revised Code, any credit union as defined in section 1733.01 of the Revised Code, any federal credit union established pursuant to federal law, any insurance company organized or authorized to do business in this state, any eligible educational institution approved pursuant to division (B)(2) of this section that applies for and receives formal approval as an eligible lender by the commission pursuant to the rules of the commission as they pertain to that institution, any pension fund eligible under the "Higher Education Amendments of 1968," 82 Stat. 1026, 20 U.S.C. 1085 , as amended, or any secondary market operation established pursuant to the "Education Amendments of 1972," 86 Stat. 261, 20 U.S.C. 1071 , as amended, or under the laws of any state.
(See "Appendix 1" for the procedures a lender must follow to become approved by the Ohio student loan commission to participate in the guaranteed loan program. See "Appendix 12" for an overview of the secondary market programs offered by Sallie Mae.)
129 v 1538 (Eff 10-27-61); 130 v 784 (Eff 1-23-63); 131 v 849 (Eff 8-24-65); 132 v S 245 (Eff 7-2-67); 133 v S 39 (Eff 5-21-69); 135 v H 207 (Eff 6-1-73); 136 v S 453 (Eff 5-20-76); 137 v H 152. Eff 5-20-77.
(Section 3351.07.1) Section 3351.071 (Procedures for locating defaulted or delinquent borrowers.)
The Ohio student loan commission may use the following procedures to locate borrowers who have defaulted or become delinquent in making payments on loans obtained pursuant to this chapter:
(A) The commission may furnish the name and social security number of any delinquent or defaulted borrower to the public employees retirement board, state teachers retirement board, school employees retirement board, board of trustees of the police and firemen's disability and pension fund, and state highway patrol retirement board. Each board shall return to the commission the most recent address of any member of the public employees retirement system, state teachers retirement system, school employees retirement system, police and firemen's disability and pension fund, and state highway patrol retirement system.
(B) The commission may furnish the name and social security number of any delinquent or defaulted borrower to the tax commissioner. The commissioner shall return to the commission the address of any such borrower as shown on the most recent return filed by such person under section 5747.08 of the Revised Code.
(C) The commission may furnish the name and social security number of any delinquent or defaulted borrower to the department of public welfare and the bureau of motor vehicles. Except as prohibited by federal law or regulation, the department and the bureau shall return to the commission the address of any such borrower that appears in their most recent records.
(D) The commission may furnish the name and social security number of any delinquent or defaulted borrower to the secretary of the department of education and to any private employer in order to obtain the address of or other information concerning such borrower. A private employer is not required to furnish information requested under this division.
(E) The commission shall reimburse a retirement board, the tax commissioner, the department of public welfare, or the bureau of motor vehicles for costs associated with services performed pursuant to divisions (A) to (C) of this section.
(See "Appendices 8, 9, 10, and 11" for explanations of the responsibilities of the lender and the Ohio student loan commission in handling delinquent and defaulted guaranteed loans.)
138 v H 363. Eff. 6-7-79.
Section 3351.08 Student loan guarantees .
The Ohio student loan commission may guarantee loans made to students of eligible institutions and their parents subject to the following conditions and limitations:
(A) A person may be eligible for a loan guaranteed by the commission if he meets the requirements of division (A)(1) or (2) of this section:
(1)(a) He is a resident or a qualified nonresident.
(See "Appendix 1" to learn the current residency requirements for loans guaranteed by the Ohio student loan commission.)
(b) He is determined by the commission, in accordance with the academic status established by the commission, to be eligible for a guaranteed loan to pursue a course of study at an eligible institution.
(See "Appendix 1" to learn the current academic status requirements for guaranteed loans.)
(c) He is enrolled or has been accepted for enrollment at an eligible institution of his choice that is approved by the commission.
(See "Appendix 1" to find out the eligibility requirements for educational institutions participating in the guaranteed loan program.)
(2) He is the parent of a person who meets the requirements of division (A)(1) of this section.
(See "Appendix 13" for information about the Ohio student loan commission's guaranteed loan program for parents.)
(B) The commission shall hold and maintain on deposit with the treasurer of state funds or negotiable securities having a market value of not less than six and two-thirds per cent of the aggregate amount of unpaid principal and interest of all notes guaranteed by the commission, exclusive of such portion thereof as may have been reinsured or guaranteed by the United States or an agency, department, or instrumentality thereof.
(C) No loan to any student shall be guaranteed to an amount in excess of the limits authorized by the "Higher Education Act of 1965," 79 Stat. 1236, 20 U.S.C. 1071 , as amended. No loan to any parent shall be guaranteed to an amount in excess of the limits authorized by the "Education Amendments of 1980," 94 Stat. 1424, 20 U.S.C. 1078-2 , as amended.
(See "Appendices 1 and 13" to find out the current authorized loan maximums.)
(D) The guarantee shall be for one hundred per cent of the unpaid principal and interest on each loan.
(E) The interest charged on any guaranteed loan not including the loan insurance premium required by division (F) of this section shall not exceed the interest rate permitted by the "Higher Education Act of 1965," 79 Stat. 1236, 20 U.S.C. 1071 or by the "Act of August 3, 1968," 82 Stat. 634, 20 U.S.C. 1071 , or the "Education Amendments of 1980," 94 Stat. 1415, 20 U.S.C. 1071 , as amended.
(See "Appendices 1, 7, and 13" to find out the current interest rates as well as the billing procedures for federal interest benefits and special allowance.)
(F) Each guaranteed loan may carry a special loan insurance premium not to exceed the amount permitted by the "Higher Education Act of 1965," 79 Stat. 1257, 20 U.S.C. 1078 , as amended, which shall be paid to the commission by the borrower and deposited to an account in the custody of the treasurer of state. Money in the account may be used only to maintain the funds available to the commission to guarantee loans and to make payments to the student loan commission operating expense account in the state special revenue fund created by section 3351.131 of the Revised Code.
(See "Appendices 1, 3, 4, and 13" for the procedures lenders should follow to collect and pay the loan insurance premium.)
(G) In addition to the limitations in division (C) of this section, the amount of loans made to a student and his parent combined for an academic year under sections 3351.14 of the Revised Code shall not exceed the student's cost of attendance less his estimated financial assistance determined in accordance with the "Education Amendments of 1980," 94 Stat. 1424, 20 U.S.C. 1078-2 , as amended.
(See "Appendix 1" for the eligibility requirements which must be met to obtain a guaranteed loan.)
Guarantees made in violation of the conditions and limitations set forth in this section are not invalid by reason of such violation.
129 v 1538 (Eff 10-27-61); 130 v 787 (Eff 1-23-63); 130 v 786 (Eff 9-2-63); 131 v 851 (Eff 8-24-65); 132 v S 245 (Eff 7-2-67); 133 v S 39 (Eff 5-21-69); 135 v H 207 (Eff 6-1-73); 136 v S453 (Eff 5-20-76); 137 v H 152 (Eff 5-20-77); 138 v H 363 (Eff 6-7-79); 138 v H 204. Eff 7-30-79.
Section 3351.09 Age does not bar loan .
Any person otherwise qualifying for a loan guaranteed by the Ohio student loan commission 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, notwithstanding the provisions of section 3109.01 of the Revised Code, 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.
129 v 1538 (Eff 10-27-61); 132 v S 245 (Eff 7-2-67); 135 v S 1. Eff 1-1-74.
Section 3351.10 Tax Exemption
All property and income of the Ohio student loan commission used exclusively for the purposes of sections 3351.05 to 3351.14 , inclusive, of the Revised Code shall be exempt from all taxes and assessments.
129 v 1538 (1541), Section 1 (Eff 10-27-61); 132 v S245, Section 1 Eff 7-2-67.
Section 3351.131 (Operating expense account.)
There is hereby created the student loan commission operating expense account in the state special revenue fund. The account shall consist of money paid into it by the Ohio student loan commission under division (F) of section 3351.08 and section 3351.13 of the Revised Code, and money in the account shall be used solely to pay the expenses of the commission. All expenses of the commission shall be paid from the special account.
(See "Appendices 1, 3, 4 and 13" for explanations of the loan insurance premium and when and how the lender should collect and pay it.)
138 v H 204. Eff 7-30-79.
Section 3351.14 Contracts subject to federal civil rights acts .
The "Civil Rights Act of 1964," 78 Stat. 241, 42 U.S.C. 2000d , applies to all contracts made with institutions and approved lenders for the guaranteeing of loans.
132 v S 245, Section 1. Eff 7-2-67.
Appendices B through O
Appendices 15 and 16
For Appendices -- To obtain the appendix, table, image, etc. please call LSC's ERF Helpdesk at 614-387-2078 or send an email to erfhelpdesk@lsc.state.oh.us