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Form a Business

LOAN CORPORATIONS

RSA tit. XV, ch. 195-E
in effect

RSA 195-E:1 Declaration of Policy.

195-E:1. Declaration of Policy. It is declared to be the policy of this state that for the benefit of the people of the state, the increase of their commerce, welfare, and prosperity and the improvement of their health and living conditions, it is essential that students attending higher educational institutions be given the fullest opportunity to learn and develop their intellectual and mental capacities. It is recognized that the financial costs to obtain an education beyond the high school level are often burdensome or prohibitive, and it is essential that qualified students or their parents be provided with low cost financial assistance in order that the students may attend such schools and to reduce the total amount of loan payments following graduation. In order to achieve this policy, it is essential that state residents be provided with an appropriate source of financing their postsecondary educations and that educational institutions wherever situated be provided with appropriate additional means to assist qualified students or their parents financially so that the students might achieve the required levels of learning and development of their intellectual and mental capacities. In order to assure the continued viability of existing loan programs whereby educational loans are made available to qualified students or their parents, it is necessary and desirable to provide an efficient, stable secondary market to which such loans may be sold, transferred, or pledged in exchange for funds with which the original lender will be enabled to continue or increase participation in such loan programs. Therefore, the general court has conferred certain powers on educational institutions, on loan corporations, on the New Hampshire higher education assistance foundation, on the New Hampshire business finance authority and on the New Hampshire business finance authority to assure the successful origination, distribution and collection of loans so as to accomplish the purposes of this chapter, all to the public benefit and good. It is further declared that the exercise by the educational institutions, the loan corporations, the New Hampshire business finance authority, the New Hampshire higher education assistance foundation and the New Hampshire business finance authority of the powers conferred under this chapter will constitute the performance of an essential governmental function. Source. 1981, 229:1. 1983, 112:1. 1986, 23:1. 1994, 86:3. 1999, 253:15. 2005, 120:1, eff. Aug. 14, 2005. 2024, 150:1, eff. Sept. 1, 2024. 2026, 335:18, eff. July 1, 2026.

RSA 195-E:2 Definitions.

195-E:2. Definitions. In this chapter: I. "Authority" means the New Hampshire business finance authority, established under RSA 162-A:3. II. "Loan corporation" means any corporation established under RSA 195-E:3. A loan corporation may make student loans to students of more than one qualified educational institution, or to the parents of those students. III. "Educational institution" means any institution for postsecondary or higher education as defined in RSA 195-D:3, V, and in addition means any institution for postsecondary training and education or which awards an undergraduate or advanced degree, whether located within or without the state of New Hampshire. IV. "Qualified educational institution" means any educational institution whose principal campus or principal facilities are located within the state of New Hampshire. V. "Eligible student" means any student attending a qualified educational institution and any New Hampshire resident attending an educational institution. VI. "Foundation" means the New Hampshire higher education assistance foundation or any voluntary nonprofit corporation organized under RSA 292 by 5 members of the board of trustees of the New Hampshire higher education assistance foundation who have been duly authorized so to do by a 2/3 vote of the said board of trustees. VII. "Parent" means mother, father or adoptive parent and shall include any person with the duty and authority to make important decisions in matters having a permanent effect on the life and development of the student and to be concerned about the general welfare of the student. VIII. "Business finance authority" means the New Hampshire business finance authority established pursuant to RSA 162-I. Source. 1981, 229:1. 1983, 112:2. 1986, 23:2, 3. 1999, 253:16, eff. July 9, 1999. 2024, 150:2, eff. Sept. 1, 2024. 2026, 335:17, eff. July 1, 2026.

RSA 195-E:3 Loan Corporation Authorized.

195-E:3. Loan Corporation Authorized. I. Any qualified educational institution may form a voluntary nonprofit corporation in accordance with this chapter for the purposes specified in this chapter. A qualified educational institution may form a loan corporation either: (a) By organizing a new voluntary nonprofit corporation as provided in this chapter; or (b) By amending the articles of agreement and bylaws of an existing voluntary nonprofit corporation organized under RSA 292 to conform the articles and bylaws to the requirements of RSA 195-E:5-9; or (c) By adopting the articles of agreement and bylaws of an existing corporation validly organized by any other entity pursuant to subparagraphs (a) or (b); or (d) By merging any voluntary nonprofit corporation organized under RSA 292 with any existing loan corporation validly organized by any other entity pursuant to subparagraphs (a) or (b). II. The provisions of RSA 195-E:3-9 shall not apply to the foundation. Source. 1981, 229:1. 1983, 112:3, eff. May 25, 1983.

RSA 195-E:4 Incorporators.

195-E:4. Incorporators. I. A qualified educational institution may, by a 2/3 vote of its board of trustees or other governing body, agree to form a loan corporation for the purpose of providing low cost financial assistance to qualified students enrolled at the institution or to their parents. The articles of agreement, articles of amendment, articles of merger, or agreement adopting the articles of agreement and bylaws of any existing loan corporation shall be signed by 5 members of the board of trustees or other governing body who are so authorized in writing by the board of trustees or other body. If a loan corporation is formed pursuant to RSA 195-E:3, I(a) or (b), the 5 members of the board of trustees or other governing body shall act as the incorporators of the loan corporation. II. The incorporators shall be deemed to be acting in their capacities as members of and on behalf of the board of trustees or other governing body. Source. 1981, 229:1. 1983, 112:4. 1986, 23:4, eff. June 17, 1986.

RSA 195-E:5 Articles of Agreement.

195-E:5. Articles of Agreement. The articles of agreement of a loan corporation shall contain the following: I. The name of the loan corporation, which shall clearly identify the qualified educational institution or institutions involved and shall contain the words "Loan Corporation"; II. The object for which the loan corporation is established; III. The provisions for disposition of the corporate assets in the event of dissolution of the loan corporation; IV. The address at which the business of the loan corporation is to be carried on; V. The amount of capital stock, if any, or the number of shares, if any; VI. The signature and post office address of each of the incorporators; VII. A true copy of the vote of the educational institution agreeing to form a loan corporation; and VIII. A true copy of the authorization for each incorporator to sign the articles of incorporation. Source. 1981, 229:1. 1983, 112:5, eff. May 25, 1983.

RSA 195-E:7 Recording.

195-E:7. Recording. The secretary of state shall record the articles of agreement in his office. When so recorded the signers shall be a loan corporation. The loan corporation and its officers and members shall have all the rights and powers and shall be subject to all the duties and liabilities as those of voluntary corporations established under RSA 292; provided that these rights, powers, duties or liabilities may be limited or expanded by this chapter. Source. 1981, 229:1, eff. Aug. 10, 1981.

RSA 195-E:8 Fees for Recording.

195-E:8. Fees for Recording. The fee for recording the articles of agreement and any record of amendment in the office of the secretary of state shall be the same as the fees which are required for voluntary nonprofit corporations under RSA 292:5. Source. 1981, 229:1, eff. Aug. 10, 1981.

RSA 195-E:10 Issuance of Bonds.

195-E:10. Issuance of Bonds. I. The authority is empowered to issue bonds and other obligations for the purposes specified in this chapter in accordance with this section, and the business finance authority is empowered to issue bonds and other obligations for the purposes specified in this chapter and in accordance with this section. II. [Repealed.] III. No bonds or other obligations shall be issued except after the governor and council, or their designee, after hearing, shall have found that: (a) The origination or acquisition of low cost loans by a loan corporation, a qualified educational institution or the foundation to qualified students or their parents will assist the students in attending their educational institutions and will lower the cost to the students of financing their educations; (b) Adequate provision has been or will be made for the payment of the principal of, or interest on, any obligations issued by the authority to finance such loan programs. (c) Adequate provision has been made for the payment of the reasonable expenses of administration of the loan programs as are necessitated by the programs. (d) The proposed procedures for redistribution of the bond proceeds, collection of student payments, interest charges and any other matters concerning the administration of the loan program are in conformance with law. IV. The authority and the business finance authority, to further their respective student loan programs, each shall have the power to: (a) Determine the nature of student loan programs for eligible students or their parents for which the authority or the business finance authority, as applicable, will issue bonds; (b) Enter into contracts for any or all student loan program purposes; (c) Enter into contracts for the administration or servicing of student loans; (d) Designate the foundation, a particular qualified educational institution or institutions, or loan corporation or corporations, as its agent for accomplishing its purposes; (e) Make loans with proceeds of the sale of its bonds to the foundation, any qualified educational institution, or any loan corporation in accordance with an agreement between the authority or the business finance authority, as applicable, and such other party or parties; provided that the proceeds of any loan made to the foundation shall be used by the foundation to purchase, originate or make loans to any eligible student or to the parents of any eligible student, but the proceeds of any loan made to a qualified educational institution or to a loan corporation shall be used by such qualified educational institution or such loan corporation to purchase, originate or make loans only to eligible students attending qualified educational institutions, or to the parents of these students; (f) Receive and accept from any public agency or any other source loans, grants, guarantees or insurance with respect to student loans and the student loan programs; (g) Establish guidelines governing the actions of the foundation, loan corporations, and qualified educational institutions in participating in the authority's or the business finance authority's student loan program, as applicable; and (h) Exercise all powers incidental and necessary for the performance of the powers listed in this paragraph. Source. 1981, 229:1. 1983, 112:6, 7. 1986, 23:5-7. 1994, 86:4, 6, eff. July 5, 1994. 2024, 150:3, eff. Sept. 1, 2024.

RSA 195-E:11 Rights of the Authority, Business Finance Authority, Foundation, Qualified Educational Institution and Loan Corporations.

195-E:11. Rights of the Authority, Business Finance Authority, Foundation, Qualified Educational Institution and Loan Corporations. I. In issuing bonds for a student loan program, the authority, the foundation, any qualified educational institution and any loan corporations created under this chapter shall have all the power and authority and be subject to all of the rights, liabilities and responsibilities as provided in RSA 195-D, insofar as these provisions do not conflict with this chapter. Nothing in this chapter shall otherwise limit any other bond issuance or other powers of the authority set forth in RSA 195-D. II. In issuing bonds for a student loan program, the business finance authority shall have all the power and authority and be subject to all of the rights, liabilities and responsibilities as provided in RSA 162-I, insofar as these provisions do not conflict with this chapter. Nothing in this chapter shall otherwise limit any other bond issuance or other powers of the business finance authority set forth in RSA 162-I. Source. 1981, 229:1. 1983, 112:8, eff. May 25, 1983. 2024, 150:4, eff. Sept. 1, 2024.

RSA 195-E:12 Credit of State Not Pledged.

195-E:12. Credit of State Not Pledged. I. Revenue bonds issued under this chapter do not constitute a debt or liability of the state or of any municipality or political subdivision of the state or a pledge of the faith and credit of the state or of any municipality or political subdivision. II. These revenue bonds are payable solely from the revenues or other funds derived from student loans, either directly or indirectly provided by this chapter for their payment. All such revenue bonds shall contain on the face of the bond a statement to the effect that neither the state nor the authority nor the business finance authority, as applicable, is obligated to pay the bond or the interest on the bond except from revenues or other funds derived from student loans, either directly or indirectly provided by this chapter, and that neither the faith and credit nor the taxing power of the state or of any municipality or political subdivision of the state is pledged to the payment of the principal of or the interest on the bonds. The issuance of revenue bonds under this chapter shall not directly or indirectly or contingently obligate the state or any municipality or political subdivision of the state to levy or to pledge any form of taxation whatever for the bonds or to make any appropriation for their payment. Source. 1981, 229:1, eff. Aug. 10, 1981. 2024, 150:5, eff. Sept. 1, 2024.

RSA 195-E:13 Source of Payment of Expenses.

195-E:13. Source of Payment of Expenses. All reasonable expenses incurred in carrying out the provisions of this chapter shall be payable by the foundation, the respective qualified educational institutions, or the respective loan corporations, as the case may be, and no liability or obligation shall be incurred by the authority or the business finance authority, as applicable, or any other state agency. Provided however, that the authority and or the business finance authority, may waive fees and incur issuance expenses on behalf of the foundation if approved by board of directors of the business finance authority, or authority, as applicable. Source. 1981, 229:1. 1983, 112:9, eff. May 25, 1983. 2024, 150:6, eff. Sept. 1, 2024.

RSA 195-E:14 Administration of Loans; No Discrimination.

195-E:14. Administration of Loans; No Discrimination. I. The foundation, a qualified educational institution and a loan corporation shall have the full power and authority and be subject to all rights, responsibilities and liabilities for the administration of a loan program and for the distribution and collection of loans to qualified students or their parents, including the determination of who is eligible to receive loans, the amounts of the loans, repayment schedules and interest rates to be charged; provided that the terms are in accordance with law and do not discriminate against any person on account of race, creed, national origin, sex, gender identity, sexual orientation, or age. In the case of student loans made to eligible students or the parents of such students who attend educational institutions that are not qualified educational institutions, the foundation shall have primary responsibility for the administration of such portion of the loan program and the servicing of such loans; provided, however, that this sentence shall not prohibit the foundation from contracting with another entity for assistance in such administration and servicing as agent for the foundation. II. The foundation, any qualified educational institution, and any loan corporation are authorized to contract with other service corporations to provide bookkeeping, data processing, loan servicing, loan administration and related fiscal services required for the conduct of their business. Source. 1981, 229:1. 1983, 112:10. 1986, 23:8, eff. June 17, 1986. 2019, 332:14, eff. Oct. 15, 2019.

RSA 195-E:15 Exemption From Taxation.

195-E:15. Exemption From Taxation. The exercise of the powers granted by this chapter will be in all respects for the benefit of the people of the state, for the increase of their commerce, welfare and prosperity, and for the improvement of their health and living conditions, and will constitute the performance of an essential governmental function. Neither the authority nor the business finance authority, as applicable, nor the loan corporations shall be required to pay any taxes or assessment upon the activities of the authority or the business finance authority, as applicable, or the loan corporations or their agents in the administration and operation of loan programs pursuant to this chapter. Source. 1981, 229:1, eff. Aug. 10, 1981. 2024, 150:7, eff. Sept. 1, 2024.

RSA 195-E:15-a Designation of Eligible Lender for Federally Guaranteed Student Loans.

195-E:15-a. Designation of Eligible Lender for Federally Guaranteed Student Loans. New Hampshire Higher Education Loan Corporation, a New Hampshire voluntary, nonprofit corporation, is hereby designated as "eligible lender" within the meaning of 20 U.S.C. section 1085(d)(1)(D), to enable it to provide a secondary market for federally guaranteed student loans. Furthermore, New Hampshire Higher Education Loan Corporation is requested to acquire student loan notes pursuant to and in accordance with the provisions of 26 U.S.C. section 150(d), as it may be amended from time to time. Source. 1993, 335:19. 1994, 86:5, eff. July 5, 1994.

RSA 195-E:16 Severability.

195-E:16. Severability. If any provision of this chapter or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the chapter which can be given effect without the invalid provisions or application, and to this end the provisions of this chapter are severable. Source. 1981, 229:1, eff. Aug. 10, 1981.
Source: New Hampshire General Court (gc.nh.gov)URL: https://gc.nh.gov/rsa/html/NHTOC/NHTOC-XV-195-E.htmFetched: 10/20/2026

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