85-9,139.02. Participants under federal loan programs; default cost fee; reimbursement; procedure; administrative fee.

(1)(a) Each postsecondary educational institution in the State of Nebraska that participates in the Federal Family Education Loan Program or the Federal Direct Student Loan Program, under Title IV of the federal Higher Education Act of 1965, as amended, shall reimburse the state for its proportionate share of any default cost fee charged to the state by the United States Secretary of Education under the federal act.

(b) Each postsecondary educational institution which (i) is currently in operation, (ii) participated in the Federal Family Education Loan Program or the Federal Direct Student Loan Program, and (iii) for the relevant time period had a cohort default rate equal to or in excess of the percentage which directly triggered the relevant default cost fee charged to the state shall be required to remit an excess default rate fee in addition to its proportionate share of the relevant default cost fee charged to the state. Such excess default rate fee shall be two hundred percent of the institution's proportionate share of the relevant default cost fee.

(c) The balance of the relevant default cost fee charged to the state and not assessed pursuant to subdivision (b) of this subsection shall be assessed to postsecondary educational institutions which are currently in operation and which participated in the Federal Family Education Loan Program or the Federal Direct Student Loan Program for the relevant time period, excluding those institutions subject to assessment pursuant to such subdivision.

(d) Any postsecondary educational institution subject to assessment pursuant to subdivision (c) of this subsection shall not be assessed an amount exceeding the respective institution's proportionate share of the relevant default cost fee charged to the state. Such proportionate share means an amount which, in proportion to the total of the relevant default cost fee charged to the state by the United States Secretary of Education, is equal to the proportion of Federal Family Education Loan Program and Federal Direct Student Loan Program loan default dollar volume attributable to the respective institution to the total of Federal Family Education Loan Program and Federal Direct Student Loan Program loan default dollar volume for all institutions which participated in the Federal Family Education Loan Program and the Federal Direct Student Loan Program for the relevant time period.

(2) The Coordinating Commission for Postsecondary Education shall adopt and promulgate rules and regulations establishing a fee structure for determining the amount of the reimbursement for each institution as provided in subsection (1) of this section.

(3) Any institution with a valid authorization to operate pursuant to the Private Postsecondary Career School Act which has a cohort default rate which triggers state liability pursuant to section 428(n) of the federal Higher Education Act of 1965, as amended, has violated the Private Postsecondary Career School Act. A hearing to determine whether the institution should have its authorization to operate or its agent's permit revoked shall be held in accordance with section 85-1634.

(4) Unless prohibited by federal law, the commission may charge and collect an administrative fee, not to exceed ten percent of the proportionate share of the relevant default cost fee, from any Nebraska postsecondary educational institution to cover the administrative expenses incurred by the commission in carrying out this section.

(5) Notwithstanding any other provision of law to the contrary, the rules and regulations may provide that a postsecondary educational institution may be exempt from the fees or the commission may adjust the fees of an institution if the institution demonstrates that exceptional mitigating circumstances contributed to its high cohort default rate.

Source:Laws 1996, LB 29, ยง 1.

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