54-44-15. Reimbursement from institutions of higher education for state's share of default costs

54-44-15. Reimbursement from institutions of higher education for state's share of

default costs.

1. If the state is required to pay a fee to the United States secretary of education to offset

the secretary's default costs relating to an institution of higher education located in

North Dakota with a cohort default rate exceeding twenty percent for the most recent

fiscal year for which rates are calculated, the director of the office of management and

budget, or the director's designee, shall:

a. Provide notice by certified mail to each institution of higher education in this state

that participates in the federal family education loan program or the federal direct

student loan program, under title IV of the Higher Education Act of 1965

[Pub. L. 89-329; 79 Stat. 1245; 20 U.S.C. 1070 et seq.] of any assessment

necessary to reimburse the state for the institution's proportionate share of any

fee charged to the state by the secretary of education under the Higher Education

Act of 1965 [Pub. L. 89-329; 79 Stat. 1230; 20 U.S.C. 1001 et seq.].

b. The amount of reimbursement due from any institution must be based upon a fee

structure approved by the United States secretary of education which has been

provided to the director of the office of management and budget by the student

loan guarantee agency. The student loan guarantee agency shall submit the fee

structure to the director of the office of management and budget prior to

implementation. The fee charged must be determined based upon the fee

structure established by the student loan guarantee agency and must be based

on the institution's cohort default rate and the state's risk of loss as provided by

section 4201 of the Omnibus Budget Reconciliation Act of 1993 [Pub. L. 103-66;

107 Stat. 370; 20 U.S.C. 1078(n)].

2. The student loan guarantee agency may adopt rules to implement this section. The

rules may provide for a process and standards to exempt an institution from

reimbursement or allow an adjustment of the required reimbursement if the institution

demonstrates that exceptional mitigating circumstances contributed to the cohort

default rate. Prior to implementing any exemption process and standards, the student

loan guarantee agency shall obtain comments on the exemption process and

standards from the director of the office of management and budget. Chapter 28-32

does not apply to rules adopted under this section.

3. If any institution fails to reimburse the office of management and budget within sixty

days of receiving an assessment under subsection 1, the amount of the assessment

plus interest on the assessment at the rate of nine percent from the date of receipt of

the assessment and reasonable collection costs, including attorney's fees, constitutes

a lien against all assets of the institution. The lien has priority over all other liens and

encumbrances acquired after the date the institution was notified of the required

reimbursement by the office of management and budget. The state may enforce any

lien created under this subsection against real property in the manner provided in

chapter 35-22, against personal property in the manner provided in chapter 32-20, or

against the owner of any institution by garnishment in the manner provided in chapter

32-09.1, except that the restrictions of subsection 1 of section 32-09.1-03 do not apply

to a garnishment commenced to collect an assessment established under this section.