Sec. 7. (a) The authority may make loans to any nonprofit college or university for the cost of an educational facility project, including the establishment of liability or other loss insurance reserves or the contribution of those reserves to a risk retention group for the purpose of providing insurance coverage against liability claims or other losses in accordance with an agreement between the authority and the nonprofit college or university.
(b) A loan authorized under this section may not exceed the total cost of the educational facility project as determined by the nonprofit college or university and approved by the authority.