ORS 348.640

(1) The Executive Director of the Office of Student Access and Completion shall provide funding to lenders pursuant to contracts which shall provide, among other things, the terms and conditions under which private sector lenders, using funding made available by the executive director, shall originate, service and administer loans pursuant to the alternative student loan program. Lenders shall receive and process loan applications from borrowers, perform credit analysis, approve or deny loan requests, and for loans that are approved, originate, document, administer and service the loans. The executive director shall make provision for payment to lenders of the reasonable costs of origination, servicing and administration of loans. Payment may be made directly by borrowers or by the executive director, as the executive director may determine.

(2) Loans shall be structured in such a manner that anticipated payments of principal and interest shall permit timely repayment of the revenue bonds to be issued by the State of Oregon pursuant to ORS 348.570 and 348.625 to 348.695. As a condition of participation in the alternative student loan program by private sector lenders, the executive director shall procure from each such lender a guarantee or letter of credit ensuring that the executive director shall receive full and timely repayment of principal of and interest due on loans originated, serviced and administered by the lender. The executive director shall provide by contract for payment by the executive director or by borrowers, as the executive director may determine, of the reasonable costs of such guarantees or letters of credit. It is the intention of ORS 348.570 and 348.625 to 348.695 that participating private sector lenders, not the executive director, shall bear the entire risk of loss, nontimely repayment or nonpayment of alternative student loan program loans.