Ind. Code ch. 21-16-5

in effect

Ind. Code § 21-16-5-1 Secondary market for guaranteed student loans; establishment of corporation

Sec. 1. The governor may request, on behalf of the state, the establishment of a private nonprofit corporation, with a bipartisan board of directors that meets the requirements of section 1.5 of this chapter, to serve as a secondary market for education loans. If a private nonprofit corporation is established, the governor may designate the corporation to: (1) serve as the secondary market for education loans; and (2) act as an eligible lender under a federal program. The corporation must satisfy the conditions imposed by sections 3 through 10 of this chapter, and its articles of incorporation must provide that upon the corporation's liquidation, any surplus funds must be paid to the state. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-2(a).] As added by P.L.2-2007, SEC.257. Amended by P.L.224-2023, SEC.6.

Ind. Code § 21-16-5-1.5 Appointment of board of directors; quorum; meetings; reimbursement of director expenses

Sec. 1.5. (a) The board of directors of the nonprofit corporation is composed of nine (9) members. The members must be appointed as follows: (1) Five (5) members appointed by the governor. (2) One (1) member appointed by the president pro tempore of the senate. (3) One (1) member appointed by the minority leader of the senate. (4) One (1) member appointed by the speaker of the house of representatives. (5) One (1) member appointed by the minority leader of the house of representatives. (b) None of the members appointed to the board may be members of the general assembly. Not more than five (5) members may belong to the same political party. Members serve at the pleasure of the appointing authority. (c) The board shall elect from among its members a chair and vice chair. (d) Five (5) members constitute a quorum for the transaction of business. An affirmative vote of at least five (5) members is necessary for the board to take action. Members of the board may not vote by proxy. (e) Meetings of the board shall be held at the call of the chair or whenever any five (5) voting members request a meeting. The members shall meet at least once every three (3) months to attend to the business of the corporation. (f) Each member of the board who is not a state employee is entitled to: (1) a salary per diem for attending meetings equal to the per diem provided by law for members of the general assembly; and (2) reimbursement for mileage and traveling expenses as provided under IC 4-13-1-4, and other expenses actually incurred in connection with the member's duties as provided in the state policies and procedures established by the Indiana department of administration and approved by the budget agency. (g) Each member of the board who is a state employee is entitled to reimbursement for traveling expenses as provided under IC 4-13-1-4 and other expenses actually incurred in connection with the member's duties as provided in the state policies and procedures established by the Indiana department of administration and approved by the budget agency. (h) The corporation shall pay expenses incurred under subsections (f) and (g) from the revenues of the corporation. (i) The corporation shall provide staff support to the board. As added by P.L.224-2023, SEC.7. Amended by P.L.42-2024, SEC.143; P.L.1-2025, SEC.201.

Ind. Code § 21-16-5-1.6 Board of directors; terms; vacancies

Sec. 1.6. (a) The term of a member of the board of directors is four (4) years. All terms begin on January 1. Each member holds office for the term of appointment and continues to serve after expiration of the appointment until a successor is appointed and qualified. A member is eligible for reappointment. (b) A vacancy in the membership of the board under this chapter shall be filled by the appointing authority for the unexpired term in the same manner as the original appointment. (c) The appointment of members in accordance with section 1.5 of this chapter must be made not later than December 31, 2023. Notwithstanding subsection (a), the terms of the members shall be staggered as follows: (1) Three (3) members appointed under section 1.5(a)(1) of this chapter shall serve a two (2) year term. (2) One (1) member appointed under section 1.5(a)(1) of this chapter, the member appointed under section 1.5(a)(3) of this chapter, and the member appointed under section 1.5(a)(5) of this chapter shall serve a three (3) year term. (3) One (1) member appointed under section 1.5(a)(1) of this chapter, the member appointed under section 1.5(a)(2) of this chapter, and the member appointed under section 1.5(a)(4) of this chapter shall serve a four (4) year term. All subsequent terms of members shall be for four (4) year terms. This subsection expires July 1, 2028. As added by P.L.224-2023, SEC.8. Amended by P.L.9-2024, SEC.427.

Ind. Code § 21-16-5-2 Public hearing; notice

Sec. 2. Before designation by the governor under section 1 of this chapter, the corporation shall conduct a public hearing to give all interested parties an opportunity to review and comment upon the bylaws and method of operation of the corporation. Notice of this hearing must be given at least fourteen (14) days before the hearing in the manner set out in IC 5-14-1.5-5(b). [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-2(b).] As added by P.L.2-2007, SEC.257.

Ind. Code § 21-16-5-3 Powers of corporation; report to the budget committee

Sec. 3. (a) The corporation must, under its articles of incorporation, limit its powers to those described in subsection (b). (b) The corporation may: (1) borrow money, only after consulting with the Indiana finance authority not less than three (3) months prior to the date the corporation begins the process of borrowing money; (2) purchase, sell, and retire education loans, if the loans are not in default status; (3) provide incentive services and payments, including the payment of premiums for the purchase of education loans and the payment of an origination fee, to assist lending institutions that provide education loans; (4) loan funds to lending institutions if: (A) the lending institution agrees to use the funds to originate education loans of an amount equal to the loan made by the corporation over a period agreeable to the corporation and to grant the corporation the right of first refusal to purchase those education loans; (B) the lending institution agrees to use education loans or government securities as collateral for the loan; and (C) the corporation has, in response to its written request, received written authorization from the governor to exercise the power described in this subdivision; (5) make direct loans to or for the benefit of an education loan borrower or to consolidate all or a part of the borrower's outstanding education loans into one (1) loan; (6) operate a secondary market for postsecondary education finance instruments, including tuition certificates and education savings certificates sold by or offered through lending institutions or postsecondary educational institutions; (7) provide financial literacy and educational tools to students, their families, and Indiana colleges and universities with respect to responsibly financing the costs of higher education; and (8) do all other things that are necessary or incidental to performing the functions listed in subdivisions (1) through (7). (c) The corporation, and any entity doing business as the corporation, including: (1) the Indiana Secondary Market for Educational Loans, Inc.; (2) INvestED; or (3) any other entity doing business as the corporation; shall, at least thirty (30) days prior to the issuance or placement of any bond, note, or other instrument by the corporation under this chapter, report to the budget committee the estimated amount of the bonds. [Pre-2007 Higher Education Recodification Citations: 20-12-21.2-3(b); 20-12-21.2-3(a).] As added by P.L.2-2007, SEC.257. Amended by P.L.132-2013, SEC.4; P.L.224-2023, SEC.9.

Ind. Code § 21-16-5-4 Annual report; annual public hearing

Sec. 4. The corporation shall submit an annual report to the governor, which must include detailed information on the structure, operation, and financial status of the corporation. The corporation shall conduct an annual public hearing to receive comment from interested parties regarding the report. Notice of the hearing must be given at least fourteen (14) days before the hearing in accordance with IC 5-14-1.5-5(b). [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-3(c).] As added by P.L.2-2007, SEC.257.

Ind. Code § 21-16-5-5 Amending articles of incorporation and bylaws

Sec. 5. (a) The corporation shall provide in its articles of incorporation that changes in its bylaws are subject to the approval of the governor. (b) The corporation shall amend its articles of incorporation and bylaws to conform to the requirements of this chapter. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-3(d).] As added by P.L.2-2007, SEC.257. Amended by P.L.224-2023, SEC.10.

Ind. Code § 21-16-5-6 Audit

Sec. 6. The corporation is subject to audit by the state board of accounts. The corporation shall bear the full costs of this audit. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-3(e).] As added by P.L.2-2007, SEC.257. Amended by P.L.181-2015, SEC.43.

Ind. Code § 21-16-5-7 Board of directors; executive session

Sec. 7. The board of directors of the corporation may meet in executive session to do any of the following: (1) Discuss negotiating strategies with respect to financing arrangements or proposals, in addition to those items listed in IC 5-14-1.5-6.1. (2) Discuss, prepare bids for, or respond to proposals or arrangements for raising capital or acquiring assets. (3) Discuss and prepare competitive marketing strategies. (4) Engage in strategic planning. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-3(f).] As added by P.L.2-2007, SEC.257. Amended by P.L.132-2013, SEC.5.

Ind. Code § 21-16-5-8 Repealed

[Pre-2007 Higher Education Recodification Citation: 20-12-21.2-3(g).] As added by P.L.2-2007, SEC.257. Repealed by P.L.132-2013, SEC.6.

Ind. Code § 21-16-5-9 Benefits of guaranty

Sec. 9. The corporation and its transferees and pledgees, so long as they are eligible lenders under a federal program, are entitled to the benefits of any guaranty given by the commission under IC 21-16-4 or any successor to the commission with respect to education loans owned or held by the corporation, its transferees, or its pledgees, as long as the corporation, its transferees, or its pledgees are eligible lenders or holders of education loans under the rules adopted under IC 4-22-2 by the commission or a successor to the commission. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-3(h).] As added by P.L.2-2007, SEC.257.

Ind. Code § 21-16-5-10 Grants; approval by the budget agency

Sec. 10. Notwithstanding any other law, the corporation may not make grants for any purpose without approval by the budget agency and the governor after review by the budget committee. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-3(i).] As added by P.L.2-2007, SEC.257. Amended by P.L.132-2013, SEC.7.

Ind. Code § 21-16-5-11 Debts incurred

Sec. 11. Debts incurred by the corporation under authority of this chapter do not represent or constitute a debt of the state of Indiana within the meaning of the provisions of the statutes of Indiana or the Constitution of the State of Indiana. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-4.] As added by P.L.2-2007, SEC.257.

Ind. Code § 21-16-5-12 Tax exemption for principal and interest

Sec. 12. The principal of and the interest on bonds and notes issued by the corporation under this chapter are exempt from taxation of every kind by the state and by the municipalities and other political subdivisions of the state. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-5.] As added by P.L.2-2007, SEC.257. Amended by P.L.79-2017, SEC.69.

Ind. Code § 21-16-5-13 Investment of funds

Sec. 13. All: (1) banks; (2) bankers; (3) trust companies; (4) savings banks and institutions; (5) building and loan associations; (6) saving and loan associations; (7) investment companies; (8) insurance companies and associations; and (9) executors, administrators, guardians, trustees, and other fiduciaries; may legally invest any sinking funds, money, or other funds that belong to them or are within their control in any bonds or notes issued under this chapter. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-6.] As added by P.L.2-2007, SEC.257.

Ind. Code § 21-16-5-14 Termination of the designation

Sec. 14. The designation by the governor under section 1 of this chapter remains in effect until the general assembly provides by law for termination of the designation. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-7.] As added by P.L.2-2007, SEC.257.

Ind. Code § 21-16-5-15 Immunity for officers and directors

Sec. 15. Except for an act of fraud or intentional misconduct, an officer or director of the corporation is not individually liable for an act or omission regarding the exercise or performance of that person's duty to the corporation. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-8.] As added by P.L.2-2007, SEC.257.

Ind. Code § 21-16-5-16 Security interest in education loans

Sec. 16. Notwithstanding IC 26-1-9.1-310(a), a security interest in education loans is perfected by: (1) possession under IC 26-1-9.1-313; or (2) filing a financing statement in the office of the secretary of state under IC 26-1-9.1-501. [Pre-2007 Higher Education Recodification Citation: 20-12-21.2-9.] As added by P.L.2-2007, SEC.257.

Ind. Code § 21-16-5-17 Repealed

[Pre-2007 Higher Education Recodification Citation: 20-12-21.2-10.] As added by P.L.2-2007, SEC.257. Amended by P.L.234-2007, SEC.51. Repealed by P.L.132-2013, SEC.8.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/21Fetched: 10/17/2026