The Washington Student Loan Guaranty Association was established in 1979 to guarantee student loans and to expand availability of guaranteed student loans in Washington. This service of providing financial aid to individuals to assist them in pursuing their college or university education has brought tangible benefits to the state by developing the talents of those individuals. However, in light of the limitations in existing grant, loan, and work study programs, increased availability of loans is desirable.
Creation of an organization that could issue qualified scholarship funding bonds in the state of Washington would serve to expand further the availability of guaranteed student loans by increasing capital available to lenders making such loans. A private non-profit entity authorized to issue qualified scholarship funding bonds would be able to finance itself without reliance on state financial support. To qualify for tax exemption under the Internal Revenue Code, such an entity must be requested by a state, but such a request does not incur the credit of the state.
NOW, THEREFORE, I, John Spellman, Governor of the state of Washington, by virtue of the power vested in me, and in accordance with Section 103 of Internal Revenue Code of 1954, as amended by P.L. 94.455, hereby request the Trustees of the Washington Student Loan Guaranty Association (except those trustees affiliated with the state of Washington) to organize a non-profit corporation that has authority to issue qualified scholarship funding bonds in the state of Washington in order to increase the availability of student loans financed from sources other than the state.
No action of the organization created upon this request shall be deemed a pledge of credit of the state, and no bonds issued by such organization shall be deemed to be issued for or on behalf of the state.