Oregon Revised Statutes Chapter 345 § 345.113 — Negotiability of contract for student loan

Negotiability of contract for student loan. (1) In any contract for the provision of instruction or training or other services by a career school on credit entered into between a career school and a student, or between a lending institution which regularly loans money to students of a particular career school and a prospective student of that career school, such contract, note or any instrument or evidence of indebtedness of the student shall have printed on the face thereof the words “Student Loan.” Such contract, note, instrument or evidence of indebtedness with the words “Student Loan” printed thereon shall not be a negotiable instrument within the meaning of ORS chapter 73. However, this section shall have no force or effect on the negotiability of any contract, promissory note, instrument or other evidence of indebtedness owned or guaranteed or insured by any state or federal governmental agency even though the contract, note, instrument or other evidence of indebtedness contains the wording required by this subsection. (2) Notwithstanding the absence of such notice on a contract, note, instrument or evidence of indebtedness arising out of a contract for the provision of training or instruction or other services by a career school, an assignee of the rights of the career school or lending institution as described in subsection (1) of this section is subject to all claims and defenses of the student against the career school or lending institution arising out of the contract for provision of professional instruction or training or other services. Any agreement to the contrary shall be of no force or effect in limiting the rights of a student under this section. The assignee’s liability under this section shall not exceed the amount owing to the assignee at the time the claim or defense is asserted against the assignee. The restrictions imposed by this subsection shall not apply with respect to any promissory note, contract, instrument or other evidence of indebtedness owned or guaranteed or insured by any state or federal governmental agency even though said note, contract, instrument or other evidence of indebtedness shall contain the words required by subsection (1) of this section. (3) An assignee of a student loan who in good faith enforces a security interest in property held by the student shall not be liable to such student for punitive damages in an action for wrongful repossession. The fact that a career school misrepresented the nature of the training or instruction or other services shall not, of itself, make an assignee’s repossession wrongful. [1975 c.478 §28; 1995 c.343 §8]