(1) The commission has the following powers in furtherance of the guarantee loan program:

(a) To arrange for the guarantee by nongovernmental organizations of loans of money by private lenders to persons who are residents of this state and who have been accepted for enrollment or who are in good standing at colleges or vocational schools in this state or elsewhere in order to assist them in meeting the expenses of their education. Any agreement entered into by the commission to effect such arrangement shall require that any such nongovernmental organization hold the funds received from the commission in a reserve fund to be expended only upon the certification to it by such a private lender that any such loan is in default and only upon the assignment to such organization of the promissory note in default. Such funds then may be applied to reimburse said lender the principal amount of the loan and accrued interest thereon remaining unpaid. Such agreement shall contain provisions for termination upon thirty days' written notice of either contracting party. Upon the effective date of such termination, such organization shall refund to the state such portion of the reserve fund as may exceed the total amount of loans guaranteed by the organization pursuant to such agreement and remaining unpaid. As additional repayments of loans are reported to it by a private lender, the organization shall refund such portion of the reserve fund then remaining as from time to time exceeds the total loans remaining unpaid.

(b) To enter into contracts with the United States government, or any department, agency, or office thereof, or any nongovernmental organization for the purpose of receiving funds or services therefrom or providing for the administration of the program thereby or in connection with any acts necessary or incidental to the performance of its powers or duties under this article;

(c) To adopt rules and regulations governing the guarantee loan program;

(d) To secure commitments from private lenders to make loans to students under the program;

(e) To participate in any federal government program for guaranteed loans or subsidies to students and to receive, hold, and disburse funds made available by any agency of the United States for the purpose for which they are made available;

(f) To perform such other acts as may be necessary or appropriate in connection with the guarantee loan program;

(g) To provide that there shall be no fee or other charge made to the applicant for loans for processing and periodic review of the qualifications for such loans.

(2) The commission shall be under the following limitations:

(a) It shall not itself lend any moneys under the program.

(b) It shall not become responsible for or guarantee any debt, contract, or liability of any other person, company, or corporation under the program.

(c) It shall not expend funds under the program greater than the amounts appropriated to it by the general assembly and available to it as a result of contributions.