(a) The board may approve or reject a linked deposit loan package. Upon approval by the board of the linked deposit loan package, the board shall forward such approved application to the state Board of Investments and the state Board of Investments shall place certificates of deposit, within the limitations provided for in section four of this article, with the eligible lending institution at three percent below current market rates, as determined and calculated by the state Board of Investments.

(b) The eligible lending institution shall enter into a deposit agreement with the state Board of Investments, which shall include requirements necessary to carry out the purposes of this article. Such requirements shall reflect the market conditions prevailing in the eligible lending institution's lending area. The agreement may include a specification of the period of time in which the eligible lending institution is to lend funds after the placement of a linked deposit and shall include provisions for the certificates of deposit to be placed for up to two-year maturities that may be renewed for periods up to two years until such time as the loan has been completely repaid, or ten and one-half years after the eligible student's cessation of enrollment in the approved institution of higher education to which the loan proceeds were paid, whichever is sooner. Interest shall be paid at the times determined by the state Board of Investments.