Page:United States Statutes at Large Volume 100 Part 1.djvu/376

 100 STAT. 340

PUBLIC LAW 99-272—APR. 7, 1986 co-payable to the institution and the borrower or to prohibit the disbursement of loan proceeds by means other than by

20 USC 1078.

20 USC 1083a.

(b) GSL LOANS REQUIREMENT.—Section 428(b)(l)(0) of the Act is

amended to read as follows: "(O) provides that funds borrowed by a student are disbursed to the institution by check or other means that is payable to and requires the endorsement or other certification by such student, except nothing in this subparagraph shall be interpreted to allow the Secretary to require checks to be made co-payable to the institution and the borrower or to prohibit the disbursement of loan proceeds by means other than by check;". (c) CONFORMING AMENDMENT.—Section 433A(a) of the Act is amended by striking out "to a borrower" in the first sentence. SEC. 16013. MULTIPLE DISBURSEMENTS OF STUDENT LOANS REQUIRED. (a) REPEAL OF INCENTIVES TO LENDERS TO MAKE MULTIPLE

20 USC 1078.

DISBURSEMENTS.—Section 428(a) of the Act is amended by striking out paragraph (8). (b) MULTIPLE DISBURSEMENT REQUIRED IN F I S L PROGRAM.—Sec-

20 USC 1077.

tion 427(a) of the Act is amended— (1) by striking out "and" at the end of paragraph (1); (2) by striking out the period at the end of paragraph (2) and inserting in lieu thereof "; and"; and (3) by adding at the end thereof the following: "(3) in the case of a loan made for any period of enrollment of more than six months, one semester, two quarters, or 600 clock hours and for an amount of $1,000 or more, the proceeds of the loan will be disbursed directly by the lender in two or more installments, none of which exceeds one-half of the loan, with the interval between the first and second installment being not less than one-third of such period. For purposes of paragraph (3), all loans issued for the same period of enrollment shall be considered as a single loan.". (c) MULTIPLE DISBURSEMENTS REQUIRED IN GSL PROGRAM.—Sec-

tion 42803)(1) of such Act is amended— (1) by redesignating subparagraph (P) as subparagraph (Q); and (2) by inserting after subparagraph (O) the following new subparagraph: "(P) provides that the proceeds of any loan made for any period of enrollment of more than six months, one semester, two quarters, or 600 clock hours and for an amount of $1,000 or more— "(i) will be disbursed directly by the lender in two or more installments, none of which exceeds one-half of the loan, with the interval between the first and second installment being not less than one-third of such period, or "(ii) will be disbursed in such installments pursuant to the escrow provisions of subsection (i) of this section, but all loans issued for the same period of enrollment shall be considered as a single loan for purposes of this subparagraph; and". 20 USC 1087-1.

(d) ORIGINATION FEE TO B E DEDUCTED PROPORTIONATELY FROM EACH INSTALLMENT.—Section 438(c)(2) of the Act is amended by

striking out "which may be deducted from the proceeds of the loan

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