Page:United States Statutes at Large Volume 100 Part 1.djvu/378

 100 STAT. 342

20 USC 1078.

20 USC 1078

Loans. 20 USC 1078 ^° ®' 20 USC 1078.

PUBLIC LAW 99-272—APR. 7, 1986

"(II) which are directly related to providing collection assistance to the lender on a delinquent loan, prior to a claim being filed by the guaranty agency, including the attributable compensation of appropriate personnel (and in the case of personnel who perform several functions, only the portion of compensation attributable to the collection assistance), fees paid to locate a missing borrower, postage, equipment, supplies, telephone, and similar charges, but does not include overhead costs. "(ii) The administrative costs for which reimbursement is authorized under this subparagraph must be clearly supplemental to the preclaim assistance for default prevention which the guaranty agency is required to provide pursuant to section 428(c)(2)(A) and section 428(f)(2) of this Act. "(iii) The services associated with carrying out this subparagraph may be provided by the guaranty agency directly or under contract, except that such services may not be carried out by an organization or entity (other than the guaranty agency)— "(I) that is the holder or servicer of the loan or an organization or entity that owns or controls the holder or servicer of the loan; or "(II) that is owned or controlled by the same corporation, partnership, association, or individual that owns or controls the holder or servicer of the loan. "(iv) The costs associated with carrying out this subparagraph may not exceed 2 percent of the outstanding principal balance of each delinquent loan subject to the supplemental preclaim assistance authorized by this subparagraph or $100, whichever is less.". (3) The amendments made by this subsection shall be effective in accordance with section 16041(a) of this title without regard to whether such amendments are reflected in the regulations prescribed by the Secretary of Education. SEC. 16015. PROMPT PAYMENT OF SUPPLEMENTAL GUARANTY ADMINISTRATIVE COST AGREEMENT. (a) PURPOSE.—It is the purpose of the amendments made by this section to assure the prompt payment of the amount due under the supplemental guaranty administrative cost agreement made under section 428(f)(2) in order to encourage improved collection of student loans and preclaims assistance to prevent default on student loans. (b) PROMPT PAYMENT REQUIRED.—(1) Section 428(f)(1) of the Act is

amended— (A) by striking out "is authorized to" and inserting in lieu thereof "shall"; (B) by striking out "shall not exceed" and inserting in lieu thereof "shall be equal to"; and (C) by striking out the third and fourth sentences of such section. (2) Section 428(f)(2) of the Act is amended— (A) by striking out "is authorized to" and inserting in lieu thereof "shall"; (B) by striking out "shall not exceed" and inserting in lieu thereof "shall be equal to"; and (C) by striking out the third and fourth sentences of such section.

�