Page:United States Statutes at Large Volume 100 Part 1.djvu/379

 PUBLIC LAW 99-272—APR. 7, 1986

100 STAT. 343

SEC. 16016. GUARANTY AGENCY; LENDER OF LAST RESORT. Section 428 of the Act is amended by adding at the end thereof the 20 USC 1078. following new subsection: "(j) In each State, the guaranty agency or an eligible lender in the State and local State described in section 435(d)(1)(D) of this Act shall make loans foYjcpTo^oldirectly, or through an agreement with an eligible lender or lenders, ^• to students who are eligible to have interest benefits paid on their behalf (under subsection (a) of this section) but who are otherwise unable to obtain loans under this part. Loans made under this subsection shall neither exceed the amount of the need of the borrower, as determined under subsection (a)(2)(B), nor be less than $200.". SEC. 16017. STUDENT LOAN CONSOLIDATION. (a) LOAN CONSOLIDATION AUTHORIZED.—Part B of title IV of the Act is amended by inserting after section 428B the following new section: "CONSOLIDATION LOANS

"SEC. 428C. (a)(1) For the purpose of providing loans to eligible borrowers for consolidation of their obligations with respect to student loans made, insured, or guaranteed under this part or made under part E of this title, the Secretary or a guaranty agency shall enter into agreements in accordance with subsection (b) with the following eligible lenders: "(A) the Student Loan Marketing Association; "(B) agencies described in subparagraphs (D) and (F) of section 435(g)(1); and "(C) eligible lenders described in subparagraphs (A), (B), (C), and (E) of such section. "(2) Except as provided in section 429(e), no contract of insurance under this part shall apply to a consolidation loan unless such loan is made under an agreement pursuant to this section and is covered by a certificate issued in accordance with subsection (b)(2). Loans covered by such a certificate that is issued by a guaranty agency shall be considered to be insured loans for the purposes of reimbursements under section 428(c), but no payment shall be made with respect to such loans under section 428(f) to any such guaranty agency. "(3) For the purpose of this section, the term 'eligible borrower' means a borrower who— "(A) has an outstanding indebtedness, at the time of application for a consolidation loan, to one or more lenders or programs under this title of not less than $5,000; "(B) has not during the previous 4 months carried at an eligible institution at least one-half the normal full-time academic workload; "(C) if in repayment status, is not delinquent with respect to any required payment on such indebtedness by more than 90 days; and '(D) is not a parent borrower under section 428B(a)(l). "(4) An individual's status as an eligible borrower under this section terminates upon receipt of a consolidation loan under this section except with respect to loans received under this title after the date of receipt of the consolidation loan. For the purpose of computing the outstanding indebtedness of such an individual, only loans received after such date shall be taken into account.

20 USC 1078-3. 20 USC 1088.

20 USC 1085. 20 USC 1079.

20 USC 1078.

20 USC 1078-2.

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