Page:United States Statutes at Large Volume 100 Part 2.djvu/279

 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1381

"(1) IN GENERAL.—The Secretary shall make payments in accordance with this paragraph to a guaranty agency in any State which provides a lender referral service for students who meet the requirements of paragraph (2). "(2) STUDENT ELIGIBILITY.—A student is eligible to apply for lender referral services to a guaranty agency in a State if— "(A) such student is either a resident of such State or is accepted for enrollment in or is attending an eligible institution in such State; and "(B) such student has sought and was unable to find a lender willing to make a loan under this part. "(3) AMOUNT OF PAYMENT.—The amount which the Secretary shall pay to any eligible guaranty agency under this paragraph shall be equal to one-half of 1 percent of the total principal amount of the loans (upon which insurance was issued under this part) to a student described in paragraph (2) who subsequently obtained such loans because of such agency's referral service. "(4) INCENTIVE FEES TO LENDERS.—Nothing in this or any law shall prohibit an agency from using all or any portion of the funds received under this part for the payment of incentive fees to lenders who agree to participate in a lender referral service. "(5) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated such sums as are necessary to carry out the provisions of this paragraph. '(f) PAYMENTS OF CERTAIN COSTS.— "(1) PAYMENTS BASED ON INSURANCE PROGRAM AGREEMENT.—

(A) The Secretary shall make payments in accordance with the provisions of this paragraph to any guaranty agency for the purposes of— "(i) the administrative cost of promotion of commercial lender participation; "(ii) the administrative costs of collection of loans; "(iii) the administrative costs of preclaims assistance for default prevention; "(iv) the administrative costs of monitoring the enrollment and repayment status of students; or "(v) other such costs related to the student loan insurance program subject to such agreement. "(B) The total amount of payments for any fiscal year made under this paragraph shall be equal to 1 percent of the total principal amount of the loans upon which insurance was issued under this part during such fiscal year by such guaranty agency. The guaranty agency shall be deemed to have a contractual right against the United States to receive payments according to the provisions of this subparagraph. Payments shall be made promptly and without administrative delay to any guaranty agency submitting an accurate and complete application therefor under this subparagraph. "(2) APPLICATIONS FOR PAYMENTS.—No payment may be made under paragraph (1) of this subsection unless the guaranty agency submits to the Secretary an application at such time, at least annually, in such manner, and containing or accompanied by such information, as the Secretary may reasonably require. Each such application shall— "(A) set forth assurances that the student loan insurance program subject to the guaranty agreement complies with

State and local governments.

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