Page:United States Statutes at Large Volume 100 Part 2.djvu/281

 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1383

"(1) ESCROW ACCOUNTS ADMINISTERED BY ESCROW AGENT.—Any

state and local

guaranty agency or eligible lender (hereafter in this subsection governments. referred to as the 'escrow agent') may enter into an agreement with any other eligible lender that is not an eligible institution or an agency or instrumentality of the State (hereafter in this subsection referred to as the 'lender') for the purpose of au., thorizing multiple disbursements of the proceeds of a loan to a ' student. Such agreement shall provide that the lender will pay the proceeds of such loans into an escrow account to be administered by the escrow agent in accordance with the provisions of paragraph (2) of this subsection. Such agreement may allow the lender to make pa3mtients into the escrow account in amounts that do not exceed the sum of the amounts required for disbursement of initial or subsequent installments to borrowers and to make such payments not more than 45 days prior to the date of the disbursement of such installment to such borrowers. Such agreement shall require the lender to notify promptly the eligible institution when funds are escrowed under this subsec^, f tion for a student at such institution. "(2) AUTHORITY OF ESCROW AGENT.—Each escrow agent entering into an agreement under paragraph (1) of this subsection is authorized to— "(A) make the disbursements in accordance with the note evidencing the loan; "(B) commingle the proceeds of all loans paid to the escrow agent pursuant to the escrow agreement entered into under such paragraph (1); "(C) invest the proceeds of such loans in obligations of the Federal Government or obligations which are insured or guaranteed by the Federal Government; "(D) retain interest or other earnings on such investment; and "(E) return to the lender undisbursed funds when the student ceases to carry at an eligible institution at least one-half of the normal full-time academic workload as determined by the institution. "(j) LENDERS-OF-LAST-RESORT.—In each State, the guaranty agency State and local or an eligible lender in the State described in section 435(d)(1)(D) of governments, this Act shall make loans directly, or through an agreement with an eligible lender or lenders, to students eligible to receive interest benefits paid on their behalf under subsection (a) of this section who are otherwise unable to obtain loans under this part. Loans made under this subsection shall not exceed the amount of the need of the borrower, as determined under subsection (a)(2)(B), nor be less than $200. "(k) INFORMATION ON DEFAULTS.— "(1) PROVISION OF INFORMATION TO ELIGIBLE INSTITUTIONS.—In

order to notify eligible institutions of former students who are in default of their continuing obligation to repay student loans, each guaranty agency may, upon the request of an eligible institution, furnish information with respect to students who were enrolled at the eligible institution and who are in default on the repayment of any loan made, insured, or guaranteed under this part. The information authorized to be furnished under this subsection may include the names and addresses of such students.

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