Page:United States Statutes at Large Volume 100 Part 2.djvu/286

 100 STAT. 1388

PUBLIC LAW 99-498—OCT. 17, 1986 "'

"(2) REFINANCING TO SECURE VARIABLE INTEREST RATE.—An

eligible lender may reissue a loan which was made under section 428B as in effect prior to the enactment of the Higher Education Amendments of 1986 in order to permit the borrower to obtain the interest rate provided under section 427A(c)(4). A lender offering to reissue a loan for such purpose may charge a borrower an amount not to exceed $100 to cover the administrative costs of reissuing such loan, not more than one-half of which shall be paid to the guarantor of the loan being reissued to cover costs of reissuance. Reissuance of a loan under this paragraph shall not affect any insurance applicable with respect to the loan, and no additional insurance fee may be charged to the borrower with respect to the loan. "(3) REFINANCING BY DISCHARGE OF PREVIOUS LOAN.—A borrower who has applied to an original lender for reissuance of a loan under paragraph (2) and who is denied such reissuance may obtain a loan from another lender for the purpose of discharging the loan from such original lender. A loan made for such purpose— "(A) shall bear interest at the applicable rate of interest ' • provided under section 427A(c)(4); "(B) shall not result in the extension of the duration of the note (other than as permitted under subsection (c)(5)(B)); "(C) may be subject to an additional insurance fee but shall not be subject to the administrative cost charge permitted by paragraph (2) of this subsection; and "(D) shall be applied to discharge the borrower from any remaining obligation to the original lender with respect to the original loan. -

"(4)

CERTIFICATION IN U E U OF PROMISSORY NOTE PRESEN-

TATION.—Each new lender may accept certification from the original lender of the borrower's original loan in lieu of presentation of the original promissory note. "(5) NOTIFICATION TO BORROWERS OF AVAILABILITY OF REFINANCING OPTIONS.—Each holder of a loan made under this

section or under section 428B as in effect prior to the date of enactment of this Act shall, not later than January 1, 1987, in the case of loans made before the date of enactment of this Act, notify the borrower of such loan— "(A) of the refinancing options for which the borrower is eligible under this subsection; "(B) of those options which will be made available by the holder; and "(C) that, with respect to any option that the holder will not make available, the holder will, to the extent practicable, refer the borrower to an eligible lender offering such option. "CONSOUDATION LOANS

20 USC 1078-3.

" S E C 428C. (a) AGREEMENTS WITH ELIGIBLE LENDERS.— "(1) AGREEMENT REQUIRED FOR INSURANCE COVERAGE.—For

the purpose of providing loans to eligible borrowers for consolidation of their obligations with respect to eligible student loans, the Secretary or a guaranty agency shall enter into agreements in accordance with subsection (b) with the following eligible lenders:

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