Page:United States Statutes at Large Volume 100 Part 2.djvu/287

 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1389

"(A) the Student Loan Marketing Association; "(B) State agencies described in subparagraphs (D) and (F) of section 435(d)(l); and "(C) other eligible lenders described in subparagraphs (A), (B), (C), and (E) of such section. "(2) INSURANCE COVERAGE OF CONSOLIDATION LOANS.—Except Contracts, 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 agency. "(3) DEFINITION OF ELIGIBLE BORROWER.—(A) For the purpose

of this section, the term 'eligible borrower' means a borrower who, at the time of application for a consolidation loan— "(i) has an outstanding indebtedness on eligible student loans, at the time of application for a consolidation loan, of not less than $5,000; "(ii) is in repayment status, or in a grace period preceding repayment, and is not delinquent with respect to any required payment on such indebtedness by more than 90 days; and "(iii) is not a parent borrower under section 428B. "(B) 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. Loans made under this section shall, to the extent used to discharge loans made under this part, be counted against the applicable limitations on aggregate indebtedness contained in sections 425(a)(2) and 428(b)(l)(B). "(4) DEFINITION OF ELIGIBLE STUDENT LOANS.—For the purpose

of paragraph (1), the term 'eligible student loans' means loans— "(A) made, insured, or guaranteed under this part; "(B) made under part E of this title; or "(C) made under subpart II of part C of title VII of the Public Health Service Act. "(b) CONTENTS OF AGREEMENTS, CERTIFICATES OF INSURANCE, AND LOAN NOTES.—

"(1) AGREEMENTS WITH LENDERS.—Any lender described in

subparagraph (A), (B), or (C) of subsection (a)(1) who wishes to ,, make consolidation loans under this section shall enter into an agreement with the Secretary or a guaranty agency which provides— "(A) that, in the case of all lenders described in subsection (a)(D, the lender will make a consolidation loan to an eligible borrower (on request of that borrower) only if the 9^. borrower certifies that the borrower has no other application pending for a loan under this section and (i) the lender « holds an outstanding loan of that borrower which is selected by the borrower for consolidation under this section, or (ii) the borrower certifies that the borrower has sought and has been unable to obtain a consolidation loan from the

42 USC 294m.

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