Page:United States Statutes at Large Volume 103 Part 3.djvu/45

 PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2113 ' (C) by adding at the end thereof the following: " (2) INSTITUTIONAL ELIGIBILITY. —Funds may not be borrowed under this section by any undergraduate student who is en- rolled at any institution during any fiscal year if the cohort default rate for such institution, for the most recent fiscal year for which such rates are available, equals or exceeds 30 percent. The Secretary shall notify institutions to which such restriction applies annually, and specify the fiscal year covered by the restriction. The Secretary shall afford any institution to which such restriction applies an opportunity to present evidence contesting the accuracy of the calculation of the cohort default rate for such institution.". (2) DEFINITION.— Section 435 of such Act (20 U.S.C. 1085) is amended by adding at the end thereof the following new subsection: "(m) COHORT DEFAULT RATE.—The term 'cohort default rate' means, for any fiscal year in which 30 or more current and former students at the institution enter repayment on loans under section 428 or 428A received for attendance at the institution, the percent- age of those current and former students who enter repayment on such loans received for attendance at that institution in that fiscal year who default before the end of the following fiscal year. For any fiscal year in which less than 30 of the institution's current and former students enter repayment, the term 'cohort default rate' means the average of the rate calculated under the preceding sentence for the 3 most recent fiscal years. In the case of a student who has attended and borrowed at more than one school, the student (and his or her subsequent repayment or default) is attrib- uted to each school for attendance at which the student received a loan that entered repayment in the fiscal year. A loan on which a payment is made by the school, its owner, agent, contractor, em- ployee, or any other entity or individual affiliated with such school, in order to avoid default by the borrower, is considered as in default for purposes of this subsection. Any loan which has been rehabili- tated before the end of such following fiscal year is not considered as in default for purposes of this subsection. The Secretary shall pre- scribe regulations designed to prevent an institution from evading the application to that institution of a default rate determination under this subsection through the use of such measures as branch- ing, consolidation, change of ownership or control, or any similar device.". (3) EFFECTIVE DATE. — (A) Except as provided in subparagraph (B), the amend- ments made by this subsection shall apply to loans made on or after January 1, 1990, and before October 1, 1991. Regu- lations prescribed by the Secretary under the last sentence of section 435(m) of the Higher Education Act of 1965 (as added by such amendments) shall apply with respect to measures described in such sentence that are used on or after October 1, 1989. (B) The amendments made by this subsection shall not be applied to prevent an individual who is enrolled on the date of enactment of this Act in a program of instruction for which the individual has obtained a loan under section i= 428A of the Higher Education Act of 1965 from receiving additional loans under such section to cover the cost of Regulations. 20 USC 1078-1 note.

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