Page:United States Statutes at Large Volume 103 Part 3.djvu/50

 103 STAT. 2118 PUBLIC LAW 101-239—DEC. 19, 1989 receiving additional loans under this title (for which he or she is otherwise eligible) on the basis of defaulting on the loan prior to such loan sale. "(4) APPLICABILITY OF GENERAL LOAN CONDITIONS. —A loan which is sold under this paragraph shall, so long as the bor- rower continues to make scheduled repayments thereon, be subject to the same terms and conditions and qualify for the same benefits and privileges as other loans made under this part.". 20 USC 1078-6 (b) PUBLICITY.—The Secretary of Education shall, from funds ^°^- available through student loan collections, commencing not less than 30 days before the beginning of the default reduction program required by the amendment made by this section, and continuing throughout the duration of such program, widely publicize (through various communications media) the availability of the default reduc- tion program. SEC. 2006. SANCTIONS AGAINST LENDERS AND INSTITUTIONS. (a) SANCTIONS BY SECRETARY ON LENDERS.— Section 432 of the Higher Education Act of 1965 (20 U.S.C. 1082) is amended by adding at the end thereof the following new subsection: "( j) AUTHORITY OF THE SECRETARY TO TAKE EMERGENCY ACTIONS AGAINST LENDERS.— "(1) IMPOSITION OP SANCTIONS.— If the Secretary— ii "(A) receives information, determined by the Secretary to be reliable, that a lender is violating any provision of this s title, any regulation prescribed under tlus title, or any applicable specitil arrangement, agreement, or limitation; (B) determines that immediate action is necessary to prevent misuse of Federal funds; and "(C) determines that the likelihood of loss outweighs the f importance of following the limitation, suspension, or termination procedures authorized in subsection (h); Mail. the Secretary shall, effective on the date on which a notice and statement of the basis of the action is mailed to the lender (by registered mail, return receipt requested), take emergency action to stop the issuance of guarantee commitments and the {)ayment of interest benefits and special allowance to the ender. "(2) LENGTH OF EMERGENCY ACTION. —An emergency action under this subsection may not exceed 30 da^s unless a limita- tion, suspension, or termination proceeding is initiated against the lender under subsection (h) before the expiration of that period. "(3) OPPORTUNITY TO SHOW CAUSE.— The Secretary shall pro- vide the lender, if it so requests, an opportunity to show cause that the emergency action is unwarranted.". Ot») SANCTIONS BY GUARANTY AGENCIES.— Section 428(b)(l) (20 U.S.C. 1078(b)(l)) is amended— (1) by inserting "emergency action," before "limitation," each place it appears in subparagraphs (T) and (U); and (2) by inserting "take emergency action," before "limit, sus- pend," in subparagraph (U). (c) SANCTIONS AGAINST INSTITUTIONS AND INSTITUTIONS' AGENTS.— Section 487(c)(l) of the Higher Education Act of 1965 (20 U.S.C. 1094(c)(l)) is amended— (1) in subparagraph (C), by striking "and" at the end thereof;

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