Page:United States Statutes at Large Volume 106 Part 1.djvu/582

 106 STAT. 550 PUBLIC LAW 102-325—JULY 23, 1992 (B) by inserting "and" after the semicolon at the end of subparagraph (D); and (C) by inserting after subparagraph (D) the following new subparagraphs: "(E) shall not have a cohort default rate (as defined in section 435(m)) greater than 15 percent; and "(F) shall use the proceeds from special allowance pay- ments and interest payments from borrowers for needbased grant programs, except for reasonable reimbursement for direct administrative expenses;**. 20 USC 1085. (e) DUE DILIGENCE. — Section 435(f) of the Act is amended by inserting "servicing and** before "collection practices**. (f) REPEAL OF ADDITIONAL DEFINITIONS. — Section 435 of the Act is further amended by striking subsections (g), (h), and (n). (g) DEFINITION OF COHORT DEFAULT RATE. —Section 435(m) of the Act is amended to read as follows: "(m) COHORT DEFAULT RATE. — "(1) IN GENERAL.—(A) Except as provided in paragraph (2), the term 'cohort default rate' means, for any fiscsu year in which 30 or more current and former students at the institution enter repa3mient on loans under section 428 or 428A received for attendance at the institution, the percentage 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. "(B) In determining the number of students who default before the end of such fiscal year, the Secretary shall include only loans for which the Secretary or a guaranty agency has paid claims for insurance, and, in calculating the cohort default rate, exclude any loans which, due to improper servicing or collection, would result in an inaccurate or incomplete calculation of the cohort default rate. "(C) For anyfiscalyear in which fewer than 30 of the institution's current and former students enter repayment, the term 'cohort default rate* means the percentage of such current and former students who entered repayment on such loans in any of the three most recent fiscal years, who defavdt before the end of the fiscal year immediately following the year in which they entered repayment. "(2) SPECIAL RULES.—(A) In the case of a student who has attended and borrowed at more than one school, the student (£Lnd such student's subsequent repa3anent or default) is attributed to each school for attendance at which the student received a loan that entered repayment in the fiscal year. "(B) A loan on which a payment is made by the school, such school's owner, agent, contractor, employee, or any other entitvr or individual amUated with such school, in order to avoid default by the borrower, is considered as in default for purposes of this subsection. "(C) Any loan which has been rehabilitated before the end of such following fiscal year is not considered as in default for the purposes of this subsection. "(D) For the purposes of this subsection, a loan made in accordance with section 428A shall not be considered to enter repa3ment until after the borrower has ceased to be enrolled in a course of study leading to a degree or certificate at an eligible institution on at least a half-time basis (as determined

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