Page:United States Statutes at Large Volume 106 Part 1.djvu/776

 106 STAT. 744 PUBLIC LAW 102-325—JULY 23, 1992 shall repay the Secretary, upon terms to be determined by the Secretary, for such funding; "(6) assign any loans to the Secretary, upon the demand of the Secretary, if a delinquency on such loan has required a funding under the insurance agreement; "(7) in the event of a delinquency on a loan, engage in such collection efforts as the Secretary shall require for a period of not less than 45 days prior to requesting a funding under the insurance agreement; "(8) establish an escrow account— "(A) into which each eligible institution shall deposit 10 percent of the proceeds of any loan made under this part; and "(i) shall be available to the Secretary to pay principgd and interest on the bonds in the event of delinquency in loan repayment; and "(ii) when all bonds under this psirt are retired or canceled, shall be divided among the eligible institutions making deposits into such account on the basis of the amount of each such institution's deposit; "(9) provide in each loan agreement with respect to a loan that, if a delinquency on such loan results in amounts being withdrawn from the escrow account to pay principal and interest on bonds, subsequent payments on such loan shall be available to replenish such escrow account; "(10) comply with the limitations set forth in section 724 of this part; and "(11) make loans only to eligible institutions under this part in accordance with regulations prescribed by the Secretary to ensure that loans are fairly allocated among as many eligible institutions as possible, consistent with making loans of amounts that will permit capital projects of sufficient size and scope to significantly contribute to the educational program of the eligible institutions. "(c) ADDITIONAL AGREEMENT PROVISIONS.— Any insurance agreement described in subsection (a) of this section shall provide as follows: "(1) The payment of principal and interest on bonds shall be insured by the Secretary until such time as such bonds have been retired or canceled. " (2) The Federal liability for delinquencies and default for bonds guaranteed under this part shall only become effective upon the exhaustion of all the funds held in the escrow accoxmt described in subsection (b)(8). "(3) The Secretary shall create a letter of credit authorizing the Department of the Treasury to disburse funds to the designated bonding authority or its assignee. "(4) The letter of credit shall be drawn upon in the amount determined by paragraph (5) of this subsection upon the certification of the designated bonding authority to the Secretary or the Secretary designee that there is a delinquency on 1 or more loans and there are insufficient funds available from loan repayments and the escrow account to make a scheduled payment of principal and interest on the bonds. "(5) Upon receipt by the Secretary or the Secretary's desi^ee of the certification described in paragraph (4) of this subsection.
 * '(B) the balance of which—

�