Page:United States Statutes at Large Volume 106 Part 3.djvu/218

 106 STAT. 2012 PUBLIC LAW 102-408—OCT. 13, 1992 "(6) contain such other provisions as are necessary to protect the financial interests of the United States. " (c) FAILURE OF SCHOOL TO COLLECT LOANS.— "(1) IN GENERAL.— Any standard established by the Secretary by regulation for the collection by schools of medicine, osteopathic medicine, dentistry, pharmacy, pediatric medicine, optometry, or veterinary medicine of loans made pursuant to loan agreements under this subpart shall provide that the ^ failure of any such school to collect such loans shall be measured in accordance with this subsection. This subsection may not be construed to require such schools to reimburse the student loan fund under this subpart for loans that became uncollectible prior to August 1985 or to penalize such schools with respect to such loans. "(2) EXTENT OF FAILURE.— The measurement of a school's failure to collect loans made under this subpart shall be the ratio (stated as a percentage) that the defaulted principal amount outstanding of such school bears to the matured loans of such school. "(3) DEFINITIONS.— For purposes of this subsection: "(A) The term 'default' means the failure of a borrower of a loan made under this subpart to— "(i) make an installment payment when due; or "(ii) comply with any other term of the promissory note for such loan, except that a loan made under this subpart shall not be considered to be in default if the loan is discharged in bankruptcy or if the school reasonably concludes from written contracts with the borrower that the borrower intends to repay the loan. "(B) The term 'defaulted principal amount outstanding' means the total amount borrowed from the loan fund of a school that has reached the repayment stage (minus any principal amount repaid or canceled) on loans— "(i) repayable monthly and in default for at least 120 days; and "(ii) repayable less frequently than monthly and in default for at least 180 days; "(C) The term 'grace period' means the period of one year beginning on the date on which the borrower ceases to pursue a full-time course of study at a school of medicine, osteopathic medicine, dentistry, pharmacy, pediatric medicine, optometry, or veterinary medicine; and "(D) The term 'matured loans' means the total principal amount of all loans made by a school under this subpart minus the total principal amount of loans made by such school to students who are— "(i) enrolled in a full-time course of study at such school; or "(ii) in their grace period. 42 USC 292r. " SEC. 722. LOAN PROVISIONS. "(a) LIMITATION ON AMOUNT.—Loans from a student loan fund (established under an agreement with a school under section 721) may not exceed for any student for each school year (or its equivalent) the sum of— "(1) the cost of tuition for such year at such school, and

�