Page:United States Statutes at Large Volume 121.djvu/820

 PUBLIC LAW 110–84—SEPT. 27, 2007

121 STAT. 799

to secure a debt obligation in the operation of an arrangement described in paragraph (1)(D). ‘‘(3) PROHIBITION.—In the case of a loan for which the special allowance payment is calculated under section 438(b)(2)(I)(vi)(II) and that is sold by the eligible not-for-profit holder holding the loan to an entity that is not an eligible not-for-profit holder under this Act, the special allowance payment for such loan shall, beginning on the date of the sale, no longer be calculated under section 438(b)(2)(I)(vi)(II) and shall be calculated under section 438(b)(2)(I)(vi)(I) instead. ‘‘(4) REGULATIONS.—Not later than 1 year after the date of enactment of the College Cost Reduction and Access Act, the Secretary shall promulgate regulations in accordance with the provisions of this subsection.’’.

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SEC. 305. SPECIAL ALLOWANCES.

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(a) REDUCTION OF LENDER SPECIAL ALLOWANCE PAYMENTS.— Section 438(b)(2)(I) (20 U.S.C. 1087–1(b)(2)(I)) is amended— (1) in clause (i), by striking ‘‘clauses (ii), (iii), and (iv)’’ and inserting ‘‘the following clauses’’; (2) in clause (v)(III), by striking ‘‘clauses (ii), (iii), and (iv)’’ and inserting ‘‘clauses (ii), (iii), (iv), and (vi)’’; and (3) by adding at the end the following: ‘‘(vi) REDUCTION FOR LOANS DISBURSED ON OR AFTER OCTOBER 1, 2007.—With respect to a loan on which the applicable interest rate is determined under section 427A(l) and for which the first disbursement of principal is made on or after October 1, 2007, the special allowance payment computed pursuant to this subparagraph shall be computed— ‘‘(I) for loans held by an eligible lender not described in subclause (II)— ‘‘(aa) by substituting ‘1.79 percent’ for ‘2.34 percent’ each place the term appears in this subparagraph; ‘‘(bb) by substituting ‘1.19 percent’ for ‘1.74 percent’ in clause (ii); ‘‘(cc) by substituting ‘1.79 percent’ for ‘2.64 percent’ in clause (iii); and ‘‘(dd) by substituting ‘2.09 percent’ for ‘2.64 percent’ in clause (iv); and ‘‘(II) for loans held by an eligible not-for-profit holder— ‘‘(aa) by substituting ‘1.94 percent’ for ‘2.34 percent’ each place the term appears in this subparagraph; ‘‘(bb) by substituting ‘1.34 percent’ for ‘1.74 percent’ in clause (ii); ‘‘(cc) by substituting ‘1.94 percent’ for ‘2.64 percent’ in clause (iii); and ‘‘(dd) by substituting ‘2.24 percent’ for ‘2.64 percent’ in clause (iv).’’. (b) INCREASED LOAN FEES FROM LENDERS.—Paragraph (2) of section 438(d) (20 U.S.C. 1087–1(d)(2)) is amended to read as follows:

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