Page:United States Statutes at Large Volume 121.djvu/830

 PUBLIC LAW 110–84—SEPT. 27, 2007

121 STAT. 809

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‘‘(i) a set of borrower benefits and servicing requirements each eligible lender shall meet in order to participate in such an auction; and ‘‘(ii) an assessment of each such eligible lender’s capacity, including capital capacity, to participate effectively. ‘‘(C) TIMING AND ORIGINATION.—Each State auction takes place every 2 years, and the eligible lenders with the winning bids for the State are the only eligible lenders permitted to originate eligible Federal PLUS Loans made under this paragraph for the cohort of students at the institutions of higher education within the State until the students graduate from or leave the institutions of higher education. ‘‘(D) BIDS.—Each eligible lender’s bid consists of the amount of the special allowance payment (after the application of section 438(b)(2)(I)(v)) the eligible lender proposes to accept from the Secretary with respect to the eligible Federal PLUS Loans made under this paragraph in lieu of the amount determined under section 438(b)(2)(I). ‘‘(E) MAXIMUM BID.—The maximum bid allowable under this paragraph shall not exceed the amount of the special allowance payable on eligible Federal PLUS Loans made under this paragraph computed under section 438(b)(2)(I) (other than clauses (ii), (iii), (iv), and (vi) of such section), except that for purposes of the computation under this subparagraph, section 438(b)(2)(I)(i)(III) shall be applied by substituting ‘1.79 percent’ for ‘2.34 percent’. ‘‘(F) WINNING BIDS.—The winning bids for each State auction shall be the 2 bids containing the lowest and the second lowest proposed special allowance payments, subject to subparagraph (E). ‘‘(G) AGREEMENT WITH SECRETARY.—Each eligible lender having a winning bid under subparagraph (F) enters into an agreement with the Secretary under which the eligible lender— ‘‘(i) agrees to originate eligible Federal PLUS Loans under this paragraph to each borrower who— ‘‘(I) seeks an eligible Federal PLUS Loan under this paragraph to enable a dependent student to attend an institution of higher education within the State; ‘‘(II) is eligible for an eligible Federal PLUS Loan; and ‘‘(III) elects to borrow from the eligible lender; and ‘‘(ii) agrees to accept a special allowance payment (after the application of section 438(b)(2)(I)(v)) from the Secretary with respect to the eligible Federal PLUS Loans originated under clause (i) in the amount proposed in the second lowest winning bid described in subparagraph (F) for the applicable State auction. ‘‘(H) SEALED BIDS; CONFIDENTIALITY.—All bids are sealed and the Secretary keeps the bids confidential, including following the announcement of the winning bids. ‘‘(I) ELIGIBLE LENDER OF LAST RESORT.—

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