Page:United States Statutes at Large Volume 122.djvu/3256

 12 2 STA T .3 233 PUBLIC LA W 11 0– 31 5— AU G .1 4, 200 8‘ ‘ (I I )ifthepar e n t bo rro w eri s a l soast ud ent , the da y after the date su c h parent borrower ceases to carry at least one - half such a wor k load and ‘‘(ii) in the case of a g raduate or professional student borrower, during the 6 - m onth period beginning on the day after the date such student ceases to carry at least one- half the normal full-time academic workload (as determined by the institution) . ‘‘( 2 ) CAPIT A L I Z ATI ON O F INT ER E S T. — ‘‘( A )IN G ENERAL.—Interest on loans made under this section for which payments of principal are deferred pursu- ant to paragraph ( 1 ) shall, if agreed upon by the borrower and the lender— ‘‘(i) be paid monthly or q uarterly; or ‘‘(ii) be added to the principal amount of the loan not more frequently than quarterly by the lender. ‘‘( B ) INS U RA B LE LI M ITS.—Capitali z ation of interest under this paragraph shall not be deemed to e x ceed the annual insurable limit on account of the borrower. ’ ’. (b) CONFORMING AMEN D MENT.— S ection 4 2 8 (b)( 7 )(C) (2 0U .S.C. 1078(b)(7)(C)) is amended by striking ‘‘section’’ and all that follows through ‘‘428C’’ and inserting ‘‘section 428B or 428C’’. (c) E FFE C TI V E D ATE.— T he amendments made by this section shall take effect for loans for which the first disbursement is made on or after J uly 1, 2008. SEC.425 . F E D E RAL C ON SOL I DA T ION LOANS. (a) ELIGIBLE BORRO W ER.—Section 428C(a)( 3 )(B)(i)( V ) (20 U.S.C. 1078 – 3(a)(3)(B)(i)(V)) is amended— (1) in item (aa), by striking ‘‘or’’ after the semicolon; (2) in item (bb), by striking the period and inserting ‘‘; or’’; and (3) by adding at the end the following

‘‘(cc) for the purpose of using the no accrual of interest for acti v e duty service members benefit offered under section 4 5 5(o).’’. (b) CONSOLIDATION L OAN LENDER AGREEMENTS.— (1) IN GENERAL.—Section 428C(b)(1) (20 U.S.C. 1078– 3(b)(1)) is amended— (A) in subparagraph (E), by striking ‘‘and’’ after the semicolon; (B) by redesignating subparagraph ( F ) as subparagraph ( G ); and (C) by inserting after subparagraph (E) the following: ‘‘(F) that the lender shall disclose to a prospective borrower, in simple and understandable terms, at the time the lender provides an application for a consolidation loan— ‘‘(i) whether consolidation would result in a loss of loan benefits under this part or part D, including loan forgiveness, cancellation, and deferment; ‘‘(ii) with respect to Federal P erkins Loans under part E— ‘‘(I) that if a borrower includes a Federal Per- kins Loan under part E in the consolidation loan, the borrower will lose all interest-free periods that would have been available for the Federal Perkins Loan, such as— 20USC1 0 78note.

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