Page:United States Statutes at Large Volume 123.djvu/1962

 123STA T . 1 94 2 PUBLIC LA W 111 – 39 —J UL Y 1, 2 0 09 todischarge the g u ara n t y agency ’ s insurance o bl igation and ‘ ‘ (I I )p ay to the holder o f such loan a special allo w ance pursuant to section 438. ‘‘( E ) DUTIES U PONA SSI G N M ENT. —W ith respect to a loan assigned under subparagraph ( A )(ii)— ‘‘(i) the guaranty agency shall add to the principal and interest outstanding at the ti m e of the assignment of such loan an amount e q ual to the amount described in subparagraph (D)(i)(II)(aa); and ‘‘(ii) the S ecretary shall pay the guaranty agency , for deposit in the agency’s O perating F und established pursuant to section 4 2 2 B, an amount equal to the amount added to the principal and interest outstanding at the time of the assignment in accordance with clause (i). ‘‘(F) E L IGI B LE LEN D E R LIMITATION.—A loan shall not be sold to an eligible lender under subparagraph (A)(i) if such lender has been found by the guaranty agency or the Secretary to ha v e substantially failed to e x ercise the due diligence required of lenders under this part. ‘‘( G )DE F AULT DUE TO ERROR.—A loan that does not meet the requirements of subparagraph (A) may also be eligible for sale or assignment under this paragraph upon a determination that the loan was in default due to clerical or data processing error and would not, in the absence of such error, be in a delinquent status.’’; (ii) in paragraph (2)— (I) by stri k ing ‘‘paragraph ( 1 ) of this sub - section’’ and inserting ‘‘paragraph (1)(A)(i)’’; and (II) by striking ‘‘paragraph (1)(B)(ii) of this subsection’’ and inserting ‘‘paragraph (1)(D)(ii)(I)’’; (iii) in paragraph (3)— (I) by striking ‘‘sold under paragraph (2)’’ and inserting ‘‘sold or assigned under paragraph (1)(A)’’; and (II) by striking ‘‘sale.’’ and inserting ‘‘sale or assignment.’’; (iv) in paragraph (4), by striking ‘‘which is sold under paragraph (1) of this subsection’’ and inserting ‘‘that is sold or assigned under paragraph (1)’’; and (v) in paragraph ( 5 ), by inserting ‘‘(whether by loan sale or assignment)’’ after ‘‘rehabilitating a loan’’; and (B) in subsection (b), in the first sentence, by inserting ‘‘or assigned to the Secretary’’ after ‘‘sold to an eligible lender’’. (2) EFFE C TI V E DATE.— T he amendments made by paragraph (1) shall be effective on the date of enactment of this Act, and shall apply to any loan on which monthly payments described in section 428F(a)(1)(A) were paid before, on, or after such date of enactment. (e) R EPA Y MENT IN FULL FOR DEAT H AND DISABILITY.— (1) IN GENERAL.—Section 43 7 (a)(1) (2 0U .S. C . 1087(a)(1)), as amended by section 437 of the H igher Education Opportunity Act ( P ublic L aw 110 – 315), is amended— 20USC1 0 78–6.Ap p licab ili ty .