Page:United States Statutes at Large Volume 79.djvu/1079

 79 STAT. ]

PUBLIC LAW 89-287-OCT. 22, 1965

(b) The Commissioner may, if he finds it necessary to do so in order to assure an equitable distribution of the benefits of this Act, assign, within the maximum amounts specified in subsection (a), insurance uotas applicable to eligible lenders, or to States or areas, and may rom time to time reassign unused portions of these quotas.

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LIMITATIONS ON INDIVIDUAL. LOANS A N D ON INSURANCE

SEC. 6, (a) No loan or loans by one or more eligible lenders in excess of $1,000 in the aggregate to any student in any academic year or its equivalent shall be covered by insurance under this Act. The aggregate insured unpaid principal amount of all such insured loans made to any student shall not at any time exceed $2,000. The annual insurable limit per student shall not be deemed to be exceeded by a line of credit under which actual payments by the lender to the borrower will not be made in any year in excess of the annual limit. (b) The insurance liability on any loan insured under this Act shall be 100 per centum of the unpaid balance of the principal amount of the loan. Such insurance liability shall not include liability for interest whether or not that interest has been added to the principal amount of the loan. SOURCES OF F U N D S

SEC. 7. Loans made by eligible lenders in accordance with this Act shall be insurable whether made from funds fully owned by the lender or from funds held by the lender in a trust or similar capacity and available for such loans. ELIGIBILITY OF STUDENT BORROWERS A N D TERMS OF STUDENT LOANS

SEC. 8. (a) A loan by an eligible lender shall be insurable under the provisions of this Act only if— (1) made to a student who (A) has been accepted for enrollment at an eligible institution or, m the case of a student already attending such institution, is in good standing there as determined by the institution, and (B) is carrying at least one-half of the normal full-time workload as determined by the institution, and (C^ has provided the lender with a statement of the institution which sets forth a schedule of the tuition and fees applicable to that student and its estimate of the cost of board and room for such a student; and (2) evidenced by a note or other written agreement which— (A) is made without security and without endorsement, except that if the borrower is a minor and such note or other written agreement executed by him would not, under the applicable law, create a binding obligation, endorsement may be required, (B) provides for repayment (except as provided in subsection (c)) of the principal amount of the loan in installments over a period of not less than three years (unless sooner repaid) nor more than six years beginning not earlier than nine months nor later than one year after the date on which the student ceases to carry at an eligible institution at least one-half the normal full-time academic workload as determined by the institution in accordance with regulations of the Commissioner, except (i) as provided in clause (C) below, (ii) that the period of the loan may not exceed nine years from the execution of the note or written agreement

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