Page:United States Statutes at Large Volume 94 Part 2.djvu/141

 PUBLIC LAW 96-374—OCT. 3, 1980

94 STAT. 1419

each eligible lender in a State described in section 435(g)(1)(D) or (F) 20 USC 1085. shall repay advances made under section 439(p) in accordance with Post, p. 1430. agreements entered between the Association and such agency, institution, organization, or lender. "(3) Loans made pursuant to this subsection shall have the same terms, conditions, and benefits as all other loans made under this part.". INTEREST RATE AND PAYMENT

SEC. 415. (a)(1) Part B of the Act is amended by inserting immediately after section 427 the following new section: " A P P L I C A B L E I N T E R E S T RATES

"SEC. 427A. (a) With respect to any loan to cover the cost of 20 USC 1077a. instruction for any period of instruction beginning on or after January 1, 1981, the rate of interest applicable to any borrower shall— "(1) not exceed 7 per centum per annum on the unpaid principal balance of the loan in the case of any borrower who, on the date of entering into the note or other written evidence of that loan, has an outstanding balance of principal or interest on any loan made, insured, or guaranteed under this part, other than a loan for which the interest rate is determined under paragraph (2) or (3) of this subsection; "(2) except as provided in paragraph (3), be 9 per centum per annum on the unpaid principal balance of the loan in the case of any borrower who, on the date of entering into the note or other written evidence of that loan, has no outstanding balance of principal or interest on any loan made, insured, or guaranteed under this part, or who has such an outstanding balance on a loan for which the interest rate is determined under this paragraph; or "(3) be 8 per centum per annum on the unpaid principal balance of the loan in the case of any borrower not subject to paragraph (1) or (2) for any loan to cover the cost of education for any period of enrollment beginning on or after a date which is three months after a determination made under subsection (b). "(b) If for any twelve-month period beginning on or after January 1, 1981, the Secretary, after consultation with the Secretary of the Treasury, determines that the average of the bond equivalent rates of ninety-one-day Treasury bills auctioned for such twelve-month period is equal to or less than 9 per centum, the interest rate for loans under this part shall be the rate prescribed in subsection (a)(3) for borrowers described in such subsection. "(c) Nothing in this section shall be construed to prohibit a lender from charging a borrower interest at a rate less than the rate which is applicable under this part.". (2) Section 427(b) of the Act is amended by striking "No maximum" 20 USC 1077. and inserting in lieu thereof "Except as provided in section 427A, no maximum". (3) Section 428(a)(3)(B)(ii) of the Act is amended by striking out "7 20 USC 1078. per centum per annum on the unpaid principal balance" and inserting in lieu thereof "the applicable interest rate under this part". (4) Section 428(b)(lKF) of the Act is amended by inserting immediately before the semicolon at the end thereof a comma and the following: "except as otherwise required by section 427A".

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