Page:United States Statutes at Large Volume 94 Part 2.djvu/146

 94 STAT. 1424

PUBLIC LAW 96-374—OCT. 3, 1980 "(5) any special options the borrower may have for deferral, cancellation, prepayment, consolidation, or other refinancing of the loan; "(6) a definition of default and the consequences to the borrower if the borrower should default, including a description of any arrangements made with credit bureau organizations; and "(7) to the extent practicable, the effect of accepting the loan on the eligibility of the borrower for other forms of student assistance.". LOANS TO PARENTS

SEC. 419. Part B of title IV of the Act is amended by inserting immediately after section 428A the following new section: LOANS TO PARENTS OF DEPENDENT UNDERGRADUATE STUDENTS 20 USC 1078-2.

"Student" and "student borrower." Limitation.

20 USC 1078.

Ante, p. 1419.

Loan insurance.

"SEC. 428B. (a) Parents of a dependent undergraduate student (as defined by regulations by the Secretary) shall be eligible to borrow funds under this part in amounts specified in subsection Qo\ and unless otherwise specified in subsections (c) and (d), such loans shall have the same terms, conditions, and benefits as all other loans made under this part. Whenever necessary to carry out the provisions of this section the terms 'student' and 'student borrower' used in this part shall include a parent borrower under this section. "(b)(1) Subject to paragraphs (2) and (3), the maximum amount parents may borrow for one student in any academic year or its equivalent (as defined by regulation by the Secretary) is $3,000. "(2) The aggregate insured principal amount for insured loans made to parents on account of an undergraduate dependent student shall not exceed $15,000. "(3) No loan may be made to any parent or student under this part which would cause their combined loans for any academic year to exceed the student's estimated cost of attendance minus such student's estimated financial assistance as certified by the eligible institution under section 428(a)(2)(A) of this part. The annual insurable limit on account of any student shall not be deemed to be exceeded by a line of credit under which actual payments to the borrower will not be made in any year in excess of the annual limit. "(c)(1) Repayment of principal on loans made under this section shall commence not later than sixty days after the date such loan is disbursed by a lender. "(2) No payments to reduce interest costs shall be paid pursuant to section 428(a) of this part on loans made pursuant to this section. "(3) Interest on loans made pursuant to this section shall be at the rate of 9 per centum per annum on the unpaid principal balance of the loan, except that, if the loan is to cover the cost of education for a period of enrollment which begins on or after a date which is three months after the date on which the Secretary has made a determination under section 427A(b) and that borrower, on the date of entering into the note or other written evidence of the loan, has no obligation to repay any amount of principal or interest on any other loan made under this section with respect to the same student, then the interest shall be at the rate of 8 per centum per annum on the unpaid principal balance of the loan. "(d) Loans made under this section shall be insured by the Secretary in a State only if—

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