II 

118TH CONGRESS 

2D SESSION S. 4926 

To establish a new Guaranteed Student Loan Program. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 1, 2024 

Mr. ROUNDS introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To establish a new Guaranteed Student Loan Program. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Affordable Future 

5 Loan Program Act of 2024’’. 

6 SEC. 2. GOVERNMENT GUARANTEED STUDENT LOAN PRO7 GRAM. 

8 At the end of title IV of the Higher Education Act 

9 of 1965 (20 U.S.C. 1070 et seq.), add the following: 


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1 ‘‘PART J—GUARANTEED STUDENT LOAN 

2 PROGRAM 

3 ‘‘SEC. 499A. STATEMENT OF PURPOSE; NONDISCRIMINA4 TION; APPROPRIATIONS AUTHORIZED. 

5 ‘‘(a) PURPOSE; DISCRIMINATION PROHIBITED.— 

6 ‘‘(1) PURPOSE.—The purpose of this part is to 

7 enable the Secretary— 

8 ‘‘(A) to pay a portion of the interest on 

9 loans to qualified students that are guaranteed 

10 under this part; and 

11 ‘‘(B) to guarantee a portion of each loan 

12 under this part. 

13 ‘‘(2) DISCRIMINATION BY CREDITORS PROHIB14 ITED.—No agency, organization, institution, bank, 

15 credit union, corporation, or other lender who regu16 larly extends, renews, or continues credit under this 

17 part shall exclude from receipt or deny the benefits 

18 of, or discriminate against any borrower or applicant 

19 in obtaining, such credit on the basis of— 

20 ‘‘(A) race, national origin, religion, sex, 

21 marital status, age, or disability status; 

22 ‘‘(B) the type or category of institution of 

23 higher education that the borrower or applicant 

24 attends or attended; 

25 ‘‘(C) the degree or program of study of the 

26 borrower or applicant; or 


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1 ‘‘(D) the creditworthiness of the borrower 

2 or applicant. 

3 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There 

4 are authorized to be appropriated to carry out this part 

5 such sums as may be necessary for the period of fiscal 

6 years 2025 through 2029. 

7 ‘‘(c) DESIGNATION.—The program established under 

8 this part shall be referred to as the ‘Affordable Future 

9 Loan Program’. Loans made pursuant to this part shall 

10 be known as ‘Affordable Future loans’. 

11 ‘‘SEC. 499A-1. PROGRAM AUTHORITY. 

12 ‘‘The Secretary shall implement the Affordable Fu13 ture Loan Program, through which the Secretary shall— 

14 ‘‘(1) pay an eligible lender 98 percent of the 

15 amount of principal and interest due on each de16 faulted eligible loan that is issued under this part by 

17 an eligible lender; 

18 ‘‘(2) reimburse an eligible lender for amounts of 

19 subsidized interest under this part; and 

20 ‘‘(3) ensure that only eligible lenders that issue 

21 loans in accordance with this part receive the guar22 antee funds described in paragraph (1) and the re23 imbursement described in paragraph (2). 


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1 ‘‘SEC. 499A-2. ELIGIBLE LENDERS AND ELIGIBLE LOANS. 

2 ‘‘(a) ELIGIBLE LENDER.—For purposes of this part 

3 an eligible lender is an eligible lender as described in sub4 paragraphs (A) through (D), (I), and (K) of section 

5 435(d)(1), except that references to ’this part’ or ref6 erences to other sections in part B in such subsection shall 

7 be construed to mean this part rather than part B or any 

8 section of part B. 

9 ‘‘(b) ELIGIBLE LOAN.— 

10 ‘‘(1) IN GENERAL.—An eligible loan is a loan 

11 issued under this part on or after the date of enact12 ment of the Affordable Future Loan Program Act of 

13 2024 to an undergraduate student who is otherwise 

14 eligible under section 484, who meets the require15 ments of paragraph (2), and who is enrolled or will 

16 be enrolled at an eligible institution of higher edu17 cation, to enable such student to pursue the stu18 dent’s courses of study at such institution. 

19 ‘‘(2) FEDERAL LOANS.—A student who desires 

20 to apply for a loan under this part and is otherwise 

21 eligible to do so, may not apply for such loan until 

22 the student— 

23 ‘‘(A) has applied for, and received a deter24 mination notice about, financial assistance 

25 under subpart 1 of part A and part D for the 

26 applicable period of study; or 


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1 ‘‘(B) states that the student elects not to 

2 apply for financial assistance under subpart 1 

3 of part A and part D for the applicable period 

4 of study. 

5 ‘‘SEC. 499A-3. AGREEMENTS WITH ELIGIBLE LENDERS. 

6 ‘‘(a) PARTICIPATION AGREEMENTS.—An agreement 

7 with an eligible lender for participation in the program 

8 under this part shall— 

9 ‘‘(1) provide that an eligible lender will offer 

10 the maximum amount of eligible loans under this 

11 part to any undergraduate student for attendance at 

12 an eligible institution of higher education; 

13 ‘‘(2) provide that the eligible lender accepts re14 sponsibility and financial liability stemming from its 

15 failure to perform its functions pursuant to the 

16 agreement; 

17 ‘‘(3) provide for the implementation of a quality 

18 assurance system, as established by the Secretary 

19 and developed in consultation with eligible lenders, 

20 to ensure that the eligible lender is complying with 

21 program requirements and meeting program objec22 tives; 

23 ‘‘(4) provide that an eligible lender will comply 

24 with the requirements of subsection (c); 


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1 ‘‘(5) provide that the funds borrowed by a stu2 dent are disbursed to the institution by check or 

3 other means that is payable to and requires the en4 dorsement or other certification by such student, ex5 cept— 

6 ‘‘(A) that nothing in this section shall be 

7 interpreted— 

8 ‘‘(i) to allow the Secretary to require 

9 checks to be made copayable to the institu10 tion and the borrower; or 

11 ‘‘(ii) to prohibit the disbursement of 

12 loan proceeds by means other than by 

13 check; and 

14 ‘‘(B) in the case of any student who is 

15 studying outside the United States in a pro16 gram of study abroad that is approved for cred17 it by the home institution at which such student 

18 is enrolled, the funds shall, at the request of the 

19 borrower, be delivered directly to the student 

20 and the checks may be endorsed, and fund 

21 transfers authorized, pursuant to an authorized 

22 power-of-attorney; 

23 ‘‘(6) provide that funds will be disbursed in a 

24 manner that ensures that any Federal Pell Grant 

25 funds, any Federal Direct Loan funds, and any 


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1 State or institutional grant or scholarship funds 

2 awarded to the borrower are disbursed prior to dis3 bursement of any funds from a loan under this part; 

4 and 

5 ‘‘(7) provide that the funds borrowed by a stu6 dent are otherwise disbursed in accordance with sec7 tion 428G. 

8 ‘‘(b) WITHDRAWAL AND TERMINATION PROCE9 DURES.—The Secretary shall establish procedures by 

10 which eligible lenders may withdraw or be terminated from 

11 the program under this part. 

12 ‘‘(c) SUBMISSION OF STATEMENTS BY HOLDERS ON

13 AMOUNT OF PAYMENT.—Each holder of an eligible loan 

14 under this part, with respect to which payments of interest 

15 are required to be made by the Secretary, shall submit 

16 to the Secretary, at such time or times and in such man17 ner as the Secretary may prescribe, statements containing 

18 such information as may be required by or pursuant to 

19 regulation for the purpose of enabling the Secretary to de20 termine the amount of the payment which the Secretary 

21 must make with respect to that loan. 

22 ‘‘SEC. 499A-4. PAYMENT OF LOAN GUARANTEE FOR DE23 FAULTED LOANS. 

24 ‘‘(a) NOTICE TO SECRETARY AND PAYMENT OF

25 LOSS.—Upon default by the student borrower on any eliVerDate Sep 11 2014 21:39 Aug 31, 2024 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4926.IS S4926

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1 gible loan under this part, and prior to the commencement 

2 of suit or other enforcement proceedings upon security for 

3 that loan, the insurance beneficiary shall promptly notify 

4 the Secretary, and the Secretary shall if requested (at that 

5 time or after further collection efforts) by the beneficiary, 

6 or may on the Secretary’s own motion, if the insurance 

7 is still in effect, pay to the beneficiary 96 percent of the 

8 amount of the loss sustained by the insured upon that loan 

9 as soon as that amount has been determined. 

10 ‘‘(b) AMOUNT OF LOSS.—The ‘amount of the loss’ 

11 on any loan shall, for the purposes of this subsection and 

12 subsection (e), be deemed to be an amount equal to the 

13 unpaid balance of the principal amount and accrued inter14 est, including interest accruing from the date of submis15 sion of a valid default claim (as determined by the Sec16 retary) to the date on which payment is authorized by the 

17 Secretary, except that such amount may be reduced based 

18 on default rate in a manner similar to the reductions de19 scribed in section 425(b). 

20 ‘‘(c) DUE DILIGENCE.—Such beneficiary shall be re21 quired to meet the standards of due diligence in the collec22 tion of the loan and shall be required to submit proof that 

23 the institution was contacted and other reasonable at24 tempts were made to locate the borrower (when the locaVerDate Sep 11 2014 21:39 Aug 31, 2024 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4926.IS S4926

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1 tion of the borrower is unknown) and proof that contact 

2 was made with the borrower (when the location is known). 

3 ‘‘(d) TIMING OF DETERMINATION.—The Secretary 

4 shall make the determination required to carry out the 

5 provisions of this section not later than 90 days after the 

6 notification by the insurance beneficiary and shall make 

7 payment in full on the amount of the beneficiary’s loss 

8 pending completion of the due diligence investigation. 

9 ‘‘(e) EFFECT OF PAYMENT OF LOSS.—Upon pay10 ment of the amount of the loss pursuant to subsection (a), 

11 the United States shall be subrogated for all of the rights 

12 of the holder of the obligation upon the insured loan and 

13 shall be entitled to an assignment of the note or other 

14 evidence of the insured loan by the insurance beneficiary. 

15 The Secretary may, in attempting to make recovery on 

16 such loans, contract with private business concerns, State 

17 student loan insurance agencies, or State guaranty agen18 cies, for payment for services rendered by such concerns 

19 or agencies in assisting the Secretary in making such re20 covery. Any contract under this subsection entered into 

21 by the Secretary shall provide that attempts to make re22 covery on such loans shall be fair and reasonable, and do 

23 not involve harassment, intimidation, false or misleading 

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1 cerning the existence of any such loan to persons other 

2 than the student borrower. 

3 ‘‘(f) FORBEARANCE NOT PRECLUDED.—Nothing in 

4 this section or in this part shall be construed to preclude 

5 any forbearance for the benefit of the student borrower 

6 which may be agreed upon by the parties to the insured 

7 loan and approved by the Secretary, or to preclude for8 bearance by the Secretary in the enforcement of the in9 sured obligation after payment on that insurance. Any for10 bearance which is approved by the Secretary under this 

11 subsection with respect to the repayment of a loan, includ12 ing a forbearance during default, shall not be considered 

13 as indicating that a holder of a federally insured loan has 

14 failed to exercise reasonable care and due diligence in the 

15 collection of the loan. 

16 ‘‘(g) CARE AND DILIGENCE REQUIRED OF HOLD17 ERS.—Nothing in this section or in this part shall be con18 strued to excuse the holder of a federally insured loan 

19 from exercising reasonable care and diligence in the mak20 ing and collection of loans under the provisions of this 

21 part. If the Secretary, after a reasonable notice and oppor22 tunity for hearing to an eligible lender, finds that it has 

23 substantially failed to exercise such care and diligence or 

24 to make the reports and statements required under section 

25 499A–3(c), the Secretary shall disqualify that lender for 


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1 further Federal insurance on loans granted pursuant to 

2 this part until the Secretary is satisfied that its failure 

3 has ceased and finds that there is reasonable assurance 

4 that the lender will in the future exercise necessary care 

5 and diligence or comply with such requirements, as the 

6 case may be. 

7 ‘‘(h) REPORTS TO CONSUMER REPORTING AGENCIES

8 AND INSTITUTIONS OF HIGHER EDUCATION.—For the 

9 purpose of promoting responsible repayment of loans 

10 under this part, the Secretary and each eligible lender and 

11 subsequent holder shall enter into an agreement with each 

12 consumer reporting agency to exchange information con13 cerning student borrowers in the same manner as such 

14 agreements are made under section 430A. 

15 ‘‘SEC. 499A-5. PURCHASE OF LOANS SOLD IN SECONDARY 

16 MARKET. 

17 ‘‘(a) IN GENERAL.—Loans under this part may be 

18 sold in the secondary market to another eligible lender. 

19 ‘‘(b) SERVICING AND LIQUIDATION.—When an eligi20 ble lender has sold the guaranteed portion of a loan in 

21 the secondary market, the loan holder must perform all 

22 necessary servicing and liquidation actions for such loan. 

23 ‘‘(c) STATUS REPORT.—In the event that the Sec24 retary purchases its guaranteed portion of such a loan 

25 from the holder of the loan, the loan holder shall provide 


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1 the Secretary with a loan status report within 15 business 

2 days of such purchase. This report shall include a status 

3 report on the borrower and plans for any type of loan 

4 workout or loan restructuring. The report shall accompany 

5 requested documentation that the Secretary determines is 

6 sufficient to be able to review the loan holder’s administra7 tion of the loan. Failure to provide requested documenta8 tion to the Secretary may lead to initiation of an action 

9 for recovery from the loan holder of all or some of the 

10 amounts the Secretary paid to the holder of the loan on 

11 a guarantee. 

12 ‘‘(d) FURTHER EVALUATION.—The Secretary shall 

13 evaluate the eligible lender’s continued participation in the 

14 secondary market and may restrict further sale of guaran15 teed portions into the secondary market until the Sec16 retary determines that the eligible lender has provided suf17 ficient documentation for purchases. 

18 ‘‘SEC. 499A-6. DEFAULT REDUCTION PROGRAM. 

19 ‘‘(a) OTHER REPAYMENT INCENTIVES.— 

20 ‘‘(1) SALE OR ASSIGNMENT OF LOAN.— 

21 ‘‘(A) IN GENERAL.—The Secretary, upon 

22 securing 9 payments made within 20 days of 

23 the due date during 10 consecutive months of 

24 amounts owed on a loan for which the Sec25 retary has made a payment under this section, 


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1 shall, if practicable, sell the loan to another eli2 gible lender. 

3 ‘‘(B) MONTHLY PAYMENTS.—The Sec4 retary shall not demand from a borrower as 

5 monthly payment amounts described in sub6 paragraph (A) more than is reasonable and af7 fordable based on the borrower’s total financial 

8 circumstances, except such monthly payment 

9 amount shall not be less than $5. 

10 ‘‘(C) CONSUMER REPORTING AGENCIES.— 

11 Upon the sale or assignment of the loan, the 

12 Secretary shall request any consumer reporting 

13 agency to which the Secretary or holder, as ap14 plicable, reported the default of the loan, to re15 move the record of the default from the bor16 rower’s credit history. 

17 ‘‘(D) ELIGIBLE LENDER LIMITATION.—A 

18 loan shall not be sold to an eligible lender under 

19 subparagraph (A) if such lender has been found 

20 by the Secretary to have substantially failed to 

21 exercise the due diligence required of lenders 

22 under this part. 

23 ‘‘(E) DEFAULT DUE TO ERROR.—A loan 

24 that does not meet the requirements of sub25 paragraph (A) may also be eligible for sale or 


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1 assignment under this paragraph upon a deter2 mination that the loan was in default due to 

3 clerical or data processing error and would not, 

4 in the absence of such error, be in a delinquent 

5 status. 

6 ‘‘(2) BORROWER ELIGIBILITY.—Any borrower 

7 whose loan is sold under paragraph (1)(A) shall not 

8 be precluded by section 484 from receiving addi9 tional loans or grants under this title (for which he 

10 or she is otherwise eligible) on the basis of default11 ing on the loan prior to such loan sale. 

12 ‘‘(3) APPLICABILITY OF GENERAL LOAN CONDI13 TIONS.—A loan that is sold under paragraph (1)(A) 

14 shall, so long as the borrower continues to make 

15 scheduled repayments thereon, be subject to the 

16 same terms and conditions and qualify for the same 

17 benefits and privileges as other loans made under 

18 this part. 

19 ‘‘(4) LIMITATION.—A borrower may obtain the 

20 benefits available under this subsection with respect 

21 to rehabilitating a loan (whether by loan sale or as22 signment) not more than 2 times per loan. 

23 ‘‘(b) SATISFACTORY REPAYMENT ARRANGEMENTS

24 TO RENEW ELIGIBILITY.—The Secretary shall establish 

25 a program which allows a borrower with a defaulted loan 


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1 or loans to renew eligibility for all title IV student finan2 cial assistance (regardless of whether the defaulted loan 

3 has been sold to an eligible lender or assigned to the Sec4 retary) upon the borrower’s payment of 6 consecutive 

5 monthly payments. The loan holder shall not demand from 

6 a borrower as a monthly payment amount under this sub7 section more than is reasonable and affordable based upon 

8 the borrower’s total financial circumstances. A borrower 

9 may only obtain the benefit of this subsection with respect 

10 to renewed eligibility once. 

11 ‘‘(c) FINANCIAL AND ECONOMIC LITERACY.—Each 

12 program described in subsection (b) shall include making 

13 available financial and economic education materials for 

14 a borrower who has rehabilitated a loan. 

15 ‘‘SEC. 499A-7. TERMS AND CONDITIONS OF LOANS. 

16 ‘‘(a) ELIGIBILITY; MAXIMUM AID.— 

17 ‘‘(1) ELIGIBILITY.—A student’s amount of need 

18 for a loan under this part shall be based solely on 

19 the student’s estimated cost of attendance and esti20 mated financial assistance, including other assist21 ance through a Federal Pell Grant or a Federal Di22 rect Loan under this title or any State or institu23 tional grant or scholarship funds awarded to the stu24 dent. An expected family contribution or student aid 

25 index shall not be considered. 


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1 ‘‘(2) MAXIMUM AID.— 

2 ‘‘(A) IN GENERAL.—Subject to subpara3 graph (B), the maximum dollar amount of fi4 nancial assistance provided annually under this 

5 part to a student shall not exceed an amount 

6 equal to— 

7 ‘‘(i) the cost of attendance for such 

8 student; minus 

9 ‘‘(ii) the total amount of— 

10 ‘‘(I) other financial assistance 

11 not received under this title (as de12 fined in section 480(i)); and 

13 ‘‘(II) other financial assistance 

14 received under this title, including a 

15 Federal Pell Grant or a Federal Di16 rect Loan. 

17 ‘‘(B) LIMITATION.—A loan under this part 

18 shall not exceed an amount equal to— 

19 ‘‘(i) $19,000 adjusted annually ac20 cording to the estimated percentage change 

21 in the Consumer Price Index (as deter22 mined by the Secretary, using the defini23 tion in section 478(f)) for the most recent 

24 calendar year ending prior to the beginning 

25 of that award year; minus 


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1 ‘‘(ii) the amount described in sub2 clause (II) of subparagraph (A)(ii). 

3 ‘‘(b) INTEREST RATE.— 

4 ‘‘(1) RATES FOR BORROWERS NOT IN REPAY5 MENT STATUS.—In the case of a borrower who is 

6 not in repayment status, for an Affordable Future 

7 Loan for which the first disbursement is made on or 

8 after July 1, 2025, the applicable rate of interest 

9 shall, during any 12-month period beginning on July 

10 1 and ending on June 30, be determined on the pre11 ceding June 1 and be equal to the lesser of— 

12 ‘‘(A) a rate equal to the high yield of the 

13 10-year Treasury note auctioned at the final 

14 auction held prior to such June 1 plus 1 per15 cent; or 

16 ‘‘(B) 6.28 percent. 

17 ‘‘(2) RATES FOR BORROWERS IN REPAYMENT

18 STATUS.—In the case of a borrower who is in repay19 ment status, for an Affordable Future Loan for 

20 which the first disbursement is made on or after 

21 July 1, 2025, the applicable rate of interest shall, 

22 during any 12-month period beginning on July 1 

23 and ending on June 30, be determined on the pre24 ceding June 1 and be equal to the lesser of— 


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1 ‘‘(A) a rate equal to the high yield of the 

2 10-year Treasury note auctioned at the final 

3 auction held prior to such June 1 plus 2 per4 cent; or 

5 ‘‘(B) 6.28 percent. 

6 ‘‘(3) PUBLICATION.—The Secretary shall deter7 mine the applicable rates of interest under this sub8 section after consultation with the Secretary of the 

9 Treasury and shall publish such rate in the Federal 

10 Register as soon as practicable after the date of de11 termination, but before June 1 preceding the award 

12 year. 

13 ‘‘(4) SUBSIDIZED INTEREST.—The amount of 

14 interest for a loan under this part shall be paid by 

15 the Secretary to the eligible lender on behalf of the 

16 borrower only during the period of time that the 

17 borrower is not in repayment status. 

18 ‘‘(5) NOT IN REPAYMENT STATUS.—In this sec19 tion the term ‘not in repayment status’ means any 

20 period of time described in subparagraphs (A), (C), 

21 or (D) of subsection (e)(2). 

22 ‘‘(c) LOAN FEE.—Each eligible lender under this 

23 part may charge the borrower an origination fee in an 

24 amount not to exceed 1.0 percent of the principal amount 

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1 stallment payment of the proceeds of the loan prior to pay2 ment to the borrower. A lender that charges an origination 

3 fee under this paragraph shall assess the same fee to all 

4 student borrowers. 

5 ‘‘(d) REPAYMENT PLANS.— 

6 ‘‘(1) DESIGN AND SELECTION.—Consistent with 

7 criteria established by the Secretary, a borrower of 

8 a loan made under this part shall be offered 2 re9 payment plans for such loan. The borrower shall be 

10 entitled to accelerate, without penalty, repayment on 

11 the borrower’s loans under this part. The borrower 

12 may choose— 

13 ‘‘(A) a 15-year fixed installment repayment 

14 plan; or 

15 ‘‘(B) the income driven repayment plan de16 scribed in paragraph (2). 

17 ‘‘(2) INCOME DRIVEN REPAYMENT PLAN.— 

18 ‘‘(A) IN GENERAL.—Under the income19 driven repayment plan under this subsection the 

20 borrower’s aggregate monthly payment for 

21 loans under this part shall be equal to the in22 come-driven calculation, divided by 12. 

23 ‘‘(B) DISCRETIONARY INCOME.—The term 

24 ‘discretionary income’ means the amount by 

25 which a borrower’s (and the borrower’s spouse, 


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1 if applicable) annual adjusted gross income ex2 ceeds 150 percent of the poverty line applicable 

3 to the borrower’s family size. 

4 ‘‘(C) DISCRETIONARY INCOME BEND

5 POINT.—The term ‘discretionary income bend 

6 point’ means $25,000, adjusted annually for in7 flation as determined by the Consumer Price 

8 Index (as such term is defined in section 

9 478(f)) for the previous calendar year. 

10 ‘‘(D) INCOME-DRIVEN CALCULATION.— 

11 ‘‘(i) IN GENERAL.—The term ‘income12 driven calculation’, when used with respect 

13 to a borrower, means the annual amount 

14 due on the total amount of loans under 

15 this part, which annual amount is equiva16 lent to— 

17 ‘‘(I) 10 percent of the borrower’s 

18 discretionary income that is less than 

19 the discretionary income bend point, 

20 plus 

21 ‘‘(II) 15 percent of the bor22 rower’s discretionary income that is 

23 equal to or greater than the discre24 tionary income bend point. 


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1 ‘‘(ii) ANNUAL CALCULATION.—The 

2 calculation under clause (i) shall be deter3 mined on an annual basis for the duration 

4 of the repayment period. 

5 ‘‘(3) SELECTION BY LENDER.—If a borrower of 

6 a loan made under this part does not select a repay7 ment plan described in paragraph (1), the eligible 

8 lender shall provide the borrower with a repayment 

9 plan described in subparagraph (A) of paragraph 

10 (1). 

11 ‘‘(4) CHANGES IN SELECTIONS.—The borrower 

12 of a loan made under this part may change the bor13 rower’s selection of a repayment plan under para14 graph (1), or the eligible lender’s selection of the 

15 plan for the borrower under paragraph (3), as the 

16 case may be, without penalty or subject to additional 

17 fees, except that such borrower shall remain in a se18 lected repayment plan for not less than 6 months. 

19 ‘‘(5) ALTERNATIVE REPAYMENT PLANS.—The 

20 lender may provide, on a case by case basis, an al21 ternative repayment plan to a borrower of a loan 

22 made under this part who demonstrates to the satis23 faction of the lender that the terms and conditions 

24 of the repayment plans available under paragraph 

25 (1) are not adequate to accommodate the borrower’s 


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1 exceptional circumstances. In designing such alter2 native repayment plans, the lender shall ensure that 

3 such plans do not exceed the cost to the Federal 

4 Government, as determined on the basis of the 

5 present value of future payments by such borrowers, 

6 of loans made using the plans available under para7 graph (1). 

8 ‘‘(6) REPAYMENT AFTER DEFAULT.— 

9 ‘‘(A) LENDER COSTS.—The eligible lender 

10 may require any borrower who has defaulted on 

11 a loan made under this part to pay all reason12 able collection costs associated with such loan. 

13 ‘‘(B) PAYMENT TO SECRETARY.—The Sec14 retary may require any borrower who has de15 faulted on a loan made under this part to repay 

16 the loan pursuant to the income driven repay17 ment plan described in paragraph (1)(B). 

18 ‘‘(e) DEFERMENT.— 

19 ‘‘(1) IN GENERAL.—A borrower of a loan made 

20 under this part who meets any of the requirements 

21 described in subparagraphs (A) through (D) of para22 graph (2) shall be eligible for a deferment, during 

23 which periodic installments of principal and interest 

24 need not be paid. 


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1 ‘‘(2) ELIGIBILITY.—A borrower of a loan made 

2 under this part shall be eligible for a deferment dur3 ing any period— 

4 ‘‘(A) during which the borrower is carrying 

5 at least a normal full-time work load for the 

6 course of study that the borrower is pursuing, 

7 as determined by the eligible institution (as 

8 such term is defined in section 435(a)) the bor9 rower is attending; or 

10 ‘‘(B) for 6 months following the date on 

11 which the borrower ceases to carry the normal 

12 full-time work load as described in subpara13 graph (A); 

14 ‘‘(C) during which the borrower— 

15 ‘‘(i) is serving on active duty during a 

16 war or other military operation or national 

17 emergency; or 

18 ‘‘(ii) is performing qualifying National 

19 Guard duty during a war or other military 

20 operation or national emergency, 

21 and for the 180-day period following the demo22 bilization date for the service described in 

23 clause (i) or (ii); or 

24 ‘‘(D) during— 


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1 ‘‘(i) any period in which such bor2 rower is receiving treatment for cancer; 

3 and 

4 ‘‘(ii) the 6 months after such period. 

5 ‘‘(3) INTEREST ACCRUAL.—During periods de6 scribed in subparagraphs (A), (C), and (D) of para7 graph (2) interest shall be subsidized in accordance 

8 with subsection (b)(4). 

9 ‘‘(f) LOAN APPLICATION AND PROMISSORY NOTE.— 

10 The common financial reporting form required in section 

11 483(a)(1) shall constitute the application for loans made 

12 under this part. The Secretary shall develop, print, and 

13 distribute to participating eligible lenders a standard 

14 promissory note and loan disclosure form. 

15 ‘‘(g) LOAN DISBURSEMENT.—Loans shall be dis16 bursed in accordance with section 499A–3. 

17 ‘‘(h) DISCLOSURES.—With respect to loans under 

18 this part and in accordance with such regulations as the 

19 Secretary shall prescribe, each eligible lender participating 

20 in this part shall comply with each of the requirements 

21 under section 433 that apply to a lender with respect to 

22 a loan under part B. 

23 ‘‘(i) ENROLLMENT PERIOD LIMITATIONS.—In order 

24 to continue to be eligible for a loan under this part, a bor25 rower shall complete the program of study not more than 


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25 

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1 5 years after the date the borrower first enters the pro2 gram of study. 

3 ‘‘SEC. 499A-8. RELATIONSHIP TO OTHER FEDERAL LOANS. 

4 ‘‘(a) IN GENERAL.—A borrower may borrow loans 

5 both under part D and under this part for the same period 

6 of study. If a borrower is borrowing loans under both part 

7 D and this part for the same period of study, the eligible 

8 lender shall ensure that the Secretary has made deter9 minations about the amount of loans awarded under part 

10 D for such period prior to determining the amount of 

11 loans under this part that the borrower is eligible to bor12 row, in accordance with section 499A–2(b). 

13 ‘‘(b) RULE OF CONSTRUCTION.—Nothing in this Act 

14 shall be construed to require a borrower who borrows 

15 loans under this part to also borrow loans under part D. 

16 ‘‘(c) PROHIBITION ON COMBINING LOANS.—The Sec17 retary may not combine or otherwise consolidate a loan 

18 made under this part with a loan made under part D, un19 less the borrower of such loans elects to consolidate such 

20 loans.’’. 

Æ 


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