I

103D CONGRESS

1ST SESSION H. R. 2055

To amend the Higher Education Act of 1965 to simplify the delivery of

student loans to borrowers and eliminate borrower confusion; to provide

a variety of repayment plans, including income contingent repayment

through the EXCEL Account, to borrowers so that they have flexibility

in managing their student loan repayment obligations, and so that those

obligations do not foreclose community service-oriented career choices

for those borrowers; to replace, through an orderly transition, the Federal

Family Education Loan Program with the Federal Direct Student Loan

Program; to avoid the unnecessary cost, to taxpayers and borrowers,

and administrative complexity associated with the Federal Family Education Loan Program through the use of a direct student loan program,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 11, 1993

Mr. ANDREWS of New Jersey (for himself, Mr. FORD of Michigan, Mr. CLAY,

Mr. MILLER of California, Mr. MURPHY, Mr. KILDEE, Mr. MARTINEZ,

Mr. ROEMER, Mr. BECERRA, Mr. BAESLER, and Mr. UNDERWOOD) introduced the following bill; which was referred to the Committee on

Education and Labor

A BILL

To amend the Higher Education Act of 1965 to simplify

the delivery of student loans to borrowers and eliminate

borrower confusion; to provide a variety of repayment

plans, including income contingent repayment through

the EXCEL Account, to borrowers so that they have

flexibility in managing their student loan repayment obligations, and so that those obligations do not foreclose
2

HR 2055 IH

community service-oriented career choices for those borrowers; to replace, through an orderly transition, the

Federal Family Education Loan Program with the Federal Direct Student Loan Program; to avoid the unnecessary cost, to taxpayers and borrowers, and administrative

complexity associated with the Federal Family Education

Loan Program through the use of a direct student loan

program, and for other purposes.

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

3 That this Act may be cited as the ‘‘Student Loan Reform

4 Act of 1993’’.

5 TITLE I—AMENDMENTS TO FEDERAL DIRECT

6 LOAN DEMONSTRATION PROGRAM

7 HEADING FOR PART

8 SEC. 111. Part D of title IV of the Higher Education

9 Act of 1965 (20 U.S.C. 1001 et seq.; hereinafter referred

10 to as ‘‘the Act’’) is amended in the part heading—

11 (1) by inserting ‘‘STUDENT’’ immediately fol12 lowing ‘‘DIRECT’’; and

13 (2) by striking out ‘‘DEMONSTRATION’’.

14 PURPOSE; PROGRAM AUTHORIZATION

15 SEC. 112. Section 451 of the Act is amended to read

16 as follows:

17 ‘‘PURPOSE; PROGRAM AUTHORIZATION

18 ‘‘SEC. 451. (a) PURPOSE.—It is the purpose of this

19 part—
3

HR 2055 IH

1 ‘‘(1) to simplify the delivery of student loans to

2 borrowers and eliminate borrower confusion;

3 ‘‘(2) to provide a variety of repayment plans,

4 including income contingent repayment through the

5 EXCEL Account, to borrowers so that they have

6 flexibility in managing their student loan repayment

7 obligations, and so that those obligations do not

8 foreclose community service-oriented career choices

9 for those borrowers;

10 ‘‘(3) to replace, through an orderly transition,

11 the Federal Family Education Loan Program under

12 part B of this title with the Federal Direct Student

13 Loan Program under this part;

14 ‘‘(4) to avoid the unnecessary cost, to taxpayers

15 and borrowers, and administrative complexity associ16 ated with the Federal Family Education Loan Pro17 gram under part B of this title through the use of

18 a direct student loan program; and

19 ‘‘(5) to create a more streamlined student loan

20 program that can be managed more effectively at

21 the Federal level.

22 ‘‘(b) PROGRAM AUTHORITY.—There are hereby made

23 available, in accordance with the provisions of this part,

24 such sums as may be necessary to make loans to all eligi25 ble students in attendance at participating institutions of
4

HR 2055 IH

1 higher education selected by the Secretary (and the eligi2 ble parents of such students), to enable such students to

3 pursue their courses of study at such institutions during

4 the period beginning July 1, 1994 and ending on June

5 30, 1998. Such loans shall be made by participating insti6 tutions that also have agreements with the Secretary to

7 originate loans, or by alternative originators designated by

8 the Secretary to make loans for students in attendance

9 at participating institutions (and their parents).’’.

10 FUNDS FOR ORIGINATION OF DIRECT STUDENT LOANS

11 SEC. 113. Section 452 of the Act is amended to read

12 as follows:

13 ‘‘FUNDS FOR ORIGINATION OF DIRECT STUDENT LOANS

14 ‘‘SEC. 452. (a) IN GENERAL.—The Secretary shall

15 provide funds for student and parent loans under this part

16 (1) directly to an institution of higher education that has

17 an agreement with the Secretary under section 454(a) to

18 participate in the direct student loan programs under this

19 part and that also has an agreement with the Secretary

20 under section 454(b) to originate loans under this part,

21 or (2) through an alternative originator designated by the

22 Secretary, on the basis of the need and the eligibility of

23 students at each participating institution, and parents of

24 such students, for such loans.

25 ‘‘(b) FEES FOR ORIGINATION SERVICES.—(1) The

26 Secretary shall pay fees to institutions of higher education
5

HR 2055 IH

1 with agreements under section 454(b), in an amount es2 tablished by the Secretary, to assist in meeting the costs

3 of loan origination. Such fees—

4 ‘‘(A) shall be paid by the Secretary based on all

5 the loans made under this part to a particular bor6 rower in the same academic year;

7 ‘‘(B) shall be subject to a sliding scale that de8 creases the amount of such fees as the number of

9 borrowers increases; and

10 ‘‘(C)(i) for academic year 1994–1995, shall not

11 exceed a program-wide average of $10 per borrower

12 for all the loans made under this part to such bor13 rower in the same academic year; and

14 ‘‘(ii) for succeeding academic years, the Sec15 retary shall establish such average fee in regulations.

16 ‘‘(2) The Secretary shall pay fees for loan origination

17 services to alternative originators of loans made under this

18 part in an amount established by the Secretary in accord19 ance with the terms of the contract between the Secretary

20 and each such alternative originator.

21 ‘‘(c) NO ENTITLEMENT TO PARTICIPATE OR ORIGI22 NATE.—No institution of higher education shall have a

23 right to participate in the programs authorized by this

24 part, originate loans, or perform any program function

25 under this part. Nothing in this subsection shall be con-
6

HR 2055 IH

1 strued so as to limit the entitlement of an eligible student

2 attending a participating institution (or the eligible parent

3 of such student) to borrow under this part.’’.

4 SELECTION OF INSTITUTIONS

5 SEC. 114. Section 453 of the Act is amended—

6 (1) by amending subsections (a) and (b) to read

7 as follows:

8 ‘‘(a) PHASE-IN OF PROGRAM.—(1)(A) The Secretary

9 shall enter into agreements pursuant to section 454(a)

10 with institutions of higher education to participate in the

11 direct student loan programs under this part, and agree12 ments pursuant to section 454(b) with institutions of

13 higher education to originate loans in such programs, for

14 academic years beginning on or after July 1, 1994. Alter15 native origination services, through which an entity other

16 than the participating institution at which the student is

17 in attendance originates the loan, shall be provided by the

18 Secretary, through one or more contracts under section

19 456 or such other means as the Secretary may provide,

20 for students attending participating institutions that do

21 not originate direct student loans under this part. Such

22 agreements for the first year of the program shall, to the

23 extent feasible, be entered into not later than January 1,

24 1994.

25 ‘‘(B) In order to ensure an expeditious but orderly

26 transition from the loan programs under part B of this
7

HR 2055 IH

1 title to the direct student loan programs under this part,

2 the Secretary shall, in the exercise of his or her discretion,

3 determine the number of institutions with which he or she

4 shall enter into agreements under sections 454 (a) and

5 (b) for any academic year, except that the Secretary shall

6 exercise such discretion so as to achieve the following

7 goals—

8 ‘‘(i) for academic year 1994–1995, loans made

9 under this part shall represent 4 percent of the sum

10 of new student loan volume under this part and part

11 B of this title;

12 ‘‘(ii) for academic year 1995–1996, loans made

13 under this part shall represent 25 percent of the

14 sum of new student loan volume under this part and

15 part B of this title;

16 ‘‘(iii) for academic year 1996–1997, loans made

17 under this part shall represent 60 percent of the

18 sum of new student loan volume under this part and

19 part B of this title; and

20 ‘‘(iv) for academic year 1997–1998, loans made

21 under this part shall represent 100 percent of the

22 sum of new student loan volume under this part and

23 part B of this title.

24 ‘‘(2) The requirements of the Cash Management Im25 provement Act of 1990 (Public Law 101–453) shall apply
8

HR 2055 IH

1 to the program under this part only to the extent specified

2 in a schedule established by the Secretaries of Education

3 and the Treasury, except that such schedule shall provide

4 for the application of all such requirements not later than

5 July 1, 1998.

6 ‘‘(b) SELECTION CRITERIA.—

7 ‘‘(1) PARTICIPATION.—(A) Each institution of

8 higher education desiring to participate in the direct

9 student loan program under this part shall submit

10 an application satisfactory to the Secretary contain11 ing such information and assurances as the Sec12 retary may require.

13 ‘‘(B) When the program authorized under this

14 part is fully implemented, the Secretary shall enter

15 into agreements under section 454(a) with institu16 tions that submit applications in accordance with

17 subparagraph (A).

18 ‘‘(C) Until such full implementation, the Sec19 retary shall select institutions for participation in

20 the direct student loan program under this part, and

21 shall enter into agreements with them under section

22 454(a), from among those institutions that submit

23 the applications described in subparagraph (A), and

24 meet such other eligibility requirements as the Sec25 retary may prescribe, by—
9

HR 2055 IH

1 ‘‘(i)(I) categorizing such institutions ac2 cording to anticipated loan volume, length of

3 academic program, and control of the institu4 tion; and

5 ‘‘(II) selecting institutions that are reason6 ably representative of the respective categories;

7 and

8 ‘‘(ii) if needed to carry out the purposes of

9 this part, selecting additional institutions.

10 ‘‘(2) ORIGINATION.—(A) The Secretary may

11 enter into a supplemental agreement with an institu12 tion (or a consortium of such institutions) that—

13 ‘‘(i) has an agreement under subsection

14 454(a);

15 ‘‘(ii) desires to originate loans under this

16 part; and

17 ‘‘(iii) meets the criteria specified in sub18 paragraph (B).

19 ‘‘(B)(i) For academic year 1994–1995, the Sec20 retary may approve an institution to originate loans

21 only if such institution—

22 ‘‘(I) made loans under part E of this title

23 in academic year 1993–1994 and did not exceed

24 the applicable maximum default rate under sec-
10

HR 2055 IH

1 tion 462(g) for the most recent fiscal year for

2 which data are available;

3 ‘‘(II) is not on the reimbursement system

4 of payment for any of the programs under sub5 part 1 or 3 of part A, part C, or part E;

6 ‘‘(III) is not overdue on program or finan7 cial reports or audits required under this title;

8 ‘‘(IV) is not subject to an emergency ac9 tion, or a limitation, suspension, or termination

10 under section 428(b)(1)(T), 432(h), or 487(c);

11 ‘‘(V) in the opinion of the Secretary, has

12 not had significant deficiencies identified by the

13 State postsecondary review entity under subpart

14 1 of part H of this title;

15 ‘‘(VI) in the opinion of the Secretary, has

16 not had severe performance deficiencies for any

17 of the programs under this title, including those

18 demonstrated by audits or program reviews

19 submitted or conducted during the five calendar

20 years immediately preceding the date of appli21 cation; and

22 ‘‘(VII) provides an assurance that it has

23 no delinquent outstanding debts to the United

24 States, unless such debts are being repaid

25 under or in accordance with a repayment ar-
11

HR 2055 IH

1 rangement satisfactory to the United States, or

2 the Secretary in his or her discretion deter3 mines that the existence or amount of such

4 debts has not been finally determined by the

5 cognizant Federal agency or agencies.

6 ‘‘(ii) For academic year 1995–1996 and subse7 quent academic years, the Secretary shall publish

8 regulations governing the approval of institutions to

9 originate loans.’’;

10 (2) by striking out subsections (c), (d), (e), and

11 (f);

12 (3) by amending subsection (g) to read as fol13 lows:

14 ‘‘(g) CONSORTIA.—Subject to such requirements as

15 the Secretary may prescribe, eligible institutions of higher

16 education with agreements under section 454(a) may

17 apply to originate loans under this part for students in

18 attendance at such institutions, as consortia. Such institu19 tions shall be required to meet the requirements to partici20 pate in the program under this part individually.’’; and

21 (4) by redesignating subsection (g) as sub22 section (c).

23 AGREEMENTS WITH INSTITUTIONS

24 SEC. 115. Section 454 of the Act is amended to read

25 as follows:
12

HR 2055 IH

1 ‘‘AGREEMENTS WITH INSTITUTIONS

2 ‘‘SEC. 454. (a) PARTICIPATION.—An agreement with

3 any institution of higher education for participation in the

4 direct student loan program under this part shall—

5 ‘‘(1) provide for the establishment and mainte6 nance of a direct student loan program at the insti7 tution under which—

8 ‘‘(A) the institution will—

9 ‘‘(i) identify eligible students who seek

10 student financial assistance at such institu11 tion in accordance with section 484;

12 ‘‘(ii) estimate the need of each such

13 student as required by part F of this title

14 for an academic year: Provided, That, any

15 loan obtained by a student under this part

16 with the same terms (except as otherwise

17 provided in this part) as loans made under

18 section 428A or 428H, or a loan obtained

19 by a parent under this part with the same

20 terms (except as otherwise provided in this

21 part) as loans made under section 428B,

22 or obtained under any State-sponsored or

23 private loan program, may be used to off24 set the expected family contribution of the

25 student for that year; and
13

HR 2055 IH

1 ‘‘(iii) provide a statement that cer2 tifies the eligibility of any student to re3 ceive a loan under this part that is not in

4 excess of the maximum amount applicable

5 to such loan, except that the institution

6 may, in exceptional circumstances specified

7 by the Secretary, refuse to certify a state8 ment that permits a student to receive a

9 loan under this part, or certify a loan

10 amount that is less than the student’s de11 termination of need (as determined under

12 part F of this title), if the reason for such

13 action is documented and provided in writ14 ten form to such student;

15 ‘‘(B) the institution will set forth a sched16 ule for disbursement of the proceeds of the loan

17 in installments, consistent with the require18 ments of section 428G; and

19 ‘‘(C) the institution will provide timely and

20 accurate information—

21 ‘‘(i) concerning the status of student

22 borrowers (and students on whose behalf

23 parents borrow under this part) while such

24 students are in attendance at the institu25 tion and concerning any new information
14

HR 2055 IH

1 of which the institution becomes aware for

2 such students (or their parents) after they

3 leave the institution, to the Secretary for

4 the servicing and collecting of loans made

5 under this part; and

6 ‘‘(ii) if the institution does not have

7 an agreement with the Secretary under

8 subsection (b), concerning student eligi9 bility and need, as determined under sub10 paragraph (A), to the Secretary as needed

11 for the alternative origination of loans to

12 eligible students and parents in accordance

13 with this part;

14 ‘‘(2) provide assurances that the institution will

15 comply with requirements established by the Sec16 retary relating to student loan information with re17 spect to loans made under this part;

18 ‘‘(3) provide that the institution accepts respon19 sibility and financial liability stemming from its fail20 ure to perform its functions pursuant to the agree21 ment;

22 ‘‘(4) provide that students at the institution

23 and their parents (with respect to such students)

24 will not be eligible to participate in the programs

25 under part B of this title for the period during
15

HR 2055 IH

1 which such institution participates in the direct stu2 dent loan program under this part;

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

4 assurance system, as established by the Secretary, to

5 ensure that the institution is complying with pro6 gram requirements and meeting program objectives;

7 ‘‘(6) provide that the institution will not charge

8 any fees of any kind, however described, to student

9 or parent borrowers for origination activities or the

10 provision of any information necessary for a student

11 or parent to receive a loan under this part, or any

12 benefits associated with such loan; and

13 ‘‘(7) include such other provisions as the Sec14 retary determines are necessary to protect the inter15 ests of the United States and to promote the pur16 poses of this part.

17 ‘‘(b) ORIGINATION.—An agreement with any institu18 tion of higher education for the origination of loans under

19 this part shall—

20 ‘‘(1) supplement the agreement entered into in

21 accordance with subsection (a);

22 ‘‘(2) include provisions established by the Sec23 retary that are similar to the participation agree24 ment provisions described in paragraphs (1)(G), (2),

25 (3), (4), (5), (6), and (7) of subsection (a), as modi-
16

HR 2055 IH

1 fied to relate to the origination of loans by the insti2 tution;

3 ‘‘(3) provide that the institution will originate

4 loans to eligible students and parents in accordance

5 with this part; and

6 ‘‘(4) provide that the note or evidence of obliga7 tion on the loan shall be the property of the

8 Secretary.

9 ‘‘(c) WITHDRAWAL AND TERMINATION PROCE10 DURES.—The Secretary shall establish procedures by

11 which institutions may withdraw or be terminated from

12 the program under this part.’’.

13 TERMS OF LOANS

14 SEC. 116. Section 456 of the Act is amended to read

15 as follows:

16 ‘‘TERMS AND CONDITIONS OF LOANS

17 ‘‘SEC. 456. (a) IN GENERAL.—(1) Unless otherwise

18 specified in this part, loans made to borrowers under this

19 part shall have the same terms, conditions, and benefits

20 as loans made to borrowers under sections 428, 428A,

21 428B, and 428H of this title.

22 ‘‘(2) Loans made to borrowers under this part that,

23 except as otherwise specified in this part, have the same

24 terms, conditions, and benefits as loans made to borrowers

25 under—
17

HR 2055 IH

1 ‘‘(A) section 428 shall be known as ‘Federal Di2 rect Stafford Loans’;

3 ‘‘(B) section 428A shall be known as ‘Federal

4 Direct Supplemental Loans for Students’;

5 ‘‘(C) section 428B shall be known as ‘Federal

6 Direct PLUS Loans’; and

7 ‘‘(D) section 428H shall be known as ‘Federal

8 Direct Unsubsidized Stafford Loans’.

9 ‘‘(b) INTEREST RATE.—(1) Section 427A(a) shall not

10 apply to loans made under this part.

11 ‘‘(2)(A) For Federal Direct Stafford Loans and Fed12 eral Direct Unsubsidized Stafford Loans made before July

13 1, 1997, the applicable rate of interest shall, during any

14 twelve-month period beginning on July 1 and ending on

15 June 30, be determined on the preceding June 1 and be

16 equal to—

17 ‘‘(i) the bond equivalent rate of ninety-one-day

18 Treasury bills auctioned at the final auction held

19 prior to such June 1; plus

20 ‘‘(ii) 3.1 percent,

21 except that such rate shall not exceed 9 percent.

22 ‘‘(B) For Federal Direct Stafford Loans and Federal

23 Direct Unsubsidized Stafford Loans made on or after July

24 1, 1997, the applicable rate of interest shall, during any

25 twelve-month period beginning on July 1 and ending on
18

HR 2055 IH

1 June 30, be determined on the preceding June 1 for all

2 such loans and be equal to—

3 ‘‘(i) the bond equivalent rate of the security

4 with a comparable maturity; plus

5 ‘‘(ii) 1 percent,

6 except that such rate shall not exceed 9 percent.

7 ‘‘(3)(A) For Federal Direct Supplemental Loans for

8 Students made before July 1, 1997, the applicable rate

9 of interest shall, during any twelve-month period begin10 ning on July 1 and ending on June 30, be determined

11 on the preceding June 1 and be equal to—

12 ‘‘(i) the bond equivalent rate of fifty-two-week

13 Treasury bills auctioned at the final auction held

14 prior to such June 1; plus

15 ‘‘(ii) 3.1 percent,

16 except that such rate shall not exceed 11 percent.

17 ‘‘(B) For Federal Direct Supplemental Loans for

18 Students made on or after July 1, 1997, the applicable

19 rate of interest shall, during any twelve-month period be20 ginning on July 1 and ending on June 30, be determined

21 on the preceding June 1 for all such loans and be equal

22 to—

23 ‘‘(i) the bond equivalent rate of the security

24 with a comparable maturity; plus

25 ‘‘(ii) 1.5 percent,
19

HR 2055 IH

1 except that such rate shall not exceed 11 percent.

2 ‘‘(4)(A) For Federal Direct PLUS Loans made be3 fore July 1, 1997, the applicable rate of interest shall, dur4 ing any twelve-month period beginning on July 1 and end5 ing on June 30, be determined on the preceding June 1

6 for loans and be equal to—

7 ‘‘(i) the bond equivalent rate of fifty-two-week

8 Treasury bills auctioned at the final auction held

9 prior to such June 1; plus

10 ‘‘(ii) 3.1 percent,

11 except that such rate shall not exceed 10 percent.

12 ‘‘(B) For Federal Direct PLUS Loans made on or

13 after July 1, 1997, the applicable rate of interest shall,

14 during any twelve-month period beginning on July 1 and

15 ending on June 30, be determined on the preceding June

16 1 for all such loans and be equal to—

17 ‘‘(i) the bond equivalent rate of the security

18 with a comparable maturity; plus

19 ‘‘(ii) 2.1 percent,

20 except that such rate shall not exceed 10 percent.

21 ‘‘(c) LOAN FEE.—The Secretary shall charge the bor22 rower of a loan made under this part a loan fee of not

23 less than 5 percent, but not more than 6.5 percent, of

24 the principal amount of the loan.
20

HR 2055 IH

1 ‘‘(d) REPAYMENT PLANS.—(1)(A) The Secretary

2 shall design each repayment plan under this subsection so

3 that, to the extent possible, the cost to the Federal Gov4 ernment for each cohort of borrowers does not exceed what

5 such cost would be if all borrowers in the cohort selected

6 the standard repayment plan described in clause (i). Con7 sistent with criteria established by the Secretary, the Sec8 retary shall offer a borrower of a loan made under this

9 part a variety of plans for repayment of such loan, includ10 ing principal and interest on the loan. The borrower may

11 choose—

12 ‘‘(i) a standard repayment plan, with a fixed

13 annual repayment amount paid over a fixed period

14 of time;

15 ‘‘(ii) an extended repayment plan, with a fixed

16 annual repayment amount paid over an extended pe17 riod of time: Provided, That, the borrower annually

18 repays a minimum amount determined by the

19 Secretary;

20 ‘‘(iii) a graduated repayment plan, with annual

21 repayment amounts established at two or more grad22 uated levels and paid over a fixed or extended period

23 of time: Provided, That, any of the borrower’s sched24 uled payments shall not be less than 50 percent, nor

25 more than 150 percent, of what the amortized pay-
21

HR 2055 IH

1 ment on the amount owed would be if the loan were

2 repaid under the standard repayment plan; and

3 ‘‘(iv) except for the borrower of a Federal Di4 rect PLUS Loan, an income contingent repayment

5 plan known as an ‘EXCEL Account,’ with varying

6 annual repayment amounts based on the income of

7 the borrower, paid over an extended period of time,

8 not to exceed a maximum length of time determined

9 by the Secretary.

10 ‘‘(B) If a borrower of a loan made under this part

11 does not select a repayment plan described in subpara12 graph (A), the Secretary may provide the borrower with

13 a repayment plan described in clause (i), (ii), or (iii) of

14 subparagraph (A).

15 ‘‘(C) The borrower of a loan made under this part

16 may change his or her selection of a repayment plan under

17 subparagraph (A), or the Secretary’s selection of a plan

18 for the borrower under subparagraph (B), as the case may

19 be, under such terms and conditions as may be established

20 by the Secretary.

21 ‘‘(D) The Secretary may provide an alternative repay22 ment plan to a borrower of a loan made under this part

23 who demonstrates to the satisfaction of the Secretary that

24 the terms and conditions of the repayment plans available
22

HR 2055 IH

1 under subparagraph (A) are not adequate to accommodate

2 the borrower’s exceptional circumstances.

3 ‘‘(E) The Secretary may require any borrower who

4 has defaulted on a loan made under this part to—

5 ‘‘(i) pay all reasonable collection costs associ6 ated with such loan; and

7 ‘‘(ii) repay the loan pursuant to an EXCEL

8 Account.

9 ‘‘(2)(A) The Secretary may obtain such information

10 as is reasonably necessary regarding the income of a bor11 rower (and the borrower’s spouse, if applicable) of a loan

12 made under this part that is, or may be, repaid pursuant

13 to an EXCEL Account for the purpose of determining the

14 annual repayment obligation of the borrower. The Sec15 retary shall establish procedures for determining the bor16 rower’s repayment obligation on that loan for such year,

17 and such other procedures as are necessary to implement

18 effectively repayment pursuant to an EXCEL Account.

19 ‘‘(B)(i) A repayment schedule for a loan made under

20 this part and repaid pursuant to an EXCEL Account shall

21 be based on the adjusted gross income (as defined in sec22 tion 62 of the Internal Revenue Code of 1986, 26 U.S.C.

23 62) of the borrower or, if the borrower is married and

24 files a Federal income tax return jointly with his or her
23

HR 2055 IH

1 spouse, on the adjusted gross income of the borrower and

2 his or her spouse.

3 ‘‘(ii) A borrower who chooses, or is required, to repay

4 a loan made under this part pursuant to an EXCEL Ac5 count, and for whom adjusted gross income is unavailable

6 or does not reasonably reflect his or her current income,

7 shall provide to the Secretary other documentation of in8 come satisfactory to the Secretary, which documentation

9 the Secretary may use to determine an appropriate repay10 ment schedule.

11 ‘‘(iii) EXCEL Account repayment schedules shall be

12 established by the Secretary through regulations and shall

13 require payments measured as a percentage of the appro14 priate portion of the annual income of the borrower (and

15 the borrower’s spouse, if applicable) as determined by the

16 Secretary.

17 ‘‘(iv) The balance due on a loan made under this part

18 that is repaid pursuant to an EXCEL Account shall equal

19 the unpaid principal amount of the loan, any accrued in20 terest, and any fees, such as late charges, assessed on such

21 loan. The Secretary may limit by regulation the amount

22 of interest that may be capitalized on such loan, and the

23 timing of any such capitalization.

24 ‘‘(C) The Secretary shall establish procedures under

25 which a borrower of a loan made under this part who
24

HR 2055 IH

1 chooses or is required to repay such loan pursuant to an

2 EXCEL Account is notified of the terms and conditions

3 of such plan, including notification of such borrower—

4 ‘‘(i) that the Internal Revenue Service will dis5 close to the Secretary the most recent available in6 formation concerning the borrower’s income; and

7 ‘‘(ii) that if a borrower considers that special

8 circumstances, such as a loss of employment by the

9 borrower or his or her spouse, warrant an adjust10 ment in the borrower’s loan repayment as deter11 mined using the information described in clause (i),

12 or the alternative documentation described in sub13 paragraph (B)(ii), the borrower may contact the

14 Secretary, who shall determine whether such adjust15 ment is appropriate, in accordance with criteria es16 tablished by the Secretary.

17 ‘‘(e) DEFERMENT.—(1) A borrower of a loan made

18 under this part who meets the requirements described in

19 paragraph (2) shall be eligible for a deferment, during

20 which periodic installments of principal need not be paid,

21 and interest—

22 ‘‘(A) shall not accrue, in the case of a Federal

23 Direct Stafford Loan or a Federal Direct Consolida24 tion Loan that consolidated only Federal Direct

25 Stafford Loans, or a combination of such loans and
25

HR 2055 IH

1 Federal Stafford Loans for which the student bor2 rower received an interest subsidy under section

3 428; or

4 ‘‘(B) shall accrue and be capitalized or paid by

5 the borrower, in the case of a Federal Direct Supple6 mental Loan for Students loan, a Federal Direct

7 PLUS Loan, a Federal Direct Unsubsidized Staf8 ford Loan, or a Federal Direct Consolidation Loan

9 other than those described in subparagraph (A).

10 ‘‘(2) A borrower of a loan made under this part shall

11 be eligible for a deferment during any period—

12 ‘‘(A) during which the borrower—

13 ‘‘(i) is pursuing at least a half-time course

14 of study at an eligible institution, as determined

15 by such institution; or

16 ‘‘(ii) is pursuing a course of study pursu17 ant to a graduate fellowship program approved

18 by the Secretary, or pursuant to a rehabilitation

19 training program for individuals with disabil20 ities approved by the Secretary.

21 except that no borrower shall be eligible for a deferment

22 under this subparagraph, or a loan made this part (other

23 than a Federal Direct PLUS Loan, or a Federal Direct

24 Consolidation Loan), while serving in a medical internship

25 or residency program;
26

HR 2055 IH

1 ‘‘(B) not in excess of three years during which

2 the borrower is seeking and unable to find full-time

3 employment;

4 ‘‘(C) not in excess of three years during which

5 the Secretary determines, in accordance with regula6 tions prescribed under section 435(o), that the bor7 rower has experienced or will experience an economic

8 hardship, regardless of the reason for such hardship.

9 ‘‘(f) FORBEARANCE.—(1)(A) A borrower of a loan

10 made under this part shall be eligible for forbearance, as

11 defined in subparagraph (B), which shall be granted by

12 the Secretary if the Secretary determines that the bor13 rower is willing but unable to make scheduled loan pay14 ments.

15 ‘‘(B) The term ‘forbearance’ means permitting the

16 temporary cessation of payments, allowing an extension of

17 time for making payments, or temporarily accepting small18 er payments than previously scheduled. Interest shall con19 tinue to accrue on a loan for which a borrower receives

20 forbearance and shall be capitalized or paid by the

21 borrower.

22 ‘‘(2)(A) A borrower of a loan made under this part

23 who is serving in a national service position, for which he

24 or she receives a national service educational award under

25 the National Service Trust Act of 1993, shall be eligible
27

HR 2055 IH

1 for forbearance granted by the Secretary during periods

2 in which the borrower is serving in such position.

3 ‘‘(B) For purposes of this paragraph, ‘forbearance’

4 shall mean the temporary cessation of payments unless the

5 borrower selects another option described in paragraph

6 (1)(B).

7 ‘‘(g) FEDERAL DIRECT CONSOLIDATION LOANS.—A

8 borrower of a loan made under this part may consolidate

9 such loan with the loans described in subsection (a)(4) and

10 (d)(1)(C) of section 428C only under the terms and condi11 tions established by the Secretary under this part. Loans

12 made under this subsection shall be known as ‘Federal

13 Direct Consolidation Loans’;

14 ‘‘(h) BORROWER DEFENSES.—Notwithstanding any

15 other provision of State or Federal law, the Secretary shall

16 specify in regulations (except as authorized under section

17 458(a)), which acts or omissions of an institution of higher

18 education a borrower may assert as a defense to repay19 ment of a loan made under this part, except that in no

20 event may a borrower recover from the Secretary, in any

21 action arising from or relating to a loan made under this

22 part, an amount in excess of the amount such borrower

23 has repaid on such loan.

24 ‘‘(i) OPTICALLY IMAGED DOCUMENTS.—Records

25 maintained in accordance with section 484A(c) may be
28

HR 2055 IH

1 used in any proceeding, as permitted by section 484A(c),

2 with respect to a loan made under this part.

3 ‘‘(j) NONDISCHARGEABILITY IN BANKRUPTCY.—Not4 withstanding any other provision of law, a loan made

5 under this part shall not be dischargeable in bankruptcy.’’.

6 CONTRACTS

7 SEC. 117. Section 457 of the Act is amended to read

8 as follows:

9 ‘‘CONTRACTS

10 ‘‘SEC. 457. (a)(1) The Secretary may award one or

11 more contracts for services and supplies under subsection

12 (b). The entities with which the Secretary may enter into

13 such contracts may include, but are not limited to, agen14 cies with agreements with the Secretary under sections

15 428 (b) and (c), if such agencies are otherwise qualified

16 and comply with the procedures applicable to the award

17 of such contracts.

18 ‘‘(2) The Secretary may, through June 30, 1998,

19 award contracts under this section without regard to the

20 requirements in section 253 of title 41, United States

21 Code, section 416 of title 41, United States Code, and sec22 tion 637(e) of title 15, United States Code and the cor23 responding requirements of the Federal Acquisition Regu24 lations if he or she determines, on a case-by-case basis,

25 that exemption from such requirements is in the public

26 interest and necessary for the orderly transition from the
29

HR 2055 IH

1 loan programs under part B to the direct student loan

2 programs under this part.

3 ‘‘(3) On and after July 1, 1998, all statutory and

4 regulatory requirements described in paragraph (2) shall

5 apply to the award of a contract under this section.

6 ‘‘(b) The Secretary may enter into one or more con7 tracts for—

8 ‘‘(1) the alternative origination of loans to stu9 dents attending institutions with agreements to par10 ticipate in the program under this part (or their par11 ents), if such institutions do not have agreements

12 with the Secretary under section 454(b);

13 ‘‘(2) the servicing and collection of loans made

14 under this part;

15 ‘‘(3) the establishment and operation of one or

16 more data systems for the maintenance of records

17 on all loans made under this part;

18 ‘‘(4) services to assist in the orderly transition

19 from the loan programs under part B to the direct

20 student loan programs under this part; and

21 ‘‘(5) such other aspects of the direct student

22 loan programs as the Secretary determines are nec23 essary to ensure the successful operation of the pro24 grams.’’.

25 REPORTS

26 SEC. 118. Section 458 of the Act is amended—
30

HR 2055 IH

1 (1) in subsection (a), by striking out ‘‘dem2 onstration program.’’ and inserting in lieu thereof

3 ‘‘program under this part.’’;

4 (2) by striking out subsections (b), (c), (d), and

5 (e); and

6 (3) adding at the end thereof the following new

7 subsections:

8 ‘‘(b) RESEARCH, DEMONSTRATION, AND EVALUA9 TION.—The Secretary may use a portion of the funds de10 scribed in section 459 for research on, or the demonstra11 tion or evaluation of, any aspects of the program author12 ized by this part, including flexible repayment plans.

13 ‘‘(c) PLAN FOR IRS PARTICIPATION AND OTHER RE14 PAYMENT OPTIONS.—(1) The Secretaries of Education

15 and the Treasury shall, within six months of the date of

16 enactment, submit a plan to the President that—

17 ‘‘(A) provides for repayment for loans made

18 under this part through wage withholding by the

19 Internal Revenue Service; and

20 ‘‘(B) evaluates the feasibility of other wage21 withholding repayment options for such loans.

22 ‘‘(2) If the President determines that the implemen23 tation of one or more repayment options contained in the

24 plan described in paragraph (1) would further the pur25 poses of this part, the Secretaries of Education and the
31

HR 2055 IH

1 Treasury shall be authorized to take such actions as are

2 reasonable and necessary to implement such repayment

3 options, including entering into an agreement pursuant to

4 section 6306 of the Internal Revenue Code of 1986.

5 ‘‘(3) The Secretary of Education may use such

6 amounts as may be necessary for the funds available

7 under section 459 to implement the repayment options se8 lected by the President under paragraph (2) and shall

9 make available to the Secretary of the Treasury such

10 amounts under section 459 as the Secretaries determine

11 to be necessary to implement those repayment options car12 ried out by the Internal Revenue Service.’’.

13 SECRETARIAL ACTIVITIES

14 SEC. 119. Section 459 of the Act is amended—

15 (1) in the section heading, by striking out

16 ‘‘SCHEDULE OF’’;

17 (2) by striking out subsection (a) and inserting

18 in lieu thereof the following new subsection:

19 ‘‘(a) NOTICE IN LIEU OF REGULATIONS FOR FIRST

20 YEAR OF PROGRAM.—The Secretary shall publish in the

21 Federal Register whatever standards, criteria, and proce22 dures, consistent with the provisions of this part, the Sec23 retary determines are reasonable and necessary to the suc24 cessful implementation of the first year of the direct stu25 dent loan program authorized by this part. Section 431

26 of the General Education Provisions Act shall not apply
32

HR 2055 IH

1 to the publication of such standards, criteria, and proce2 dures.’’;

3 (3) by striking out subsections (b) and (e);

4 (4) in subsection (c)—

5 (A) by inserting ‘‘a date not later than’’

6 immediately preceding ‘‘October 1, 1993,’’; and

7 (B) by striking out ‘‘participate’’ through

8 the end thereof and inserting in lieu thereof the

9 following: ‘‘participate in the first year of the

10 direct student loan program under this part.’’;

11 (5) in subsection (d), by striking out ‘‘partici12 pate’’ through the end thereof and inserting in lieu

13 thereof the following: ‘‘participate in the first year of

14 the loan program under this part.’’; and

15 (6) by redesignating subsections (c) and (d) as

16 subsections (b) and (c), respectively.

17 REPEALS AND REDESIGNATIONS

18 SEC. 120. (a) Section 455 of the Act is repealed.

19 (b) Sections 456, 457, 458, 459, and 459A are redes20 ignated as sections 455, 456, 457, 458, and 459, respec21 tively.

22 FUNDS FOR ADMINISTRATIVE EXPENSES

23 SEC. 121. Section 459 of the Act (as redesignated

24 by section 120) is amended by striking out ‘‘administra25 tive costs under this part,’’ through the end thereof and

26 inserting in lieu thereof the following: ‘‘administrative
33

HR 2055 IH

1 costs under this part, including the costs of the transition

2 from the loan programs under part B to the direct student

3 loan programs under this part and transition support for

4 the expenses of guaranty agencies in servicing outstanding

5 loans in their portfolios and in guaranteeing new loans,

6 not to exceed $261,000,000 in fiscal year 1994,

7 $346,000,000 in fiscal year 1995, $552,000,000 in fiscal

8 year 1996, $596,000,000 in fiscal year 1997, and

9 $749,000,000 in fiscal year 1998. If in any fiscal year,

10 the Secretary determines that additional funds for admin11 istrative expenses are needed as a result of such transi12 tion, or the expansion of the direct student loan programs

13 under this part, the Secretary is authorized to use funds

14 available under this section for a subsequent fiscal year

15 for such expenses. The Secretary is also authorized to

16 carry over funds available under this section to a subse17 quent fiscal year.’’.

18 TITLE II—CONFORMING AMENDMENTS

19 PART A—CONFORMING AMENDMENTS TO THE HIGHER

20 EDUCATION ACT OF 1965

21 PRESERVING LOAN ACCESS

22 SEC. 211. (a) PURPOSE.—It is the purpose of the

23 amendments made by this section to provide the Secretary

24 with flexible authority as needed to preserve access to stu25 dent and parent loans under part B of title IV of the Act
34

HR 2055 IH

1 during the transition from the Federal Family Education

2 Loan Program under such part to the Federal Direct

3 Student Loan Program under part D of such title.

4 (b) ADVANCES TO GUARANTY AGENCIES FOR LEND5 ER-OF-LAST-RESORT SERVICES.—(1) Section 428(j) of

6 the Act is amended by adding at the end thereof the

7 following new paragraph:

8 ‘‘(4) ADVANCES TO GUARANTY AGENCIES FOR

9 LENDER-OF-LAST-RESORT SERVICES DURING TRANSI10 TION TO DIRECT LENDING.—(A) In order to ensure the

11 availability of loan capital during the transition from the

12 Federal Family Education Loan Program under this part

13 to the Federal Direct Student Loan Program under part

14 D of this title, the Secretary is authorized to provide a

15 guaranty agency with additional advance funds in accord16 ance with section 422(c)(7), with such restrictions on the

17 use of such funds as are determined appropriate by the

18 Secretary, in order to ensure that the guaranty agency will

19 make loans as the lender-of-last-resort. Such agency shall

20 make such loans in accordance with this subsection and

21 the requirements of the Secretary.

22 ‘‘(B) Notwithstanding any other provision in this

23 part, a guaranty agency serving as a lender-of-last-resort

24 under this paragraph shall be paid a fee, established by

25 the Secretary, for making such loans in lieu of interest
35

HR 2055 IH

1 and special allowance subsidies, and shall be required to

2 assign such loans to the Secretary on demand. Upon such

3 assignment, the portion of the advance represented by the

4 loans assigned shall be considered repaid by such guaranty

5 agency.’’.

6 (2) Section 422(c)(7) of the Act is amended by strik7 ing out ‘‘to a guaranty agency’’ through the end thereof

8 and inserting in lieu thereof the following: ‘‘to a guaranty

9 agency—

10 ‘‘(A) in accordance with section 428(j), in order

11 to ensure that the guaranty agency shall make loans

12 as the lender-of-last-resort during the transition

13 from the Federal Family Education Loan Program

14 under this part to the Federal Direct Student Loan

15 Program under part D of this title; or

16 ‘‘(B) if the Secretary is seeking to terminate

17 the guaranty agency’s agreement, or assuming the

18 guaranty agency’s functions, in accordance with sec19 tion 428(c)(10)(F)(v), in order to assist the agency

20 in meeting its immediate cash needs, ensure the un21 interrupted payment of claims, or ensure that the

22 guaranty agency shall make loans as described in

23 subparagraph (A);’’.

24 (c) LENDER REFERRAL SERVICES.—Section 428(e)

25 of the Act is amended—
36

HR 2055 IH

1 (1) in paragraph (1)—

2 (A) by amending the paragraph heading to

3 read as follows: ‘‘IN GENERAL; AGREEMENTS

4 WITH GUARANTY AGENCIES.—’’;

5 (B) by inserting the subparagraph designa6 tion ‘‘(A)’’ immediately after the paragraph

7 designation;

8 (C) by striking out ‘‘in any State’’ and in9 serting in lieu thereof ‘‘with which the Sec10 retary has an agreement under subparagraph

11 (B)’’; and

12 (D) by adding at the end thereof the fol13 lowing new subparagraph:

14 ‘‘(B)(i) The Secretary may enter into

15 agreements with guaranty agencies that meet

16 standards established by the Secretary to pro17 vide lender referral services in geographic areas

18 specified by the Secretary. Such guaranty agen19 cies shall be paid in accordance with paragraph

20 (3) for such services.

21 ‘‘(ii) The Secretary shall publish in the

22 Federal Register whatever standards, criteria,

23 and procedures, consistent with the provisions

24 of this part and part D of this title, the Sec25 retary determines are reasonable and necessary
37

HR 2055 IH

1 to provide lender referral services under this

2 subsection and ensure loan access to student

3 and parent borrowers during the transition

4 from the loan programs under this part to the

5 direct student loan programs under part D of

6 this title. Section 431 of the General Education

7 Provisions Act shall not apply to the publication

8 of such standards, criteria, and procedures.’’;

9 (2) in paragraph (2)—

10 (A) in the matter preceding subparagraph

11 (A), by striking out ‘‘in a State’’ and inserting

12 in lieu thereof ‘‘with which the Secretary has an

13 agreement under paragraph (1)(B)’’;

14 (B) by amending subparagraph (A) to read

15 as follows:

16 ‘‘(A)(i) such student is either a resident of,

17 or is accepted for enrollment in, or is attending,

18 an eligible institution located in a geographic

19 area for which the Secretary (I) determines

20 that loans are not available to all eligible stu21 dents, and (II) has entered into an agreement

22 with a guaranty agency under paragraph (1)(B)

23 to provide lender referral services; and’’;

24 (3) in paragraph (3), by striking out ‘‘The’’ and

25 inserting in lieu thereof ‘‘From funds available for
38

HR 2055 IH

1 costs of transition under section 459 of the Act,

2 the’’; and

3 (4) by striking out paragraph (5).

4 (d) STUDENT LOAN MARKETING ASSOCIATION.—

5 Section 439(q) of the Act is amended—

6 (1) in paragraph (1)(A)—

7 (A) in the first sentence, by striking out

8 ‘‘the Association or its designated agent may

9 begin making loans’’ and inserting in lieu there10 of ‘‘the Association or its designated agent

11 shall, subject to the limitations in section

12 428(j)(3), begin making loans to such eligible

13 borrowers’’; and

14 (B) by striking out the second sentence

15 therein;

16 (2) in paragraph (2)(A), by striking out ‘‘the

17 Association or its designated agent may’’ and insert18 ing in lieu thereof ‘‘the Association or its designated

19 agent shall, subject to the limitations in section

20 428(j)(3),’’; and

21 (3) in paragraph (3), by striking out ‘‘that—’’

22 through the end thereof and inserting in lieu thereof

23 the following: ‘‘that the conditions that caused the

24 implementation of this subsection have ceased to

25 exist.’’.
39

HR 2055 IH

1 GUARANTY AGENCY RESERVES

2 SEC. 212. Section 422 of the Act is amended by add3 ing at the end thereof the following new subsection:

4 ‘‘(g) PRESERVATION OF GUARANTY AGENCY RE5 SERVES.—(1) Notwithstanding any other provision of law,

6 the reserve funds of the guaranty agencies, and any assets

7 purchased with such reserve funds, regardless of who

8 holds or controls the reserves or assets, shall be considered

9 to be the property of the United States to be used in the

10 operation of the program authorized by this part or the

11 program authorized by part D of this title. However, the

12 Secretary may not require the return of all of a guaranty

13 agency reserve funds to the Secretary unless he or she de14 termines that such return is essential to the operation of

15 the program authorized by this part or the program au16 thorized by part D of this title, or to ensure the orderly

17 termination of the guaranty agency’s operations and the

18 liquidation of its assets. The reserves shall be maintained

19 by each guaranty agency to pay program expenses and

20 contingent liabilities, as authorized by the Secretary, ex21 cept that the Secretary may—

22 ‘‘(A) direct a guaranty agency to return to the

23 Secretary a portion of its reserve fund which the

24 Secretary determines is unnecessary to pay the pro-
40

HR 2055 IH

1 gram expenses and contingent liabilities of the guar2 anty agency; and

3 ‘‘(B) direct the guaranty agency to require the

4 return, to the guaranty agency or to the Secretary,

5 of any reserve funds or assets held by, or under the

6 control of, any other entity, which the Secretary de7 termines are necessary to pay the program expenses

8 and contingent liabilities of the guaranty agency, or

9 which are required for the orderly termination of the

10 guaranty agency’s operations and the liquidation of

11 its assets.

12 ‘‘(2) To ensure that the funds and assets of the guar13 anty agency are preserved, any contract with respect to

14 the administration of a guaranty agency’s reserve funds,

15 or the administration of any assets purchased or acquired

16 with the reserve funds of the guaranty agency, that is en17 tered into or extended by the guaranty agency, or any

18 other party on behalf of or with the concurrence of the

19 guaranty agency, after the effective date of this provision

20 shall provide that the contract is terminable by the Sec21 retary upon thirty days notice to the contracting parties

22 if the Secretary determines that such contract includes an

23 impermissible transfer of the reserve funds or assets, or

24 is otherwise inconsistent with the terms or purposes of this

25 section.’’.
41

HR 2055 IH

1 TERMS OF LOANS

2 SEC. 213. Section 428 of the Act is amended—

3 (1) in subsection (b)(1)—

4 (A) in subparagraph (D), by striking out

5 ‘‘be subject to’’ through the end thereof and in6 serting in lieu thereof the following: ‘‘be subject

7 to income contingent repayment in accordance

8 with subsection (m);’’;

9 (B) by redesignating subparagraphs (W),

10 (X), and (Y) as subparagraphs (X), (Y), and

11 (Z), respectively; and

12 (C) by inserting immediately after sub13 paragraph (V) the following new subparagraph:

14 ‘‘(W)(i) provides that, upon written re15 quest, a lender shall grant a borrower forbear16 ance on such terms as are otherwise consistent

17 with the regulations of the Secretary, during

18 periods in which the borrower is serving in a

19 national service position, for which he or she re20 ceives a national service educational award

21 under the National Service Trust Act of 1993;

22 ‘‘(ii) provides that clauses (iii) and (iv) of

23 subparagraph (V) shall also apply to a forbear24 ance granted under this subparagraph; and
42

HR 2055 IH

1 ‘‘(iii) provides that interest shall continue

2 to accrue on a loan for which a borrower re3 ceives forbearance under this subparagraph and

4 shall be capitalized or paid by the borrower;’’;

5 (2) in subsection (c)(3)(A), by striking out

6 ‘‘subsection (b)(1)(V)’’ through the end thereof and

7 inserting in lieu thereof the following: ‘‘subsections

8 (b)(1)(V) and (W);’’; and

9 (3) in subsection (m)—

10 (A) by amending paragraph (1) to read as

11 follows:

12 ‘‘(1) The Secretary may require any borrower

13 who has defaulted on a loan made under this part

14 that is assigned to the Secretary under subsection

15 (c)(8) to repay that loan under an income contingent

16 repayment plan, the terms and conditions of which

17 shall be established by the Secretary and the same

18 as, or similar to, the EXCEL Account established

19 for purposes of part D of this title.’’;

20 (B) by striking out paragraphs (2) and

21 (4);

22 (C) by amending paragraph (3) to read as

23 follows:

24 ‘‘(3) LOANS FOR WHICH INCOME CONTINGENT

25 REPAYMENT MAY BE REQUIRED.—A loan made
43

HR 2055 IH

1 under this part may be required to be repaid under

2 this section if the note or other evidence of the loan

3 has been assigned to the Secretary pursuant to sub4 section (c)(8).’’; and

5 (D) by redesignating paragraph (3) as

6 paragraph (2).

7 ASSIGNMENT OF LOANS

8 SEC. 214. (a) Section 428(c)(8) of the Act is amend9 ed—

10 (1) by inserting the subparagraph designation

11 ‘‘(A)’’ immediately following the section heading;

12 (2) by striking out the second and third sen13 tences therein; and

14 (3) adding at the end thereof the following new

15 subparagraphs:

16 ‘‘(B) An orderly transition from the Fed17 eral Family Education Loan Program under

18 this part to the Federal Direct Student Loan

19 Program under part D of this title shall be

20 deemed to be in the Federal fiscal interest, and

21 a guaranty agency shall promptly assign loans

22 to the Secretary under this paragraph upon his

23 or her request.’’.
44

HR 2055 IH

1 TERMINATION OF GUARANTY AGENCY AGREEMENTS;

2 ASSUMPTION OF GUARANTY AGENCY FUNCTIONS BY THE

3 SECRETARY

4 SEC. 215. Section 428(c)(10) of the Act is amend5 ed—

6 (1) in subparagraph (C), by inserting a comma

7 and ‘‘as appropriate,’’ immediately following ‘‘the

8 Secretary shall’’;

9 (2) in subparagraph (D)—

10 (A) by inserting the clause designation

11 ‘‘(i)’’ immediately following the subparagraph

12 designation;

13 (B) by striking out ‘‘Each’’ and inserting

14 in lieu thereof ‘‘If the Secretary is not seeking

15 to terminate the guaranty agency’s agreement

16 under subparagraph (E), or assuming the guar17 anty agency’s functions under subparagraph

18 (F), a’’;

19 (C) by adding at the end thereof the fol20 lowing new clause:

21 ‘‘(ii) If the Secretary is seeking to ter22 minate the guaranty agency’s agreement

23 under subparagraph (E), or assuming the

24 guaranty agency’s functions under sub25 paragraph (F), a management plan de26 scribed in subparagraph (C) shall include
45

HR 2055 IH

1 the means by which the Secretary and the

2 guaranty agency shall work together to en3 sure the orderly termination of the oper4 ations, and liquidation of the assets, of the

5 guaranty agency.’’;

6 (3) in subparagraph (E)—

7 (A) in clause (ii), by striking out ‘‘or’’ at

8 the end thereof;

9 (B) in clause (iii), by striking out the pe10 riod at the end thereof and inserting in lieu

11 thereof a semicolon; and

12 (C) by adding at the end thereof the fol13 lowing new clauses:

14 ‘‘(iv) the Secretary determines that

15 such action is necessary to protect the

16 Federal fiscal interest;

17 ‘‘(v) the Secretary determines that

18 such action is necessary to ensure the con19 tinued availability of loans to student or

20 parent borrowers; or

21 ‘‘(vi) the Secretary determines that

22 such action is necessary to ensure an or23 derly transition from the loan programs

24 under this part to the direct student loan

25 programs under part D of this title.’’;
46

HR 2055 IH

1 (4) in subparagraph (F)—

2 (A) in the matter preceding clause (i), by

3 striking out ‘‘Except as provided in subpara4 graph (G), if’’ and inserting in lieu thereof

5 ‘‘If’’;

6 (B) by amending clause (v) to read as

7 follows:

8 ‘‘(v) provide the guaranty agency with

9 additional advance funds in accordance

10 with section 422(c)(7), with such restric11 tions on the use of such funds as is deter12 mined appropriate by the Secretary, in

13 order to—

14 ‘‘(I) meet the immediate cash

15 needs of the guaranty agency;

16 ‘‘(II) ensure the uninterrupted

17 payment of claims; or

18 ‘‘(III) ensure that the guaranty

19 agency will make loans as the lender20 of-last-resort, in accordance with sub21 section (j)(4);’’;

22 (C) in clause (vi)—

23 (i) by striking out ‘‘and to avoid’’ and

24 inserting in lieu thereof ‘‘to avoid’’;
47

HR 2055 IH

1 (ii) by striking out the period at the

2 end thereof and inserting in lieu thereof a

3 comma and ‘‘and to ensure an orderly

4 transition from the loan programs under

5 this part to the direct student loan pro6 grams under part D of this title.’’; and

7 (iii) by redesignating such clause as

8 clause (vii); and

9 (D) by inserting immediately following

10 clause (v) the following new clause:

11 ‘‘(vi) use all funds and assets of the

12 guaranty agency to assist in the activities

13 undertaken in accordance with this sub14 paragraph and take appropriate action to

15 require the return, to the guaranty agency

16 or the Secretary, of any funds or assets

17 provided by the guaranty agency, under

18 contract or otherwise, to any person or or19 ganization; or’’;

20 (5) by striking out subparagraph (G);

21 (6) by redesignating subparagraphs (H), (I),

22 and (J) as subparagraphs (I), (J), and (K), respec23 tively;

24 (7) by inserting immediately following subpara25 graph (F) the following new subparagraphs:
48

HR 2055 IH

1 ‘‘(G) Notwithstanding any other provision

2 of Federal or State law, if the Secretary has

3 terminated or is seeking to terminate a guar4 anty agency’s agreement under subparagraph

5 (E), or has assumed a guaranty agency’s func6 tions under subparagraph (F)—

7 ‘‘(i) such guaranty agency may not

8 file for bankruptcy;

9 ‘‘(ii) no State court may issue any

10 order affecting the Secretary’s actions with

11 respect to such guaranty agency;

12 ‘‘(iii) any contract with respect to the

13 administration of a guaranty agency’s re14 serve funds, or the administration of any

15 assets purchased or acquired with the re16 serve funds of the guaranty agency, that is

17 entered into or extended by the guaranty

18 agency, or any other party on behalf of or

19 with the concurrence of the guaranty agen20 cy, after the effective date of this provision

21 shall provide that the contract is ter22 minable by the Secretary upon thirty days

23 notice to the contracting parties if the Sec24 retary determines that such contract in25 cludes an impermissible transfer of the re-
49

HR 2055 IH

1 serve funds or assets, or is otherwise in2 consistent with the terms or purposes of

3 this section; and

4 ‘‘(iv) no provision of State law shall

5 apply to the actions of the Secretary in

6 terminating the operations of a guaranty

7 agency;

8 ‘‘(H) Notwithstanding any other provision

9 of law, the Secretary’s liability for any out10 standing liabilities of a guaranty agency (other

11 than outstanding student loan guarantees under

12 this part), the functions of which the Secretary

13 has assumed, shall not exceed the fair market

14 value of the reserves of the guaranty agency,

15 minus any necessary liquidation or other ad16 ministrative costs.’’; and

17 (8) in subparagraph (K) (as redesignated by

18 paragraph (5)), by striking out ‘‘system, together’’

19 through the end thereof and inserting in lieu thereof

20 the following: ‘‘system and the progress of the tran21 sition from the loan programs under this part to the

22 direct student loan programs under part D of this

23 title.’’.

24 ADMINISTRATIVE COST ALLOWANCE

25 SEC. 216. Section 428(f)(1) of the Act is amended—
50

HR 2055 IH

1 (1) in subparagraph (A), by striking out ‘‘The

2 Secretary’’ and inserting in lieu thereof ‘‘For a fiscal

3 year prior to fiscal year 1994, the Secretary’’; and

4 (2) in subparagraph (B), inserting ‘‘prior to fis5 cal year 1994’’ immediately following ‘‘any fiscal

6 year’’.

7 CONSOLIDATION LOANS

8 SEC. 217. Section 428C of the Act is amended—

9 (1) by amending subsection (a)(3)(A) to read as

10 follows:

11 ‘‘(A) For the purpose of this section, the

12 term ‘eligible borrower’ means a borrower who,

13 at the time of application for a consolidation

14 loan is in repayment status, or in a grace pe15 riod preceding repayment, or is a delinquent or

16 defaulted borrower who will reenter repayment

17 through loan consolidation.’’;

18 (2) in subsection (b)—

19 (A) in paragraph (1)—

20 (i) in subparagraph (A)(ii), by insert21 ing ‘‘with income-sensitive repayment

22 terms’’ immediately following ‘‘obtain a

23 consolidation loan’’;

24 (ii) by redesignating subparagraph

25 (E) as subparagraph (F); and
51

HR 2055 IH

1 (iii) by inserting immediately following

2 subparagraph (D) the following new sub3 paragraph:

4 ‘‘(E) that the lender shall offer an income5 sensitive repayment schedule, established by the

6 lender in accordance with the regulations of the

7 Secretary, to the borrower of any consolidation

8 loan made by the lender on or after July 1,

9 1994; and’’;

10 (B) in paragraph (4), by amending sub11 paragraph (C) to read as follows:

12 ‘‘(C)(i) provides that periodic installments

13 of principal need not be paid, but interest shall

14 accrue and be paid in accordance with clause

15 (ii), during any period for which the borrower

16 would be eligible for a deferral under section

17 428(b)(1)(M), and that any such period shall

18 not be included in determining the repayment

19 period pursuant to subsection (c)(2) of this

20 section; and

21 ‘‘(ii) provides that interest shall accrue and

22 be paid—

23 ‘‘(I) by the Secretary, in the case of

24 a consolidation loan that consolidated only

25 Federal Stafford Loans for which the stu-
52

HR 2055 IH

1 dent borrower received an interest subsidy

2 under section 428; or

3 ‘‘(II) by the borrower, or capitalized,

4 in the case of a consolidation loan other

5 than one described in subclause (I) ;’’; and

6 (C) by adding at the end thereof the fol7 lowing new paragraph:

8 ‘‘(5) In the event that a borrower is unable to

9 obtain a consolidation loan with income-sensitive re10 payment terms acceptable to the borrower from a

11 lender with an agreement under subsection (a)(1),

12 the Secretary shall offer any such borrower who ap13 plies for it, a direct consolidation loan to be repaid

14 pursuant to an EXCEL Account under part D of

15 this title, except that the Secretary shall not offer

16 such loans if, in his or her judgment, the Depart17 ment does not yet have the necessary origination

18 and servicing arrangements in place for such

19 loans.’’; and

20 (3) in subsection (c)—

21 (A) in paragraph (1), by amending sub22 paragraphs (B) and (C) to read as follows:

23 ‘‘(B) A consolidation loan made before

24 July 1, 1994, shall bear interest at an annual
53

HR 2055 IH

1 rate on the unpaid principal balance of the loan

2 that is equal to the greater of—

3 ‘‘(i) the weighted average of the inter4 est rates on the loans consolidated,

5 rounded to the nearest whole percent; or

6 ‘‘(ii) 9 percent.

7 ‘‘(C) a consolidation loan made on or after

8 July 1, 1994 shall interest at an annual rate on

9 the unpaid principal balance of the loan that is

10 equal to the weighted average of the interest

11 rates on the loans consolidated, rounded up12 ward to the nearest whole percent.’’;

13 (B) in paragraph (2)—

14 (i) in subparagraph (A)—

15 (I) in the matter preceding clause

16 (i), by striking out ‘‘income sensitive

17 repayment schedules. Such repayment

18 terms’’ and inserting in lieu thereof

19 ‘‘income sensitive repayment sched20 ules, established by the lender in ac21 cordance with the regulations of the

22 Secretary. Except as required by such

23 income sensitive repayment schedules,

24 or by the terms of repayment pursu25 ant to an EXCEL Account offered by
54

HR 2055 IH

1 the Secretary under subsection (b)(5),

2 such repayment terms’’

3 (II) by redesignating clauses (i),

4 (ii), (iii), (iv), and (v) as clauses (ii),

5 (iii), (iv), (v), and (vi), respectively;

6 and

7 (III) by inserting immediately

8 preceding clause (ii) (as redesignated

9 by subclause (II)) the following new

10 clause:

11 ‘‘(i) is less than $7,500, then such

12 consolidation loan shall be repaid in not

13 more than ten years;’’;

14 (ii) by striking out subsection (B);

15 and

16 (iii) by redesignating subparagraph

17 (C) as subparagraph (B); and

18 (C) in paragraph (3)(A), by inserting im19 mediately following the subparagraph designa20 tion the following: ‘‘except as required by the

21 terms of repayment pursuant to an EXCEL

22 Account offered by the Secretary under sub23 section (b)(5),’’.

24 STUDENT LOAN MARKETING ASSOCIATION

25 SEC. 218. Section 439 of the Act is further amended

26 by adding at the end thereof the following new subsection:
55

HR 2055 IH

1 ‘‘(s) TRANSITION STUDY AND ACTIVITIES.—(1) The

2 Secretaries of Education and the Treasury, in consultation

3 with the Association, shall prepare a study, to be com4 pleted within six months of the enactment of this provi5 sion, which shall examine alternatives concerning the sta6 tus, operations, and purposes of the Association during

7 and after the transition from the Federal Family Edu8 cation Loan Program to the Federal Direct Student Loan

9 Program. Such alternatives shall include providing for an

10 orderly transition of the Association from a Government11 Sponsored Enterprise to a private corporation when the

12 Federal Direct Student Loan Program is fully imple13 mented. Such study shall—

14 ‘‘(A) consider how best to meet the needs of

15 students and taxpayers;

16 ‘‘(B) reflect the need for the Association to

17 maintain liquidity and perform other functions for

18 the Federal Family Education Loan Program during

19 the transition from such program to the Federal Di20 rect Student Loan Program under part D of this

21 title, including additional duties as specified by the

22 Secretary of Education or the Secretary of the

23 Treasury;
56

HR 2055 IH

1 ‘‘(C) consider any appropriate changes to part

2 D of title VII, relating to the College Construction

3 Loan Insurance Association; and

4 ‘‘(D) be considered by the Secretaries of Edu5 cation and the Treasury in developing any legislative

6 proposals concerning any changes to the status of

7 the Association as a Government-Sponsored Enter8 prise or its duties under the Federal Family

9 Education Loan Program.

10 ‘‘(2) The Secretaries of Education and the Treasury

11 are directed to work with the Association to ensure that

12 any changes in the Association’s status, operations, or

13 purposes are carried out efficiently and effectively.’’.

14 AUTHORITY TO USE OPTICALLY IMAGED DOCUMENTS

15 SEC. 219. (a) Section 484A of the Act is amended—

16 (1) in the heading, by adding a semicolon and

17 ‘‘OPTICALLY IMAGED DOCUMENTS’’ after ‘‘LIMITA18 TIONS’’; and

19 (2) by adding at the end thereof the following

20 new subsection:

21 ‘‘(c)(1) IN GENERAL.—It is the purpose of this sub22 section to—

23 ‘‘(A) allow the Secretary to use optical imaging

24 technology to store and retrieve documents and

25 records, including promissory notes and repayment

26 agreements, required for the administration of the
57

HR 2055 IH

1 programs authorized under part D of this title, or

2 for the administration of loans made under part B

3 of this title that have been assigned to the Secretary;

4 ‘‘(B) permit the Secretary to destroy originals

5 of such documents and records, including promissory

6 notes and repayment agreements, after they have

7 been optically imaged, thereby achieving significant

8 savings in storage and retrieval costs; and

9 ‘‘(C) ensure that the Secretary may introduce

10 as evidence in any proceeding with respect to the

11 programs or loans described in subparagraph (A)

12 optically imaged documents and records, including

13 promissory notes and repayment agreements.

14 ‘‘(2) Notwithstanding any other provision of Federal

15 or State law, an optically imaged copy of any document

16 or record, including a promissory note or repayment

17 agreement, may be introduced as evidence in any proceed18 ing with respect to the programs or loans described in

19 paragraph (1)(A) in any Federal or State court, or other

20 tribunal, and such optically imaged copy shall be admissi21 ble in any court or tribunal of the United States or any

22 State as if it were the original document or record and

23 have the same force and effect as the original.

24 ‘‘(3) Nothing in this subsection shall be interpreted

25 to preclude the admissibility of a duplicate of a document
58

HR 2055 IH

1 or record required for the administration of the programs

2 or loans described in paragraph (1)(A) made by a tech3 nology other than optical imaging consistent with the Fed4 eral Rules of Evidence and section 1732 of title 28 of the

5 United States Code, or applicable State law.

6 ‘‘(4) Nothing in this subsection shall be interpreted

7 to preclude the admissibility of an optically imaged copy

8 of any document or record in a proceeding outside the

9 scope of this subsection consistent with the Federal Rules

10 of Evidence and section 1732 of title 28 of the United

11 States Code, or applicable State law.’’.

12 (b) Section 432 of the Act is amended by adding at

13 the end thereof the following new subsection:

14 ‘‘(q) OPTICALLY IMAGED DOCUMENTS.—Records

15 maintained in accordance with section 484A(c) may be

16 used in any proceeding, as permitted by section 484A(c),

17 with respect to a loan that was made under this part and

18 has been assigned to the Secretary.’’.

19 (c) Section 487 of the Act is amended by adding at

20 the end thereof the following new subsection:

21 ‘‘(f) USE OF OPTICALLY IMAGED DOCUMENTS.—In

22 any proceeding with respect to a program or activity under

23 part D of this title, or with respect to a loan made under

24 part B of this title that has been assigned to the Sec-
59

HR 2055 IH

1 retary, records maintained in accordance with section

2 484A may be used as provided in that section.’’.

3 PART B—AMENDMENTS TO OTHER LAWS

4 DISCLOSURE OF TAX RETURN INFORMATION

5 SEC. 221. (a) Section 6103(a)(3) of the Internal Rev6 enue Code of 1986 (26 U.S.C. 6103(a)(3); relating to con7 fidentiality and disclosure of returns and return informa8 tion; hereinafter referred to as ‘‘the Code’’) is amended

9 by striking out ‘‘(l)(12)’’ and inserting in lieu thereof ‘‘(l)

10 (10), (12), or (13)’’.

11 (b) Section 6103(l) of the Code is amended—

12 (1) in paragraph (10)(B), by striking out ‘‘offi13 cers and employees of an agency receiving return in14 formation under subparagraph (A) shall use such in15 formation’’ and inserting in lieu thereof ‘‘return in16 formation disclosed under subparagraph (A) may be

17 used by officers and employees of an agency, and by

18 officers, employees, and agents of the Department of

19 Education,’’; and

20 (2) at the end thereof, by adding a new para21 graph to read as follows:

22 ‘‘(13) DISCLOSURE OF RETURN INFORMATION

23 TO CARRY OUT INCOME CONTINGENT REPAYMENT

24 OF STUDENT LOANS.—
60

HR 2055 IH

1 ‘‘(A) IN GENERAL.—The Secretary may,

2 upon written request from the Secretary of

3 Education, disclose to officers and employees of

4 the Department of Education return informa5 tion with respect to a taxpayer who has received

6 a Federal loan under a student loan program

7 and whose loan repayment amounts are based

8 in whole or in part on the taxpayer’s income.

9 Such return information shall be limited to—

10 ‘‘(i) taxpayer identity information

11 with respect to such taxpayer;

12 ‘‘(ii) the filing status of such tax13 payer; and

14 ‘‘(iii) the adjusted gross income of

15 such taxpayer (as defined in section 62).

16 ‘‘(B) RESTRICTION ON USE OF DISCLOSED

17 INFORMATION.—Return information disclosed

18 under subparagraph (A) may be used by offi19 cers, employees, and agents of the Department

20 of Education only for the purposes of, and to

21 the extent necessary in, establishing an appro22 priate income contingent repayment level under

23 a student loan program.

24 ‘‘(C) DEFINITIONS.—For purposes of this

25 paragraph, the term ‘student loan program’
61

HR 2055 IH

1 means the program authorized under part D of

2 title IV of the Higher Education Act of 1965

3 and includes loans under parts B and E of title

4 IV the Higher Education Act of 1965 that are

5 in default and have been assigned to the De6 partment of Education.’’.

7 (c) Section 6103(m)(4) of the Code is amended—

8 (1) in the heading, by inserting ‘‘OWE AN

9 OVERPAYMENT ON FEDERAL PELL GRANTS

10 OR’’ immediately after ‘‘INDIVIDUALS WHO’’;

11 (2) in subparagraph (A)—

12 (A) by redesignating clauses (i) and (ii) as

13 subclauses (I) and (II); and

14 (B) by striking out ‘‘of any taxpayer who’’

15 and inserting in lieu thereof ‘‘of any taxpayer—

16 ‘‘(i) who owes an overpayment of a

17 grant awarded to that taxpayer under sub18 part 1 of part A of title IV of the Higher

19 Education Act of 1965, or

20 ‘‘(ii) who’’;

21 (3) in subparagraph (B)—

22 (A) in clause (i), by striking out ‘‘under

23 part B’’ and inserting in lieu thereof ‘‘under

24 part B or D’’; and
62

HR 2055 IH

1 (B) in clause (ii), by striking out ‘‘under

2 part E’’ and inserting in lieu thereof ‘‘under

3 subpart 1 of part A, part D, or E’’;

4 (d) Section 6103(p) of the Code is amended—

5 (1) in paragraph (3)(A), by striking out ‘‘(11),

6 or (12), (m)’’ and inserting in lieu thereof ‘‘(11),

7 (12), or (13), (m)’’;

8 (2) in paragraph (4)—

9 (A) in the matter preceding subparagraph

10 (A), by striking out ‘‘(10), or (11),’’ and insert11 ing in lieu thereof ‘‘(10), (11), or (13),’’;

12 (B) in subparagraph (F)(ii), by striking

13 out ‘‘(11), or (12),’’ and inserting in lieu there14 of ‘‘(11), (12), or (13),’’; and

15 (C) in the flush left material after sub16 paragraph (F), by striking out ‘‘under sub17 section (1)(12)(B)’’ and inserting in lieu thereof

18 ‘‘under paragraph (10), (12)(B), or (13) of sub19 section (1)’’.

20 (e) Subchapter A of chapter 64 of the Code is further

21 amended by adding at the end thereof the following new

22 section:
63

HR 2055 IH

1 ‘‘SEC. 6306. COLLECTION OF PAYMENTS ON FEDERAL DI2 RECT STUDENT LOANS.

3 ‘‘Upon a determination by the President under sec4 tion 457(c)(2) of the Higher Education Act of 1965 con5 cerning the implementation of a plan for the repayment

6 of Federal Direct Student Loans through wage withhold7 ing or other means by the Internal Revenue Service, the

8 Secretary of the Treasury may enter into an agreement

9 with the Secretary of Education to provide for the collec10 tion of payments on loans made pursuant to part D of

11 title IV of such Act. Notwithstanding any other provision

12 of law, the Secretary of the Treasury may assess and col13 lect such payments as though they were additional income

14 taxes due, and may establish such procedures and conven15 tions as are necessary under such agreement, including

16 those related to withholding, payment of estimated tax,

17 allocation of payments, and dispute resolution.’’.

18 (f) Section 7213(a)(2) of the Code is amended by

19 striking out ‘‘(10) or (12)’’ and inserting in lieu thereof

20 ‘‘(10), (12), or (13),’’.

21 AMENDMENT TO THE BALANCED BUDGET AND

22 EMERGENCY DEFICIT CONTROL ACT OF 1985

23 SEC. 222. The Balanced Budget and Emergency Def24 icit Control Act of 1985 is amended—

25 (1) in section 252(c)(1)(B), by striking out

26 ‘‘guaranteed’’;
64

HR 2055 IH

1 (2) in section 256(b)—

2 (A) by striking out the subsection heading

3 and inserting in lieu thereof the following: ‘‘EF4 FECT OF ORDERS ON STUDENT LOAN PRO5 GRAMS.—’’;

6 (B) by inserting immediately after the

7 paragraph heading the following: ‘‘FEDERAL

8 FAMILY EDUCATION LOAN PROGRAM.—(A)’’;

9 (C) by redesignating paragraphs (2) and

10 (3) as subparagraphs (A) and (B), respectively;

11 (D) in paragraph (1)(A) (as redesignated

12 in subparagraph (B)), by striking out ‘‘de13 scribed in paragraphs (2) and (3)’’ and insert14 ing in lieu thereof ‘‘described in subparagraphs

15 (B) and (C)’’;

16 (E) in paragraph (1)(B) (as redesignated

17 in subparagraph (C)), by redesignating sub18 paragraphs (A) and (B) as clauses (i) and (ii),

19 respectively; and

20 (F) by adding at the end thereof the fol21 lowing new paragraph:

22 ‘‘(1) FEDERAL DIRECT STUDENT LOAN PRO23 GRAM.—(A) Any reductions that are required to be

24 achieved from the Federal Direct Student Loan pro25 gram operated under part D of title IV of the
65

HR 2055 IH

1 Higher Education Act of 1965 as a consequence of

2 an order issued pursuant to section 254, shall be

3 achieved only by the application of the measures de4 scribed in subparagraph (B).

5 ‘‘(B) For any loan made during the period be6 ginning on the date that an order issued under sec7 tion 254 takes effect with respect to a fiscal year,

8 and ending at the close of such fiscal year, the loan

9 fee that is authorized to be collected pursuant to

10 section 456(c) of such Act shall be increased by 0.50

11 percent.’’.

12 TITLE III—EFFECTIVE DATES

13 SEC. 301. (a) Except as otherwise provided in this

14 section, the amendments made by this title shall be effec15 tive upon enactment.

16 (b) The amendments made by section 213 of this Act

17 shall be effective for loans made in accordance with section

18 428 for periods of instruction beginning on or after July

19 1, 1993, or made on or after July 1, 1993, in the case

20 of loans made in accordance with section 428A, 428B, or

21 428C of the Act.

22 (c) The amendments made by section 216 of this Act

23 shall be effective on October 1, 1994.

24 (d) The amendments made by section 217 of this Act

25 shall be effective for loans made on or after July 1, 1994.
66

HR 2055 IH

Æ

HR 2055 IH——2

HR 2055 IH——3

HR 2055 IH——4

HR 2055 IH——5