HR 2651 RFS 
‘‘(2) USE OF LOAN PROCEEDS.—A student who 
receives a loan under the program may use the pro-
ceeds of the loan only for postsecondary expenses in-
curred at an institution designated by the Secretary 
under subsection (d)(4) for books, tuition, required 
fees, travel to and from training facilities, and room 
and board. 
‘‘(h) STUDENT ELIGIBILITY.—To be eligible to re-
ceive a loan under the program, a student shall— 
‘‘(1) be eligible to hold a license or merchant 
mariner document issued by the Coast Guard; 
‘‘(2) provide to the Secretary such information 
as the Secretary may require, including all current 
Coast Guard documents, certifications, proof of 
United States citizenship or permanent legal status, 
and a statement of intent to enter a maritime ca-
reer; 
‘‘(3) meet the enrollment requirements of a 
maritime training institution designated by the Sec-
retary under subsection (d)(4); and 
‘‘(4) sign an agreement to— 
‘‘(A) complete a course of instruction at 
such a maritime training institution; and 
‘‘(B) maintain a license or document and 
work under the authority of the license or docu-
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ment and any associated endorsements for at 
least 18 months following the date of gradua-
tion from the maritime program for which the 
loan proceeds will be used. 
‘‘(i) ADMINISTRATION OF LOANS.— 
‘‘(1) CONTENTS OF LOAN AGREEMENTS.—Any 
agreement between the Secretary and a student bor-
rower for a loan under the program shall— 
‘‘(A) be evidenced by a note or other writ-
ten instrument that provides for the repayment 
of the principal amount of the loan and any 
origination fee, together with interest thereon, 
in equal installments (or, if the student bor-
rower so requests, in graduated periodic install-
ments determined in accordance with such 
schedules as may be approved by the Secretary) 
payable quarterly, bimonthly, or monthly, at the 
option of the student borrower, over a period 
beginning 9 months from the date on which the 
student borrower completes study or discon-
tinues attendance at the maritime program for 
which the loans are used at the institution ap-
proved by the Secretary and not exceeding 10 
years; 
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‘‘(B) include provision for acceleration of 
repayment of the whole, or any part, of such 
loan, at the option of the student borrower; 
‘‘(C) provide the loan without security and 
without endorsement; 
‘‘(D) provide that the liability to repay the 
loan shall be canceled upon the death of the 
student borrower, or if the student borrower be-
comes permanently and totally disabled, as de-
termined in accordance with regulations to be 
issued by the Secretary; 
‘‘(E) contain a notice of the system of dis-
closure of information concerning default on 
such loan to credit bureau organizations; and 
‘‘(F) include provisions for deferral of re-
payment, as determined by the Secretary. 
‘‘(2) RATE OF INTEREST.—A student borrower 
who receives a loan under the program on or after 
January 1, 2010, and before October 1, 2015, shall 
be obligated to repay the loan amount to the Sec-
retary, together with interest beginning in the period 
referred to in paragraph (1)(A), at a rate to be de-
termined as follows: 
‘‘(A) For a loan for which the first dis-
bursement is made on or after January 1, 
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2010, and before October 1, 2011, 5.6 percent 
on the unpaid principal balance of the loan. 
‘‘(B) For a loan for which the first dis-
bursement is made on or after October 1, 2011, 
and before October 1, 2012, 4.5 percent on the 
unpaid principal balance of the loan. 
‘‘(C) For a loan for which the first dis-
bursement is made on or after October 1, 2012, 
3.4 percent on the unpaid principal balance of 
the loan. 
‘‘(3) DISCLOSURE
REQUIRED
PRIOR
TO
DIS-
BURSEMENT.— 
‘‘(A) IN GENERAL.—The Secretary shall at 
or prior to the time the Secretary makes a loan 
to a student borrower under the program, pro-
vide thorough and adequate loan information on 
such loan to the student borrower. The disclo-
sures required by this paragraph may be made 
as part of the written application material pro-
vided to the student borrower, as part of the 
promissory note evidencing the loan, or on a 
separate written form provided to the student 
borrower. 
‘‘(B) CONTENTS.—The disclosures shall 
include— 
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‘‘(i) the address to which communica-
tions and payments should be sent; 
‘‘(ii) the principal amount of the loan; 
‘‘(iii) the amount of any charges col-
lected at or prior to the disbursal of the 
loan and whether such charges are to be 
deducted from the proceeds of the loan or 
paid separately by the student borrower; 
‘‘(iv) the stated interest rate on the 
loan; 
‘‘(v) the yearly and cumulative max-
imum amounts that may be borrowed; 
‘‘(vi) an explanation of when repay-
ment of the loan will be required and when 
the student borrower will be obligated to 
pay interest that accrues on the loan; 
‘‘(vii) a statement as to the minimum 
and maximum repayment term that the 
Secretary may impose, and the minimum 
monthly payment required by law and a 
description of any penalty imposed as a 
consequence of default, such as liability for 
expenses reasonably incurred in attempts 
by the Secretary to collect on a loan; 
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‘‘(viii) a statement of the total cumu-
lative balance, including the loan applied 
for, owed by the student borrower to the 
Secretary, and an estimate of the projected 
monthly payment, given such cumulative 
balance; 
‘‘(ix) an explanation of any special op-
tions the student borrower may have for 
loan consolidation or other refinancing of 
the loan; 
‘‘(x) a statement that the student bor-
rower has the right to prepay all or part 
of the loan, at any time, without penalty; 
‘‘(xi) a statement summarizing cir-
cumstances in which repayment of the loan 
or interest that accrues on the loan may be 
deferred, and a brief notice of the program 
for repayment of loans, on the basis of 
military service, pursuant to the Depart-
ment of Defense educational loan repay-
ment program (10 U.S.C. 16302); 
‘‘(xii) a definition of default and the 
consequences to the student borrower if 
the student borrower defaults, together 
with a statement that the disbursement of, 
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and the default on, a loan under this part 
shall be reported to a credit bureau or 
credit reporting agency; 
‘‘(xiii) to the extent practicable, the 
effect of accepting the loan on the eligi-
bility of the student borrower for other 
forms of student assistance; and 
‘‘(xiv) an explanation of any cost the 
student borrower may incur in the making 
or collection of the loan. 
‘‘(C) INFORMATION
TO
BE
PROVIDED 
WITHOUT
COST.—The information provided 
under this paragraph shall be available to the 
Secretary without cost to the student borrower. 
‘‘(4) REPAYMENT AFTER DEFAULT.—The Sec-
retary may require any student borrower who has 
defaulted on a loan made under the program to— 
‘‘(A) pay all reasonable collection costs as-
sociated with such loan; and 
‘‘(B) repay the loan pursuant to an income 
contingent repayment plan. 
‘‘(5) AUTHORIZATION TO REDUCE RATES AND 
FEES.—Notwithstanding any other provision of this 
section, the Secretary may prescribe by regulation 
any reductions in the interest rate or origination fee 
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paid by a student borrower of a loan made under the 
program as the Secretary determines appropriate to 
encourage ontime repayment of the loan. Such re-
ductions may be offered only if the Secretary deter-
mines the reductions are cost neutral and in the best 
financial interest of the United States. 
‘‘(6) COLLECTION OF REPAYMENTS.—The Sec-
retary shall collect repayments made under the pro-
gram and exercise due diligence in such collection, 
including maintenance of all necessary records to en-
sure that maximum repayments are made. Collection 
and servicing of repayments under the program shall 
be pursued to the full extent of the law, including 
wage garnishment if necessary. The Secretary of the 
Department in which the Coast Guard is operating 
shall provide the Secretary of Transportation with 
any information regarding a mariner that may aid 
in the collection of repayments under this section. 
‘‘(7) REPAYMENT SCHEDULE.—A student bor-
rower who receives a loan under the program shall 
repay the loan quarterly, bimonthly, or monthly, at 
the option of the student borrower, over a period be-
ginning 9 months from the date the student bor-
rower completes study or discontinues attendance at 
the maritime program for which the loan proceeds 
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are used and ending not more than 10 years after 
the date repayment begins. Provisions for deferral of 
repayment shall be determined by the Secretary. 
‘‘(8) CONTRACTS FOR SERVICING AND COLLEC-
TION OF LOANS.—The Secretary may— 
‘‘(A) enter into a contract or other ar-
rangement with State or nonprofit agencies 
and, on a competitive basis, with collection 
agencies for servicing and collection of loans 
under this section; and 
‘‘(B) conduct litigation necessary to carry 
out this section. 
‘‘(j) REVOLVING LOAN FUND.— 
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a revolving loan fund consisting of amounts 
deposited in the fund under paragraph (2). 
‘‘(2) DEPOSITS.—The Secretary shall deposit in 
the fund— 
‘‘(A) receipts from the payment of prin-
cipal and interest on loans made under the pro-
gram; and 
‘‘(B) any other monies paid to the Sec-
retary by or on behalf of individuals under the 
program. 
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‘‘(3) AVAILABILITY OF AMOUNTS.—Amounts in 
the fund shall be available to the Secretary, without 
further appropriation— 
‘‘(A) to cover the administrative costs of 
the program, including the maintenance of 
records and making collections under this sec-
tion; and 
‘‘(B) to the extent that amounts remain 
available after paying such administrative costs, 
to make loans under the program. 
‘‘(4) MAINTENANCE
OF
RECORDS.—The Sec-
retary shall maintain accurate records of the admin-
istrative costs referred to in paragraph (3)(A). 
‘‘(k) ANNUAL REPORT.—The Secretary, on an an-
nual basis, shall submit to the Committee on Transpor-
tation and Infrastructure of the House of Representatives 
and the Committee on Commerce, Science, and Transpor-
tation of the Senate a report on the program, including— 
‘‘(1) the total amount of loans made under the 
program in the preceding year; 
‘‘(2) the number of students receiving loans 
under the program in the preceding year; and 
‘‘(3) the total amount of loans made under pro-
gram that are in default as of the date of the report. 
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‘‘(l) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated for each of fiscal years 
2010 through 2015— 
‘‘(1) $10,000,000 for making loans under the 
program; and 
‘‘(2) $1,000,000 for administrative expenses of 
the Secretary in carrying out the program. 
‘‘§ 51706. Maritime recruitment, training, and reten-
tion grant program 
‘‘(a) STRATEGIC PLAN.— 
‘‘(1) IN GENERAL.—Not later than one year 
after the date of enactment of this section, and at 
least once every 3 years thereafter, the Secretary of 
Transportation, acting through the Administrator of 
the Maritime Administration, shall publish in the 
Federal Register a plan that describes the dem-
onstration, research, and multistate project priorities 
of the Department of Transportation concerning 
merchant mariner recruitment, training, and reten-
tion for the 3-year period following the date of publi-
cation of the plan. 
‘‘(2) CONTENTS.—A plan published under para-
graph (1) shall contain strategies and identify poten-
tial projects to address merchant mariner recruit-
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