HR 2055 IH
(4) in subparagraph (F)—
(A) in the matter preceding clause (i), by
striking out ‘‘Except as provided in subpara-
graph (G), if’’ and inserting in lieu thereof
‘‘If’’;
(B) by amending clause (v) to read as
follows:
‘‘(v) provide the guaranty agency with
additional advance funds in accordance
with section 422(c)(7), with such restric-
tions on the use of such funds as is deter-
mined appropriate by the Secretary, in
order to—
‘‘(I) meet the immediate cash
needs of the guaranty agency;
‘‘(II) ensure the uninterrupted
payment of claims; or
‘‘(III) ensure that the guaranty
agency will make loans as the lender-
of-last-resort, in accordance with sub-
section (j)(4);’’;
(C) in clause (vi)—
(i) by striking out ‘‘and to avoid’’ and
inserting in lieu thereof ‘‘to avoid’’;
HR 2055 IH
(ii) by striking out the period at the
end thereof and inserting in lieu thereof a
comma and ‘‘and to ensure an orderly
transition from the loan programs under
this part to the direct student loan pro-
grams under part D of this title.’’; and
(iii) by redesignating such clause as
clause (vii); and
(D) by inserting immediately following
clause (v) the following new clause:
‘‘(vi) use all funds and assets of the
guaranty agency to assist in the activities
undertaken in accordance with this sub-
paragraph and take appropriate action to
require the return, to the guaranty agency
or the Secretary, of any funds or assets
provided by the guaranty agency, under
contract or otherwise, to any person or or-
ganization; or’’;
(5) by striking out subparagraph (G);
(6) by redesignating subparagraphs (H), (I),
and (J) as subparagraphs (I), (J), and (K), respec-
tively;
(7) by inserting immediately following subpara-
graph (F) the following new subparagraphs:
HR 2055 IH
‘‘(G) Notwithstanding any other provision
of Federal or State law, if the Secretary has
terminated or is seeking to terminate a guar-
anty agency’s agreement under subparagraph
(E), or has assumed a guaranty agency’s func-
tions under subparagraph (F)—
‘‘(i) such guaranty agency may not
file for bankruptcy;
‘‘(ii) no State court may issue any
order affecting the Secretary’s actions with
respect to such guaranty agency;
‘‘(iii) any contract with respect to the
administration of a guaranty agency’s re-
serve funds, or the administration of any
assets purchased or acquired with the re-
serve funds of the guaranty agency, that is
entered into or extended by the guaranty
agency, or any other party on behalf of or
with the concurrence of the guaranty agen-
cy, after the effective date of this provision
shall provide that the contract is ter-
minable by the Secretary upon thirty days
notice to the contracting parties if the Sec-
retary determines that such contract in-
cludes an impermissible transfer of the re-
HR 2055 IH
serve funds or assets, or is otherwise in-
consistent with the terms or purposes of
this section; and
‘‘(iv) no provision of State law shall
apply to the actions of the Secretary in
terminating the operations of a guaranty
agency;
‘‘(H) Notwithstanding any other provision
of law, the Secretary’s liability for any out-
standing liabilities of a guaranty agency (other
than outstanding student loan guarantees under
this part), the functions of which the Secretary
has assumed, shall not exceed the fair market
value of the reserves of the guaranty agency,
minus any necessary liquidation or other ad-
ministrative costs.’’; and
(8) in subparagraph (K) (as redesignated by
paragraph (5)), by striking out ‘‘system, together’’
through the end thereof and inserting in lieu thereof
the following: ‘‘system and the progress of the tran-
sition from the loan programs under this part to the
direct student loan programs under part D of this
title.’’.
ADMINISTRATIVE COST ALLOWANCE
SEC. 216. Section 428(f)(1) of the Act is amended—
HR 2055 IH
(1) in subparagraph (A), by striking out ‘‘The
Secretary’’ and inserting in lieu thereof ‘‘For a fiscal
year prior to fiscal year 1994, the Secretary’’; and
(2) in subparagraph (B), inserting ‘‘prior to fis-
cal year 1994’’ immediately following ‘‘any fiscal
year’’.
CONSOLIDATION LOANS
SEC. 217. Section 428C of the Act is amended—
(1) by amending subsection (a)(3)(A) to read as
follows:
‘‘(A) For the purpose of this section, the
term ‘eligible borrower’ means a borrower who,
at the time of application for a consolidation
loan is in repayment status, or in a grace pe-
riod preceding repayment, or is a delinquent or
defaulted borrower who will reenter repayment
through loan consolidation.’’;
(2) in subsection (b)—
(A) in paragraph (1)—
(i) in subparagraph (A)(ii), by insert-
ing 
‘‘with 
income-sensitive 
repayment
terms’’ immediately following ‘‘obtain a
consolidation loan’’;
(ii) by redesignating subparagraph
(E) as subparagraph (F); and