Student Loan Consolidation and Technical Amendments Act of 1983
PL 98-79 (H.R.3394), enacted 08/15/1983

97 STAT. 476 
PUBLIC LAW 98-79—AUG. 15, 1983 
Aug. 15, 1983 
[H.R. 3394] 
Student Loan 
Consolidation 
and Technical 
Amendments 
Act of 1983. 
20 u s e 1001 
note. 
96 Stat. 1405. 
20 u s e 1087-2. 
Public Law 98-79 
98th Congress 
An Act 
To provide additional authority for the consolidation of student loans and to make 
certain other changes in Federal student fmancial assistance. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled. That this Act may 
be cited as the "Student Loan Consolidation and Technical Amend-
ments Act of 1983". 
EXTENSION OF EXISTING STUDENT LOAN CONSOLIDATION AUTHORITY 
SEC. 2. Section 439(o) of the Higher Education Act of 1965 (hereaf-
ter in this Act referred to as "the Act") is amended by striking out 
"on August 1, 1983" in paragraph (5) and inserting in lieu thereof 
"on November 1, 1983". 
20 u s e 1083a. 
DISCLOSURE OF INFORMATION TO STUDENT BORROWERS 
SEC. 3. (a) Section 433A of the Act is amended to read as follows: 
Information 
disclosure. 
STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS 
"SEC. 433A. (a) Each eligible lender shall, at or prior to the time 
such lender disburses a loan to a borrower which is insured or 
guaranteed under this part, provide thorough and accurate loan 
information on such loan to the borrower. Any disclosure required 
by this subsection may be made by an eligible lender as part of the 
written application material provided to the borrower, or as part of 
the promissory note evidencing the loan, or on a separate written 
form provided to the borrower. The disclosures shall include— 
"(1) the name of the eligible lender, and the address to which 
communications and payments should be sent; 
"(2) the principal amount of the loan; 
"(3) the amount of any charges, such as the origination fee 
and insurance premium, collected by the lender at or prior to 
the disbursal of the loan and whether such charges are deducted 
from the proceeds of the loan or paid separately by the 
borrower; 
"(4) the stated interest rate on the loan; 
"(5) the yearly and cumulative maximum amounts that may 
be borrowed; 
"(6) an explanation of when repayment of the loan will be 
required and when the borrower will be obligated to pay inter-
est that accrues on the loan; 
"(7) a statement as to the minimum and maximum repayment 
term which the lender may impose, and the minimum annual 
payment required by law; 
"(8) an explanation of any special options the borrower may 
have for loan consolidation or other refinancing of the loan; 
PUBLIC LAW 98-79—AUG. 15, 1983 
97 STAT. 477 
"(9) a statement that the borrower has the right to prepay all 
or part of the loan, at any time, without penalty, a statement 
summarizing circumstances 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 section 902 of the Department of 
Defense Authorization Act, 1981 (10 U.S.C. 2141, note); 
"(10) a definition of default and the consequences to the 
borrower if the borrower defaults, including a statement that 
the default may be reported to a credit bureau or credit report-
ing agency; 
"(11) to the extent practicable, the effect of accepting the loan 
on the eligibility of the borrower for other forms of student 
assistance; and 
"(12) an explanation of any cost the borrower may incur in 
the making or collection of the loan. 
"(b) Each eligible lender shall, at or prior to the start of the 
repayment period of the student borrower on loans made, insured, 
or guaranteed under this part, disclose to the borrower the informa-
tion required under this subsection. Any disclosure required by this 
subsection may be made by an eligible lender either in a promissory 
note evidencing the loan or loans or in a written statement provided 
to the borrower. The disclosures shall include: 
"(1) the name of the eligible lender, and the address to which 
communications and payments should be sent; 
"(2) the scheduled date upon which the repayment period is to 
begin; 
"(3) the estimated balance owed by the borrower on the loan 
or loans covered by the disclosure as of the scheduled date on 
which the repayment period is to begin (including, if applicable, 
the estimated amount of interest to be capitalized); 
"(4) the stated interest rate on the loan or loans, or the 
combined interest rate of loans with different stated interest 
rates; 
"(5) the nature of any fees which may accrue or be charged to 
the borrower during the repayment period; 
"(6) the repayment schedule for all loans covered by the 
disclosure including the date the first installment is due, and 
the number, amount, and frequency of required payments; 
"(7) an explanation of any special options the borrower may 
have for loan consolidation or other refinancing of the loan; 
"(8) the projected total of interest charges which the borrower 
will pay on the loan or loans, assuming that the borrower 
makes payments exactly in accordance with the repayment 
schedule; and 
"(9) a statement that the borrower has the right to prepay all 
or part of the loan or loans covered by the disclosure at any 
time without penalty. 
"(c) Such information shall be available without cost to the bor-
rower. The failure of an eligible lender to provide information as 
required by this section shall not (1) relieve a borrower of the 
obligation to repay a loan in accordance with its terms, (2) provide a 
basis for a claim for civil damages, or (3) be deemed to abrogate the 
obligation of the Secretary under a contract of insurance or reinsur-
ance, or the obligation of a State or nonprofit private agency or 
organization which has an agreement with the Secretary under 
section 428(b) under a contract of guaranty. The Secretary may 
10 u s e 2141 
note. 
Information 
disclosure. 
Loan repayment, 
obligation. 
20 u s e 1078. 
97 STAT. 478 
PUBLIC LAW 98-79—AUG. 15, 1983 
limit, suspend, or terminate the continued participation of an eligi-
ble lender in making loans under this part for failure by that lender 
to comply with this section.". 
20 use 1087CC-1. 
(b) Section 463A of the Act is amended to read as follows: 
20 u s e 1087CC. 
Information 
disclosure. 
10 u s e 2141 
note. 
STUDENT LOAN INFORMATION BY ELIGIBLE INSTITUTIONS 
"SEC. 463A. (a) Each institution of higher education, in order to 
carry out the provisions of section 463(a)(8), shall, at or prior to the 
time such institution makes a loan to a student borrower which is 
made under this part, provide thorough and adequate loan informa-
tion on such loan to the student borrower. Any disclosure required 
by this subsection may be made by an institution of higher educa-
tion as part of the written application material provided to the 
borrower, or as part of the promissory note evidencing the loan, or 
on a separate written form provided to the borrower. The disclosures 
shall include: 
"(1) the name of the institution of higher education, and the 
address to which communications and payments should be sent; 
"(2) the principal amount of the loan; 
"(3) the amount of any charges collected by the institution at 
or prior to the disbursal of the loan and whether such charges 
are deducted from the proceeds of the loan or paid separately by 
the borrower; 
"(4) the stated interest rate on the loan; 
"(5) the yearly and cumulative maximum amounts that may 
be borrowed; 
"(6) an explanation of when repayment of the loan will be 
required and when the borrower will be obligated to pay inter-
est that accrues on the loan; 
"(7) a statement as to the minimum and maximum repayment 
term which the institution may impose, and the minimum 
monthly payment required by law; 
"(8) an explanation of any special options the borrower may 
have for loan consolidation or other refinancing of the loan; 
"(9) a statement that the borrower has the right to prepay all 
or part of the loan, at any time, without penalty, a statement 
summarizing circumstances 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 section 902 of the Department of 
Defense Authorization Act, 1981 (10 U.S.C. 2141, note); 
"(10) a definition of default and the consequences to the 
borrower if the borrower defaults, including a statement that 
the default may be reported to a credit bureau or credit report-
ing agency; 
"(11) to the extent practicable, in effect of accepting the loan 
on the eligibility of the borrower for other forms of student 
assistance; and 
"(12) an explanation of any cost the borrower may incur in 
the making or collection of the loan. 
"(b) Each institution of higher education shall enter into an 
agreement with the Secretary under which the institution will, prior 
to the start of the repayment period of the student borrower on 
loans made under this part, disclose to the student borrower the 
information required under this subsection. Any disclosures re-
quired by this subsection may be made by an institution of higher 
PUBLIC LAW 98-79—AUG. 15, 1983 
97 STAT. 479 
education either in a promissory note evidencing the loan or loans 
or in a written statement provided to the borrower. The disclosures 
shall include— 
"(1) the name of the institution of higher education, and the 
address to which communications and payments should be sent; 
"(2) the scheduled date upon which the repayment period is to 
begin; 
"(3) the estimated balance owed by the borrower on the loan 
or loans covered by the disclosure as of the scheduled date on 
which the repayment period is to begin (including, if applicable, 
the estimated amount of interest to be capitalized); 
"(4) the stated interest rate on the loan or loans, or the 
combined interest rate of loans with different stated interest 
rates; 
"(5) the nature of any fees which may accrue or be charged to 
the borrower during the repayment period; 
"(6) the repayment schedule for all loans covered by the 
disclosure including the date the first installment is due, and 
the number, amount, and frequency of required payments; 
"(7) an explanation of any special options the borrower may 
have for loan consolidation or other refinancing of the loan; 
"(8) the projected total of interest charges which the borrower 
will pay on the loan or loans, assuming that the borrower 
makes payments exactly in accordance with the repayment 
schedule; and 
"(9) a statement that the borrower has the right to prepay all 
or part of the loan or loans covered by the disclosure at any 
time without penalty. 
"(c) Such information shall be available without cost to the bor-
rower. The failure of an eligible institution to provide information 
as required by this section shall not (1) relieve a borrower of the 
obligation to repay a loan in accordance with its terms, (2) provide a 
basis for a claim for civil damages, or (3) be deemed to abrogate the 
obligation of the Secretary to make payments with respect to such 
loan.". 
Information 
disclosure. 
Loan repayment, 
obligation. 
STUDENT FINANCIAL ASSISTANCE TECHNICAL AMENDMENT ACT OF 1982 
REVISIONS 
SEC. 4. (a) The Student Financial Assistance Technical Amend-
ments of 1982 is amended by striking out section 3 through 6 and 96 Stat. 1400. 
inserting in lieu thereof the following: 
COST OF ATTENDANCE 
"SEC. 3. (a) Except as provided in subsection (b), but notwithstand-
ing any other provision of law, the cost of attendance criteria used 
for calculating eligibility for and the amount of Pell Grants for 
academic years 1983-1984, and 1984-1985, shall be the same as those 
criteria in effect for academic year 1982-1983. 
"(b) The cost of attendance allowance for room and board for 
students not residing at home or in institutionally owned or 
operated housing for the academic year 1984-1985 shall be a stand-
ard amount determined by the institution of higher education based 
on the expenses reasonably incurred by such student for room and 
board, which shall be at least $1,100 but not more than $1,600. 
20 u s e 1070a 
note. 
97 STAT. 480 
PUBLIC LAW 98-79—AUG. 15, 1983 
20 use 1089 
note. 
20 use 1070b; 42 
use 2751; 20 
use 1088. 
20 use 1070a 
note. 
20 use 1070a. 
Publication in 
Federal 
Register. 
20 use 1089. 
Publication in 
Federal 
Register. 
"SEPARATION OF PELL GRANT FAMILY CONTRIBUTION SCHEDULE FROM 
CAMPUS-BASED PROGRAMS 
"SEC. 4. The Secretary of Education shall establish or approve 
separate systems of need analysis for the academic years 1983-1984, 
1984-1985, and 1985-1986 for the programs authorized under sub-
part 2 of part A, part C, and part E of title IV of the Higher 
Education Act of 1965. 
"PELL GRANT FAMILY CONTRIBUTION SCHEDULES FOR ACADEMIC YEARS 
1984-1985 AND 1985-1986 
"SEC. 5. (a) Except as provided in subsections (b) and (c), the family 
contribution schedule for academic year 1983-1984 for Pell Grants 
under subpart 1 of part A of title IV of the Higher Education Act of 
1965 shall be the family contribution schedule for such grants for 
each of the academic years 1984-1985 and 1985-1986. 
"(b)(1) Each of the amounts allowed as an offset for family size for 
dependent and independent students in the family contribution 
schedule for each of the academic years 1984-1985 and 1985-1986 
shall be computed by increasing (or decreasing) the comparable 
amount (for the same family size) in the family contribution sched-
ule for the preceding academic year (as set by this section) by a 
percentage equal to the percentage increase (or decrease) in the 
Consumer Price Index for Wage Earners and Clerical Workers 
published by the Department of Labor, and rounding the result to 
the nearest $100. 
"(2) For purposes of paragraph (1) of this subsection, the percent-
age increase (or decrease) in the Consumer Price Index for Wage 
Earners and Clerical Workers is the change, expressed as a per 
centum, between the arithmetic mean of such index— 
"(A) for the period from October 1, 1981, through September 
30, 1982, and the arithmetic mean of such index for the period 
from October 1, 1982, through September 30, 1983, in the case of 
the academic year 1984-1985; and 
"(B) for the period from October 1, 1982, through September 
30, 1983, and the arithmetic mean of such index for the period 
from October 1,1983, through September 30,1984, in the case of 
the academic year 1985-1986. 
"(3) The Secretary of Education shall publish in the Federal 
Register the changes in amounts allowed as an offset for family size 
as a consequence of the requirements of this subsection immediately 
after publication by the Secretary of Labor of the Consumer Price 
Index for September 1983 (with respect to academic year 1984-1985) 
and immediately after such publication for September 1984 (with 
respect to academic year 1985-1986). 
"(c) For purposes of subsection (a), the family contribution sched-
ule for academic year 1983-1984 shall be modified by the Secretary 
of Education for use for each of academic years 1984-1985 and 1985-
1986— 
"(1) to reflect the most recent and relevant data, and 
"(2) to comply with section 482(b)(3) of the Higher Education 
Act of 1965 with respect to the treatment of payments under 
title 38 of the United States Code. 
"(d) The modified family contribution schedule under this section 
shall be published in the Federal Register— 
PUBLIC LAW 98-79—AUG. 15, 1983 
97 STAT. 481 
"(1) not later than fifteen days after the date of enactment of 
the Student Loan Consolidation and Technical Amendments 
Act of 1983 for academic year 1984-1985; and 
Ante, p. 476. 
"(2) not later than April 1, 1984, for academic year 1985-1986. 
INDEPENDENT STUDENT DETERMINATION 
20 u s e 1089 
note. 
96 Stat. 1403. 
20 u s e 1078 
note. 
"SEC. 6. Notwithstanding any rule or regulation, the criteria for 
the determination of independent student status, prescribed under 
section 482(c)(2) of the Higher Education Act of 1965, in effect for 20 use 1089. 
academic year 1982-1983 shall be the criteria for such determina-
tions for each of the academic years 1983-1984, 1984-1985, and 1985-
1986.". 
(b) Section 9 of such Act is amended— 
(1) by inserting "from July 1, 1984, through June 30, 1985, and 
from July 1, 1985, through June 30, 1986," after "June 30, 
1984," in subsection (a); 
(2) by striking out "the period of instruction from July 1, 1983, 
through June 30, 1984," in subsection (b) and inserting in lieu 
thereof "each of the periods of instruction (beginning after June 
30, 1983) described in subsection (a)"; and 
(3) by striking out subsection (c) and inserting in lieu thereof 
the following: 
"(c) The modified family contribution schedule under this section 
shall be submitted not later than— 
"(1) April 1, 1983, for the period of instruction from July 1, 
1983, through June 30, 1984; 
"(2) April 1, 1984, for the period of instruction from July 1, 
1984, through June 30, 1985; and 
"(3) April 1, 1985, for the period of instruction from July 1, 
1985, through June 30, 1986, 
and shall otherwise be subject to the provisions of section 482(a) of 
the Higher Education Act of 1965.". 
20 u s e 1089. 
CLARIFICATION OF APPLICABILITY OF 8 PER CENTUM RATE 
SEC. 5. (a) Section 427 
A(a) of the Act is amended— 
(1) by striking out "other than" and all that follows through 
"this subsection" in paragraph (1) and inserting in lieu thereof 
"for which the interest rate does not exceed 7 per centum"; 
(2) by striking out "any loan made, insured" and all that 
follows through "this paragraph" in paragraph (2) and inserting 
in lieu thereof "any loan described in paragraph (1) or any loan 
for which the interest rate is determined under paragraph (1)"; 
and 
(3) by striking out paragraph (3) and inserting in lieu thereof 
the following: 
"(3) be 8 per centum per annum on the unpaid principal 
balance of the loan for a loan to cover the cost of education for 
any period of enrollment beginning on or after a date which is 
three months after a determination made under subsection (b) 
in the case of any borrower who, on the date of entering into the 
note or other written evidence of the loan, has no outstanding 
balance of principal or interest on any loan for which the 
interest rate is determined under paragraph (1) or (2) of this 
subsection.". 
20 u s e 1077a. 
11-194 O - 85 — 17 : QL 3 
97 STAT. 482 
PUBLIC LAW 98-79—AUG. 15, 1983 
20 u s e 1077a. 
"Period of 
instruction." 
"Period of 
enrollment." 
20 u s e 1077a 
note. 
20 u s e 1077a. 
(b)(1) Section 427 
A of the Act is further amended by adding at the 
end thereof the following new subsection: 
"(e) For the purposes of subsection (a) of this section— 
"(1) the term 'period of instruction' shall, at the discretion of 
the lender, be any academic year, semester, trimester, quarter, 
or other academic period; or shall be the period for which the 
loan is made as determined by the institution of higher educa-
tion; and 
"(2) the term 'period of enrollment' shall be the period for 
which the loan is made as determined by the institution of 
higher education and shall coincide with academic terms such 
as academic year, semester, trimester, quarter, or other aca-
demic period as defined by such institution.". 
(2) The amendment made by this subsection shall be effective as if 
enacted as part of the amendment made by section 415(a)(1) of the 
Education Amendments of 1980. 
NONDISCRIMINATION 
20 use 1071. 
SEC. 6. Section 421 of the Act is amended— 
(1) by inserting "; NONDISCRIMINATION;" after "STATEMENT OF 
PURPOSE" in the heading of such section; 
(2) by inserting "(1)" after "SEC. 421. (a)"; and 
(3) by inserting before subsection (b) the following new para-
graph: 
"(2) No institution, bank, credit union, corporation, or other 
lender who regularly extends, renews, or continues credit or pro-
vides insurance under this part shall exclude from receipt or deny 
the benefits of, or discriminate against any borrower or applicant in 
obtaining, such credit or insurance on the basis of race, national 
origin, religion, sex or marital status, age, or handicapped status.". 
RESTRICTION ON SPECIAL ALLOWANCES 
20 use 1087-1. 
SEC. 7. (a) Section 438 of the Act is amended by redesignating 
subsection (d) as subsection (e) and inserting before such subsection 
the following: 
"(d)(1) In order for the holders of loans which were made or 
purchased with funds obtained by the holder from an Authority 
issuing obligations, the income from which is exempt from taxation 
26 use 1 et seq. under the Internal Revenue Code of 1954, to be eligible to receive a 
special allowance under subsection (b)(2) of this section, the Author-
Plans, 
ity shall submit to the Secretary a plan for doing business. The 
Secretary shall approve or disapprove such plan within thirty days 
after the date of its submission. Each such plan shall contain 
provisions designed to assure that— 
"(A) no eligible lender in the area served by the Authority 
will be excluded from participation in the program of the 
Authority and all eligible lenders may participate in the pro-
gram on the same terms and conditions if eligible lenders are 
going to participate in the program; 
"(B) no director or staff member of the Authority who re-
ceives compensation from the Authority may own stock in, or 
receive compensation from, any agency that would contract to 
service and collect the loans of the Authority; 
"(C) student loans will not be purchased from participating 
lenders at a premium or discount amounting to more than 1 per 
PUBLIC LAW 98-79—AUG. 15, 1983 
97 STAT. 483 
centum of the unpaid principal amount borrowed plus accrued 
interest to the date of acquisition, but a reasonable loan trans-
fer fee may be paid by the purchaser; 
"(D) the Authority will, within the limit of funds available 
and subject to the applicable State and Federal law, make loans 
to, or purchase loans incurred by, all eligible students who are 
residents of, or who attend an eligible institution within, the 
area served by the Authority; 
"(E) the Authority has a plan under which the Authority will 
pursue the development of new lender participation in a con-
tinuing program of benefits to students together with assur-
ances of existing lender commitments to the program; 
"(F) there will be an annual audit of the Authority by a 
certified public accounting firm which will include review of 
compliance by the Authority with the provisions of the plan; 
and 
"(G) the Authority will not issue obligations for amounts in 
excess of the reasonable needs for student loan credit within the 
area served by the Authority, after taking into account existing 
sources of student loan credit in that area. 
"(2) In order for the holders of loans which were made or pur-
chased with funds obtained by the holder from an Authority issuing 
obligations, the income from which is exempt from taxation under 
the Internal Revenue Code of 1954, to be eligible to receive a special 26 USC l et seq. 
allowance under subsection (b)(2) of this section on any such loans, 
the Authority shall not engage in any pattern or practice which 
results in a denial of a borrower's access to loans under this part 
because of the borrower's race, sex, color, religion, national origin, 
age, handicapped status, income, attendance at a particular eligible 
institution within the area served by the Authority, length of the 
borrower's educational program, or the borrower's academic year in 
school.". 
(b) Section 420(b) of the Education Amendments of 1980 is 20 USC l087-la. 
(c) Section 438(b)(2)(B)(iii) of the Act is amended by striking out 20 USC 1087-1. 
"section 420(b) of the Education Amendments of 1980" and inserting 
in lieu thereof "subsection (d) of this section". 
(d) Until two years after the date of enactment of this Act, section 20 usc 1087-1 
438(d)(2) of the Act (as added by subsection (a) of this section) shall "ot^-
not operate to prevent the payment of special allowances on loans 
described in such section 438(d)(2) because an Authority described in 
such section denies access to loans under part B of title IV of the Act 20 USC 1071. 
to students in attendance at particular institutions with specified 
high default rates on such loans, if such denial is pursuant to a rule 
of such Authority adopted prior to August 1, 1983. 
STUDENT LOAN MARKETING ASSOCIATION 
SEC. 8. Section 439(1) of the Act is amended by striking out 96 Stat. 1405. 
"September 30, 1984" and inserting in lieu thereof "September 30, 20 USC 1087-2. 
1988". 
ADMINISTRATIVE COSTS 
SEC. 9. The amendments made by section 417(c) of the Education 20 USC 1078 
Amendments of 1980 shall be effective as if enacted as part of the go^ug^, ^Q^O 
1087-1, 1087-2. 
20 u s e 1077. 
97 STAT. 484 
PUBLIC LAW 98-79—AUG. 15, 1983 
amendment made by section 127(a) of the Education Amendments of 
20 u s e prec. 
1976. 
1071, 1071-1078, 
REPAYMENT STATUS 
1078-1, 
10^9-1087,^^ o 
SEC. 10. Section 427(a)(2)(B) of the Act is amended by striking out 
"six months after the date on which" and inserting in lieu thereof 
"six months after the month in which". 
20 use 1078. 
(b) Section 428(b)(1)(E) of the Act is amended— 
(1) by inserting "the month in which" after "ten years begin-
ning six months after"; and 
(2) in clause (i), by inserting "the month in which" after "not 
earlier than six months after". 
20 use 1077 
(c) The amendments made by this section shall be effective with 
respect to any loan under part B of title IV of the Act on which 
repayment has not commenced prior to the date of enactment of this 
Act. 
NATIONAL COMMISSION ON STUDENT FINANCIAL ASSISTANCE 
20 use 1098. 
SEC. 11. Section 491(d)(3) of the Act is amended by striking out "90 
days following the submission of its final report" and inserting in 
lieu thereof "on November 1,1983". 
DEFERMENTS OF AUXILIARY LOANS 
20 use 1078-2. 
SEC. 12. Section 428B(a)(l) of the Act is amended by inserting 
before the period at the end of the second sentence the following: ", 
but such a parent borrower shall not be eligible for any deferment 
pursuant to section 427(a)(2)(C) or 428(b)(l)(M)". 
Approved August 15, 1983. 
note 
20 u s e 1071 
LEGISLATIVE HISTORY—H.R. 3394: 
HOUSE REPORT No. 98-324 (Comm. on Education and Labor). 
eONGRESSIONAL REOORD, Vol. 129 (1983): 
Aug. 1, considered and passed House. 
Aug. 2, considered and passed Senate, amended. 
Aug. 3, House concurred in Senate amendments. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 19, No. 33 (1983): 
Aug. 16, Presidential statement.