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"(B) in the case of any individual who regularly resided with and received support from only one parent, an individual whose only such parent did not complete a baccalaureate degree; "(2) the term 'low-income individual' means an individual from a family whose taxable income for the preceding year did not exceed 150 percent of an amount equal to the poverty level determined by using criteria of poverty established by the Bureau of the Census; and "(3) no veteran shall be deemed ineligible to participate in any program under this subpart by reason of such individual's age who— "(A) served on active duty for a period of more than 180 b days, any part of which occurred after January 31, 1955, and was discharged or released therefrom under conditions other than dishonorable; or "(B) served on active duty after January 31, 1955, and was discharged or released therefrom because of a service ' connected disability.

Veterans.

''

"TALENT SEARCH

417B. (a) PROGRAM AUTHORITY.—The Secretary shall carry out a program to be known as talent search which shall be designed— "(1) to identify qualified youths with potential for education at the postsecondary level and to encourage such youths to complete secondary school and to undertake a program of postsecondary education; "(2) to publicize the availability of student financial assistance available to persons who pursue a program of postsecondary education; and "(3) to encourage persons who have not completed programs of education at the secondary or postsecondary level, but who have the ability to complete such programs, to reenter such programs. "(b) TUTORIAL SERVICES.—A talent search project assisted under this subpart may include, in addition to the services described in paragraphs (1), (2), and (3) of subsection (a), tutorial services for youths being encouraged to undertake or reenter programs of postsecondary education if such tutorial services are not otherwise available to such youths through a project assisted under this subpart. "SEC.

20 USC I070d-i.

"(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving

applications for talent search projects under this subpart for any fiscal year the Secretary shall— "(1) require an assurance that not less than two-thirds of the youths participating in the project proposed to be carried out under any application be low-income individuals who are first generation college students; "(2) require that such participants be persons who either have completed 6 years of elementary education or are at least 12 years of age but not more than 27 years of age, unless the imposition of any such limitation with respect to any person would defeat the purposes of this section or the purposes of section 417E;

Disadvantaged persons,

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PUBLIC LAW 99-498—OCT. 17, 1986

"(3) require an assurance that individuals participating in the project proposed in the application do not have access to servi ices from another project funded under this section or under section 417E; and r "(4) require assurances that the project will be located in a >/ setting accessible to the persons proposed to be served by the project. • ^

20 USC I070d-la.

V

"UPWARD BOUND

'

417C. (a) PROGRAM AUTHORITY.—The Secretary shall carry out a program to be known as upward bound which shall be designed to generate skills and motivation necessary for success in education beyond high school. "(b) PERMISSIBLE SERVICES.—Any upward bound project assisted under the subpart may provide services such as— "(1) instruction in reading, writing, study skills, mathematics, and other subjects necessary for success beyond high school; "(2) personal counseling; "(3) academic advice and assistance in high school course selection; "(4) tutorial services; "(5) exposure to cultural events, academic programs, and other activities not usually available to disadvantaged youth; "(6) activities designed to acquaint youths participating in the project with the range of career options available to them; ' "(7) instruction designed to prepare youths participating in the project for careers in which persons from disadvantaged backgrounds are particularly underrepresented; "(8) on-campus residential programs; and ' "(9) programs and activities as described in paragraphs (1) IS through (8) which are specially designed for students of limited English proficiency. "SEC.

I "^i « l H i

"(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving

Disadvantaged persons.

irf..

'

applications for upward bound projects under this subpart for any fiscal year the Secretary shall— "(1) require an assurance that not less than two-thirds of the youths participating in the project proposed to be carried out under any application be low-income individuals who are first generation college students; "(2) require an assurance that the remaining youths participating in the project proposed to be carried out under any application be either low-income individuals or be first generation college students; "(3) require that there be a determination by the institution, with respect to each participant in such project, that the participant has a need for academic support in order to pursue success' fully a program of education beyond high school; and "(4) require that such participants be persons who have completed 8 years of elementary education and are at least 13 years of age but not more than 19 years of age, unless the imposition of any such limitation would defeat the purposes of this section. "(d) MAXIMUM STIPENDS.—Youths participating in a project proposed to be carried out under any application may be paid stipends not in excess of $60 per month during June, July, and August, and not in excess of $40 per month during the remaining period of the year.

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


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100 STAT. 1339

" S T U D E N T SUPPORT SERVICES

417D. (a) PROGRAM AUTHORITY.—The Secretary shall carry 20 USC out a program to be known as student support services (hereinafter 1070d-lb. referred to as 'student support services'). "(b) PERMISSIBLE SERVICES.—A support services project assisted under this subpart may provide services such as— "(1) instruction in reading, writing, study skills, mathematics, and other subjects necessary for success beyond high school; "(2) personal counseling; "(3) academic advice and assistance in course selection; "(4) tutorial services and counseling and peer counseling; "(5) exposure to cultural events and academic programs not usually available to disadvantaged students; "(6) activities designed to acquaint students participating in the project with the range of career options available to them; "(7) activities designed to assist students participating in the project in securing admission and financial assistance for enroll, ment in graduate and professional programs; g, "(8) activities designed to assist students currently enrolled in 2-year institutions in securing admission and financial assistance for enrollment in a four-year program of postsecondary education; and "(9) programs and activities as described in paragraphs (1)
 * through (8) which are specially designed for students of limited

English proficiency. "SEC.

"(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving

applications for support services projects under this subpart for any fiscal year the Secretary shall— "(1) require an assurance that not less than two-thirds of the persons participating in the project proposed to be carried out under any application— H "(A) be physically handicapped, or t "(B) be low-income individuals who are first generation Disadvantaged persons. college students; "(2) require an assurance that the remaining students particihf pating in the project proposed to be carried out under any application either be low-income individuals, first generation college students, or physically handicapped; "(3) require that there be a determination by the institution, with respect to each participant in such project, that the participant has a need for academic support in order to pursue successfully a program of education beyond high school; "(4) require that such participants be enrolled or accepted for '^ enrollment at the institution which is the recipient of the grant or contract; and "(5) require an assurance from the institution which is the recipient of the grant or contract that each student enrolled in the project will receive sufficient financial assistance to meet that student's full financial need. "(d) POST-BACCALAUREATE ACHIEVEMENT PROGRAM AUTHORITY.—
 * 3

(1) The Secretary shall carry out a program to be known as the "Post-Baccalaureate Achievement Program". "(2) A post-baccalaureate achievement project assisted under this subsection may provide services such as—

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100 STAT. 1340

"(A) opportunities for research or other scholarly activities at the institution or at graduate centers designed to provide students with effective preparation for doctoral study; "(B) summer internships; "(C) seminars and other educational activities designed to b-^ prepare students for doctoral study; "(D) tutoring; "(E) academic counseling; and "(F) activities designed to assist students participating in the project in securing admission to and financial assistance for enrollment in graduate programs. "(2) In approving applications for post-baccalaureate achievement projects assisted under this subsection for any fiscal year, the Secretary shall require— Disadvantaged "(A) an assurance that not less than two-thirds of the individP^J^o^s. uals participating in the project proposed to be carried out under any application be low-income individuals who are firstgeneration college students; "(B) an assurance that the remaining persons participating in ^^' the project proposed to be carried out be from a group that is underrepresented in graduate education; "(C) an assurance that participants be enrolled in a degree program at an eligible institution in accordance with the provisions of section 487; and
 * >'i:. "(D) an assurance that participants in summer research

internships have completed their sophomore year in postsecondary education. "(4) In addition to such other selection criteria as may be prescribed by regulations, the Secretary shall consider in making awards to institutions under this subsection— "(A) the quality of research and other scholarly activities in which students will be involved; "(B) the level of faculty involvement in the project and the b \- i. V- ' description of the research in which students will be involved; and "(C) the institution's plan for identifying and recruiting participants including students enrolled in projects authorized under this subsection. "(5) Students participating in research under a post-baccalaureate achievement project may receive stipends not to exceed $2,400 per annum. "(6) No funds shall be allocated to projects authorized under this subsection until projects authorized by the other provisions of this subpart are allocated a minimum of $168,800,000, and in no case shall funds allocated to projects authorized under this subsection exceed— "(A) $1,000,000 in the fiscal year 1988, V "(B) $2,000,000 in the fiscal year 1989, ". "(C) $3,000,000 in the fiscal year 1990, and "(D) $4,000,000 in the fiscal year 1991. EDUCATIONAL OPPORTUNITY CENTERS

20 USC

1070d-lc.

"SEC. 417E.

(a) PROGRAM AUTHORITY; SERVICES PROVIDED.—The

Secretary shall carry out a program to be known as educational opportunity centers which shall be designed—

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 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1341

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"(1) to provide information with respect to financial and academic assistance available for individuals desiring to pursue a program of postsecondary education; and "(2) to provide assistance to such persons in applying for admission to institutions at which a program of postsecondary education is offered, including preparing necessary applications for use by admissions and financial aid officers. "(b) TUTORIAL AND COUNSEUNG SERVICES,—An educational opportunity center assisted under this subpart may provide, in addition to the services described in paragraphs (1) and (2) of subsection (a), tutorial and counseling services for persons participating in the project if such tutorial and counseling services are not otherwise available through a project assisted under this subpart. "(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving

applications for educational opportunity centers under this subpart for any fiscal year the Secretary shall— "(1) require an assurance that not less than two-thirds of the persons participating in the project proposed to be carried out under any application be low-income individuals who are first generation college students; ,j "(2) require that such participants be persons who are at least nineteen years of age, unless the imposition of such limitation with respect to any person would defeat the purposes of this section or the purposes of section 417B; and "(3) require an assurance that individuals participating in the project proposed in the application do not have access to services from another project funded under this section or under section 417B. STAFF DEVELOPMENT ACTIVITIES

"SEC. 417F. For the purpose of improving the operation of the programs and projects authorized by this subpart, the Secretary is authorized to make grants to institutions of higher education and other public and private nonprofit institutions and organizations to provide training for staff and leadership personnel employed in, or preparing for employment in, such programs and projects. Such training shall include conferences, internships, seminars, workshops, and the publication of manuals designed to improve the operation of such programs and projects and shall be carried out in the various regions of the Nation in order to ensure that the training opportunities are appropriate to meet the needs in the local areas being served by such programs and projects. Grants for the purposes of this section shall be made only after consultation with regional and State professional associations of persons having special knowledge with respect to the needs and problems of such programs and projects.

20 USC

1070d-ld.

'SUBPART 5—SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE ENGAGED IN MIGRANT AND SEASONAL FARMWORK MAINTENANCE AND EXPANSION OF EXISTING PROGRAMS

418A. (a) PROGRAM AUTHORITY.—The Secretary shall maintain and expand existing secondary and postsecondary high school equivalency program and college assistance migrant program projects located at institutions of higher education or at private "SEC.

20 USC 1070d-2.

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PUBLIC LAW 99-498—OCT. 17, 1986

nonprofit organizations working in cooperation with institutions of higher education. "(b)

SERVICES PROVIDED BY HIGH SCHOOL EQUIVALENCY PRO-

GRAM.—The services authorized by this subpart for the high school equivalency program include— "(1) recruitment services to reach persons who are 17 years of age and over, who themselves or whose parents have spent a minimum of 75 days during the past 24 months in migrant and seasonal farmwork, and who lack a high school diploma or its equivalent; "(2) educational services which provide instruction designed to help students obtain a general education diploma which meets the guidelines established by the State in which the project is located for high school equivalency; "(3) supportive services which include the following: "(A) personal, vocational, and academic counseling; "(B) placement services designed to place students in a • university, college, or junior college program, or in military -'* service or career positions; and "(C) health services; ^' "(4) information concerning and assistance in obtaining available student financial aid; "(5) weekly stipends for high school equivalency program participants; "(6) housing for those enrolled in residential programs; "(7) exposure to cultural events, academic programs, and to migrant youth; and "(8) other essential supportive services, as needed to ensure the success of eligible students. "(c) SERVICES PROVIDED BY COLLEGE ASSISTANCE MIGRANT PRO-
 * other educational and cultural activities usually not available

. r '., GRAM.—Services authorized by this subpart for the college assistance migrant program include— "(1) outreach and recruitment services to reach persons who themselves or whose parents have spent a minimum of 75 days during the past 24 months in migrant and seasonal farmwork, ! and who meet the minimum qualifications for attendance at a college or university; i, ^ ^ "(2) supportive and instructional services which include: "(A) personal, academic, and career counseling as an ,; ongoing part of the program; .' "(B) tutoring and academic skill building instruction and s assistance; "(C) assistance with special admissions; t >.,; "(D) health services; and "(E) other services as necessary to assist students in completing program requirements; "(3) assistance in obtaining student financial aid which includes, but is not limited to: "(A) stipends; "(B) scholarships; - ,;>< v "(C) student travel; 4; "(D) career oriented work study; »., "(E) books and supplies; "(F) tuition and fees; 1; "(G) room and board; and . <

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 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1343

"(H) other assistance necessary to assist students in completing their first year of college; "(4) housing support for students living in institutional facilities and commuting students; "(5) exposure to cultural events, academic programs, and other activities not usually available to migrant youth; and "(6) other support services as necessary to ensure the success of eligible students. "(d) MANAGEMENT PLAN REQUIRED.—Each project application

shall include a management plan which contains assurances that staff shall have a demonstrated knowledge and be sensitive to the unique characteristics and needs of the migrant and seasonal farmworker population, and provisions for: "(1) staff in-service training; "(2) training and technical assistance; "(3) staff travel; "(4) student travel; "(5) interagency coordination; and "(6) an evaluation plan. "(e) THREE-YEAR GRANT PERIOD; CONSIDERATION OF PRIOR EXPERI-

ENCE.—Except under extraordinary circumstances, the Secretary shall award grants for a 3-year period. For the purpose of making grants under this subpart, the Secretary shall consider the prior experience of service delivery under the particular project for which funds are sought by each applicant. Such prior experience shall be awarded the same level of consideration given this factor for applicants for programs authorized by subpart 4 of this part in accordance with section 417A(b)(2). "(f) MINIMUM ALLOCATIONS.—The Secretary shall not allocate an amount less than— "(1) $150,000 for each project under the high school equivalency program, and "(2) $150,000 for each project under the college assistance migrant program. "(g) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated for this part $9,000,000 for fiscal year 1987, and such sums as may be necessary for the 4 succeeding fiscal years. "SUBPART 6—ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM "STATEMENT OF PURPOSE

"SEC. 419A. It is the purpose of this subpart to establish a Robert C. Byrd Honors Scholarship Program to promote student excellence and achievement and to recognize exceptionally able students who show promise of continued excellence.

20 USC

1070d-31.

DEFINITION

'SEC. 419B. For the purpose of this subpart— "(1) the term 'secondary school' has the same meaning given that term under section 198(a)(7) of the Elementary and Secondary Education Act of 1965; and "(2) the term 'State' means each of the several States, the District of Columbia, and the Commonwealth of Puerto Rico.

20 USC

1070d-32.

20 USC 2854.

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100 STAT. 1344 '-

State and local governments.

20 USC

1070d-33.

•

"SEC.

-

419C.

•

(a)

SCHOLARSHIPS AUTHORIZED

PROGRAM

AUTHORITY.—The

Secretary

is

authorized, in accordance with the provisions of this subpart, to make grants to States to enable the States to award scholarships to individuals who have demonstrated outstanding academic achievement and who show promise of continued academic achievement. "(b) PERIOD OF AWARD.—Scholarships under this section shall be awarded for a period of one academic year for the first year of study at an institution of higher education. "(c) USE AT ANY INSTITUTION PERMITTED.—A student awarded a

scholarship under this subpart may attend any institution of higher education. "(d) BYRD SCHOLARS.—Individuals awarded scholarships under this subpart shall be known as 'Byrd Scholars'. ALLOCATION AMONG STATES

20 USC 1070d-34.

"SEC. 419D. From the sums appropriated pursuant to section 419K for any fiscal year, the Secretary shall allocate to each State having an agreement under section 419E— "(1) $1,500 multiplied by the number of individuals in the State eligible for scholarships pursuant to section 419G(b), plus "(2) $10,000, plus 5 percent of the amount to which a State is eligible under paragraph (1) of this section. AGREEMENTS

20 USC 1070d-35.

"SEC. 419E. The Secretary shall enter into an agreement with each State desiring to participate in the scholarship program authorized by this subpart. Each such agreement shall include provisions designed to assure that— "(1) the State educational agency will administer the scholarship program authorized by this subpart in the State; "(2) the State educational agency will comply with the eligibility and selection provisions of this subpart; "(3) the State educational agency will conduct outreach activi> ties to publicize the availability of scholarships under this E subpart to all eligible students in the State, with particular emphasis on activities designed to assure that students from low-income and moderate-income families have access to the information on the opportunity for full participation in the scholarship program authorized by this subpart; "(4) the State educational agency will pay to each individual in the State who is awarded a scholarship under this subpart $1,500 at an awards ceremony in accordance with section 4191; and "(5) the State educational agency will use the amount of the allocation described in paragraph (2) of section 419D for administrative expenses, including the conduct of the awards ceremony required by section 4191. ». \~ a •'iP'E U G I B I U T Y OF SCHOLARS

20 USC 1070d-36.

"SEC. 419F. (a) HIGH SCHOOL GRADUATION OR EQUIVALENT AND ADMISSION TO INSTITUTION REQUIRED.—Each student awarded a

scholarship under this subpart shall be a graduate of a public or private secondary school or have the equivalent of a certificate of

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100 STAT. 1345

graduation as recognized by the State in which the student resides and must have been admitted for enrollment at an institution of higher education. "(b) SELECTION BASED ON PROMISE OF ACADEMIC ACHIEVEMENT.—

Each student awarded a scholarship under this subpart must demonstrate outstanding academic achievement and show promise of continued academic achievement. "SELECTION OF SCHOLARS

419G. (a) ESTABLISHMENT OF CRITERIA.—The State educational agency is authorized to establish the criteria for the selection of scholars under this subpart. "(b) ADOPTION OF PROCEDURES.—The State educational agency shall adopt selection procedures which are designed to assure that 10 individuals will be selected from among residents of each congressional district in a State (and in the case of the District of Columbia and the Commonwealth of Puerto Rico not to exceed 10 individuals will be selected in such District or Commonwealth). "SEC.

State and local governments.

20 USC

1070d-37.

"(c) CONSULTATION REQUIREMENT.—In carrying out its responsibil-

ities under subsections (a) and (b), the State educational agency shall consult with school administrators school boards, teachers, counselors, and parents. STIPENDS AND SCHOLARSHIP CONDITIONS "SEC.

419H. (a) AMOUNT OF AWARD.—Each student awarded a

scholarship under this subpart shall receive a stipend of $1,500 for the academic year of study for which the scholarship is awarded. "(b) USE OF AWARD.—The State educational agency shall establish procedures to assure that a scholar awarded a scholarship under this subpart pursues a course of study at an institution of higher education.

20 USC

1070d-38.

state and local governments.

"AWARDS CEREMONY

"SEC. 4191. (a) LOCAL CEREMONY.—The State educational agency shall make arrangements to award scholarships under this subpart at a place in each State which is convenient to the individuals selected to receive such scholarships. To the extent possible, the award shall be made by Members of the Senate and Members of the House of Representatives (by the Delegate in the case of the District of Columbia and the Resident Commissioner in the case of the Commonwealth of Puerto Rico) who represent the State, Commonwealth, or District, as the case may be, from which the individuals come. "(b) TIMING OF SELECTION.—The selection process shall be completed, and the awards made prior to the end of each secondary academic year.

20 USC 1070d-39.

" C O N S T R U C T I O N OF N E E D S PROVISIONS

"SEC. 419J. Nothing in this subpart, or any other Act, shall be construed to permit the receipt of a scholarship under this subpart to be counted for any needs test in connection with the awarding of any grant or the making of any loan under this Act or any other provision of Federal law relating to educational assistance.

20 USC

1070d-40.

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 100 STAT. 1346

PUBLIC LAW 99-498—OCT. 17, 1986 AUTHORIZATION OF APPROPRIATIONS

20 USC

1070d-41.

"SEC. 419K. There are authorized to be appropriated for this subpart $8,000,000 for fiscal year 1987, and such sums as may be necessary for the 4 succeeding fiscal years. "SUBPART 7—ASSISTANCE TO INSTITUTIONS OF HIGHER EDUCATION PAYMENTS TO INSTITUTIONS OF HIGHER EDUCATION

Grants. 20 USC 1070e.

420. (a) COST OF EDUCATION PAYMENTS.—Each institution of higher education shall be entitled for each fiscal year to a cost-ofeducation payment in accordance with the provisions of this section. "SEC.

"(b) COMPUTATION OF AMOUNT.—(1) The amount of the cost-of-

education payment to which an institution shall be entitled under this section for a fiscal year shall be, subject to subsection (d), the amount determined under paragraph (2)(A) plus the amount determined under paragraph (2)(B). "(2)(A)(i) The Secretary shall determine the amount to which an institution is entitled under this subparagraph on the basis of the total number of undergraduate students who are in attendance at the institution and the number of students who are also recipients of basic grants under subpart 1, in accordance with the following table: "If the total number of students in attendance is— Not over 1,000 Over 1,000 but not over 2,500 Over 2,500 but not over 5,000

Over 5,000 but not over 10.000

Over 10,000

The amount of the grant is— $500 for each recipient. $500 for each of 100 recipients; plus $400 for each recipient in excess of 100. $500 for each of 100 recipients; plus $400 for each of 150 recipients in excess of 100; plus $300 for each recipient in excess of 250. $500 for each 100 recipients; plus $400 for each of 150 recipients in excess of 100; plus $300 for each of 250 recipients in excess of 250; plus $200 for each recipient in excess of 500. $500 for each of the 100 recipients; plus $400 for each of 150 recipients in excess of 100; plus $300 for each of 250 recipients in excess of 250; plus $200 for each of 500 recipients in excess of 500; plus $100 for each recipient in excess of 1,000.

"(ii) In any case where a recipient of a basic grant under subpart 1 attends an institution receiving a cost-of-education payment under this subpart on less than a full-time basis, the amount determined under this subparagraph with respect to the student shall be reduced in proportion to the degree to which that student is not attending on a full-time basis. "(iii) If during any period of any fiscal year the funds available for making payments on the basis of entitlements established under this subparagraph are insufficient to satisfy fully all such entitlements, the amount paid with respect to each such entitlement shall be ratably reduced. When additional funds become available for such purpose, the amount of payment from such additional funds shall be in proportion to the degree to which each such entitlement is unsatisfied by the payments made under the first sentence of this division.

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"(B)(i) The Secretary shall determine with respect to each institution an amount equal to the appropriate percent (specified on the table below) of the aggregate of— "(I) supplemental educational opportunity grants under subpart 2; "(11) work-study payments under part C; and "(III) loans to students under part E; made for such year to students who are in attendance at such institution. The Secretary shall determine such amounts on the basis of percentages of such aggregate, and the number of students in attendance at institutions during the most recent academic year ending prior to such fiscal year, in accordance with the following table: "If the number of students in attendance at the institution is— Not over 1,000 Over 1,000 but not over 3,000 Over 3,000 but not over 10,000 Over 10,000

The percentage of such aggregate shall be— 50 percent. 46 percent. 42 percent. 38 percent.

"(ii) If during any period of any fiscal year the funds available for making payments on the basis of entitlements established under this subparagraph are insufficient to satisfy fully all such entitlements, the amount paid with respect to each such entitlement shall be ratably reduced. When additional funds become available for such purpose, the amount of payment from such additional funds shall be in proportion to the degree to which each such entitlement is unsatisfied by the payments made under the first sentence of this division. "(3)(A) In determining the number of students in attendance at institutions of higher education under this subsection, the Secretary shall compute the full-time equivalent of part-time students. "(B) The Secretary shall make a separate determination of the number of students in attendance at an institution of higher education and the number of recipients of basic grants at any such institution at each branch or separate campus of that institution located in a different community from the principal campus of that institution pursuant to criteria established by him.

-u -

"(c) APPLICATIONS; CONTENTS AND MANNER OF FILING.—An institu-

tion of higher education may receive a cost-of-education payment in accordance with this section only upon application therefor. An application under this section shall be submitted at such time or times, in such manner, and containing such information as the Secretary determines necessary to carry out his functions under this title, and shall— "(1) set forth such policies, assurances, and procedures as will ensure that— "(A) the funds received by the institution under this section will be used solely to defray instructional expenses in academically related programs of the applicant; "(B) the funds received by the institution under this section will not be used for a school or department of divinity or for any religious worship or sectarian activity; "(C) the applicant will expend, during the academic year for which a payment is sought, for all academically related programs of the institution, an amount equal to at least the average amount so expended during the 3 years preceding the year for which the grant is sought; and

^

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 100 STAT. 1348

PUBLIC LAW 99-498—OCT. 17, 1986

"(D) the applicant will submit to the Secretary such reports as the Secretary may require by regulation; and "(2) contain such other statement of policies, assurances, and procedures as the Secretary may require by regulation in order to protect the financial interests of the United States. "(d) APPORTIONMENT OF APPROPRIATIONS.—(1) The Secretary shall pay to each institution of higher education for each fiscal year the amount to which it is entitled under this section. "(2) Of the total sums appropriated to make payments on the basis of entitlements established under this section and to make payments under part D of title IX— "(A) 45 percent shall be available for making payments on the basis of entitlements established under paragraph (2)(A) of subsection (a); "(B) 45 percent shall be available for making payments on the basis of entitlements established under paragraph (2)(B) of subsection (a); and "(C) 10 percent shall be available for making payments under part D of title IX. "(3) No payments on the basis of entitlements established under paragraph (2)(A) of subsection (a) may be made during any fiscal year for which the appropriations for making grants under subpart 1 does not equal at least 50 percent of the appropriation necessary for satisfying the total of all entitlements established under such subpart. In no event shall, during any fiscal year, the aggregate of the payments to which this paragraph applies exceed that percentage of the total entitlements established under such paragraph (2)(A) which equals the percentage of the total entitlements established under subpart 1 which are satisfied by appropriations for such purpose for that fiscal year. "(e) LIMITATION ON APPROPRIATIONS.—No funds are authorized to be appropriated for this subpart for fiscal year 1987. "VETERANS EDUCATION OUTREACH PROGRAM

20 USC I070e-i.

420A. (a) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out the provisions of this section $5,000,000 for fiscal year 1987, and such sums as may be necessary for the 4 succeeding fiscal years. "(b) SIZE AND DURATION OF AWARDS.—(1) The minimum grant that may be awarded to an institution under this section is $1,000, which may remain available for expenditure over a period not to exceed 2 academic years. "(2) The amount of the payment to which any institution shall be entitled under this section for any fiscal year shall be— "(A) $300 for each person who is a veteran receiving vocational rehabilitation under chapter 31 of title 38, United States 38 USC 1500 et Code, or a veteran receiving educational assistance under chapI f use 1651 et ^®^ ^^ ®^ such title 38, and who is in attendance at such seq. institution as an undergraduate student during such year; "(B) $150 for each person who is in attendance at such institution as an undergraduate student during such year and who has been the recipient of educational assistance under 38 USC 1690 et subchapter V or VI of chapter 34 of such title 38, or who has a seq., 1695 et seq. service-connected disability as defined in section 101(16) of such 38 USC 101. title 38, or who is disabled, as determined in accordance with "SEC.

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 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1349

regulations promulgated by the Secretary after consultation with the Administrator of Veterans' Affairs; and "(C) $100 for each person who is in attendance at such institution as an undergraduate student during such year and who has received an honorable discharge from military service but who is no longer eligible to or does not receive educational benefits under chapter 31 or chapter 34 of title 38 of the United States Code.

38 USC 1500 et

"(3) In any case where a person on behalf of whom a payment is ««9v 1651 et seq. made under this section attends an institution on less than a fulltime basis, the amount of the payment on behalf of that person shall be reduced in proportion to the degree to which that person is not attending on a full-time basis. "(4)(A) The Secretary shall pay to each institution of higher education which has had an application approved under subsection (c) the amount to which it is entitled under this section. If the amount appropriated for any fiscal year is not sufficient to pay the amounts to which all such institutions are entitled, the Secretary shall ratably reduce such payments. If any amounts become available for a fiscal year after such reductions have been imposed, such reduced payments shall be increased on the same basis as they were reduced. "(B) The maximum amount of payments to any institution of higher education, or any branch thereof which is located in a community which is different from that in which the parent institution thereof is located, in any fiscal year shall be $75,00. In making payments under this section for any fiscal year, the Secretary shall apportion the appropriation for making such payments, from funds which become available as a result of the limitation on payments set forth in the preceding sentence, in such a manner as will result in the receipt by each institution which is eligible for payment under this section of the first $9,000 (or the amount of its entitlement for that fiscal year, but not less than $1,000, whichever is the lesser) and then additional amounts up to the limitation set forth in the preceding sentence. "(5) Not less than 90 percent of the amounts paid to any institution under paragraph (3)(A) in any fiscal year shall be used to implement the requirement of subsection (c)(2)(C)(i), and to the extent that such funds remain after implementing such requirement, funds limited by such 90 percent requirement shall be used ' •"' for implementing the requirements of clauses (ii) through (v) of subsection (c)(2)(C), except that the Secretary may, in accordance ^l^ with criteria established in regulations jointly prescribed by the Secretary with the Administrator, waive the requirement of this subsection to the extent that he finds that such institution is adequately carrying out all such requirements without the necessity for such application of such amount of the payments received under this subsection. "(c) ELIGIBILITY FOR AWARDS.—(1) During the period beginning

July 1, 1987, and ending September 1, 1991, each institution of higher education shall be entitled to a payment under, and in accordance with, this section during any fiscal year if the number of persons who are veterans with honorable discharges and are in attendance as undergraduate students at the institution is at least 100. "(2) An institution of higher education shall be eligible to receive the payment to which it is entitled under this section only if it

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 100 STAT. 1350

V

38 USC 1690 et

PUBLIC LAW 99-498—OCT. 17, 1986

makes application therefor to the Secretary. An application under this section shall be submitted at such time or times, in such manner, in such form and containing such information as the Secretary determines necessary to carry out the functions of the Secretary under this title, and shall— "(A) set forth such policies, assurances, and procedures as will ensure that— "(i) the funds received by the institution under this sec» tion and available to it after the requirements of subsection (e) have been met will be used solely to defray instructional expenses in academically related programs of the applicant; "(ii) the funds received by the institution under this section will not be used for a school or department of divinity or for any religious worship or sectarian activity; "(iii) the applicant will expend, during the academic year for which a payment is sought, for all academically related programs of the institution, an amount equal to at least the average amount so expended during the 3 years preceding the year for which the grant is sought; "(iv) the applicant will expend, during the academic year for which a payment is sought, for enhancing the functions of the Veterans Education Outreach Program, an amount V). equal to at least the amount of the award under this section from sources other than this or any other Federal program; and "(v) the applicant will submit to the Secretary such reports as the Secretary may require by regulation; "(B) contain such other statement of policies, assurances, and procedures as the Secretary may require by regulation in order to protect the financial interests of the United States; and "(C) set forth such plans, policies, assurances, and procedures as will ensure that the applicant will make an adequate effort— I "(i) to maintain an office of veterans' affairs which has responsibility for veterans' outreach, recruitment, and special education programs, including the provision of educational, vocational, and personal counseling for veterans, "(ii) to carry out programs designed to prepare educationally disadvantaged veterans for postsecondary education (I) under subchapter V of chapter 34 of title 38, United States Code, and (II) in the case of any institution located near a military installation, under subchapter VI of such chapter

38 USC 1695 et

34,

"(iii) to carry out active outreach (with special emphasis on service-connected disabled veterans, other disabled or handicapped veterans, incarcerated veterans, and educationally disadvantaged veterans), recruiting, and counseling activities through the use of funds available under federally assisted work-study programs (with special emphasis on the veteran-student services program under section 1685 of such title 38), "(iv) to carry out an active tutorial assistance program for veterans, including dissemination of information regarding such program, with special emphasis on making maximum use of the benefits available under section 1692 of such title 38, and "(v) to coordinate activities carried out under this part with the readjustment counseling program authorized

p ,j n V i; »'#i3' , v y

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 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1351

under section 612A of title 38, United States Code, and with the programs of veterans employment and training authorized under the Job Training Partnership Act and under 29 USC 1501 chapters 41 and 42 of title 38, United States Code, in order ^^^^^ 2000 to assist in serving the readjustment, rehabilitation, per2011 et sea sonal counseling, and employment needs of veterans, except that an institution which the Secretary determines, in accordance with regulations jointly prescribed by the Secretary and the Administrator of Veterans' Affairs (hereinafter referred to as the 'Administrator'), cannot feasibly itself, in terms of the number of veterans in attendance there, carry out any or all of the programs set forth in clauses (i) through (v) of subparagraph (C), may carry out such program or programs through a consortium agreement with one or more other institutions of higher education and shall be required to carry out such programs only to the extent that the Secretary determines, in accordance with regulations jointly prescribed by the Secretary and the Administrator, is appropriate in terms of the number of veterans in attendance at such institution. The adequacy of efforts to meet the requirements of subparagraph (C) of this paragraph shall be determined by the Secretary, based upon the recommendations of the Administrator, in accordance with criteria established in regulations jointly prescribed by the Secretary and the Administrator. "(3) The Secretary shall not approve an application under this subsection unless he determines that the applicant will implement the requirements of subparagraph (C) of paragraph (1) within the first academic year during which it receives a payment under this section. "(4) Any institution which has been eligible under this section prior to September 30, 1985, for a continuous period of three of the last five years shall be determined eligible under the terms of this section. "(d) COORDINATION OF PROGRAMS.—The Secretary, in carrying out the provisions of this section, shall seek to assure the coordination of programs assisted under this section with programs carried out by the Veterans' Administration pursuant to title 38, United States Code, and the Administrator shall provide all assistance, technical consultation, and information otherwise authorized by law as necessary to promote the maximum effectiveness of the activities and programs assisted under this section. "(e) ADMINISTRATION OF PROGRAM.—The program provided for in

this section shall be administered by an identifiable administrative unit in the Department. "(f) DISSEMINATION OF INFORMATION.—From the amounts appropriated for this section, the Secretary shall retain one percent or $10,000, whichever is less, for the purpose of collecting information about exemplary Veterans Educational Outreach Programs and disseminating that information to other institutions of higher education having such programs on their campuses. Such collection and dissemination shall be done on an annual basis.

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Page:United States Statutes at Large Volume 100 Part 2.djvu/250

 100 STAT. 1352

PUBLIC LAW 99-498—OCT. 17, 1986 'SUBPART 8—SPECIAL CHILD CARE SERVICES FOR DISADVANTAGED COLLEGE STUDENTS SPECIAL CHILD CARE SERVICES FOR DISADVANTAGED COLLEGE STUDENTS

Grants. 20 USC 1070f.

20 USC 1070a-l note.

20 USC 1001 note.

420B. (a) PROGRAM AUTHORITY.—Funds appropriated pursuant to subsection (c) shall be used by the Secretary to make grants to institutions of higher education to provide special child care services to disadvantaged students. "(b) APPLICATIONS.—Any institution wishing to receive a grant under this section shall submit an application to the Secretary. Such application shall include— "(1) a description of the program to be established; "(2) assurances by the applicant to the Secretary that— . "(A) not less than two-thirds of the participants in the program are low-income individuals; "(B) the remaining participants in the program are either low-income individuals; "(C) the participants require the services to pursue a successful program of education beyond high school; .> > "(D) the participants are enrolled at the institution which is the recipient of the grant; "(E) all participants will receive sufficient assistance (under this subpart, other provisions of this title, or otherwise) to meet that student's full financial need for child care services related to such enrollment; and ,. "(F) the institution will meet such need of participants by providing child care through vouchers, contracted services, or direct provision of services; and "(3) such information (and meet such conditions) as may be required by the Secretary. "(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out the purpose of this section, $10,000,000 for fiscal year 1987, and such sums as may be necessary for the 4 succeeding fiscal years. "(d) DEFINITIONS.—For the purpose of this subpart— "(1) the term 'first generation college student' means— "(A) an individual both of whose parents did not complete a baccalaureate degree; or fej i "(B) in the case of any individual who regularly resided with and received support from only one parent, an individr<l ual whose only such parent did not complete a baccalaureate degree; and "(2) the term 'low-income individual' means an individual from a family whose taxable income for the preceding year did not exceed 150 percent of an amount equal to the poverty level determined by using criteria of poverty established by the Bureau of the Census.", (b) EFFECTIVE DATES.—(1) Except as provided in paragraph (2), sections 411A through 411F of the Act as amended by this section shall apply with respect to the determination of need for Pell Grants for academic years beginning with academic year 1988-1989. With respect to any preceding academic year, such determinations shall be made in accordance with regulations prescribed by the Secretary of Education in accordance with the Student Financial Assistance Technical Amendments Act of 1982. "SEC.

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 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1353

(2) The definition of independent student contained in section 411F(12) of the Act as amended by this section shall apply with respect to the determination of such need for academic years beginning with academic year 1987-1988. (3) Section 411(c) of the Act as amended by this section shall apply only to individuals who receive a Pell Grant for the first time for a period of enrollment beginning on or after July 1, 1987. (4) Section 411(f) of the Act as amended by this section shall apply to the awarding of Pell Grants for periods of enrollment beginning on or after July 1, 1987. (5) Section 413C(c)(2) of the Act as amended by this section shall apply to the awarding of grants under subpart 2 of part A of title IV of the Act for periods of enrollment beginning on or after July 1, 1987. (6) The changes made in section 417D of the Act shall apply with respect to grants awarded under such section in fiscal year 1988 or any succeeding fiscal year.

20 USC 1070a-l note.

20 USC 1070a note. 20 USC 1070a note. 20 USC 1070b-2 note.

20 USC 1070d-lb note.

SEC. 402. EXTENSION OF GUARANTEED STUDENT LOAN PROGRAM.

(a) AMENDMENT.—Part B of title IV of the Act (20 U.S.C. 1071 et seq.) is amended to read as follows: 'PART B—GUARANTEED STUDENT LOAN PROGRAM STATEMENT OF PURPOSE; NONDISCRIMINATION; AND APPROPRIATIONS AUTHORIZED "SEC. 421. (a) PURPOSE; DISCRIMINATION PROHIBITED.—

f

"(1) PURPOSE.—The purpose of this part is to enable the Secretary— "(A) to encourage States and nonprofit private institutions and organizations to establish adequate loan insurance programs for students in eligible institutions (as defined in section 435), "(B) to provide a Federal program of student loan insurance for students or lenders who do not have reasonable access to a State or private nonprofit program of student loan insurance covered by an agreement under section 428(b), "(C) to pay a portion of the interest on loans to qualified students which are insured under this part, and "(D) to guarantee a portion of each loan insured under a program of a State or of a nonprofit private institution or organization which meets the requirements of section 428(a)(l)(B). "(2) DISCRIMINATION BY CREDITORS PROHIBITED.—No agency, organization, institution, bank, credit union, corporation, or other lender who regularly extends, renews, or continues credit or provides 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 bsisis of race, national origin, religion, sex, marital status, age, or handicapped status. "(b)

AUTHORIZATION OF APPROPRIATIONS.—For the

purpose

of

carrying out this part— "(1) there are authorized to be appropriated to the student loan insurance fund (established by section 431)(A) the sum of

State and local governments. Insurance. 20 USC 1071.

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Page:United States Statutes at Large Volume 100 Part 2.djvu/252

 100 STAT. 1354 ,:.1 > sf

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..

PUBLIC LAW 99-498—OCT. 17, 1986

$1,000,000, and (B) such further sums, if any, as may become necessary for the adequacy of the student loan insurance fund, "(2) there are authorized to be appropriated, for payments under section 428 with respect to interest on student loans and for payments under section 437, such sums for the fiscal year, ending June 30, 1966, and succeeding fiscal years, as may be required therefor, "(3) there is authorized to be appropriated the sum of $17,500,000 for making advances pursuant to section 422 for the reserve funds of State and nonprofit private student loan insurance programs, "(4) there are authorized to be appropriated (A) the sum of $12,500,000 for making advances after June 30, 1968, pursuant to sections 422(a) and (b), and (B) such sums as may be necessary for making advances pursuant to section 422(c), for the reserve funds of State and nonprofit private student loan insurance programs, and "(5) there are authorized to be appropriated such sums as may be necessary for the purpose of paying an administrative cost allowance in accordance with section 428(f) to guaranty agencies. Sums appropriated under paragraphs (1), (2), (4), and (5) of this subsection shall remain available until expended. No additional sums are authorized to be appropriated under paragraph (3) or (4) of this subsection by reason of the reenactment of such paragraphs by the Higher Education Amendments of 1986. "ADVANCES FOR RESERVE FUNDS OF STATE AND NONPROFIT PRIVATE LOAN INSURANCE PROGRAMS

20 USC 1072.

"SEC. 422. (a) PURPOSE OF AND AUTHORITY FOR ADVANCES TO RESERVE FUNDS.— "(1) PURPOSE; ELIGIBLE RECIPIENTS.—From sums appropriated

pursuant to paragraphs (3) and (4)(A) of section 421(b), the Secretary is authorized to make advances to any State with which the Secretary has made an agreement pursuant to section 428(b) for the purpose of helping to establish or strengthen the reserve fund of the student loan insurance program covered by that agreement. If for any fiscal year a State does not have a student loan insurance program covered by an agreement made pursuant to section 428(b), and the Secretary determines after consultation with the chief executive officer of that State that there is no reasonable likelihood that the State will have such a student loan insurance program for such year, the Secretary may make advances for such year for the same purpose to one or more nonprofit private institutions or organizations with which the Secretary has made an agreement pursuant to section 428(b) in order to enable students in the State to participate in a program of student loan insurance covered by such an agreement. The Secretary may make advances under this subsection both to a State program (with which he has such an agreement) and to one or more nonprofit private institutions or organizations (with which he has such an agreement) in that State if he determines that such advances are necessary in order that students in each eligible institution have access through such institution to a student loan insurance program which meets the requirements of section 428(b)(1).

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Page:United States Statutes at Large Volume 100 Part 2.djvu/253

 PUBLIC LAW 99-498—OCT. 17, 1986 "(2) MATCHING REQUIREMENT.—NO advance shall be made after June 30, 1968, unless matched by an equal amount from non-Federal sources. Such equal amount may include the unencumbered non-Federal portion of a reserve fund. As used in the preceding sentence, the term 'unencumbered non-Federal portion' means the amount (determined as of the time immediately preceding the making of the advance) of the reserve fund less the greater of— "(A) the sum of— "(i) advances made under this section prior to July 1, 1968; "(ii) an amount equal to twice the amount of advances made under this section after June 30, 1968, and before the advance for purposes of which the determination is made; and "(iii) the proceeds of earnings on advances made under this section; or "(B) any amount which is required to be maintained in such fund pursuant to State law or regulation, or by agreement with lenders, as a reserve against the insurance of outstanding loans. "(3) TERMS AND CONDITIONS; REPAYMENT.—Advances pursuant

to this subsection shall be upon such terms and conditions (including conditions relating to the time or times of payment) consistent with the requirements of section 428(b) as the Secretary determines will best carry out the purpose of this section. Advances made by the Secretary under this subsection shall be repaid within such period as the Secretary may deem to be appropriate in each case in the light of the maturity and solvency of the reserve fund for which the advance was made. '(b) LIMITATIONS ON TOTAL ADVANCES.—

"(1) IN GENERAL.—The total of the advances from the sums appropriated pursuant to paragraph (4)(A) of section 421(b) to nonprofit private institutions and organizations for the benefit of students in any State and to such State may not exceed an amount which bears the same ratio to such sums as the population of such State aged 18 to 22, inclusive, bears to the population of all the States aged 18 to 22 inclusive, but such advances may otherwise be in such amounts as the Secretary determines will best achieve the purposes for which they are made. The amount available for advances to any State shall not be less than $25,000 and any additional funds needed to meet this requirement shall be derived by proportionately reducing (but not below $25,000) the amount available for advances to each of the remaining States. "(2) CALCULATION OF POPULATION.—For the purpose of this subsection, the population aged 18 to 22, inclusive, of each State and of all the States shall be determined by the Secretary on the basis of the most recent satisfactory data available to him. '(c) ADVANCES FOR INSURANCE OBLIGATIONS.— "(1) USE FOR PAYMENT OF INSURANCE OBLIGATIONS.—From

sums appropriated pursuant to section 421(b)(4)(B), the Secretary shall advance to each State which has an agreement with the Secretary under section 428(c) with respect to a student loan insurance program, an amount determined in accordance with paragraph (2) of this subsection to be used for the purpose of

100 STAT. 1355

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 100 STAT. 1356

PUBLIC LAW 99-498—OCT. 17, 1986 making payments under the State's insurance obligations under such program. "(2) AMOUNT OF ADVANCES.—(A) Except

as provided

in

subparagraph (B), the amount to be advanced to each such State shall be equal to 10 percent of the principal amount of loans made by lenders and insured by such agency on those loans on which the first payment of principal became due during the fiscal year immediately preceding the fiscal year in which the advance is made. "(B) The amount of any advance determined according to subparagraph (A) of this paragraph shall be reduced by— "(i) the amount of any advance or advances made to such I State pursuant to this subsection at an earlier date; and "(ii) the amount of the unspent balance of the advances made to a State pursuant to subsection (a). Notwithstanding subparagraph (A) and the preceding sentence of this subparagraph, but subject to subparagraph (D) of this paragraph, the amount of any advance to a State described in paragraph (5)(A) for the first year of its eligibility under such paragraph, and the amount of any advance to any State described in paragraph (5)(B) for each year of its eligibility under such paragraph, shall not be less than $50,000. "(C) For the purpose of subparagraph (B), the unspent balance of the advances made to a State pursuant to subsection (a) shall be that portion of the balance of the State's reserve fund (remaining at the time of the State's first request for an advance pursuant to this subsection) which bears the same ratio to such balance as the Federal advances made and not returned by such State, pursuant to subsection (a), bears to the total of all past contributions to such reserve funds from all sources (other than interest on investment of any portion of the reserve fund) contributed since the date such State executed an agreement pursuant to section 4280t)). "(D) If the sums appropriated for any fiscal year for paying the amounts determined under subparagraphs (A) and (B) are not sufficient to pay such amounts in full, then such amounts shall be reduced— "(i) by ratably reducing that portion of the amount allocated to each State which exceeds $50,000; and "(ii) if further reduction is required, by equally reducing the $50,000 minimum allocation of each State. If additional sums become available for paying such amounts for any fiscal year during which the preceding sentence has been applied, such reduced amounts shall be increased on the same basis as they were reduced. "(3) USE OF EARNINGS FOR INSURANCE OBLIGATIONS.—The earnings, if any, on any investments of advances received pursuant to this subsection must be used for making payments under the State's insurance obligations. "(4) REPAYMENT OF ADVANCES.—Advances made by the Secretary under this subsection shall, subject to subsection (d), be repaid within such period as the Secretary may deem to be appropriate and shall be deposited in the fund established by section 431. "(5) LIMITATION ON NUMBER OF ADVANCES.—Advances puisu-

ant to this subsection shall be made to a State—

-.

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 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1357

"(A) in the case of a State which is actively carrying on a program under an agreement pursuant to section 428(b) which was entered into before October 12, 1976, upon such date as such State may request, but not before October 1, 1977, and on the same day of each of the 2 succeeding calendar years after the date so requested; and "(B) in the case of a State which enters into an agreement pursuant to section 428(b) on or after October 12, 1976, or which is not actively carrying on a program under an agreement pursuant to such section on such date, upon such date as such State may request, but not before October 1, 1977, and on the same day of each of the 4 succeeding calendar years after the date so requested of the advance. "(6) PAYMENT OF ADVANCES WHERE NO STATE PROGRAM.—(A) If

.

for any fiscal year a State does not have a student loan insurance program covered by an agreement made pursuant to section 428(b), and the Secretary determines after consultation with the chief executive officer of that State that there is no reasonable likelihood that the State will have such a student loan insurance program for such year, the Secretary may make advances pursuant to this subsection for such year for the same purpose to one or more nonprofit private institutions or organizations with which he has made an agreement pursuant to subsection (c), as well as subsection (b), of section 428 and subparagraph (B) of this paragraph in order to enable students in that State to participate in a program of student loan insurance covered by such agreements. "(B) The Secretary may enter into an agreement with a private nonprofit institution or organization for the purpose of this paragraph under which such institution or organization— "(i) agrees to establish within such State at least one office with sufficient staff to handle written and telephone inquiries from students, eligible lenders, and other persons in the State, to encourage maximum commercial lender participation within the State, and to conduct periodic visits to at least the major eligible lenders within the State; "(ii) agrees that its insurance will not be denied any student because of his or her choice of eligible institutions; and "(iii) certifies that it is neither an eligible institution, nor has any substantial affiliation with an eligible institution. "(d) RECOVERY OF ADVANCES DURING FISCAL YEARS 1988 AND

1989.— "(1) AMOUNT AND USE OF RECOVERED FUNDS.—Notwithstand-

ing any other provision of this section, advances made by the Secretary under this section shall be repaid in accordance with this subsection and shall be deposited in the fund established by section 431. The Secretary shall, in accordance with the requirements of paragraph (2), recover (and so deposit) an amount equal to $75,000,000 during fiscal year 1988 and an amount equal to $35,000,000 for fiscal year 1989. "(2) DETERMINATION OF GUARANTY AGENCY OBLIGATIONS.—In

determining the amount of advances which shall be repaid by a guaranty agency under paragraph (1), the Secretary— "(A) shall consider the solvency and maturity of the reserve and insurance funds of the guaranty agency assisted by such advances, as determined by the Comptroller

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 100 STAT. 1358

PUBLIC LAW 99-498—OCT. 17, 1986

> '" • • ^

General taking into account the requirements of State law as in effect on the date of enactment of the Higher Education Amendments of 1986; "(B) shall not seek repayment of such advances from any State described in subsection (c)(5)(B) during any year of its eligibility under such subsection; and "(C) shall not seek repayment of such advances from any State if such repayment encumbers the reserve fund requirement of State law as in effect on such date of enactment. "EFFECTS OF ADEQUATE NON-FEDERAL PROGRAMS

20 USC 1073.

"SEC. 423. (a) FEDERAL INSURANCE BARRED TO LENDERS WITH ACCESS TO STATE OR PRIVATE INSURANCE.—Except as provided in

subsection (b), the Secretary shall not issue certificates of insurance under section 429 to lenders in a State if the Secretary determines that every eligible institution has reasonable access in that State to a State or private nonprofit student loan insurance program which is covered by an agreement under section 428(b). "(b) EXCEPTIONS.—The Secretary may issue certificates of insurance under section 429 to a lender in a State— "(1) for insurance of a loan made to a student borrower who does not, by reason of the borrower's residence, have access to • loan insurance under the loan insurance program of such State ""i- (or under any private nonprofit loan insurance program which has received an advance under section 422 for the benefit of y students in such State); ^ "(2) for insurance of all the loans made to student borrowers by a lender who satisfies the Secretary that, by reason of the residence of such borrowers, such lender will not have access to any single State or nonprofit private loan insurance program which will insure substantially all of the loans such lender ^ intends to make to such student borrowers; or "(3) under such circumstances as may be approved by the ' guaranty agency in such State, for the insurance of a loan to a borrower for whom such lender previously was issued such a •'^ certificate if the loan covered by such certificate is not yet repaid. "SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PROGRAM 20 USC 1074.

"SEC. 424. (a) LIMITATIONS ON AMOUNTS OF LOANS COVERED BY FEDERAL INSURANCE.—The total principal amount of new loans

made and installments paid pursuant to lines of credit (as defined in section 435) to students covered by Federal loan insurance under this part shall not exceed $2,000,000,000 for the period from July 1, 1976, to September 30, 1976, and for each of the succeeding fiscal years ending prior to October 1, 1992. Thereafter, Federal loan insurance pursuant to this part may be granted only for loans made (or for loan installments paid pursuant to lines of credit) to enable students, who have obtained prior loans insured under this part, to continue or complete their educational program; but no insurance may be granted for any loan made or installment paid after September 30, 1997. "(b) APPORTIONMENT OF AMOUNTS.—The Secretary may, if he or

she finds it necessary to do so in order to assure an equitable

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 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1359

distribution of the benefits of this part, assign, within the maximum amounts specified in subsection (a), Federal loan insurance quotas applicable to eligible lenders, or to States or areas, and may from time to time reassign unused portions of these quotas. "LIMITATIONS ON INDIVIDUAL FEDERALLY INSURED LOANS AND ON FEDERAL LOAN INSURANCE "SEC. 425. (a) ANNUAL AND AGGREGATE LIMITS.— "(1) ANNUAL LIMITS.—(A) The total of loans made

to a student in any academic year or its equivalent (as determined by the Secretary) which may be covered by Federal loan insurance under this part may not exceed— "(i) $2,625, in the case of a student who has not successfully completed the first and second year of a program of undergraduate education; "(ii) $4,000, in the case of a student who has successfully completed such first and second year but who has not successfully completed the remainder of a program of B undergraduate education; or "(iii) $7,500, in the case of a graduate or professional student (as defined in regulations of the Secretary). "(B) The annual insurable limits contained in subparagraph (A) shall not apply in cases where the Secretary determines, pursuant to regulations, that a higher amount is warranted in order to carry out the purpose of this part with respect to students engaged in specialized training requiring exceptionally high costs of education. The annual insurable limit per student shall not be deemed to be exceeded by a line of credit under which actual payments by the lender to the borrower will not be made in any year in excess of the annual limit. "(2) AGGREGATE LIMITS.—(A) The aggregate insured unpaid principal amount for all such insured loans made to any student shall not at any time exceed— "(i) $17,250, in the case of any student who has not successfully completed a program of undergraduate edu'^ cation; and "(ii) $54,750, in the case of any graduate or professional student (as defined by regulations of the Secretary and including any loans which are insured by the Secretary under this part, or by a guaranty agency, made to such person before he or she became a graduate or professional student). "(B) The Secretary may increase the aggregate insurable limit applicable to students who are pursuing programs which the Secretary determines are exceptionally expensive. "(b) LEVEL OF INSURANCE COVERAGE BASED ON DEFAULT RATE.— "(1) REDUCTION FOR DEFAULTS IN EXCESS OF 5 OR 9 PERCENT.—

(A) Except as provided in subparagraph (B), the insurance liability on any loan insured by the Secretary under this part shall be 100 percent of the unpaid balance of the principal amount of the loan plus interest, except that— "(i) if, for any fiscal year, the total amount of payments under section 430 by the Secretary to any eligible lender as described in section 435(d)(l)(D) exceeds 5 percent of the sum of the loans made by such lender which are insured by the Secretary and which were in repayment at the end of

20 USC 1075.

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 100 STAT. 1360

PUBLIC LAW 99-498—OCT. 17, 1986 '

State and local governments. Securities.

20 USC 1001 note.

the preceding fiscal year, the insurance liability under this subsection for that portion of such excess which represents loans insured after the applicable date with respect to such loans, as determined under subparagraph (C), shall be equal to 90 percent of the amount of such portion; or '" "(ii) if, for any fiscal year, the total amount of such payments to such a lender exceeds 9 percent of such sum, the insurance liability under this subsection for that portion of such excess which represents loans insured after the applicable date with respect to such loans, as determined under subparagraph (C), shall be equal to 80 percent of the amount of such portion. "(B) Notwithstanding subparagraph (A), the provisions of clauses (i) and (ii) of such subparagraph shall not apply to an eligible lender as described in section 435(d)(l)(D) for the fiscal year in which such lender begins to carry on a loan program insured by the Secretary, or for any of the 4 succeeding fiscal years. "(C) The applicable date with respect to a loan made by an eligible lender as described in section 435(d)(1)(D) shall be— "(i) the 90th day after the adjournment of the next regular session of the appropriate State legislature which convenes after the date of enactment of the Education Amendments of 1976, or "(ii) if the primary source of lending capital for such lender is derived from the sale of bonds, and the constitution of the appropriate State prohibits a pledge of such State's credit as security against such bonds, the day which is one year after such 90th day. "(2) COMPUTATION OF AMOUNTS IN REPAYMENT.—For the purpose of this subsection, the sum of the loans made by a lender which are insured by the Secretary and which are in repayment shall be the original principal amount of loans made by such lender which are insured by the Secretary reduced by— "(A) the amount the Secretary has been required to pay to discharge his or her insurance obligations under this part; "(B) the original principal amount of loans insured by the Secretary which have been fully repaid; "(C) the original principal amount insured on those loans for which payment of first installment of principal has not become due pursuant to section 427(a)(2)(B) or such first installment need not be paid pursuant to section 427(a)(2)(C); and "(D) the original principal amount of loans repaid by the Secretary under section 437. "(3) PAYMENTS TO ASSIGNEES.—For the purpose of this subsection, payments by the Secretary under section 430 to an assignee of the lender with respect to a loan shall be deemed payments made to such lender. "(4) PLEDGE OF FULL FAITH AND CREDIT.—The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under the provisions of section 430 or 437 of this part.

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Rh believe there was likely to be a market for any of his commodities.

"A fine haul, lieutenant," said the captain.

"Yes, indeed," said the lieutenant; "but what if the owner refuses to part with it?"

"No fear; no fear," replied the captain. "As soon as ever the old rascal finds that there are no more Arabs or Algerians for him to fleece, he will be ready enough to transact a little business with us. We will pay him by bills of acceptance on some of his old friends in the Old World."

"But why should he want any payment?" inquired the lieutenant. "Under the circumstances, he must know that you have a right to make a requisition of his goods."

"No, no," quickly rejoined Servadac; "we will not do that. Just because the fellow is a German we shall not be justified in treating him in German fashion. We will transact our business in a business like way. Only let him once realize that he is on a new globe, with no prospect of getting back to the old one, and he will be ready enough to come to terms with us."

"Perhaps you are right," replied the lieutenant; "I hope you are. But anyhow, it will not do to leave the tartan here; not only would she be in danger in the event of a storm, but it is very questionable whether she could resist the pressure of the ice, if the water were to freeze."

"Quite true, Procope; and accordingly I give you the commission to see that your crew bring her round to the Shelif as soon as may be."

"To-morrow morning it shall be done," answered the lieutenant, promptly.

Upon returning to the shore, it was arranged that the whole of the little colony should forthwith assemble at the gourbi. The Spaniards were summoned and Isaac, although he could only with reluctance take his wistful gaze from his tartan, obeyed the governor's orders to follow.

An hour later and the entire population of twenty-two had met in the chamber adjoining the gourbi. Young Pablo made his first acquaintance with little Nina, and the child seemed highly delighted to find a companion so nearly of her own age. Leaving the children to entertain each other, Captain Servadac began his address.

Before entering upon further explanation, he said that he counted upon the cordial co-operation of them all for the common welfare.

Negrete interrupted him by declaring that no promises or pledges could be given until he and his countrymen knew how soon they could be sent back to Spain.

"To Spain, do you say?" asked Servadac.

"To Spain!" echoed Isaac Hakkabut, with a hideous yell. "Do they expect to go back to Spain till they have paid their debts? Your Excellency, they owe me twenty reals apiece for their passage here; they owe me two hundred reals. Are they to be allowed…?"

"Silence Mordecai, you fool!" shouted Ben Zoof, who was accustomed to call the Jew by any Hebrew name that came uppermost to his memory. "Silence!"

Servadac was disposed to appease the old man's anxiety by promising to see that justice was ultimately done; but, in a fever of frantic excitement, he went on to implore that he might have the loan of a few sailors to carry his ship to Algiers.

"I will pay you honestly; I will pay you well," he cried; but his ingrained propensity for making a good bargain prompted him to add, "provided you do not overcharge me."

Ben Zoof was about again to interpose some angry exclamation; but Servadac checked him, and continued in Spanish: "Listen to me, my friends. Something very strange has happened. A most wonderful event has cut us off from Spain, from France, from Italy, from every country of Europe. In fact, we have left the Old World entirely. Of the whole earth, nothing remains except this island on which you are now taking refuge. The old globe is far, far away. Our present abode is but an insignificant fragment that is left. I dare not tell you that there is any chance of your ever again seeing your country or your homes."

He paused. The Spaniards evidently had no conception of his meaning.

Negrete begged him to tell them all again. He repeated all that he had said, and by introducing some illustrations from familiar things, he succeeded to a certain extent in conveying some faint idea of the convulsion that had happened. The event was precisely what he had foretold. The communication was received by all alike with the most supreme indifference.

Hakkabut did not say a word. He had listened with manifest attention, his lips twitching now and then as if suppressing a smile. Servadac turned to him, and asked whether he was still disposed to put out to sea and make for Algiers.

The Jew gave a broad grin, which, however, he was careful to conceal from the Spaniards. "Your Excellency jests," he said in French; and turning to Count Timascheff, he added in Russian: "The governor has made up a wonderful tale."

The count turned his back in disgust, while the Jew sidled up to little Nina and muttered in Italian. "A lot of lies, pretty one; a lot of lies!"

"Confound the knave!" exclaimed Ben Zoof; "he gabbles every tongue under the sun!"

"Yes," said Servadac; "but whether he speaks French, Russian, Spanish, German, or Italian, he is neither more nor less than a Jew."

On the following day, without giving himself any further concern about the Jew's incredulity, the captain gave orders for the Hansa. to be shifted round to the harbor of the Shelif. Hakkabut raised no objection, not only because he was aware that the move insured the immediate safety of his tartan, but because he was secretly entertaining the hope that he might entice away two or three of the Dobryna's crew and make his escape to Algiers or some other port.

Operations now commenced for preparing proper winter quarters. Spaniards and Russians alike joined heartily in the work, the diminution of atmospheric pressure and of the force of attraction contributing such an increase to their muscular force as materially facilitated all their labors. The first business was to accommodate the building adjacent to the gourbi to the wants of the little colony. Here for the present the Spaniards were


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Page:United States Statutes at Large Volume 100 Part 2.djvu/259

 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1361

"SOURCES OF FUNDS

"SEC. 426. Loans made by eligible lenders in accordance with this part shall be insurable by the Secretary whether made from funds fully owned by the lender or from funds held by the lender in a trust or similar capacity and available for such loans.

20 USC 1076.

"ELIGIBILITY OF STUDENT BORROWERS AND TERMS OF FEDERALLY INSURED STUDENT LOANS "SEC. 427.

(a) LIST OF REQUIREMENTS.—Except as provided in

section 428C, a loan by an eligible lender shall be insurable by the Secretary under the provisions of this part only if— "(1) made to a student who (A) is an eligible student under section 484, (B) has agreed to notify promptly the holder of the loan concerning any change of address, and (C) is carrying at least one-half the normal full-time academic workload for the course of study the student is pursuing (as determined by the institution); and "(2) evidenced by a note or other written agreement which— "(A) is made without security and without endorsement, except that if the borrower is a minor and such note or other written agreement executed by the borrower would not, under the applicable law, create a binding obligation, endorsement may be required; "(B) provides for repayment (except as provided in subsection (c)) of the principal amount of the loan in installments over a period of not less than 5 years (unless sooner repaid or unless the student, during the 6 months preceding the start of the repayment period, specifically requests that repayment be made over a shorter period) nor more than 10 years beginning 6 months after the month in which the student ceases to carry at an eligible institution at least one-half the normal full-time academic workload as determined by the institution, except— "(i) as provided in subparagraph (C); "(ii) that the note or other written instrument may contain such reasonable provisions relating to repayment in the event of default in the payment of interest or in the payment of the cost of insurance premiums, or other default by the borrower, as may be authorized by regulations of the Secretary in effect at the time the loan is made; and "(iii) that the lender and the student, after the student ceases to carry at an eligible institution at least one-half the normal full-time academic workload as determined by the institution, may agree to a repayment schedule which begins earlier, or is of shorter duration, than required by this subparagraph, but in the event a borrower has requested and obtained a repayment period of less than 5 years, the borrower may at any time prior to the total repayment of the loan, have the repayment period extended so that the total repayment period is not less than 5 years; "(C) provides that periodic installments of principal need not be paid, but interest shall accrue and be paid, during any period—

20 USC 1077.

7

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Page:United States Statutes at Large Volume 100 Part 2.djvu/260

 100 STAT. 1362

Armed Forces.

Voluntarism. 22 USC 2501 note. 42 USC 4951 note.

26 USC 501.

29 USC 206.

Si'

PUBLIC LAW 99-498—OCT. 17, 1986 "(i) during which the borrower (I) is pursuing a fulltime course of study at an eligible institution, (II) is pursuing at least a half-time course of study (as determined by such institution) during an enrollment period for which the student has obtained a loan under this part, or (III) is pursuing a course of study pursuant to a graduate fellowship program approved by the Secretary, or pursuant to a rehabilitation training program for disabled individuals approved by the Secretary; "(ii) not in excess of 3 years during which the borrower is a member of the Armed Forces of the United States, is an active duty member of the National Oceanic and Atmospheric Administration Corps, or is an officer in the Commissioned Corps of the Public Health Service; "(iii) not in excess of 3 years during which the borrower is in service as a volunteer under the Peace Corps Act; "(iv) not in excess of 3 years during which the borrower is in service as a full-time volunteer under the Domestic Volunteer Service Act of 1973; "(v) not in excess of 3 years during which the borrower is in service, comparable to the service referred to in clauses (iii) and (iv), as a full-time volunteer for an organization which is exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1954; "(vi) not in excess of 3 years during which the borrower is engaged as a full-time teacher in a public or private elementary or secondary school in a teacher shortage area established by the Secretary pursuant to section 428(b)(4); "(vii) not in excess of 2 years during which the ', borrower is serving an internship, the successful completion of which is required in order to receive professional recognition required to begin professional practice or service; "(viii) not in excess of 3 years during which the borrower is temporarily totally disabled, as established by sworn affidavit of a qualified physician, or during which the borrower is unable to secure employment by regison of the care required by a dependent who is so disabled; "(ix) not in excess of 24 months, at the request of the borrower, during which the borrower is seeking and unable to find full-time employment; "(x) not in excess of 6 months of parental leave; or "(xi) not in excess of 12 months for mothers with preschool age children who are just entering or reentering the work force and who are compensated at a rate not exceeding $1 in excess of the rate prescribed under section 6 of the Fair Labor Standards Act of 1938, and that any such period shall not be included in determining the 10-year period provided in subparagraph (B); "(D) provides for interest on the unpaid principal balance of the loan at a yearly rate, not exceeding the applicable maximum rate prescribed in section 427A, which interest

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Page:United States Statutes at Large Volume 100 Part 2.djvu/261

 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1363

shall be payable in installments over the period of the loan except that, if provided in the note or other written agreement, any interest payable by the student may be deferred until not later than the date upon which repayment of the first installment of principal falls due, in which case interest accrued during that period may be added on that date to the principal; "(E) provides that the lender will not collect or attempt to collect from the borrower any portion of the interest on the note which is payable by the Secretary under this part, and that the lender will enter into such agreements with the Secretary as may be necessary for the purpose of section 437; "(F) entitles the student borrower to accelerate without penalty repayment of the whole or any part of the loan; "(G)(i) contains a notice of the system, of disclosure of information concerning such loan to credit bureau organizations under section 430A, and (ii) provides that the lender on request of the borrower will provide information on the repayment status of the note to such organizations; and "(H) contains such other terms and conditions, consistent with the provisions of this part and with the regulations issued by the Secretary pursuant to this part, as may be agreed upon by the parties to such loan, including, if agreed upon, a provision requiring the borrower to pay the lender, in addition to principal and interest, amounts equal to the insurance premiums payable by the lender to the Secretary with respect to such loan; "(3) the funds borrowed by a student are disbursed to the institution by check or other means that is payable to and requires the endorsement or other certification by such student, except nothing in this title shall be interpreted to allow the Secretary to require checks to be made co-payable to the institution and the borrower or to prohibit the disbursement of loan proceeds by means other than by check; and "(4) in the case of any loan made for any period of enrollment that ends more than 180 days (or 6 months) after the date disbursement is scheduled to occur, and for an amount of more than $1,000, the proceeds of the loan will, subject to subsection (b), be disbursed directly by the lender in two or more installments, none of which exceeds one-half of the loan, with the second installment being disbursed after not less than one-third of such period (except as necessary to permit the second installment to be disbursed at the beginning of the second semester, quarter, or similar division of such period of enrollment). "(b) SPECIAL RULES FOR MULTIPLE DISBURSEMENT.—For the purpose of subsection (a)(4)— "(1) all loans issued for the same period of enrollment shall be considered as a single loan; and "(2) the requirements of such subsection shall not apply in the case of a loan made under section 428A, 428B, or 428C, or made to a student to cover the cost of attendance at an eligible institution outside the United States. "(c) MINIMUM REPAYMENT RATE.—The total of the payments by a borrower during any year of any repayment period with respect to

71-19A 0 - 89 - 10: QL. 3 Part 2

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Page:United States Statutes at Large Volume 100 Part 2.djvu/262

 100 STAT. 1364

PUBLIC LAW 99-498—OCT. 17, 1986

the aggregate amount of all loans to that borrower which are insured under this part shall not, unless the borrower and the lender otherwise agree, be less than $600 or the balance of all such loans (together with interest thereon), whichever amount is less, except that in the case of a husband and wife, both of whom have such loans outstanding, the total of the combined payments for such a couple during any year shall not be less than $600 or the balance of all such loans, whichever is less. '

20 USC 1077a.

-

"APPLICABLE INTEREST RATES

427A. (a) RATES TO B E CONSISTENT FOR BORROWER'S ENTIRE DEBT.—With respect to any loan to cover the cost of instruction for any period of instruction beginning on or after January 1, 1981, the rate of interest applicable to any borrower shall— "(1) not exceed 7 percent per year on the unpaid principal balance of the loan in the case of any borrower who, on the date of entering into the note or other written evidence of that loan, has an outstanding balance of principal or interest on any loan made, insured, or guaranteed under this part, for which the interest rate does not exceed 7 percent; "(2) except as provided in paragraph (3), be 9 percent per year on the unpaid principal balance of the loan in the case of any borrower who, on the date of entering into the note or other written evidence of that loan, has no outstanding balance of principal or interest on any loan described in paragraph (1) or any loan for which the interest rate is determined under para( graph (1); or "(3) be 8 percent per year 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 3 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. "SEC.

"(b) REDUCTION FOR N E W BORROWERS AFTER DECLINE IN TREASURY

BILL RATES.—If for any 12-month period beginning on or after January 1, 1981, the Secretary, after consultation with the Secretary of the Treasury, determines that the average of the bond equivalent rates of 91-day Treasury bills auctioned for such 12-month period is equal to or less than 9 percent, the interest rate for loans under this part shall be the rate prescribed in subsection (a)(3) for borrowers described in such subsection. "(c) RATES FOR SUPPLEMENTAL LOANS FOR STUDENTS AND LOANS FOR PARENTS.—

"(1) IN GENERAL.—Except as otherwise provided in this subsection, the applicable rate of interest on loans made pursu^- ant to section 428A or 428B on or after October 1, 1981, shall be 14 percent per year on the unpaid principal balance of the loan. 3i

"(2) REDUCTION OF RATE AFTER DECLINE IN TREASURY BILL

'" RATES.—If for any 12-month period beginning on or after Octo* ber 1, 1981, the Secretary, after consultation with the Secretary of the Treasury, determines that the average of the bond equivalent rates of 91-day Treasury bills auctioned for such 12'•'••' month period is equal to or less than 14 percent, the applicable rate of interest for loans made pursuant to section 428A or 428B

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Page:United States Statutes at Large Volume 100 Part 2.djvu/263

 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1365

on and after the first day of the first month beginning after the date of publication of such determination shall be 12 percent per year on the unpaid principal balance of the loan. "(3)

INCREASE OF RATE AFTER INCREASE IN TREASURY BILL

RATES.—If for any 12-month period beginning on or after the date of publication of a determination under paragraph (2), the Secretary, after consultation with the Secretary of the Treasury, determines that the average of the bond equivalent rates of 91-day Treasury bills auctioned for such 12-month period exceeds 14 percent, the applicable rate of interest for loans made pursuant to section 428A or 428B on and after the first day of the first month beginning after the date of publication of that determination under this paragraph shall be 14 percent per year on the unpaid principal balance of the loan. "(4) AvAiLABiliTY OF VARIABLE RATES.—(A) For any loan made pursuant to section 428A or 428B to cover the cost of instruction for any period of enrollment beginning on or after July 1, 1987, or any loan made pursuant to such section prior to such date that is refinanced pursuant to section 428A(d) or 428B(d), the applicable rate of interest during any calendar year shall be determined under subparagraph (B), except that such rate shall not exceed 12 percent. "(B) For any calendar year, the rate determined under this subparagraph is determined on December 15 preceding such calendar year and is equal to— "(i) the average of the bond equivalent rates of 91-day Treasury bills auctioned during the 12 months ending on November 30 preceding such calendar year; plus "(ii) 3.75 percent. "(C) The Secretary shall determine the applicable rate of interest under subparagraph (B) after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination. "(d) INTEREST RATES FOR N E W BORROWERS AFTER JULY 1, 1988.— Notwithstanding subsections (a) and (b) of this section, with respect to any loan (other than a loan made pursuant to sections 428A, 428B, and 428C) to cover the cost of instruction for any period of enrollment beginning on or after July 1, 1988, to 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 made, insured, or guaranteed under this part, the applicable rate of interest shall be— "(1) 8 percent per year on the unpaid principal balance of the loan during the period beginning on the date of the disbursement of the loan and ending 4 years after the commencement of repayment; and "(2) 10 percent per year on the unpaid principal balance of the loan during the remainder of the repayment period. "(e) TREATMENT OF EXCESS INTEREST PAYMENTS ON N E W BORROWER ACCOUNTS RESULTING FROM DECUNE IN TREASURY BILL RATES.—

"(1) IN GENERAL.—If, with respect to a loan for which the applicable interest rate is 10 percent under subsection (d) of this section at the close of any calendar quarter, the sum of the average of the bond equivalent rates of 91-day Treasury bills auctioned for that quarter and 3.25 percent is less than 10

Securities.

Federal Register, publication.

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Page:United States Statutes at Large Volume 100 Part 2.djvu/264

 100 STAT. 1366

U.M'

PUBLIC LAW 99-498—OCT. 17, 1986 percent, then an adjustment shall be made to a borrower's account— "(A) by calculating excess interest in the amount computed under paragraph (2) of this subsection; and "(B) by crediting the excess interest to the reduction of principal to the extent provided for under paragraph (3) of this subsection. "(2) AMOUNT OF ADJUSTMENT.—The amount of any adjust-

ment of interest on a loan to be made under this subsection for any quarter shall be equal to— "(A) 10 percent minus the sum of (i) the average of the bond equivalent rates of 91-day Treasury bills auctioned for such calendar quarter, and (ii) 3.25 percent; multiplied by "(B) the outstanding principal balance of the loan (not including unearned interest added to principal) at the end of such calendar quarter; divided by "(C) four. "(3) ANNUAL ADJUSTMENT OF INTEREST AND BORROWER ELIGI-

'* ' „. ^

BiliTY FOR CREDIT.—Any adjustment amount computed pursuant to paragraph (2) of this subsection for any quarter shall be credited, by the holder of the loan on the last day of the calendar year in which such quarter falls, to the loan account of the borrower so as to reduce the principal balance of such account. No such credit shall be made to the loan account of a borrower who on the last day of the calendar year is delinquent for more than 30 days in making a required payment on the loan. Any credit which is to be made to a borrower's account pursuant to this subsection shall be made effective commencing no later than 30 days following the last day of the calendar year in which the quarter falls for which the credit is being made. Nothing in this subsection shall be construed to require refunding any repayment of a loan. At the option of the lender, the amount of such adjustment may be distributed to the borrower either by reduction in the amount of the periodic payment on the loan, or by reducing the number of payments that shall be made with respect to the loan. "(4) PUBLICATION OF TREASURY BILL RATE.—For the purpOSe o f

enabling holders of loans to make the determinations and adjustments provided for in this subsection, the Secretary shall for each calendar quarter commencing with the quarter beginning on July 1, 1987, publish a notice of the average of the bond equivalent rates of 91-day Treasury bills auctioned for such quarter. Such notice shall be published not later than 7 days after the end of the quarter to which the notice relates. "(5) STUDY OF TREATMENT OF EXCESS INTEREST PAYMENTS PROVI-

SIONS.—The Secretary shall examine and evaluate the provisions of this subsection, and not later than 6 months after the date of enactment of the Higher Education Amendments of 1986, prepare and submit to the Congress such legislative proposals as the Secretary determines are necessary to carry out the objectives of this subsection. "(f) LESSER RATES PERMITTED.—Nothing in this section or section 428C shall be construed to prohibit a lender from charging a borrower interest at a rate less than the rate which is applicable under this part.

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