,,ii  #aah? ,,congress  #b;d ,session   
,s4 #dibf  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,augu/ #a1 #bjbd,mr4   
,r\nds introduc$ ! foll[+ bill2 :i* 0   
read twice & ref]r$ to ! ,committee on  
,heal?1 ,education1 ,labor1 & ,p5sions  
,a ,,bill  ,to e/abli% a new ,gu>ante$  
,/ud5t ,loan ,program4  #a4 ,%ort title 
,?is ,act may be cit$ z ! ,af=dable     
,future ,loan ,program ,act ( #bjbd4    
#b4 ,gov]nm5t ,gu>ante$ ,/ud5t ,loan    
,program ,at ! end ( title ,,iv ( !     
,high] ,education ,act ( #aife 7#bj     
,u4,s4,c4 #ajgj et seq471 add ! foll[+3 
,j ,gu>ante$ ,/ud5t ,loan ,program      
#dii;,a4 ,/atem5t ( purpose2            
nondiscrim9ation2 appropriations        
au?oriz$  7a7 ,purpose2 discrim9ation   
prohibit$  7#a7 ,purpose ,! purpose (   
?is "p is to enable ! ,secret>y-- 7,a7  
to pay a portion ( ! int]e/ on loans to 
qualifi$ /ud5ts t are gu>ante$ "u ?is   
"p2 &  7,b7 to gu>antee a portion ( ea* 
loan "u ?is "p4  7#b7 ,discrim9ation by 
cr$itors prohibit$ ,no ag5cy1           

organization1 in/itution1 bank1 cr$it   
union1 corporation1 or o!r l5d] :o      
regul>ly ext5ds1 r5ews1 or cont9ues     
cr$it "u ?is "p %all exclude f receipt  
or d5y ! b5efits (1 or discrim9ate aga9/
 any borr[] or applicant 9 obta9+1 su*  
cr$it on ! basis (-- 7,a7 race1 national
 orig91 religion1 sex1 m>ital /atus1    
age1 or disability /atus2  7,b7 ! type  
or category ( in/itution ( high]        
education t ! borr[] or applicant att5ds
 or att5d$2  7,c7 ! degree or program ( 
/udy ( ! borr[] or applicant2 or  7,d7 !
 cr$itwor?9ess ( ! borr[] or applicant4 
7b7 ,au?orization ( appropriations ,!re 
are au?oriz$ to be appropriat$ to c>ry  
out ?is "p su* sums z may be necess>y = 
! p]iod ( fiscal ye>s #bjbe ?r\gh #bjbi4
  7c7 ,designation ,! program e/abli%$  
"u ?is "p %all be ref]r$ to z !         
,af=dable ,future ,loan ,program4 ,loans
 made pursuant to ?is "p %all be kn[n z 
,af=dable ,future loans4  #dii;,a-#a4   
,program au?ority ,! ,secret>y %all     
implem5t ! ,af=dable ,future ,loan      

,program1 ?r\gh :i* ! ,secret>y %all--  
7#a7 pay an eligible l5d] #ih p]c5t ( ! 
am\nt ( pr9cipal & int]e/ due on ea*    
default$ eligible loan t is issu$ "u ?is
 "p by an eligible l5d]2  7#b7 reimburse
 an eligible l5d] = am\nts ( subsidiz$  
int]e/ "u ?is "p2 &  7#c7 ensure t only 
eligible l5d]s t issue loans 9          
accordance ) ?is "p receive ! gu>antee  
funds describ$ 9 p>agraph 7#a7 & !      
reimbursem5t describ$ 9 p>agraph 7#b74  
#dii;,a-#b4 ,eligible l5d]s & eligible  
loans  7a7 ,eligible l5d] ,= purposes ( 
?is "p an eligible l5d] is an eligible  
l5d] z describ$ 9 subp>agraphs 7,a7     
?r\gh 7,d71 7,i71 & 7,k7 ( section      
#dce7;d77#a71 except t ref]5ces to '?is 
"p' or ref]5ces to o!r sections 9 "p ,b 
9 su* subsection %all be con/ru$ to mean
 ?is "p r ?an "p ,b or any section ( "p 
,b4  7b7 ,eligible loan  7#a7 ,9 ,g5]al 
,an eligible loan is a loan issu$ "u ?is
 "p on or aft] ! date ( enactm5t ( !    
,af=dable ,future ,loan ,program ,act ( 
#bjbd to an und]graduate /ud5t :o is    

o!rwise eligible "u section #dhd1 :o    
meets ! requirem5ts ( p>agraph 7#b71 &  
:o is enroll$ or w be enroll$ at an     
eligible in/itution ( high] education1  
to enable su* /ud5t to pursue ! /ud5t's 
c\rses ( /udy at su* in/itution4  7#b7  
,f$]al loans ,a /ud5t :o desires to     
apply = a loan "u ?is "p & is o!rwise   
eligible to d s1 may n apply = su* loan 
until ! /ud5t-- 7,a7 has appli$ =1 &    
receiv$ a det]m9ation notice ab\t1      
f9ancial assi/ance "u subp>t #a ( "p ,a 
& "p ,d = ! applicable p]iod ( /udy2 or 
7,b7 /ates t ! /ud5t elects n to apply =
 f9ancial assi/ance "u subp>t #a ( "p ,a
 & "p ,d = ! applicable p]iod ( /udy4   
#dii;,a-#c4 ,agreem5ts ) eligible l5d]s 
7a7 ,p>ticipation agreem5ts ,an agreem5t
 ) an eligible l5d] = p>ticipation 9 !  
program "u ?is "p %all-- 7#a7 provide t 
an eligible l5d] w (f] ! maximum am\nt (
 eligible loans "u ?is "p to any        
und]graduate /ud5t = att5dance at an    
eligible in/itution ( high] education2  
7#b7 provide t ! eligible l5d] accepts  

responsibility & f9ancial liability     
/emm+ f its failure to p]=m its         
functions pursuant to ! agreem5t2  7#c7 
provide = ! implem5tation ( a quality   
assurance sy/em1 z e/abli%$ by !        
,secret>y & develop$ 9 consultation )   
eligible l5d]s1 to ensure t ! eligible  
l5d] is comply+ ) program requirem5ts & 
meet+ program objectives2  7#d7 provide 
t an eligible l5d] w comply ) !         
requirem5ts ( subsection 7c72  7#e7     
provide t ! funds borr[$ by a /ud5t are 
disburs$ to ! in/itution by *eck or o!r 
means t is payable to & requires !      
endorsem5t or o!r c]tification by su*   
/ud5t1 except-- 7,a7 t no?+ 9 ?is       
section %all be int]pret$-- 7i7 to all[ 
! ,secret>y to require *ecks to be made 
copayable to ! in/itution & ! borr[]2 or
  7ii7 to prohibit ! disbursem5t ( loan 
proce$s by means o!r ?an by *eck2 &     
7,b7 9 ! case ( any /ud5t :o is /udy+   
outside ! ,unit$ ,/ates 9 a program (   
/udy abroad t is approv$ = cr$it by !   
home in/itution at :i* su* /ud5t is     

enroll$1 ! funds %all1 at ! reque/ ( !  
borr[]1 be deliv]$ directly to ! /ud5t &
 ! *ecks may be endors$1 & fund transf]s
 au?oriz$1 pursuant to an au?oriz$      
p[]-(-attorney2  7#f7 provide t funds w 
be disburs$ 9 a mann] t ensures t any   
,f$]al ,pell ,grant funds1 any ,f$]al   
,direct ,loan funds1 & any ,/ate or     
in/itutional grant or s*ol>%ip funds    
aw>d$ to ! borr[] are disburs$ prior to 
disbursem5t ( any funds f a loan "u ?is 
"p2 &  7#g7 provide t ! funds borr[$ by 
a /ud5t are o!rwise disburs$ 9          
accordance ) section #dbh;,g4  7b7      
,)drawal & t]m9ation proc$ures ,!       
,secret>y %all e/abli% proc$ures by :i* 
eligible l5d]s may )draw or be t]m9at$ f
 ! program "u ?is "p4  7c7 ,submission (
 /atem5ts by hold]s on am\nt ( paym5t   
,ea* hold] ( an eligible loan "u ?is "p1
 ) respect to :i* paym5ts ( int]e/ are  
requir$ to be made by ! ,secret>y1 %all 
submit to ! ,secret>y1 at su* "t or     
times & 9 su* mann] z ! ,secret>y may   
prescribe1 /atem5ts conta9+ su*         

in=mation z may be requir$ by or        
pursuant to regulation = ! purpose (    
enabl+ ! ,secret>y to det]m9e ! am\nt ( 
! paym5t :i* ! ,secret>y mu/ make )     
respect to t loan4  #dii;,a-#d4 ,paym5t 
( loan gu>antee = default$ loans  7a7   
,notice to secret>y & paym5t ( loss ,^u 
default by ! /ud5t borr[] on any        
eligible loan "u ?is "p1 & prior to !   
comm5cem5t ( suit or o!r en=cem5t       
proce$+s ^u security = t loan1 !        
insurance b5efici>y %all promptly notify
 ! ,secret>y1 & ! ,secret>y %all if     
reque/$ 7at t "t or aft] fur!r          
collection ef=ts7 by ! b5efici>y1 or may
 on ! ,secret>y's own motion1 if !      
insurance is /ill 9 effect1 pay to !    
b5efici>y #if p]c5t ( ! am\nt ( ! loss  
su/a9$ by ! insur$ ^u t loan z soon z t 
am\nt has be5 det]m9$4  7b7 ,am\nt (    
loss ,! am\nt ( ! loss on any loan %all1
 = ! purposes ( ?is subsection &        
subsection 7e71 be deem$ to be an am\nt 
equal to ! unpaid balance ( ! pr9cipal  
am\nt & accru$ int]e/1 includ+ int]e/   

accru+ f ! date ( submission ( a valid  
default claim 7z det]m9$ by ! ,secret>y7
 to ! date on :i* paym5t is au?oriz$ by 
! ,secret>y1 except t su* am\nt may be  
r$uc$ bas$ on default rate 9 a mann]    
simil> to ! r$uctions describ$ 9 section
 #dbe7;b74  7c7 ,due dilig5ce ,su*      
b5efici>y %all be requir$ to meet !     
/&>ds ( due dilig5ce 9 ! collection ( ! 
loan & %all be requir$ to submit pro( t 
! in/itution 0 contact$ & o!r reasonable
 attempts 7 made to locate ! borr[] 7:5 
! location ( ! borr[] is unkn[n7 & pro( 
t contact 0 made ) ! borr[] 7:5 !       
location is kn[n74  7d7 ,tim+ (         
det]m9ation ,! ,secret>y %all make !    
det]m9ation requir$ to c>ry out !       
provisions ( ?is section n lat] ?an #ij 
days aft] ! notification by ! insurance 
b5efici>y & %all make paym5t 9 full on !
 am\nt ( ! b5efici>y's loss p5d+        
completion ( ! due dilig5ce             
inve/igation4  7e7 ,effect ( paym5t (   
loss ,^u paym5t ( ! am\nt ( ! loss      
pursuant to subsection 7a71 ! ,unit$    

,/ates %all be subrogat$ = all ( !      
rights ( ! hold] ( ! obligation ^u !    
insur$ loan & %all be entitl$ to an     
assignm5t ( ! note or o!r evid5ce ( !   
insur$ loan by ! insurance b5efici>y4 ,!
 ,secret>y may1 9 attempt+ to make      
recov]y on su* loans1 contract ) private
 bus9ess conc]ns1 ,/ate /ud5t loan      
insurance ag5cies1 or ,/ate gu>anty     
ag5cies1 = paym5t = s]vices r5d]$ by su*
 conc]ns or ag5cies 9 assi/+ ! ,secret>y
 9 mak+ su* recov]y4 ,any contract "u   
?is subsection ent]$ into by ! ,secret>y
 %all provide t attempts to make recov]y
 on su* loans %all be fair & reasonable1
 & d n involve h>assm5t1 intimidation1  
false or mislead+ repres5tations1 or    
unnecess>y communications conc]n+ !     
exi/5ce ( any su* loan to p]sons o!r ?an
 ! /ud5t borr[]4  7f7 ,=be>ance n       
preclud$ ,no?+ 9 ?is section or 9 ?is "p
 %all be con/ru$ to preclude any        
=be>ance = ! b5efit ( ! /ud5t borr[] :i*
 may be agre$ ^u by ! p>ties to ! insur$
 loan & approv$ by ! ,secret>y1 or to   

preclude =be>ance by ! ,secret>y 9 !    
en=cem5t ( ! insur$ obligation aft]     
paym5t on t insurance4 ,any =be>ance :i*
 is approv$ by ! ,secret>y "u ?is       
subsection ) respect to ! repaym5t ( a  
loan1 includ+ a =be>ance dur+ default1  
%all n be consid]$ z indicat+ t a hold] 
( a f$]ally insur$ loan has fail$ to    
ex]cise reasonable c>e & due dilig5ce 9 
! collection ( ! loan4  7g7 ,c>e &      
dilig5ce requir$ ( hold]s ,no?+ 9 ?is   
section or 9 ?is "p %all be con/ru$ to  
excuse ! hold] ( a f$]ally insur$ loan f
 ex]cis+ reasonable c>e & dilig5ce 9 !  
mak+ & collection ( loans "u !          
provisions ( ?is "p4 ,if ! ,secret>y1   
aft] a reasonable notice & opportunity =
 he>+ to an eligible l5d]1 f9ds t x has 
sub/antially fail$ to ex]cise su* c>e & 
dilig5ce or to make ! reports & /atem5ts
 requir$ "u section #dii;,a-#c7;c71 !   
,secret>y %all disqualify t l5d] = fur!r
 ,f$]al insurance on loans grant$       
pursuant to ?is "p until ! ,secret>y is 
satisfi$ t its failure has ceas$ & f9ds 

t !re is reasonable assurance t ! l5d] w
 9 ! future ex]cise necess>y c>e &      
dilig5ce or comply ) su* requirem5ts1 z 
! case may be4  7h7 ,reports to consum] 
report+ ag5cies & in/itutions ( high]   
education ,= ! purpose ( promot+        
responsible repaym5t ( loans "u ?is "p1 
! ,secret>y & ea* eligible l5d] &       
subsequ5t hold] %all ent] into an       
agreem5t ) ea* consum] report+ ag5cy to 
ex*ange in=mation conc]n+ /ud5t borr[]s 
9 ! same mann] z su* agreem5ts are made 
"u section #dcj;,a4  #dii;,a-#e4        
,pur*ase ( loans sold 9 second>y m>ket  
7a7 ,9 ,g5]al ,loans "u ?is "p may be   
sold 9 ! second>y m>ket to ano!r        
eligible l5d]4  7b7 ,s]vic+ &           
liquidation ,:5 an eligible l5d] has    
sold ! gu>ante$ portion ( a loan 9 !    
second>y m>ket1 ! loan hold] mu/ p]=m   
all necess>y s]vic+ & liquidation       
actions = su* loan4  7c7 ,/atus report  
,9 ! ev5t t ! ,secret>y pur*ases its    
gu>ante$ portion ( su* a loan f ! hold] 
( ! loan1 ! loan hold] %all provide !   

,secret>y ) a loan /atus report )9 #ae  
bus9ess days ( su* pur*ase4 ,?is report 
%all include a /atus report on ! borr[] 
& plans = any type ( loan work\t or loan
 re/ructur+4 ,! report %all accompany   
reque/$ docum5tation t ! ,secret>y      
det]m9es is suffici5t to be able to     
review ! loan hold]'s adm9i/ration ( !  
loan4 ,failure to provide reque/$       
docum5tation to ! ,secret>y may lead to 
initiation ( an action = recov]y f !    
loan hold] ( all or "s ( ! am\nts !     
,secret>y paid to ! hold] ( ! loan on a 
gu>antee4  7d7 ,fur!r evaluation ,!     
,secret>y %all evaluate ! eligible      
l5d]'s cont9u$ p>ticipation 9 ! second>y
 m>ket & may re/rict fur!r sale (       
gu>ante$ portions into ! second>y m>ket 
until ! ,secret>y det]m9es t ! eligible 
l5d] has provid$ suffici5t docum5tation 
= pur*ases4  #dii;,a-#f4 ,default       
r$uction program  7a7 ,o!r repaym5t     
inc5tives  7#a7 ,sale or assignm5t (    
loan  7,a7 ,9 g5]al ,! ,secret>y1 ^u    
secur+ #i paym5ts made )9 #bj days ( !  

due date dur+ #aj consecutive mon?s (   
am\nts ow$ on a loan = :i* ! ,secret>y  
has made a paym5t "u ?is section1 %all1 
if practicable1 sell ! loan to ano!r    
eligible l5d]4  7,b7 ,mon?ly paym5ts ,! 
,secret>y %all n dem& f a borr[] z      
mon?ly paym5t am\nts describ$ 9         
subp>agraph 7,a7 m ?an is reasonable &  
af=dable bas$ on ! borr[]'s total       
f9ancial circum/ances1 except su* mon?ly
 paym5t am\nt %all n be less ?an #e4    
7,c7 ,consum] report+ ag5cies ,^u ! sale
 or assignm5t ( ! loan1 ! ,secret>y %all
 reque/ any consum] report+ ag5cy to :i*
 ! ,secret>y or hold]1 z applicable1    
report$ ! default ( ! loan1 to remove ! 
record ( ! default f ! borr[]'s cr$it   
hi/ory4  7,d7 ,eligible l5d] limitation 
,a loan %all n be sold to an eligible   
l5d] "u subp>agraph 7,a7 if su* l5d] has
 be5 f\nd by ! ,secret>y to h           
sub/antially fail$ to ex]cise ! due     
dilig5ce requir$ ( l5d]s "u ?is "p4     
7,e7 ,default due to error ,a loan t    
does n meet ! requirem5ts ( subp>agraph 

7,a7 may also be eligible = sale or     
assignm5t "u ?is p>agraph ^u a          
det]m9ation t ! loan 0 9 default due to 
cl]ical or data process+ error & w\ld n1
 9 ! abs5ce ( su* error1 be 9 a del9qu5t
 /atus4  7#b7 ,borr[] eligibility ,any  
borr[] ^: loan is sold "u p>agraph      
7#a77;,a7 %all n be preclud$ by section 
#dhd f receiv+ additional loans or      
grants "u ?is title 7= :i* he or %e is  
o!rwise eligible7 on ! basis ( default+ 
on ! loan prior to su* loan sale4  7#c7 
,applicability ( g5]al loan conditions  
,a loan t is sold "u p>agraph 7#a77;,a7 
%all1 s long z ! borr[] cont9ues to make
 s*$ul$ repaym5ts !reon1 be subject to !
 same t]ms & conditions & qualify = !   
same b5efits & privileges z o!r loans   
made "u ?is "p4  7#d7 ,limitation ,a    
borr[] may obta9 ! b5efits available "u 
?is subsection ) respect to rehabilitat+
 a loan 7:e!r by loan sale or assignm5t7
 n m ?an #b times p] loan4  7b7         
,satisfactory repaym5t arrangem5ts ,to  
r5ew eligibility ,! ,secret>y %all      

e/abli% a program :i* all[s a borr[] ) a
 default$ loan or loans to r5ew         
eligibility = all title ,,iv /ud5t      
f9ancial assi/ance 7reg>dless ( :e!r !  
default$ loan has be5 sold to an        
eligible l5d] or assign$ to ! ,secret>y7
 ^u ! borr[]'s paym5t ( #f consecutive  
mon?ly paym5ts4 ,! loan hold] %all n    
dem& f a borr[] z a mon?ly paym5t am\nt 
"u ?is subsection m ?an is reasonable & 
af=dable bas$ ^u ! borr[]'s total       
f9ancial circum/ances4 ,a borr[] may    
only obta9 ! b5efit ( ?is subsection )  
respect to r5ew$ eligibility once4  7c7 
,f9ancial & economic lit]acy ,ea*       
program describ$ 9 subsection 7b7 %all  
include mak+ available f9ancial &       
economic education mat]ials = a borr[]  
:o has rehabilitat$ a loan4  #dii;,a-#g4
 ,t]ms & conditions ( loans  7a7        
,eligibility2 ,maximum aid  7#a7        
,eligibility ,a /ud5t's am\nt ( ne$ = a 
loan "u ?is "p %all be bas$ solely on ! 
/ud5t's e/imat$ co/ ( att5dance &       
e/imat$ f9ancial assi/ance1 includ+ o!r 

assi/ance ?r\gh a ,f$]al ,pell ,grant or
 a ,f$]al ,direct ,loan "u ?is title or 
any ,/ate or in/itutional grant or      
s*ol>%ip funds aw>d$ to ! /ud5t4 ,an    
expect$ family contribution or /ud5t aid
 index %all n be consid]$4  7#b7        
,maximum aid  7,a7 ,9 ,g5]al ,subject to
 subp>agraph 7,b71 ! maximum doll> am\nt
 ( f9ancial assi/ance provid$ annually  
"u ?is "p to a /ud5t %all n exce$ an    
am\nt equal to-- 7i7 ! co/ ( att5dance =
 su* /ud5t2 m9us  7ii7 ! total am\nt (--
 7,i7 o!r f9ancial assi/ance n receiv$  
"u ?is title 7z def9$ 9 section         
#dhj7;i772 &  7,,ii7 o!r f9ancial       
assi/ance receiv$ "u ?is title1 includ+ 
a ,f$]al ,pell ,grant or a ,f$]al       
,direct ,loan4  7,b7 ,limitation ,a loan
 "u ?is "p %all n exce$ an am\nt equal  
to-- 7i7 #ai1jjj adju/$ annually accord+
 to ! e/imat$ p]c5tage *ange 9 !        
,consum] ,price ,index 7z det]m9$ by !  
,secret>y1 us+ ! def9ition 9 section    
#dgh7;f77 = ! mo/ rec5t cal5d> ye> end+ 
prior to ! beg9n+ ( t aw>d ye>2 m9us    

7ii7 ! am\nt describ$ 9 subclause 7,,ii7
 ( subp>agraph 7,a77ii74  7b7 ,int]e/   
rate  7#a7 ,rates = ,borr[]s n 9        
repaym5t /atus ,9 ! case ( a borr[] :o  
is n 9 repaym5t /atus1 = an ,af=dable   
,future ,loan = :i* ! fir/ disbursem5t  
is made on or aft] ,july #a1 #bjbe1 !   
applicable rate ( int]e/ %all1 dur+ any 
#ab-mon? p]iod beg9n+ on ,july #a & end+
 on ,june #cj1 be det]m9$ on ! prec$+   
,june #a & be equal to ! less] (-- 7,a7 
a rate equal to ! high yield ( ! #aj-ye>
 ,treasury note auction$ at ! f9al      
auction held prior to su* ,june #a plus 
#a p]c5t2 or  7,b7 #f4bh p]c5t4  7#b7   
,rates = ,borr[]s 9 repaym5t /atus ,9 ! 
case ( a borr[] :o is 9 repaym5t /atus1 
= an ,af=dable ,future ,loan = :i* !    
fir/ disbursem5t is made on or aft]     
,july #a1 #bjbe1 ! applicable rate (    
int]e/ %all1 dur+ any #ab-mon? p]iod    
beg9n+ on ,july #a & end+ on ,june #cj1 
be det]m9$ on ! prec$+ ,june #a & be    
equal to ! less] (-- 7,a7 a rate equal  
to ! high yield ( ! #aj-ye> ,treasury   

note auction$ at ! f9al auction held    
prior to su* ,june #a plus #b p]c5t2 or 
7,b7 #f4bh p]c5t4  7#c7 ,publication ,! 
,secret>y %all det]m9e ! applicable     
rates ( int]e/ "u ?is subsection aft]   
consultation ) ! ,secret>y ( ! ,treasury
 & %all publi% su* rate 9 ! ,f$]al      
,regi/] z soon z practicable aft] ! date
 ( det]m9ation1 b be=e ,june #a prec$+ !
 aw>d ye>4  7#d7 ,subsidiz$ int]e/ ,!   
am\nt ( int]e/ = a loan "u ?is "p %all  
be paid by ! ,secret>y to ! eligible    
l5d] on behalf ( ! borr[] only dur+ !   
p]iod ( "t t ! borr[] is n 9 repaym5t   
/atus4  7#e7 ,n 9 repaym5t /atus ,9 ?is 
section ! t]m n 9 repaym5t /atus means  
any p]iod ( "t describ$ 9 subp>agraphs  
7,a71 7,c71 or 7,d7 ( subsection        
7e77#b74  7c7 ,loan fee ,ea* eligible   
l5d] "u ?is "p may *>ge ! borr[] an     
orig9ation fee 9 an am\nt n to exce$    
#a4j p]c5t ( ! pr9cipal am\nt ( ! loan1 
to be d$uct$ proportionately f ea*      
in/allm5t paym5t ( ! proce$s ( ! loan   
prior to paym5t to ! borr[]4 ,a l5d] t  

*>ges an orig9ation fee "u ?is p>agraph 
%all assess ! same fee to all /ud5t     
borr[]s4  7d7 ,repaym5t plans  7#a7     
,design & selection ,consi/5t ) crit]ia 
e/abli%$ by ! ,secret>y1 a borr[] ( a   
loan made "u ?is "p %all be (f]$ #b     
repaym5t plans = su* loan4 ,! borr[]    
%all be entitl$ to accel]ate1 )\t       
p5alty1 repaym5t on ! borr[]'s loans "u 
?is "p4 ,! borr[] may *oose-- 7,a7 a    
#ae-ye> fix$ in/allm5t repaym5t plan2 or
  7,b7 ! income driv5 repaym5t plan     
describ$ 9 p>agraph 7#b74  7#b7 ,income 
driv5 repaym5t plan  7,a7 ,9 ,g5]al ,"u 
! income-driv5 repaym5t plan "u ?is     
subsection ! borr[]'s aggregate mon?ly  
paym5t = loans "u ?is "p %all be equal  
to ! income-driv5 calculation1 divid$ by
 #ab4  7,b7 ,discretion>y income ,! t]m 
discretion>y income means ! am\nt by :i*
 a borr[]'s 7& ! borr[]'s sp\se1 if     
applicable7 annual adju/$ gross income  
exce$s #aej p]c5t ( ! pov]ty l9e        
applicable to ! borr[]'s family size4   
7,c7 ,discretion>y income b5d po9t ,!   

t]m discretion>y income b5d po9t means  
#be1jjj1 adju/$ annually = inflation z  
det]m9$ by ! ,consum] ,price ,index 7z  
su* t]m is def9$ 9 section #dgh7;f77 = !
 previ\s cal5d> ye>4  7,d7 ,income-driv5
 calculation  7i7 ,9 g5]al ,! t]m       
income-driv5 calculation1 :5 us$ )      
respect to a borr[]1 means ! annual     
am\nt due on ! total am\nt ( loans "u   
?is "p1 :i* annual am\nt is equival5t   
to-- 7,i7 #aj p]c5t ( ! borr[]'s        
discretion>y income t is less ?an !     
discretion>y income b5d po9t1 plus      
7,,ii7 #ae p]c5t ( ! borr[]'s           
discretion>y income t is equal to or    
great] ?an ! discretion>y income b5d    
po9t4  7ii7 ,annual calculation ,!      
calculation "u clause 7i7 %all be       
det]m9$ on an annual basis = ! duration 
( ! repaym5t p]iod4  7#c7 ,selection by 
l5d] ,if a borr[] ( a loan made "u ?is  
"p does n select a repaym5t plan        
describ$ 9 p>agraph 7#a71 ! eligible    
l5d] %all provide ! borr[] ) a repaym5t 
plan describ$ 9 subp>agraph 7,a7 (      

p>agraph 7#a74  7#d7 ,*anges 9          
selections ,! borr[] ( a loan made "u   
?is "p may *ange ! borr[]'s selection ( 
a repaym5t plan "u p>agraph 7#a71 or !  
eligible l5d]'s selection ( ! plan = !  
borr[] "u p>agraph 7#c71 z ! case may   
be1 )\t p5alty or subject to additional 
fees1 except t su* borr[] %all rema9 9 a
 select$ repaym5t plan = n less ?an #f  
mon?s4  7#e7 ,alt]native repaym5t plans 
,! l5d] may provide1 on a case by case  
basis1 an alt]native repaym5t plan to a 
borr[] ( a loan made "u ?is "p :o       
demon/rates to ! satisfaction ( ! l5d] t
 ! t]ms & conditions ( ! repaym5t plans 
available "u p>agraph 7#a7 are n        
adequate to accommodate ! borr[]'s      
exceptional circum/ances4 ,9 design+ su*
 alt]native repaym5t plans1 ! l5d] %all 
ensure t su* plans d n exce$ ! co/ to ! 
,f$]al ,gov]nm5t1 z det]m9$ on ! basis (
 ! pres5t value ( future paym5ts by su* 
borr[]s1 ( loans made us+ ! plans       
available "u p>agraph 7#a74  7#f7       
,repaym5t aft] default  7,a7 ,l5d] co/s 

,! eligible l5d] may require any borr[] 
:o has default$ on a loan made "u ?is "p
 to pay all reasonable collection co/s  
associat$ ) su* loan4  7,b7 ,paym5t to  
,secret>y ,! ,secret>y may require any  
borr[] :o has default$ on a loan made "u
 ?is "p to repay ! loan pursuant to !   
income driv5 repaym5t plan describ$ 9   
p>agraph 7#a77;,b74  7e7 ,def]m5t  7#a7 
,9 ,g5]al ,a borr[] ( a loan made "u ?is
 "p :o meets any ( ! requirem5ts        
describ$ 9 subp>agraphs 7,a7 ?r\gh 7,d7 
( p>agraph 7#b7 %all be eligible = a    
def]m5t1 dur+ :i* p]iodic in/allm5ts (  
pr9cipal & int]e/ ne$ n be paid4  7#b7  
,eligibility ,a borr[] ( a loan made "u 
?is "p %all be eligible = a def]m5t dur+
 any p]iod-- 7,a7 dur+ :i* ! borr[] is  
c>ry+ at lea/ a normal full-"t "w load =
 ! c\rse ( /udy t ! borr[] is pursu+1 z 
det]m9$ by ! eligible in/itution 7z su* 
t]m is def9$ 9 section #dce7;a77 !      
borr[] is att5d+2 or  7,b7 = #f mon?s   
foll[+ ! date on :i* ! borr[] ceases to 
c>ry ! normal full-"t "w load z describ$

 9 subp>agraph 7,a72  7,c7 dur+ :i* !   
borr[]-- 7i7 is s]v+ on active duty dur+
 a w> or o!r milit>y op]ation or        
national em]g5cy2 or  7ii7 is p]=m+     
qualify+ ,national ,gu>d duty dur+ a w> 
or o!r milit>y op]ation or national     
em]g5cy1  & = ! #ahj-;day p]iod foll[+ !
 demobilization date = ! s]vice describ$
 9 clause 7i7 or 7ii72 or  7,d7 dur+--  
7i7 any p]iod 9 :i* su* borr[] is       
receiv+ treatm5t = canc]2 &  7ii7 ! #f  
mon?s aft] su* p]iod4  7#c7 ,int]e/     
accrual ,dur+ p]iods describ$ 9         
subp>agraphs 7,a71 7,c71 & 7,d7 (       
p>agraph 7#b7 int]e/ %all be subsidiz$ 9
 accordance ) subsection 7b77#d74  7f7  
,loan application & promissory note ,!  
common f9ancial report+ =m requir$ 9    
section #dhc7;a77#a7 %all con/itute !   
application = loans made "u ?is "p4 ,!  
,secret>y %all develop1 pr9t1 &         
di/ribute to p>ticipat+ eligible l5d]s a
 /&>d promissory note & loan disclosure 
=m4  7g7 ,loan disbursem5t ,loans %all  
be disburs$ 9 accordance ) section      

#dii;,a-#c4  7h7 ,disclosures ,) respect
 to loans "u ?is "p & 9 accordance ) su*
 regulations z ! ,secret>y %all         
prescribe1 ea* eligible l5d] p>ticipat+ 
9 ?is "p %all comply ) ea* ( !          
requirem5ts "u section #dcc t apply to a
 l5d] ) respect to a loan "u "p ,b4  7i7
 ,enrollm5t p]iod limitations ,9 ord] to
 cont9ue to be eligible = a loan "u ?is 
"p1 a borr[] %all complete ! program (  
/udy n m ?an #e ye>s aft] ! date !      
borr[] fir/ ent]s ! program ( /udy4     
#dii;,a-#h4 ,relation%ip to o!r ,f$]al  
,loans  7a7 ,9 g5]al ,a borr[] may borr[
 loans bo? "u "p ,d & "u ?is "p = ! same
 p]iod ( /udy4 ,if a borr[] is borr[+   
loans "u bo? "p ,d & ?is "p = ! same    
p]iod ( /udy1 ! eligible l5d] %all      
ensure t ! ,secret>y has made           
det]m9ations ab\t ! am\nt ( loans aw>d$ 
"u "p ,d = su* p]iod prior to det]m9+ ! 
am\nt ( loans "u ?is "p t ! borr[] is   
eligible to borr[1 9 accordance )       
section #dii;,a-#b7;b74  7b7 ,rule (    
con/ruction ,no?+ 9 ?is ,act %all be    

con/ru$ to require a borr[] :o borr[s   
loans "u ?is "p to also borr[ loans "u  
"p ,d4  7c7 ,prohibition on comb9+ loans
 ,! ,secret>y may n comb9e or o!rwise   
consolidate a loan made "u ?is "p ) a   
loan made "u "p ,d1 unless ! borr[] (   
su* loans elects to consolidate su*     
loans4  4