US Code

Public Law 119-73 (01/23/2026)

20 U.S.C. § 1087c

Selection of institutions for participation and origination

(a)

General authority

section 1087d(a) of this titlesection 1087d(b) of this titlesection 1087f(b) of this titleThe Secretary shall enter into agreements pursuant to with institutions of higher education to participate in the direct student loan program under this part, and agreements pursuant to with institutions of higher education, or consortia thereof, to originate loans in such program, for academic years beginning on or after . Alternative origination services, through which an entity other than the participating institution at which the student is in attendance originates the loan, shall be provided by the Secretary, through 1 or more contracts under or such other means as the Secretary may provide, for students attending participating institutions that do not originate direct student loans under this part. Such agreements for the academic year 1994–1995 shall, to the extent feasible, be entered into not later than .

(b)

Selection criteria

(1)

Application

Each institution of higher education desiring to participate in the direct student loan program under this part shall submit an application satisfactory to the Secretary containing such information and assurances as the Secretary may require.

(2)

Selection procedure

section 1087d(a) of this titleThe Secretary shall select institutions for participation in the direct student loan program under this part, and shall enter into agreements with such institutions under , from among those institutions that submit the applications described in paragraph (1), and meet such other eligibility requirements as the Secretary shall prescribe.

(c)

Selection criteria for origination

(1)

In general

The Secretary may enter into a supplemental agreement with an institution (or a consortium of such institutions) that—
(A)
1
1 So in original. Probably should be “section”.
has an agreement under subsection  1087d(a) of this title;
(B)
desires to originate loans under this part; and
(C)
meets the criteria described in paragraph (2).
(2)

Selection criteria

The Secretary may approve an institution to originate loans only if such institution—
(A)
is not on the reimbursement system of payment for any of the programs under subpart 1 or 3 of part A, part C, or part E of this subchapter;
(B)
is not overdue on program or financial reports or audits required under this subchapter;
(C)
is not subject to an emergency action, or a limitation, suspension, or termination under section 1078(b)(1)(T), 1082(h), or 1094(c) of this title;
(D)
in the opinion of the Secretary, has not had severe performance deficiencies for any of the programs under this subchapter, including such deficiencies demonstrated by audits or program reviews submitted or conducted during the 5 calendar years immediately preceding the date of application;
(E)
provides an assurance that such institution has no delinquent outstanding debts to the Federal Government, unless such debts are being repaid under or in accordance with a repayment arrangement satisfactory to the Federal Government, or the Secretary in the Secretary’s discretion determines that the existence or amount of such debts has not been finally determined by the cognizant Federal agency; and
(F)
meets such other criteria as the Secretary may establish to protect the financial interest of the United States and to promote the purposes of this part.
(d)

Eligible institutions

section 1085(a) of this titleThe Secretary may not select an institution of higher education for participation under this section unless such institution is an eligible institution under .

(e)

Consortia

section 1087d(a) of this titleSubject to such requirements as the Secretary may prescribe, eligible institutions of higher education (as determined under subsection (d)) with agreements under may apply to the Secretary as consortia to originate loans under this part for students in attendance at such institutions. Each such institution shall be required to meet the requirements of subsection (c) with respect to loan origination.

Pub. L. 89–329, title IV, § 453Pub. L. 99–498, title IV, § 404100 Stat. 1438Pub. L. 102–325, title IV, § 451106 Stat. 569Pub. L. 103–66, title IV, § 4021107 Stat. 342Pub. L. 103–208, § 2(e)107 Stat. 2470Pub. L. 105–244, title IV, § 451112 Stat. 1715Pub. L. 111–39, title IV, § 404(b)(1)123 Stat. 1946(, as added , , ; amended , , ; , , ; , , ; , , ; , , .)

Editorial Notes

Codification

section 2 of Pub. L. 103–208Pub. L. 102–325Pub. L. 102–325Pub. L. 103–66Amendment by (which was effective as if included in ) was executed to this section as amended by and , to reflect the probable intent of Congress.

Prior Provisions

Pub. L. 89–329, title IV, § 453Pub. L. 90–575, title I, § 14182 Stat. 1032Pub. L. 92–318, title I, § 136(b)(2)86 Stat. 272Pub. L. 94–482, title I, § 129(a)90 Stat. 2144A prior section 1087c, , as added , , ; amended , , , authorized grants and contracts for training and research in cooperative education programs, prior to repeal by , , , eff. 30 days after .

Amendments

Pub. L. 111–39section 1087g(a)(2) of this title2009—Subsec. (c)(3). struck out par. (3). Text read as follows: “The Secretary shall promulgate and publish in the Federal Register regulations governing the approval of institutions to originate loans under this part in accordance with .”

Pub. L. 105–244, § 451(a)1998—Subsec. (a). , amended heading, redesignated par. (1) as entire subsec., and struck out pars. (2) to (4) which provided for transition from loan programs under part B of this subchapter to direct student loan program under this part and defined term “new student loan volume”.

Pub. L. 105–244, § 451(b)Subsec. (b)(2). , substituted “prescribe.” for “prescribe, by, to the extent possible—

“(A)(i) categorizing such institutions according to anticipated loan volume, length of academic program, control of the institution, highest degree offered, size of student enrollment, geographic location, annual loan volume, and default experience; and

“(ii) beginning in academic year 1995–1996 selecting institutions that are reasonably representative of each of the categories described pursuant to clause (i); and

“(B) if the Secretary determines it necessary in order to carry out the purposes of subparagraph (A) and attain such reasonable representation (as required by subparagraph (A)), selecting additional institutions.”

Pub. L. 105–244, § 451(c)(1)(A)Subsec. (c)(2). , (B), substituted “Selection criteria” for “Transition selection criteria” in heading and “The Secretary” for “For academic year 1994–1995, the Secretary” in introductory provisions.

Pub. L. 105–244, § 451(c)(1)(E)Subsec. (c)(2)(A). , redesignated subpar. (B) as (A).

Pub. L. 105–244, § 451(c)(1)(C)section 1087bb(g) of this title, struck out subpar. (A) which read as follows: “made loans under part E of this subchapter in academic year 1993–1994 and did not exceed the applicable maximum default rate under for the most recent fiscal year for which data are available;”.

Pub. L. 105–244, § 451(c)(1)(E)Subsec. (c)(2)(B) to (D). , redesignated subpars. (C), (D), and (F) as (B) to (D), respectively. Former subpar. (B) redesignated (A).

Pub. L. 105–244, § 451(c)(1)(E)Subsec. (c)(2)(E). , redesignated subpar. (G) as (E).

Pub. L. 105–244, § 451(c)(1)(D), struck out subpar. (E) which read as follows: “in the opinion of the Secretary, has not had significant deficiencies identified by a State postsecondary review entity under subpart 1 of part H of this subchapter;”.

Pub. L. 105–244, § 451(c)(1)(E)Subsec. (c)(2)(F) to (H). , redesignated subpars. (G) and (H) as (E) and (F), respectively. Former subpar. (F) redesignated (D).

Pub. L. 105–244, § 451(c)(2)Subsec. (c)(3). , struck out “after transition” after “approval” in heading and substituted “The Secretary” for “For academic year 1995–1996 and subsequent academic years, the Secretary” in text.

Pub. L. 103–661993— amended section generally, substituting provisions relating to selection of institutions for participation and origination for former provisions relating to selection by Secretary.

Pub. L. 103–208Subsec. (b)(2)(B). amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “if the Secretary determines it necessary to carry out the purposes of this part, selecting additional institutions.” See Codification note above.

Pub. L. 102–3251992— amended section generally, substituting provisions relating to selection by the Secretary for former provisions relating to agreements with institutions of higher education.

Statutory Notes and Related Subsidiaries

Effective Date of 2009 Amendment

Pub. L. 111–39Pub. L. 110–315section 3 of Pub. L. 111–39section 1001 of this titleAmendment by effective as if enacted on the date of enactment of (), see , set out as a note under .

Effective Date of 1998 Amendment

Pub. L. 105–244Pub. L. 105–244section 3 of Pub. L. 105–244section 1001 of this titleAmendment by effective , except as otherwise provided in , see , set out as a note under .

Effective Date of 1993 Amendment

Pub. L. 103–208Pub. L. 102–325section 5(a) of Pub. L. 103–208section 1051 of this titleAmendment by effective as if included in the Higher Education Amendments of 1992, , except as otherwise provided, see , set out as a note under .

Effective Date of 1992 Amendment

Pub. L. 102–325section 2 of Pub. L. 102–325section 1001 of this titleAmendment by effective , see , set out as a note under .