20 U.S.C. § 1087cc | Agreements with institutions of higher education

(a)

Contents of agreements

An agreement with any institution of higher education for the payment of Federal capital contributions under this part shall—

(1)

provide for the establishment and maintenance of a student loan fund for the purpose of this part;

(2)

provide for the deposit in such fund of—

(A)

section 1087aa of this title Federal capital contributions from funds appropriated under ;

(B)

a capital contribution by an institution in an amount equal to one-third of the Federal capital contributions described in subparagraph (A);

(C)

collections of principal and interest on student loans made from deposited funds;

(D)

section 1087dd(c)(1)(H) of this title charges collected pursuant to regulations under ; and

(E)

any other earnings of the funds;

(3)

provide that such student loan fund shall be used only for—

(A)

loans to students, in accordance with the provisions of this part;

(B)

administrative expenses, as provided in subsection (b);

(C)

section 1087ff of this title capital distributions, as provided in ; and

(D)

section 1087dd(c)(1)(H) of this title costs of litigation, and other collection costs agreed to by the Secretary in connection with the collection of a loan from the fund (and interest thereon) or a charge assessed pursuant to regulations under ;

(4)

provide that where a note or written agreement evidencing a loan has been in default despite due diligence on the part of the institution in attempting collection thereon—

(A)

if the institution has knowingly failed to maintain an acceptable collection record with respect to such loan, as determined by the Secretary in accordance with criteria established by regulation, the Secretary may—

(i)

require the institution to assign such note or agreement to the Secretary, without recompense; and

(ii)

section 1087bb of this title apportion any sums collected on such a loan, less an amount not to exceed 30 percent of any sums collected to cover the Secretary’s collection costs, among other institutions in accordance with ; or

(B)

section 1087bb of this title if the institution is not one described in subparagraph (A), the Secretary may allow such institution to refer such note or agreement to the Secretary, without recompense, except that, once every six months, any sums collected on such a loan (less an amount not to exceed 30 percent of any such sums collected to cover the Secretary’s collection costs) shall be repaid to such institution and treated as an additional capital contribution under ;

(5)

section 1087bb of this title provide that, if an institution of higher education determines not to service and collect student loans made available from funds under this part, the institution will assign, at the beginning of the repayment period, notes or evidence of obligations of student loans made from such funds to the Secretary and the Secretary shall apportion any sums collected on such notes or obligations (less an amount not to exceed 30 percent of any such sums collected to cover that Secretary’s collection costs) among other institutions in accordance with ;

(6)

provide that, notwithstanding any other provision of law, the Secretary will provide to the institution any information with respect to the names and addresses of borrowers or other relevant information which is available to the Secretary, from whatever source such information may be derived;

(7)

section 1087cc–1 of this title provide assurances that the institution will comply with the provisions of ;

(8)

provide that the institution of higher education will make loans first to students with exceptional need; and

(9)

include such other reasonable provisions as may be necessary to protect the United States from unreasonable risk of loss and as are agreed to by the Secretary and the institution, except that nothing in this paragraph shall be construed to permit the Secretary to require the assignment of loans to the Secretary other than as is provided for in paragraphs (4) and (5).

(b)

Administrative expenses

section 1096 of this titleAn institution which has entered into an agreement under subsection (a) shall be entitled, for each fiscal year during which it makes student loans from a student loan fund established under such agreement, to a payment in lieu of reimbursement for its expenses in administering its student loan program under this part during such year. Such payment shall be made in accordance with .

(c)

Cooperative agreements with consumer reporting agencies

(1)

section 1087gg of this title For the purpose of promoting responsible repayment of loans made pursuant to this part, the Secretary and each institution of higher education participating in the program under this part shall enter into cooperative agreements with consumer reporting agencies to provide for the exchange of information concerning student borrowers concerning whom the Secretary has received a referral pursuant to and regarding loans held by the Secretary or an institution.

(2)

section 1080a of this title Each cooperative agreement made pursuant to paragraph (1) shall be made in accordance with the requirements of except that such agreement shall provide for the disclosure by the Secretary or an institution, as the case may be, to such consumer reporting agencies, with respect to any loan held by the Secretary or the institution, respectively, of—

(A)

the date of disbursement and the amount of such loans made to any borrower under this part at the time of disbursement of the loan;

(B)

information concerning the repayment and collection of any such loan, including information concerning the status of such loan; and

(C)

the date of cancellation of the note upon completion of repayment by the borrower of any such loan, or upon cancellation or discharge of the borrower’s obligation on the loan for any reason.

(3)

section 1681c of title 15 Notwithstanding paragraphs (4) and (5) of subsection (a) of , a consumer reporting agency may make a report containing information received from the Secretary or an institution regarding the status of a borrower’s account on a loan made under this part until the loan is paid in full.

(4)

(A)

Except as provided in subparagraph (B), an institution of higher education, after consultation with the Secretary and pursuant to the agreements entered into under paragraph (1), shall disclose at least annually to any consumer reporting agency with which the Secretary has such an agreement the information set forth in paragraph (2), and shall disclose promptly to such consumer reporting agency any changes to the information previously disclosed.

(B)

The Secretary may promulgate regulations establishing criteria under which an institution of higher education may cease reporting the information described in paragraph (2) before a loan is paid in full.

(5)

Each institution of higher education shall notify the appropriate consumer reporting agencies whenever a borrower of a loan that is made and held by the institution and that is in default makes 6 consecutive monthly payments on such loan, for the purpose of encouraging such consumer reporting agencies to update the status of information maintained with respect to that borrower.

(d)

Limitation on use of interest bearing accounts

In carrying out the provisions of subsection (a)(9), the Secretary may not require that any collection agency, collection attorney, or loan servicer collecting loans made under this part deposit amounts collected on such loans in interest bearing accounts, unless such agency, attorney, or servicer holds such amounts for more than 45 days.

(e)

Special due diligence rule

1 See References in Text note below.

In carrying out the provisions of subsection (a)(5)  relating to due diligence, the Secretary shall make every effort to ensure that institutions of higher education may use Internal Revenue Service skip-tracing collection procedures on loans made under this part.

Pub. L. 89–329, title IV, § 463 Pub. L. 99–498, title IV, § 405(a)Oct. 17, 1986100 Stat. 1444 Pub. L. 100–50, § 13(e)June 3, 1987101 Stat. 349 Pub. L. 102–325, title IV, § 463(a)July 23, 1992106 Stat. 579 Pub. L. 103–208, § 2(f)(5)Dec. 20, 1993107 Stat. 2471 Pub. L. 105–244, title IV, § 463Oct. 7, 1998112 Stat. 1724 Pub. L. 110–315, title IVAug. 14, 2008122 Stat. 3246 Pub. L. 111–39, title IV, § 405(2)July 1, 2009123 Stat. 1947(, as added , , ; amended , (f), , ; , (b), , ; –(7), , ; , , ; , §§ 432(b)(5), 463, , , 3266; , , .)

Editorial Notes

References in Text

Pub. L. 105–244, title IV, § 463(a)(3)Oct. 7, 1998112 Stat. 1724Subsection (a)(5) relating to due diligence, referred to in subsec. (e), was redesignated subsec. (a)(4), by , , .

Prior Provisions

Pub. L. 89–329, title IV, § 463 Pub. L. 92–318, title I, § 137(b)June 23, 197286 Stat. 274 Pub. L. 94–482, title I, § 130(c)Oct. 12, 197690 Stat. 2146 Pub. L. 96–374, title IVOct. 3, 198094 Stat. 1439 Pub. L. 99–272, title XVIApr. 7, 1986100 Stat. 352 Pub. L. 99–498A prior section 1087cc, , as added , , ; amended , , ; , §§ 442(b)(1)–(4), 445(a), (b)(1), 447(a), 448(b), title XIII, § 1391(a)(1), , , 1440, 1442, 1443, 1503; , §§ 16025, 16026, , , 353, related to agreements with institutions of higher education, prior to the general revision of this part by .

Amendments

Pub. L. 111–39, § 405(2)(A)(i)2009—Subsec. (c)(2)(A). , realigned margins.

Pub. L. 111–39, § 405(2)(A)(ii)Pub. L. 105–244, § 463(b)(2)(C)Subsec. (c)(2)(B). , added subpar. (B) and struck out former subpar. (B), resulting in text identical to that after execution of the amendment by . See 1998 Amendment note below.

Pub. L. 111–39, § 405(2)(B)section 1681c of title 15Subsec. (c)(3). , substituted “and (5)” for “and (6)” and made technical amendment to reference in original act which appears in text as reference to .

Pub. L. 110–315, § 463(a)2008—Subsec. (a)(4)(B). , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “if the institution is not one described in subparagraph (A), the Secretary may—

section 1087bb of this title“(i) allow such institution to transfer its interest in such loan to the Secretary, for collection, and the Secretary may use any collections thereon (less an amount not to exceed 30 percent of any such sums collected to cover the Secretary’s collection costs) to make allocations to institutions of additional capital contributions in accordance with ; or

“(ii) allow such institution to refer such note or agreement to the Secretary, without recompense, except that any sums collected on such a loan (less an amount not to exceed 30 percent of any such sums collected to cover the Secretary’s collection costs) shall be repaid to such institution no later than 180 days after collection by the Secretary and treated as an additional capital contribution;”.

Pub. L. 110–315, § 463(b)Subsec. (a)(9). , inserted “, except that nothing in this paragraph shall be construed to permit the Secretary to require the assignment of loans to the Secretary other than as is provided for in paragraphs (4) and (5)” before period.

Pub. L. 110–315, § 432(b)(5)(A)Subsec. (c). , substituted “consumer reporting agencies” for “credit bureau organizations” in heading.

Pub. L. 110–315, § 432(b)(5)(B)Subsec. (c)(1). , substituted “consumer reporting agencies” for “credit bureau organizations”.

Pub. L. 110–315, § 432(b)(5)(C)Subsec. (c)(2). , substituted “such consumer reporting agencies” for “such organizations”.

Pub. L. 110–315, § 432(b)(5)(D)Subsec. (c)(4)(A). , substituted “consumer reporting agency” for “credit bureau organization” in two places.

Pub. L. 110–315, § 432(b)(5)(E)Subsec. (c)(5). , substituted “consumer reporting agencies” for “credit bureau organizations” and “such consumer reporting agencies” for “such organizations”.

Pub. L. 105–244, § 463(a)(1)1998—Subsec. (a)(2)(B). , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “a capital contribution—

“(i) by an institution that—

“(I) is granted permission by the Secretary to participate in an Expanded Lending Option under the program, and

“(II) has a default rate which does not exceed 7.5 percent for award year 1993–1994 and has a cohort default rate which does not exceed 15 percent for award year 1994–1995 or for any succeeding award year,

in an amount not less than the amount of the Federal capital contributions described in subparagraph (A); or

“(ii) by any other institution, in an amount not less than three-seventeenths of such Federal capital contribution in fiscal year 1993, and one-third of such Federal capital contribution in each of the succeeding fiscal years, of the amount of the Federal capital contributions described in subparagraph (A);”.

Pub. L. 105–244, § 463(a)(2)Subsec. (a)(4) to (10). , (3), redesignated pars. (5) to (10) as (4) to (9), respectively, and struck out former par. (4) which read as follows: “provide that where a note or written agreement evidencing a note has been in default for (A) 120 days, in the case of a loan which is repayable in monthly installments, or (B) 180 days, in the case of a loan which is repayable in less frequent installments, notice of such default shall be given to the Secretary in an annual report describing the total number of loans from such fund which are in such default;”.

Pub. L. 105–244, § 463(b)(1)section 1087gg of this titleSubsec. (c)(1). , substituted “the Secretary and each institution of higher education participating in the program under this part shall” for “the Secretary shall” and inserted “and regarding loans held by the Secretary or an institution” after “”.

Pub. L. 105–244, § 463(b)(2)(A)Subsec. (c)(2). , in introductory provisions, substituted “by the Secretary or an institution, as the case may be, to such organizations, with respect to any loan held by the Secretary or the institution, respectively, of—” for “by the Secretary to such organizations, with respect to any loan for which the Secretary is responsible, of—”.

Pub. L. 105–244, § 463(b)(2)(B)Subsec. (c)(2)(A). , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the date of disbursement and the amount of any such loan;”.

Pub. L. 105–244, § 463(b)(2)(C)Subsec. (c)(2)(B). , inserted “the repayment and” after “concerning” the first place appearing and substituted “status of such” for “status of any defaulted”.

Pub. L. 105–244, § 463(b)(2)(D)Subsec. (c)(2)(C). , inserted “, or upon cancellation or discharge of the borrower’s obligation on the loan for any reason” before period at end.

Pub. L. 105–244, § 463(b)(3)(A)Subsec. (c)(3). , in introductory provisions, inserted “or an institution” after “from the Secretary” and substituted “until the loan is paid in full.” for “until—”.

Pub. L. 105–244, § 463(b)(3)(B)Subsec. (c)(3)(A), (B). , struck out subpars. (A) and (B) which read as follows:

“(A) 7 years from the date on which the Secretary accepted an assignment or referral of a loan, or

“(B) 7 years from the date the Secretary first reports the account to a consumer reporting agency.”

Pub. L. 105–244, § 463(b)(4)Subsec. (c)(4). , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “Each institution of higher education, after consultation with the Secretary and pursuant to the agreements entered into under paragraph (1), shall disclose at least annually to any credit bureau organization with which the Secretary has such an agreement—

“(A) the amount of loans made to any borrower under this part at the time of the disbursement of the loan; and

section 1080a(a) of this title“(B) the information set forth in .”

Pub. L. 105–244, § 463(b)(4)Subsec. (c)(5). , added par. (5).

Pub. L. 105–244, § 463(c)Subsec. (d). , substituted “subsection (a)(9)” for “subsection (a)(10)”.

Pub. L. 103–208, § 2(f)(5)1993—Subsec. (a)(2)(B)(i)(II). , substituted “7.5 percent for award year 1993–1994 and has a cohort default rate which does not exceed 15 percent for award year 1994–1995 or for any succeeding award year” for “7.5 percent”.

Pub. L. 103–208, § 2(f)(6)Subsec. (c)(4). , substituted “shall disclose at least annually” for “shall disclose” in introductory provisions.

Pub. L. 103–208, § 2(f)(7)Subsecs. (d), (e). , added subsecs. (d) and (e).

Pub. L. 102–325, § 463(a)1992—Subsec. (a)(2)(B). , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “a capital contribution by such institution in an amount equal to not less than one-ninth of the amount of the Federal capital contributions described in subparagraph (A);”.

Pub. L. 102–325, § 463(b)(1)Subsec. (c)(3)(B). , struck out “, if that account has not been previously reported by any other holder of the note” after “agency”.

Pub. L. 102–325, § 463(b)(2)Subsec. (c)(4). , added par. (4).

Pub. L. 100–50, § 13(e)1987—Subsec. (a)(4). , substituted “in an annual report” for “in a report” and struck out “, and made to the Secretary at least semiannually” after “in such default”.

Pub. L. 100–50, § 13(f)section 1096 of this title section 1092 of this titleSubsec. (b). , substituted “” for “”.

Statutory Notes and Related Subsidiaries

Effective Date of 2009 Amendment

Pub. L. 111–39 Pub. L. 110–315Aug. 14, 2008section 3 of Pub. L. 111–39 section 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. 105–244Oct. 1, 1998Pub. L. 105–244 section 3 of Pub. L. 105–244 section 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. 103–208 Pub. L. 102–325 section 5(a) of Pub. L. 103–208 section 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. 102–325July 23, 1992July 1, 1993section 468 of Pub. L. 102–325 section 1087dd of this titleAmendment by effective , except that changes made in subsec. (a)(2)(B), relating to the matching of Federal capital contributions, applicable to funds provided for such program for award years beginning on or after , see , set out as a note under .

Effective Date of 1987 Amendment

Pub. L. 100–50 Pub. L. 99–498 section 27 of Pub. L. 100–50 section 1001 of this titleAmendment by effective as if enacted as part of the Higher Education Amendments of 1986, , see , set out as a note under .

Effective Date

Oct. 17, 1986section 2 of Pub. L. 99–498 section 1001 of this titleSection effective , except as otherwise provided, see , set out as a note under .

July 1, 1987section 405(b) of Pub. L. 99–498 section 1087dd of this titleSubsection (a)(9) of this section applicable only to loans made for periods of enrollment beginning on or after , see , set out as a note under .