Public Law 98–79

Section 433A of the Act is amended to read as follows:

“Sec. 433A. “student loan information by eligible lenders

(a)(a)

Each eligible lender shall, at or prior to the time such lender disburses a loan to a borrower which is insured or guaranteed under this part, provide thorough and accurate loan information on such loan to the borrower. Any disclosure required by this subsection may be made by an eligible lender as part of the written application material provided to the borrower, or as part of the promissory note evidencing the loan, or on a separate written

Information disclosure.

form provided to the borrower. The disclosures shall include—

“(1)“(1)

the name of the eligible lender, and the address to which communications and payments should be sent;

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“(2)“(2)

the principal amount of the loan;

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“(3)“(3)

the amount of any charges, such as the origination fee and insurance premium, collected by the lender at or prior to the disbursal of the loan and whether such charges are deducted from the proceeds of the loan or paid separately by the borrower;

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“(4)“(4)

the stated interest rate on the loan;

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“(5)“(5)

the yearly and cumulative maximum amounts that may be borrowed;

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“(6)“(6)

an explanation of when repayment of the loan will be required and when the borrower will be obligated to pay interest that accrues on the loan;

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“(7)“(7)

a statement as to the minimum and maximum repayment term which the lender may impose, and the minimum annual payment required by law;

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“(8)“(8)

an explanation of any special options the borrower may have for loan consolidation or other refinancing of the loan;

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“(9)“(9)

a statement that the borrower has the right to prepay all or part of the loan, at any time, without penalty, a statement summarizing circumstances in which repayment of the loan or interest that accrues on the loan may be deferred, and a brief notice of the program for repayment of loans, on the basis of military service, pursuant to section 902 of the Department of Defense Authorization Act, 1981 (10 U.S.C. 2141, note);

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“(10)“(10)

a definition of default and the consequences to the borrower if the borrower defaults, including a statement that the default may be reported to a credit bureau or credit reporting agency;

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“(11)“(11)

to the extent practicable, the effect of accepting the loan on the eligibility of the borrower for other forms of student assistance; and

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“(12)“(12)

an explanation of any cost the borrower may incur in the making or collection of the loan.

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“(b)“(b)

Each eligible lender shall, at or prior to the start of the

Information disclosure.

repayment period of the student borrower on loans made, insured, or guaranteed under this part, disclose to the borrower the information required under this subsection. Any disclosure required by this subsection may be made by an eligible lender either in a promissory note evidencing the loan or loans or in a written statement provided to the borrower. The disclosures shall include:

“(1)“(1)

the name of the eligible lender, and the address to which communications and payments should be sent;

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“(2)“(2)

the scheduled date upon which the repayment period is to begin;

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“(3)“(3)

the estimated balance owed by the borrower on the loan or loans covered by the disclosure as of the scheduled date on which the repayment period is to begin (including, if applicable, the estimated amount of interest to be capitalized);

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“(4)“(4)

the stated interest rate on the loan or loans, or the combined interest rate of loans with different stated interest rates;

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“(5)“(5)

the nature of any fees which may accrue or be charged to the borrower during the repayment period;

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“(6)“(6)

the repayment schedule for all loans covered by the disclosure including the date the first installment is due, and the number, amount, and frequency of required payments;

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“(7)“(7)

an explanation of any special options the borrower may have for loan consolidation or other refinancing of the loan;

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“(8)“(8)

the projected total of interest charges which the borrower will pay on the loan or loans, assuming that the borrower makes payments exactly in accordance with the repayment schedule; and

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“(9)“(9)

a statement that the borrower has the right to prepay all or part of the loan or loans covered by the disclosure at any time without penalty.

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“(c)“(c)

Such information shall be available without cost to the borrower. The failure of an eligible lender to provide information as

Loan repayment, obligation.

required by this section shall not (1) relieve a borrower of the obligation to repay a loan in accordance with its terms, (2) provide a basis for a claim for civil damages, or (3) be deemed to abrogate the obligation of the Secretary under a contract of insurance or reinsurance, or the obligation of a State or nonprofit private agency or organization which has an agreement with the Secretary under section 428(b) under a contract of guaranty. The Secretary may

20 USC 1078.

limit, suspend, or terminate the continued participation of an eligible lender in making loans under this part for failure by that lender to comply with this section.”.

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Section 463A of the Act is amended to read as follows:

“Sec. 463A. “student loan information by eligible institutions

(a)(a)

Each institution of higher education, in order to

20 USC 1087cc.

carry out the provisions of section 463(a)(8), shall, at or prior to the time such institution makes a loan to a student borrower which is made under this part, provide thorough and adequate loan information on such loan to the student borrower. Any disclosure required by this subsection may be made by an institution of higher education as part of the written application material provided to the borrower, or as part of the promissory note evidencing the loan, or

Information disclosure.

on a separate written form provided to the borrower. The disclosures shall include:

“(1)“(1)

the name of the institution of higher education, and the address to which communications and payments should be sent;

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“(2)“(2)

the principal amount of the loan;

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“(3)“(3)

the amount of any charges collected by the institution at or prior to the disbursal of the loan and whether such charges are deducted from the proceeds of the loan or paid separately by the borrower;

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“(4)“(4)

the stated interest rate on the loan;

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“(5)“(5)

the yearly and cumulative maximum amounts that may be borrowed;

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“(6)“(6)

an explanation of when repayment of the loan will be required and when the borrower will be obligated to pay interest that accrues on the loan;

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“(7)“(7)

a statement as to the minimum and maximum repayment term which the institution may impose, and the minimum monthly payment required by law;

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“(8)“(8)

an explanation of any special options the borrower may have for loan consolidation or other refinancing of the loan;

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“(9)“(9)

a statement that the borrower has the right to prepay all or part of the loan, at any time, without penalty, a statement summarizing circumstances in which repayment of the loan or interest that accrues on the loan may be deferred, and a brief notice of the program for repayment of loans, on the basis of military service, pursuant to section 902 of the Department of

10 USC 2141 note.

Defense Authorization Act, 1981 (10 U.S.C. 2141, note);

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“(10)“(10)

a definition of default and the consequences to the borrower if the borrower defaults, including a statement that the default may be reported to a credit bureau or credit reporting agency;

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“(11)“(11)

to the extent practicable, in effect of accepting the loan on the eligibility of the borrower for other forms of student assistance; and

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“(12)“(12)

an explanation of any cost the borrower may incur in the making or collection of the loan.

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“(b)“(b)

Each institution of higher education shall enter into an agreement with the Secretary under which the institution will, prior to the start of the repayment period of the student borrower on loans made under this part, disclose to the student borrower the information required under this subsection. Any disclosures required by this subsection may be made by an institution of higher education either in a promissory note evidencing the loan or loans or in a written statement provided to the borrower. The disclosures

Information disclosure.

shall include—

“(1)“(1)

the name of the institution of higher education, and the address to which communications and payments should be sent;

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“(2)“(2)

the scheduled date upon which the repayment period is to begin;

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“(3)“(3)

the estimated balance owed by the borrower on the loan or loans covered by the disclosure as of the scheduled date on which the repayment period is to begin (including, if applicable, the estimated amount of interest to be capitalized);

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“(4)“(4)

the stated interest rate on the loan or loans, or the combined interest rate of loans with different stated interest rates;

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“(5)“(5)

the nature of any fees which may accrue or be charged to the borrower during the repayment period;

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“(6)“(6)

the repayment schedule for all loans covered by the disclosure including the date the first installment is due, and the number, amount, and frequency of required payments;

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“(7)“(7)

an explanation of any special options the borrower may have for loan consolidation or other refinancing of the loan;

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“(8)“(8)

the projected total of interest charges which the borrower will pay on the loan or loans, assuming that the borrower makes payments exactly in accordance with the repayment schedule; and

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“(9)“(9)

a statement that the borrower has the right to prepay all or part of the loan or loans covered by the disclosure at any time without penalty.

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“(c)“(c)

Such information shall be available without cost to the borrower. The failure of an eligible institution to provide information

Loan repayment, obligation.

as required by this section shall not (1) relieve a borrower of the obligation to repay a loan in accordance with its terms, (2) provide a basis for a claim for civil damages, or (3) be deemed to abrogate the obligation of the Secretary to make payments with respect to such loan.”.

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The Student Financial Assistance Technical Amendments of 1982 is amended by striking out section 3 through 6 and

96 Stat. 1400.

inserting in lieu thereof the following:

“Sec. 3. “cost of attendance

(a)(a)

Except as provided in subsection (b), but notwithstanding

20 USC 1070a note.

any other provision of law, the cost of attendance criteria used for calculating eligibility for and the amount of Pell Grants for academic years 1983–1984, and 1984–1985, shall be the same as those criteria in effect for academic year 1982–1983.

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“(b)“(b)

The cost of attendance allowance for room and board for students not residing at home or in institutionally owned or operated housing for the academic year 1984–1985 shall be a standard amount determined by the institution of higher education based on the expenses reasonably incurred by such student for room and board, which shall be at least $1,100 but not more than $1,600.

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“Sec. 4. “separation of pell grant family contribution schedule from campus-based programs

The Secretary of Education shall establish or approve separate systems of need analysis for the academic years 1983–1984, 1984–1985, and 1985–1986 for the programs authorized under subpart 2 of part A, part C, and part E of title IV of the Higher

20 USC 1070b; 42 USC 2751; 20 USC 1088.

Education Act of 1965.

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“Sec. 5. “pell grant family contribution schedules for academic years 1984–1985 and 1985–1986

(a)(a)

Except as provided in subsections (b) and (c), the family contribution schedule for academic year 1983–1984 for Pell Grants under subpart 1 of part A of title IV of the Higher Education Act of

20 USC 1070a.

1965 shall be the family contribution schedule for such grants for each of the academic years 1984–1985 and 1985–1986.

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“(b)“(b)

(1)(1)

Each of the amounts allowed as an offset for family size for dependent and independent students in the family contribution schedule for each of the academic years 1984–1985 and 1985–1986 shall be computed by increasing (or decreasing) the comparable amount (for the same family size) in the family contribution schedule for the preceding academic year (as set by this section) by a percentage equal to the percentage increase (or decrease) in the Consumer Price Index for Wage Earners and Clerical Workers published by the Department of Labor, and rounding the result to the nearest $100.

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“(2)“(2)

For purposes of paragraph (1) of this subsection, the percentage increase (or decrease) in the Consumer Price Index for Wage Earners and Clerical Workers is the change, expressed as a per centum, between the arithmetic mean of such index—

“(A)“(A)

for the period from October 1, 1981, through September 30, 1982, and the arithmetic mean of such index for the period from October 1, 1982, through September 30, 1983, in the case of the academic year 1984–1985; and

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“(B)“(B)

for the period from October 1, 1982, through September 30, 1983, and the arithmetic mean of such index for the period from October 1, 1983, through September 30, 1984, in the case of the academic year 1985–1986.

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“(3)“(3)

The Secretary of Education shall publish in the Federal Register the changes in amounts allowed as an offset for family size as a consequence of the requirements of this subsection immediately after publication by the Secretary of Labor of the Consumer Price Index for September 1983 (with respect to academic year 1984–1985) and immediately after such publication for September 1984 (with respect to academic year 1985–1986).

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“(c)“(c)

For purposes of subsection (a), the family contribution schedule for academic year 1983–1984 shall be modified by the Secretary of Education for use for each of academic years 1984–1985 and 1985–1986—

“(1)“(1)

to reflect the most recent and relevant data, and

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“(2)“(2)

to comply with section 482(b)(3) of the Higher Education

20 USC 1089.

Act of 1965 with respect to the treatment of payments under title 38 of the United States Code.

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“(d)“(d)

The modified family contribution schedule under this section shall be published in the Federal Register—

“(1)“(1)

not later than fifteen days after the date of enactment of the Student Loan Consolidation and Technical Amendments Act of 1983 for academic year 1984–1985; and

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“(2)“(2)

not later than April 1, 1984, for academic year 1985–1986.

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“Sec. 6. “independent student determination

Notwithstanding any rule or regulation, the criteria for

20 USC 1089 note.

20 USC 1089.

the determination of independent student status, prescribed under section 482(c)(2) of the Higher Education Act of 1965, in effect for academic year 1982–1983 shall be the criteria for such determinations for each of the academic years 1983–1984, 1984–1985, and 1985–1986.”.

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Section 9 of such Act is amended—

Section 427 A(a) of the Act is amended—

by inserting “; nondiscrimination;” after “statement of purpose” in the heading of such section;

by inserting “(1)” after “Sec. 421. (a)”; and

by inserting before subsection (b) the following new paragraph:

“(2)“(2)

No 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 basis of race, national origin, religion, sex or marital status, age, or handicapped status.”.

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Section 438 of the Act is amended by redesignating subsection (d) as subsection (e) and inserting before such subsection the following:

“(d)“(d)

(1)(1)

in order for the holders of loans which were made or purchased with funds obtained by the holder from an Authority issuing obligations, the income from which is exempt from taxation

26 USC 1 et seq.

under the Internal Revenue Code of 1954, to be eligible to receive a special allowance under subsection (b)(2) of this section, the Authority

Plans.

shall submit to the Secretary a plan for doing business. The Secretary shall approve or disapprove such plan within thirty days after the date of its submission. Each such plan shall contain provisions designed to assure that—

“(A)“(A)

no eligible lender in the area served by the Authority will be excluded from participation in the program of the Authority and all eligible lenders may participate in the program on the same terms and conditions if eligible lenders are going to participate in the program;

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“(B)“(B)

no director or staff member of the Authority who receives compensation from the Authority may own stock in, or receive compensation from, any agency that would contract to service and collect the loans of the Authority;

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“(C)“(C)

student loans will not be purchased from participating lenders at a premium or discount amounting to more than 1 per centum of the unpaid principal amount borrowed plus accrued interest to the date of acquisition, but a reasonable loan transfer fee may be paid by the purchaser;

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“(D)“(D)

the Authority will, within the limit of funds available and subject to the applicable State and Federal law, make loans to, or purchase loans incurred by, all eligible students who are residents of, or who attend an eligible institution within, the area served by the Authority;

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“(E)“(E)

the Authority has a plan under which the Authority will pursue the development of new lender participation in a continuing program of benefits to students together with assurances of existing lender commitments to the program;

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“(F)“(F)

there will be an annual audit of the Authority by a certified public accounting firm which will include review of compliance by the Authority with the provisions of the plan; and

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“(G)“(G)

the Authority will not issue obligations for amounts in excess of the reasonable needs for student loan credit within the area served by the Authority, after taking into account existing sources of student loan credit in that area.

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“(2)“(2)

In order for the holders of loans which were made or purchased with funds obtained by the holder from an Authority issuing obligations, the income from which is exempt from taxation under the Internal Revenue Code of 1954, to be eligible to receive a special

26 USC 1 et seq.

allowance under subsection (b)(2) of this section on any such loans, the Authority shall not engage in any pattern or practice which results in a denial of a borrower's access to loans under this part because of the borrower’s race, sex, color, religion, national origin, age, handicapped status, income, attendance at a particular eligible institution within the area served by the Authority, length of the borrower’s educational program, or the borrower’s academic year in school.”.

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Section 420(b) of the Education Amendments of 1980 is

20 USC 1087–1a.

repealed.

Section 438(b)(2)(B)(iii) of the Act is amended by striking out

20 USC 1087–1.

“section 420(b) of the Education Amendments of 1980” and inserting in lieu thereof “subsection (d) of this section”.

Until two years after the date of enactment of this Act, section

20 USC 1087–1 note.

438(d)(2) of the Act (as added by subsection (a) of this section) shall not operate to prevent the payment of special allowances on loans described in such section 438(d)(2) because an Authority described in such section denies access to loans under part B of title IV of the Act to students in attendance at particular institutions with specified high default rates on such loans, if such denial is pursuant to a rule of such Authority adopted prior to August 1, 1983.

Section 428(b)(1)(E) of the Act is amended—

The amendments made by this section shall be effective with respect to any loan under part B of title IV of the Act on which repayment has not commenced prior to the date of enactment of this Act.