|
U.S. Code as of:
01/19/04
Section 1092a. Combined payment plan
(a) Eligibility for plan
Upon the request of the borrower, a lender described in
subparagraph (A), (B), or (C) of section 1078-3(a)(1) of this
title, or defined in subpart I (!1) of part C of title VII of the
Public Health Service Act may, with respect to a consolidation loan
made under section 1078-3 of this title (and section 1087-2(o) of
this title as in effect prior to the enactment of section 1078-3 of
this title) and loans guaranteed under subpart I (!1) of part C of
title VII of the Public Health Service Act (known as Health
Education Assistance Loans), offer a combined payment plan under
which the lender shall submit one bill to the borrower for the
repayment of all such loans for the monthly or other similar period
of repayment.
(b) Applicability of other requirements
A lender offering a combined payment plan shall comply with all
provisions of section 1078-3 of this title applicable to loans
consolidated or to be consolidated and shall comply with all
provisions of subpart I (!1) of part C of title VII of the Public
Health Service Act applicable to loans under that subpart which are
made part of the combined payment plan, except that a lender
offering a combined payment plan under this section may offer
consolidation loans pursuant to section 1078-3(b)(1)(A) of this
title if such lender holds any outstanding loan of a borrower which
is selected for inclusion in a combined payment plan.
(c) Lender eligibility
Such lender may offer a combined payment plan only if -
(1) the lender holds an outstanding loan of that borrower which
is selected by the borrower for incorporation into a combined
payment plan pursuant to this section (including loans which are
selected by the borrower for consolidation under this section);
or
(2) the borrower certifies that the borrower has sought and has
been unable to obtain a combined payment plan from the holders of
the outstanding loans of that borrower.
(d) Borrower selection of competing offers
In the case of multiple offers by lenders to administer a
combined payment plan for a borrower, the borrower shall select
from among them the lender to administer the combined payment plan
including its loan consolidation component.
(e) Effect of plan
Upon selection of a lender to administer the combined payment
plan, the lender may reissue any Health Education Assistance Loan
selected by the borrower for incorporation in the combined payment
plan which is not held by such lender and the proceeds of such
reissued loan shall be paid by the lender to the holder or holders
of the loans so selected to discharge the liability on such loans,
if -
(1) the lender selected to administer the combined payment plan
has determined to its satisfaction, in accordance with reasonable
and prudent business practices, for each loan being reissued (A)
that the loan is a legal, valid, and binding obligation of the
borrower; (B) that each such loan was made and serviced in
compliance with applicable laws and regulations; and (C) the
insurance on such loan is in full force and effect; and
(2) the loan being reissued was not in default (as defined in
section 733(e)(3) (!2) of the Public Health Service Act) at the
time the request for a combined payment plan is made.
(f) Notes and insurance certificates
(1) Each loan reissued under subsection (e) of this section shall
be evidenced by a note executed by the borrower. The Secretary of
Health and Human Services shall insure such loan under a
certificate of comprehensive insurance with no insurance limit, but
any such certificate shall only be issued to an authorized holder
of loans insured under subpart I (!2) of part C of title VII of the
Public Health Service Act (including the Student Loan Marketing
Association). Such certificates shall provide that all loans
reissued under this section shall be fully insured against loss of
principal and interest. Any insurance issued with respect to loans
reissued under this section shall be excluded from the limitation
on maximum insurance authority set forth in section 728(a) (!2) of
the Public Health Service Act. Notwithstanding the provisions of
section 729(a) (!2) of the Public Health Service Act, the reissued
loan shall be made in an amount, including outstanding principal,
capitalized interest, accrued unpaid interest not yet capitalized,
and authorized late charges. The proceeds of each such loan will be
paid by the lender to the holder of the original loan being
reissued and the borrower's obligation to that holder on that loan
shall be discharged.
(2) Except as otherwise specifically provided for under the
provisions of this section, the terms of any reissued loan shall be
the same as the terms of the original loan. The maximum repayment
period for a loan reissued under this section shall not exceed the
remainder of the period which would have been permitted on the
original loan. If the lender holds more than one loan insured under
subpart I (!2) of part C of title VII of the Public Health Service
Act, the maximum repayment period for all such loans may extend to
the latest date permitted for any individual loan. Any reissued
loan may be consolidated with any other Health Education Assistance
Loan as provided in the Public Health Service Act [42 U.S.C. 201 et
seq.], and, with the concurrence of the borrower, repayment of any
such loans during any period may be made in amounts that are less
than the interest that accrues on such loans during that period.
(g) Termination of borrower eligibility
The status of an individual as an eligible combined payment plan
borrower terminates upon receipt of a combined payment plan.
(h) Fees and premiums
No origination fee or insurance premium shall be charged to the
borrower on any combined payment plan, and no origination fee or
insurance premium shall be payable by the lender to the Secretary
of Health and Human Services.
(i) Commencement of repayment
Repayment of a combined payment plan shall commence within 60
days after the later of the date of acceptance of the lender's
offer to administer a combined payment plan, the making of the
consolidation loan or the reissuance of any Health Education
Assistance Loans pursuant to subsection (e) of this section.
|
|