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20 U.S.C. § 1071 — Statement of purpose; nondiscrimination; and appropriations authorized
Federal law — U.S. Code and appendices · legal_authorities
**(a) Purpose; discrimination prohibited**
(1) **Purpose** — The purpose of this part is to enable the Secretary—
(A) to encourage States and nonprofit private institutions and organizations to establish adequate loan insurance programs for students in eligible institutions (as defined in [section 1085 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1085&num=0&edition=prelim)),
(B) to provide a Federal program of student loan insurance for students or lenders who do not have reasonable access to a State or private nonprofit program of student loan insurance covered by an agreement under [section 1078(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/b&num=0&edition=prelim),
(C) to pay a portion of the interest on loans to qualified students which are insured under this part, and
(D) to guarantee a portion of each loan insured under a program of a State or of a nonprofit private institution or organization which meets the requirements of [section 1078(a)(1)(B) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/a/1/B&num=0&edition=prelim).
(2) **Discrimination by creditors prohibited** — No agency, organization, 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, marital status, age, or handicapped status.
**(b) Authorization of appropriations** For the purpose of carrying out this part—
(1) there are authorized to be appropriated to
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Source file: Laws/federal/codes/united-states-code/title-20/section-1071-statement-of-purpose-nondiscrimination-and-appropriations-authorized--98a592b7e2.md
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Source location: Title 20, Chapter 28, § 1071; chapter-028-higher-education-resources-and-student-assistance.md
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**(a) Purpose; discrimination prohibited**
(1) **Purpose** — The purpose of this part is to enable the Secretary—
(A) to encourage States and nonprofit private institutions and organizations to establish adequate loan insurance programs for students in eligible institutions (as defined in [section 1085 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1085&num=0&edition=prelim)),
(B) to provide a Federal program of student loan insurance for students or lenders who do not have reasonable access to a State or private nonprofit program of student loan insurance covered by an agreement under [section 1078(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/b&num=0&edition=prelim),
(C) to pay a portion of the interest on loans to qualified students which are insured under this part, and
(D) to guarantee a portion of each loan insured under a program of a State or of a nonprofit private institution or organization which meets the requirements of [section 1078(a)(1)(B) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/a/1/B&num=0&edition=prelim).
(2) **Discrimination by creditors prohibited** — No agency, organization, 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, marital status, age, or handicapped status.
**(b) Authorization of appropriations** For the purpose of carrying out this part—
(1) there are authorized to be appropriated to the student loan insurance fund (established by [section 1081 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1081&num=0&edition=prelim)) (A) the sum of $1,000,000, and (B) such further sums, if any, as may become necessary for the adequacy of the student loan insurance fund,
(2) there are authorized to be appropriated, for payments under [section 1078 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078&num=0&edition=prelim) with respect to interest on student loans and for payments under [section 1087 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1087&num=0&edition=prelim), such sums for the fiscal year ending June 30, 1966, and succeeding fiscal years, as may be required therefor,
(3) there is authorized to be appropriated the sum of $17,500,000 for making advances pursuant to [section 1072 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072&num=0&edition=prelim) for the reserve funds of State and nonprofit private student loan insurance programs,
(4) there are authorized to be appropriated (A) the sum of $12,500,000 for making advances after June 30, 1968, pursuant to sections 1072(a) and (b) of this title, and (B) such sums as may be necessary for making advances pursuant to [section 1072(c) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072/c&num=0&edition=prelim), for the reserve funds of State and nonprofit private student loan insurance programs,
(5) there are authorized to be appropriated such sums as may be necessary for the purpose of paying a loan processing and issuance fee in accordance with [section 1078(f) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/f&num=0&edition=prelim) to guaranty agencies, and
(6) there is authorized to be appropriated, and there are appropriated, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary for the purpose of carrying out [section 1072(c)(7) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072/c/7&num=0&edition=prelim).
Sums appropriated under paragraphs (1), (2), (4), and (5) of this subsection shall remain available until expended, except that no sums may be expended after June 30, 2010, with respect to loans under this part for which the first disbursement is after such date. No additional sums are authorized to be appropriated under paragraph (3) or (4) of this subsection by reason of the reenactment of such paragraphs by the Higher Education Amendments of 1986.
**(c) Designation** The program established under this part shall be referred to as the “Robert T. Stafford Federal Student Loan Program”. Loans made pursuant to sections 1077 and 1078 of this title shall be known as “Federal Stafford Loans”.
**(d) Termination of authority to make or insure new loans** Notwithstanding paragraphs (1) through (6) of subsection (b) or any other provision of law—
(1) no new loans (including consolidation loans) may be made or insured under this part after June 30, 2010; and
(2) no funds are authorized to be appropriated, or may be expended, under this chapter or any other Act to make or insure loans under this part (including consolidation loans) for which the first disbursement is after June 30, 2010,
except as expressly authorized by an Act of Congress enacted after March 30, 2010.
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Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
Section, Pub. L. 100–77, title VII, § 701, as added Pub. L. 103–382, title III, § 322, Oct. 20, 1994, 108 Stat. 3956, related to State literacy initiatives.
A prior section 11421, Pub. L. 100–77, title VII, § 702, July 22, 1987, 101 Stat. 525; Pub. L. 100–297, title VI, § 6001, Apr. 28, 1988, 102 Stat. 423; Pub. L. 100–628, title VII, § 701, Nov. 7, 1988, 102 Stat. 3244; Pub. L. 101–645, title VI, § 611, Nov. 29, 1990, 104 Stat. 4734, related to State literacy initiatives, prior to the general amendment of this part by Pub. L. 103–382.
#### Effective Date of Repeal
Pub. L. 105–220, title I, § 199(c)(2)(A), Aug. 7, 1998, 112 Stat. 1059, which provided that the repeal made by subsection (b)(1) (repealing sections 11421, 11461 to 11466, 11471, and 11472 of this title) would take effect on July 1, 1999, was repealed by Pub. L. 113–128, title V, § 511(a), July 22, 2014, 128 Stat. 1705.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Establishment** There is hereby established a student loan insurance fund (hereinafter in this section called the “fund”) which shall be available without fiscal year limitation to the Secretary for making payments in connection with the default of loans insured by the Secretary under this part, or in connection with payments under a guaranty agreement under [section 1078(c) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/c&num=0&edition=prelim). All amounts received by the Secretary as premium charges for insurance and as receipts, earnings, or proceeds derived from any claim or other assets acquired by the Secretary in connection with operations under this part, any excess advances under [section 1072 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072&num=0&edition=prelim), and any other moneys, property, or assets derived by the Secretary from operations in connection with this section, shall be deposited in the fund. All payments in connection with the default of loans insured by the Secretary under this part, or in connection with such guaranty agreements shall be paid from the fund. Moneys in the fund not needed for current operations under this section may be invested in bonds or other obligations guaranteed as to principal and interest by the United States.
**(b) Borrowing authority** If at any time the moneys in the fund are insufficient to make payments in connection with the default of any loan insured by the Secretary under this part, or in connection with any guaranty agreement made under [section 1078(c) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/c&num=0&edition=prelim), the Secretary is authorized, to the
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Repayment in full for death and disability**
(1) **In general** — If a student borrower who has received a loan described in subparagraph (A) or (B) of [section 1078(a)(1) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/a/1&num=0&edition=prelim) dies or becomes permanently and totally disabled (as determined in accordance with regulations of the Secretary), or if a student borrower who has received such a loan is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, has lasted for a continuous period of not less than 60 months, or can be expected to last for a continuous period of not less than 60 months then the Secretary shall discharge the borrower’s liability on the loan by repaying the amount owed on the loan. The Secretary may develop such safeguards as the Secretary determines necessary to prevent fraud and abuse in the discharge of liability under this subsection. Notwithstanding any other provision of this subsection, the Secretary may promulgate regulations to reinstate the obligation of, and resume collection on, loans discharged under this subsection in any case in which—
(A) a borrower received a discharge of liability under this subsection and after the discharge the borrower—
(i) receives a loan made, insured, or guaranteed under this subchapter; or
(ii) has earned income in excess of the poverty line; or
(B) the Secretary determines the reinstatement and resumption to be necessary.
(2) **Disability determinations** — A borrower who has been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected condition and who provides documentation of
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Purpose of and authority for advances to reserve funds**
(1) **Purpose; eligible recipients** — From sums appropriated pursuant to paragraphs (3) and (4)(A) of [section 1071(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1071/b&num=0&edition=prelim), the Secretary is authorized to make advances to any State with which the Secretary has made an agreement pursuant to [section 1078(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/b&num=0&edition=prelim) for the purpose of helping to establish or strengthen the reserve fund of the student loan insurance program covered by that agreement. If for any fiscal year a State does not have a student loan insurance program covered by an agreement made pursuant to [section 1078(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/b&num=0&edition=prelim), and the Secretary determines after consultation with the chief executive officer of that State that there is no reasonable likelihood that the State will have such a student loan insurance program for such year, the Secretary may make advances for such year for the same purpose to one or more nonprofit private institutions or organizations with which the Secretary has made an agreement pursuant to [section 1078(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/b&num=0&edition=prelim) in order to enable students in the State to participate in a program of student loan insurance covered by such an agreement. The Secretary may make advances under this subsection both to a State program (with which he has such an agreement) and to one or more nonprofit private institutions or organizations (w
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Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
#### Codification
Section, Pub. L. 89–10, title I, § 1491, as added Pub. L. 100–297, title I, § 1001, Apr. 28, 1988, 102 Stat. 202, which contained transition provisions, was omitted in the general amendment of the Elementary and Secondary Education Act of 1965, Pub. L. 89–10, by Pub. L. 103–382, title I, § 101, Oct. 20, 1994, 108 Stat. 3519.
Prior sections 2901 to 2904 were repealed by Pub. L. 97–35, title V, § 587(a)(1), Aug. 13, 1981, 95 Stat. 480, eff. Oct. 1, 1982.
Section 2901, Pub. L. 89–10, title II, § 221, as added Pub. L. 95–561, title II, § 201, Nov. 1, 1978, 92 Stat. 2204, set out statement of purpose for basic skills improvement program.
Section 2902, Pub. L. 89–10, title II, § 222, as added Pub. L. 95–561, title II, § 201, Nov. 1, 1978, 92 Stat. 2205; amended Pub. L. 96–46, § 1(12), Aug. 6, 1979, 93 Stat. 339, related to agreements with State educational agencies.
Section 2903, Pub. L. 89–10, title II, § 223, as added Pub. L. 95–561, title II, § 201, Nov. 1, 1978, 92 Stat. 2207, related to distribution of grants by the Secretary.
Section 2904, Pub. L. 89–10, title II, § 224, as added Pub. L. 95–561, title II, § 201, Nov. 1, 1978, 92 Stat. 2207, provided for a State leadership program.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Institution of higher education** For purposes of this chapter, other than subchapter IV, the term “institution of higher education” means an educational institution in any State that—
(1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate, or persons who meet the requirements of [section 1091(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1091/d&num=0&edition=prelim);
(2) is legally authorized within such State to provide a program of education beyond secondary education;
(3) provides an educational program for which the institution awards a bachelor’s degree or provides not less than a 2-year program that is acceptable for full credit toward such a degree, or awards a degree that is acceptable for admission to a graduate or professional degree program, subject to review and approval by the Secretary;
(4) is a public or other nonprofit institution; and
(5) is accredited by a nationally recognized accrediting agency or association, or if not so accredited, is an institution that has been granted preaccreditation status by such an agency or association that has been recognized by the Secretary for the granting of preaccreditation status, and the Secretary has determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or association within a reasonable time.
**(b) Additional institutions included** For purposes of this chapter, other than subchapter IV, the term “institution of higher education” also includes—
(1) any school that provides not less than a 1-year program of training to prepare students for gainful employment in a re
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Definition of institution of higher education for purposes of student assistance programs**
(1) **Inclusion of additional institutions** — Subject to paragraphs (2) through (4) of this subsection, the term “institution of higher education” for purposes of subchapter IV includes, in addition to the institutions covered by the definition in [section 1001 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1001&num=0&edition=prelim)—
(A) a proprietary institution of higher education (as defined in subsection (b) of this section);
(B) a postsecondary vocational institution (as defined in subsection (c) of this section); and
(C) only for the purposes of part D of subchapter IV, an institution outside the United States that is comparable to an institution of higher education as defined in [section 1001 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1001&num=0&edition=prelim) and that has been approved by the Secretary for the purpose of part D of subchapter IV, consistent with the requirements of [section 1087b(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1087b/d&num=0&edition=prelim).
(2) **Institutions outside the United States**
(A) *In general* — For the purpose of qualifying as an institution under paragraph (1)(C), the Secretary shall establish criteria by regulation for the approval of institutions outside the United States and for the determination that such institutions are comparable to an institution of higher education as defined in [section 1001 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1001&num=0&edition=prelim) (except that a graduate medical school, nursing schoo
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Federal law — U.S. Code and appendices · legal_authorities
As used in this part:
**(a) Eligible institution**
(1) **In general** — Except as provided in paragraph (2), the term “eligible institution” means an institution of higher education, as defined in [section 1002 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1002&num=0&edition=prelim), except that, for the purposes of sections 1077(a)(2)(C)(i) and 1078(b)(1)(M)(i) of this title, an eligible institution includes any institution that is within this definition without regard to whether such institution is participating in any program under this subchapter and includes any institution ineligible for participation in any program under this part pursuant to paragraph (2) of this subsection.
(2) **Ineligibility based on high default rates**
(A) An institution whose cohort default rate is equal to or greater than the threshold percentage specified in subparagraph (B) for each of the three most recent fiscal years for which data are available shall not be eligible to participate in a program under this part for the fiscal year for which the determination is made and for the two succeeding fiscal years, unless, within 30 days of receiving notification from the Secretary of the loss of eligibility under this paragraph, the institution appeals the loss of its eligibility to the Secretary. The Secretary shall issue a decision on any such appeal within 45 days after its submission. Such decision may permit the institution to continue to participate in a program under this part if—
(i) the institution demonstrates to the satisfaction of the Secretary that the Secretary’s calculation of its cohort default rate is not accurate, and that recalculation would reduce its cohort default rate for any of the three fiscal years below the thr
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Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
Section 3841, Pub. L. 97–35, title V, § 581, Aug. 13, 1981, 95 Stat. 475, related to statement of purpose for program of special projects.
Section 3842, Pub. L. 97–35, title V, § 582, Aug. 13, 1981, 95 Stat. 475; Pub. L. 97–300, title I, § 183, Oct. 13, 1982, 96 Stat. 1357; Pub. L. 97–313, Oct. 14, 1982, 96 Stat. 1462, related to authorized activities.
#### Effective Date of Repeal
Repeal effective July 1, 1988, see section 6303 of Pub. L. 100–297, set out as an Effective Date of 1988 Amendment note under [section 1071 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1071&num=0&edition=prelim).
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Federal interest subsidies**
(1) **Types of loans that qualify** — Each student who has received a loan for study at an eligible institution for which the first disbursement is made before July 1, 2010, and—
(A) which is insured by the Secretary under this part; or
(B) which is insured under a program of a State or of a nonprofit private institution or organization which was contracted for, and paid to the student, within the period specified in paragraph (5), and which—
(i) in the case of a loan insured prior to July 1, 1967, was made by an eligible lender and is insured under a program which meets the requirements of subparagraph (E) of subsection (b)(1) and provides that repayment of such loan shall be in installments beginning not earlier than 60 days after the student ceases to pursue a course of study (as described in subparagraph (D) of subsection (b)(1)) at an eligible institution, or
(ii) in the case of a loan insured after June 30, 1967, was made by an eligible lender and is insured under a program covered by an agreement made pursuant to subsection (b),
shall be entitled to have paid on his or her behalf and for his or her account to the holder of the loan a portion of the interest on such loan under circumstances described in paragraph (2).
(2) **Additional requirements to receive subsidy**
(A) Each student qualifying for a portion of an interest payment under paragraph (1) shall—
(i) have provided to the lender a statement from the eligible institution, at which the student has been accepted for enrollment, or at which the student is in attendance, which—
(I) sets forth the loan amount for which the student shows financial need; and
(II) sets forth a schedule for disbursement of the proceeds of the loan in ins
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