Browse Arkansas Code titles and sections
20 U.S.C. § 1078–6 — Default reduction program
Federal law — U.S. Code and appendices · legal_authorities
**(a) Other repayment incentives**
(1) **Sale or assignment of loan**
(A) *In general* — Each guaranty agency, upon securing 9 payments made within 20 days of the due date during 10 consecutive months of amounts owed on a loan for which the Secretary has made a payment under paragraph (1) of [section 1078(c) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/c&num=0&edition=prelim), shall—
(i) if practicable, sell the loan to an eligible lender; or
(ii) beginning July 1, 2014, assign the loan to the Secretary if the guaranty agency has been unable to sell the loan under clause (i).
(B) *Monthly payments* — Neither the guaranty agency nor the Secretary shall demand from a borrower as monthly payment amounts described in subparagraph (A) more than is reasonable and affordable based on the borrower’s total financial circumstances. With respect to a borrower who has 1 or more loans made under part D on or after July 1, 2027 that are described in subparagraph (A), the total monthly payment of the borrower for all such loans shall not be less than $10.
(C) *Consumer reporting agencies* — Upon the sale or assignment of the loan, the Secretary, guaranty agency or other holder of the loan shall request any consumer reporting agency to which the Secretary, guaranty agency or holder, as applicable, reported the default of the loan, to remove the record of the default from the borrower’s credit history.
(D) *Duties upon sale* — With respect to a loan sold under subparagraph (A)(i)—
(i) the guaranty agency—
(I) shall, in the case of a sale made on or after July 1, 2014, repay the Secretary 100 percent of the amount of the principal balance outstanding at the time of such sale, multiplied by the reinsuran
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1078–6
Stored review status: release_metadata_unconfirmed. A text match is a research starting point; applicability is not established.
Original supplied file — preserved unchanged
Download original Markdown file
File SHA-256: 39634293cd5cbce515c566402179a099cc6de4510208a718175b060afae56d49. The original may include catalog metadata, neighboring provisions, or embedded records outside this collection's scope. Search shows only the selected federal record. Historical editions and unverified snapshots are not a statement of current law.
Authority boundary: historical or unconfirmed source not current law verified.
Record provenance
Stable record: federal_law:legal_authorities:record_usc_768ccb55874ce0016b14623d
Source file: Laws/federal/codes/united-states-code/title-20/section-10786-default-reduction-program--263f8ecf22.md
Pages: Not recorded – Not recorded
Passage SHA-256: b31f6ac572e45220008e9937c7be823174e1e0cc113dc5aa4c00279cc77b6310
Source location: Title 20, Chapter 28, § 1078–6; chapter-028-higher-education-resources-and-student-assistance.md
Stored source content
**(a) Other repayment incentives**
(1) **Sale or assignment of loan**
(A) *In general* — Each guaranty agency, upon securing 9 payments made within 20 days of the due date during 10 consecutive months of amounts owed on a loan for which the Secretary has made a payment under paragraph (1) of [section 1078(c) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/c&num=0&edition=prelim), shall—
(i) if practicable, sell the loan to an eligible lender; or
(ii) beginning July 1, 2014, assign the loan to the Secretary if the guaranty agency has been unable to sell the loan under clause (i).
(B) *Monthly payments* — Neither the guaranty agency nor the Secretary shall demand from a borrower as monthly payment amounts described in subparagraph (A) more than is reasonable and affordable based on the borrower’s total financial circumstances. With respect to a borrower who has 1 or more loans made under part D on or after July 1, 2027 that are described in subparagraph (A), the total monthly payment of the borrower for all such loans shall not be less than $10.
(C) *Consumer reporting agencies* — Upon the sale or assignment of the loan, the Secretary, guaranty agency or other holder of the loan shall request any consumer reporting agency to which the Secretary, guaranty agency or holder, as applicable, reported the default of the loan, to remove the record of the default from the borrower’s credit history.
(D) *Duties upon sale* — With respect to a loan sold under subparagraph (A)(i)—
(i) the guaranty agency—
(I) shall, in the case of a sale made on or after July 1, 2014, repay the Secretary 100 percent of the amount of the principal balance outstanding at the time of such sale, multiplied by the reinsurance percentage in effect when payment under the guaranty agreement was made with respect to the loan; and
(II) may, in the case of a sale made on or after July 1, 2014, in order to defray collection costs—
(aa) charge to the borrower an amount not to exceed 16 percent of the outstanding principal and interest at the time of the loan sale; and
(bb) retain such amount from the proceeds of the loan sale; and
(ii) the Secretary shall reinstate the Secretary’s obligation to—
(I) reimburse the guaranty agency for the amount that the agency may, in the future, expend to discharge the guaranty agency’s insurance obligation; and
(II) pay to the holder of such loan a special allowance pursuant to [section 1087–1 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1087-1&num=0&edition=prelim).
(E) *Duties upon assignment* — With respect to a loan assigned under subparagraph (A)(ii)—
(i) the guaranty agency shall add to the principal and interest outstanding at the time of the assignment of such loan an amount equal to the amount described in subparagraph (D)(i)(II)(aa); and
(ii) the Secretary shall pay the guaranty agency, for deposit in the agency’s Operating Fund established pursuant to [section 1072b of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072b&num=0&edition=prelim), an amount equal to the amount added to the principal and interest outstanding at the time of the assignment in accordance with clause (i).
(F) *Eligible lender limitation* — A loan shall not be sold to an eligible lender under subparagraph (A)(i) if such lender has been found by the guaranty agency or the Secretary to have substantially failed to exercise the due diligence required of lenders under this part.
(G) *Default due to error* — A loan that does not meet the requirements of subparagraph (A) may also be eligible for sale or assignment under this paragraph upon a determination that the loan was in default due to clerical or data processing error and would not, in the absence of such error, be in a delinquent status.
(2) **Use of proceeds of sales** — Amounts received by the Secretary pursuant to the sale of such loans by a guaranty agency under paragraph (1)(A)(i) shall be deducted from the calculations of the amount of reimbursement for which the agency is eligible under paragraph (1)(D)(ii)(I) for the fiscal year in which the amount was received, notwithstanding the fact that the default occurred in a prior fiscal year.
(3) **Borrower eligibility** — Any borrower whose loan is sold or assigned under paragraph (1)(A) shall not be precluded by [section 1091 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1091&num=0&edition=prelim) from receiving additional loans or grants under this subchapter (for which he or she is otherwise eligible) on the basis of defaulting on the loan prior to such loan sale or assignment.
(4) **Applicability of general loan conditions** — A loan that is sold or assigned under paragraph (1) shall, so long as the borrower continues to make scheduled repayments thereon, be subject to the same terms and conditions and qualify for the same benefits and privileges as other loans made under this part.
(5) **Limitation** — A borrower may obtain the benefits available under this subsection with respect to rehabilitating a loan (whether by loan sale or assignment) only one time per loan.
**(b) Satisfactory repayment arrangements to renew eligibility** Each guaranty agency shall establish a program which allows a borrower with a defaulted loan or loans to renew eligibility for all subchapter IV student financial assistance (regardless of whether the defaulted loan has been sold to an eligible lender or assigned to the Secretary) upon the borrower’s payment of 6 consecutive monthly payments. The guaranty agency shall not demand from a borrower as a monthly payment amount under this subsection more than is reasonable and affordable based upon the borrower’s total financial circumstances. A borrower may only obtain the benefit of this subsection with respect to renewed eligibility once.
**(c) Financial and economic literacy** Each program described in subsection (b) shall include making available financial and economic education materials for a borrower who has rehabilitated a loan.
Cross-references
Connections may be documented source relationships, shared citations or nearby passages. Each explains its basis; a connection alone does not establish applicability to your situation.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Terms and conditions**
(1) Loans from any student loan fund established pursuant to an agreement under [section 1087cc of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1087cc&num=0&edition=prelim) to any student by any institution shall, subject to such conditions, limitations, and requirements as the Secretary shall prescribe by regulation, be made on such terms and conditions as the institution may determine.
(2)
(A) Except as provided in paragraph (4), the total of loans made to a student in any academic year or its equivalent by an institution of higher education from a loan fund established pursuant to an agreement under this part shall not exceed—
(i) $5,500, in the case of a student who has not successfully completed a program of undergraduate education; or
(ii) $8,000, in the case of a graduate or professional student (as defined in regulations issued by the Secretary).
(B) Except as provided in paragraph (4), the aggregate unpaid principal amount for all loans made to a student by institutions of higher education from loan funds established pursuant to agreements under this part may not exceed—
(i) $60,000, in the case of any graduate or professional student (as defined by regulations issued by the Secretary, and including any loans from such funds made to such person before such person became a graduate or professional student);
(ii) $27,500, in the case of a student who has successfully completed 2 years of a program of education leading to a bachelor’s degree but who has not completed the work necessary for such a degree (determined under regulations issued by the Secretary), and including any loans from such funds made to such person before such person became such a student; and
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1087dd
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
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
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1001
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
Section, Pub. L. 89–329, title IV, § 420R, as added Pub. L. 111–39, title IV, § 401(a)(9), July 1, 2009, 123 Stat. 1939, related to grants for veteran’s dependents, known as Iraq and Afghanistan Service Grants.
#### Effective Date of Repeal
Repeal effective as if included in title VII of div. FF of Pub. L. 116–260 and subject to the effective date of section 701(b) of title VII (July 1, 2024), see section 103(d) of div. R of Pub. L. 117–103, set out as an Effective Date of 2022 Amendment note under [section 1070a of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1070a&num=0&edition=prelim).
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1070
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
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
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1002
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Establishment** Each guaranty agency shall, not later than 60 days after October 7, 1998, establish a fund designated as the Operating Fund.
**(b) Investment of funds** Funds deposited into the Operating Fund shall be invested at the discretion of the guaranty agency in accordance with prudent investor standards.
**(c) Additional deposits** After the establishment of the Operating Fund, the guaranty agency shall deposit into the Operating Fund—
(1) the loan processing and issuance fee paid by the Secretary pursuant to [section 1078(f) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/f&num=0&edition=prelim);
(2) 30 percent of amounts received after October 7, 1998, from the Secretary as payment for administrative cost allowances for loans upon which insurance was issued prior to October 7, 1998;
(3) the account maintenance fee paid by the Secretary in accordance with [section 1087h of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1087h&num=0&edition=prelim);
(4) the default aversion fee paid in accordance with section 1078(l) of this title;
(5) amounts remaining pursuant to section 1078(c)(6)(B) 11 See References in Text note below. of this title from collection on defaulted loans held by the agency, after payment of the Secretary’s equitable share, excluding amounts deposited in the Federal Fund pursuant to [section 1072a(c)(2) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072a/c/2&num=0&edition=prelim); and
(6) other receipts as specified in regulations of the Secretary.
**(d) Uses of funds**
(1) **In general** — Funds in the Operating Fund shall be used for application processing, loan disbursement, enrollment and repay
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1072b
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Authorizations**
(1) **Part A**
(A) There are authorized to be appropriated to carry out part A (other than sections 1059c through 1059g of this title), $135,000,000 for fiscal year 2009, and such sums as may be necessary for each of the five succeeding fiscal years.
(B) There are authorized to be appropriated to carry out [section 1059c of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1059c&num=0&edition=prelim), $30,000,000 for fiscal year 2009, and such sums as may be necessary for each of the five succeeding fiscal years.
(C) There are authorized to be appropriated to carry out [section 1059d of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1059d&num=0&edition=prelim), $15,000,000 for fiscal year 2009, and such sums as may be necessary for each of the five succeeding fiscal years.
(D) There are authorized to be appropriated to carry out [section 1059e of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1059e&num=0&edition=prelim), $75,000,000 for fiscal year 2009 and each of the five succeeding fiscal years.
(E) There are authorized to be appropriated to carry out [section 1059f of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1059f&num=0&edition=prelim), $25,000,000 for fiscal year 2009, and such sums as may be necessary for each of the five succeeding fiscal years.
(F) There are authorized to be appropriated to carry out [section 1059g of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1059g&num=0&edition=prelim), $30,000,000 for fiscal year 2009, and such sums as may be necessary for each of the five succeeding fiscal years.
(2) **Part
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1051
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** In order to receive any grant, loan, or work assistance under this subchapter, a student must—
(1) be enrolled or accepted for enrollment in a degree, certificate, or other program (including a program of study abroad approved for credit by the eligible institution at which such student is enrolled) leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of [section 1094 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1094&num=0&edition=prelim), except as provided in subsections (b)(3) and (b)(4), and not be enrolled in an elementary or secondary school;
(2) if the student is presently enrolled at an institution, be maintaining satisfactory progress in the course of study the student is pursuing in accordance with the provisions of subsection (c);(q)
(3) not owe a refund on grants previously received at any institution under this subchapter, or be in default on any loan from a student loan fund at any institution provided for in part E, or a loan made, insured, or guaranteed by the Secretary under this subchapter for attendance at any institution;
(4) file with the Secretary, as part of the original financial aid application process, a certification, which need not be notarized, but which shall include—
(A) a statement of educational purpose stating that the money attributable to such grant, loan, or loan guarantee will be used solely for expenses related to attendance or continued attendance at such institution; and
(B) such student’s social security number;
(5) be a citizen or national of the United States, a permanent resident of the United States, or able to provide evidence from the Immigration and N
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1091
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.