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20 U.S.C. § 1072b — Agency Operating Fund
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
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Source location: Title 20, Chapter 28, § 1072b; chapter-028-higher-education-resources-and-student-assistance.md
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**(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 repayment status management, default aversion activities (including those described in [section 1072(h)(8) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072/h/8&num=0&edition=prelim)), default collection activities, school and lender training, financial aid awareness and related outreach activities, compliance monitoring, and other student financial aid related activities, as selected by the guaranty agency.
(2) **Special rule** — The guaranty agency may, in the agency’s discretion, transfer funds from the Operating Fund to the Federal Fund for use pursuant to [section 1072a of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072a&num=0&edition=prelim). Such transfer shall be irrevocable, and any funds so transferred shall become the sole property of the United States.
(3) **Definitions** — For purposes of this subsection:
(A) *Default collection activities* — The term “default collection activities” means activities of a guaranty agency that are directly related to the collection of the loan on which a default claim has been paid to the participating lender, including the due diligence activities required pursuant to regulations of the Secretary.
(B) *Default aversion activities* — The term “default aversion activities” means activities of a guaranty agency that are directly related to providing collection assistance to the lender on a delinquent loan, prior to the loan’s being legally in a default status, including due diligence activities required pursuant to regulations of the Secretary.
(C) *Enrollment and repayment status management* — The term “enrollment and repayment status management” means activities of a guaranty agency that are directly related to ascertaining the student’s enrollment status, including prompt notification to the lender of such status, an audit of the note or written agreement to determine if the provisions of that note or agreement are consistent with the records of the guaranty agency as to the principal amount of the loan guaranteed, and an examination of the note or agreement to assure that the repayment provisions are consistent with the provisions of this part.
**(e) Ownership and regulation of Operating Fund**
(1) **Ownership** — The Operating Fund, with the exception of funds transferred from the Federal Fund in accordance with [section 1072a(f) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072a/f&num=0&edition=prelim), shall be considered to be the property of the guaranty agency.
(2) **Regulation** — Except as provided in paragraph (3), the Secretary may not regulate the uses or expenditure of moneys in the Operating Fund, but the Secretary may require such necessary reports and audits as provided in [section 1078(b)(2) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/b/2&num=0&edition=prelim).
(3) **Exception** — Notwithstanding paragraphs (1) and (2), during any period in which funds are owed to the Federal Fund as a result of transfer under [section 1072a(f) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072a/f&num=0&edition=prelim)—
(A) moneys in the Operating Fund may only be used for expenses related to the student loan programs authorized under this part; and
(B) the Secretary may regulate the uses or expenditure of moneys in the Operating Fund.
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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
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1001
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Establishment** Each guaranty agency shall, not later than 60 days after October 7, 1998, deposit all funds, securities, and other liquid assets contained in the reserve fund established pursuant to [section 1072 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072&num=0&edition=prelim) into a Federal Student Loan Reserve Fund (in this section and [section 1072b of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072b&num=0&edition=prelim) referred to as the “Federal Fund”), which shall be an account of a type selected by the agency, with the approval of the Secretary.
**(b) Investment of funds** Funds transferred to the Federal Fund shall be invested in obligations issued or guaranteed by the United States or a State, or in other similarly low-risk securities selected by the guaranty agency, with the approval of the Secretary. Earnings from the Federal Fund shall be the sole property of the Federal Government.
**(c) Additional deposits** After the establishment of the Federal Fund, a guaranty agency shall deposit into the Federal Fund—
(1) all amounts received from the Secretary as payment of reinsurance on loans pursuant to [section 1078(c)(1) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1078/c/1&num=0&edition=prelim);
(2) from amounts collected on behalf of the obligation of a defaulted borrower, a percentage amount equal to the complement of the reinsurance percentage in effect when payment under the guaranty agreement was made—
(A) with respect to the defaulted loan pursuant to sections 1078(c)(6)(A) 11 See References in Text note below. and 1078–6(a)(1)(B) of this title; and
(B) with respect to a loan that the Secretary h
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1072a
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Administrative expenses**
(1) **Additional mandatory funds for servicing** — There shall be available to the Secretary (in addition to any other amounts appropriated under any appropriations Act for administrative costs under this part and part B and out of any money in the Treasury not otherwise appropriated) $1,000,000,000 to be obligated for administrative costs under this part and part B, including the costs of servicing the direct student loan programs under this part, which shall remain available until expended.
(2) **Repealed. Pub. L. 113–67, div. A, title V, § 502(2), Dec. 26, 2013, 127 Stat. 1187**
(3) **Authorization for administrative costs beginning in fiscal years 2007 through 2014** — For each of the fiscal years 2007 through 2014, there are authorized to be appropriated such sums as may be necessary for administrative costs under this part and part B, including the costs of the direct student loan programs under this part.
(4) **Continuing mandatory funds for account maintenance fees** — For each of the fiscal years 2007 through 2021,11 See Funds for Account Maintenance Fees note below. there shall be available to the Secretary, from funds not otherwise appropriated, funds to be obligated for account maintenance fees payable to guaranty agencies under part B and calculated in accordance with subsection (b).
(5) **Account maintenance fees** — Account maintenance fees under paragraph (3) 22 See References in Text note below. shall be paid quarterly and deposited in the Agency Operating Fund established under [section 1072b of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1072b&num=0&edition=prelim).
(6) **Technical assistance to institutions of higher education**
(A) *Provision of assistance* — The Se
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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
Source: Supplied U.S. Code snapshot — release unconfirmed · 20 U.S.C. § 1078
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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
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Federal law — U.S. Code and appendices · legal_authorities
**(a) State-by-State information** The Secretary shall direct each guaranty agency with which the Secretary has an 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) to provide to the Secretary the information necessary for the development of Internet web links and access for students and families to a comprehensive listing of the postsecondary education opportunities, programs, publications, Internet web sites, and other services available in the States for which such agency serves as the designated guarantor.
**(b) Guaranty agency activities**
(1) **Plan and activity required** — Each guaranty agency with which the Secretary has an 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) shall develop a plan, and undertake the activity necessary, to gather the information required under subsection (a) and to make such information available to the public and to the Secretary in a form and manner as prescribed by the Secretary.
(2) **Activities** — Each guaranty agency shall undertake such activities as are necessary to promote access to postsecondary education for students through providing information on college planning, career preparation, and paying for college. The guaranty agency shall publicize such information and coordinate such activities with other entities that either provide or distribute such information in the States for which such guaranty agency serves as the designated guarantor.
(3) **Funding** — The activities required by this section may be funded from the guaranty agency’s Operating Fund established pursuant to [section 1072b of this title](https://
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Federal law — U.S. Code and appendices · legal_authorities
Page 403
TITLE 20—EDUCATION
§ 1072b
1 See References in Text note below.
Editorial Notes
REFERENCES IN TEXT
Section 1078(c)(6)(A) of this title, referred to in sub-
sec. (c)(2)(A), was redesignated section 1078(c)(6)(A)(i) of
this title by Pub. L. 109–171, title VIII, § 8014(d)(3)(A),
(B), Feb. 8, 2006, 120 Stat. 170.
AMENDMENTS
2008—Subsec. (d)(1). Pub. L. 110–315 substituted ‘‘and
1087’’ for ‘‘1087, and 1087–2(q)’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE
Section effective Oct. 1, 1998, except as otherwise pro-
vided in Pub. L. 105–244, see section 3 of Pub. L. 105–244,
set out as an Effective Date of 1998 Amendment note
under section 1001 of this title.
§ 1072b. Agency Operating Fund
(a) Establishment
Each guaranty agency shall, not later than 60
days after October 7, 1998, establish a fund des-
ignated 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;
(2) 30 percent of amounts received after Oc-
tober 7, 1998, from the Secretary as payment
for administrative cost allowances for loans
upon which insurance was issued prior to Oc-
tober 7, 1998;
(3) the account maintenance fee paid by the
Secretary in accordance with section 1087h of
this title;
(4) the default aversion fee paid in accord-
ance with section 1078(l) of this title;
(5) amounts remaining pursuant to section
1078(c)(6)(B) 1 of this title from collection on
defaulted loans held by t
Source: Supplied 2024 U.S. Code historical extraction · 20 U.S.C. § 1072b
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