20 U.S.C. § 1083a — Consumer education information

Page 494 TITLE 20—EDUCATION § 1083a 101 Stat. 346; Pub. L. 102–325, title IV, § 426, July 23, 1992, 106 Stat. 548; Pub. L. 103–208, § 2(c)(53), (54), (k)(4), Dec. 20, 1993, 107 Stat. 2468, 2485; Pub. L. 105–244, title IV, § 428, Oct. 7, 1998, 112 Stat. 1704; Pub. L. 110–315, title IV, § 434(a), Aug. 14, 2008, 122 Stat. 3247.) Editorial Notes REFERENCES IN TEXT The Truth in Lending Act, referred to in subsec. (f)(3), is title I of Pub. L. 90–321, May 29, 1968, 82 Stat. 146, which is classified generally to subchapter I (§ 1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables. PRIOR PROVISIONS A prior section 1083, Pub. L. 89–329, title IV, § 433, Nov. 8, 1965, 79 Stat. 1247; Pub. L. 90–575, title I, § 116(d), Oct. 16, 1968, 82 Stat. 1024; Pub. L. 92–318, title I, § 132(c), June 23, 1972, 86 Stat. 261; Pub. L. 94–482, title I, § 127(a), Oct. 12, 1976, 90 Stat. 2129; Pub. L. 95–43, § 1(a)(34), June 15, 1977, 91 Stat. 216; Pub. L. 96–374, title XIII, § 1391(a)(1), Oct. 3, 1980, 94 Stat. 1503, related to require- ments for institutional lenders, prior to the general re- vision of this part by Pub. L. 99–498. AMENDMENTS 2008—Pub. L. 110–315 amended section generally. Prior to amendment, section consisted of subsecs. (a) to (e) relating to student loan information by eligible lend- ers. 1998—Subsec. (a). Pub. L. 105–244, § 428(a), amended heading and introductory provisions generally. Prior to amendment, introductory provisions read as follows: ‘‘Each eligible lender shall, at or prior to the time such lender disburses a loan which is insured or guaranteed under this part (other than a loan made under section 1078–3 of this title), provide thorough and accurate loan information on such loan to the borrower. Any disclo- sure required by this subsection may be made by an eligible lender as part of the written application mate- rial provided to the borrower, or as part of the promis- sory note evidencing the loan, or on a separate written form provided to the borrower. The disclosure shall in- clude—’’. Subsec. (b). Pub. L. 105–244, § 428(b), amended heading and introductory provisions generally. Prior to amend- ment, introductory provisions read as follows: ‘‘Each eligible lender shall, at or prior to the start of the re- payment period of the student borrower on loans made, insured, or guaranteed under this part, disclose to the borrower the information required under this sub- section. For any loan made, insured, or guaranteed under this part, other than a loan made under section 1078–2 or 1078–3 of this title, such disclosure required by this subsection shall be made not less than 30 days nor more than 240 days before the first payment on the loan is due from the borrower. The disclosure shall include—’’. 1993—Subsec. (b). Pub. L. 103–208, § 2(c)(53), sub- stituted ‘‘30 days’’ for ‘‘60 days’’ in introductory provi- sions. Subsec. (e). Pub. L. 103–208, § 2(k)(4), amended direc- tory language of Pub. L. 102–325, § 426(c). See 1992 Amendment note below. Pub. L. 103–208, § 2(c)(54), substituted ‘‘sections’’ for ‘‘section’’ before ‘‘1078–1’’. 1992—Subsec. (a). Pub. L. 102–325, § 426(a), added par. (1) and redesignated former pars. (1) to (13) as (2) to (14), respectively. Subsec. (b). Pub. L. 102–325, § 426(b)(1), in introductory provisions, inserted second sentence and struck out former second sentence which read as follows: ‘‘Any disclosure required by this subsection may be made by an eligible lender either in a promissory note evidenc- ing the loan or loans or in a written statement pro- vided to the borrower.’’ Subsec. (b)(8). Pub. L. 102–325, § 426(b)(2), inserted ‘‘ex- cept as provided in subsection (e) of this section,’’ be- fore ‘‘the projected’’. Subsec. (e). Pub. L. 102–325, § 426(c), as amended by Pub. L. 103–208, § 2(k)(4), added subsec. (e). 1987—Subsec. (a). Pub. L. 100–50, § 10(z)(1), inserted ‘‘(other than a loan made under section 1078–3 of this title)’’ after ‘‘this part’’ in first sentence. Subsec. (a)(8). Pub. L. 100–50, § 10(z)(2), added par. (8) and struck out former par. (8) which read as follows: ‘‘a statement of the total cumulative balance, including the loan applied for, owed by the student to that lend- er, the projected level of indebtedness of the student based on a 4-year college career, and an estimate of the projected monthly repayment given the level of indebt- edness over a 4- or 5-year college career;’’. Subsec. (b)(7). Pub. L. 100–50, § 10(z)(3), inserted ‘‘, except that such explanation is not required when the loan being made is a consolidation loan under sec- tion 1078–3 of this title’’ before semicolon at end. Subsec. (d). Pub. L. 100–50, § 10(z)(4), substituted ‘‘no- tifies a borrower of approval of a loan’’ for ‘‘makes the first disbursement of a loan with respect to a bor- rower’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Pub. L. 110–315, title IV, § 434(b), Aug. 14, 2008, 122 Stat. 3252, provided that: ‘‘(1) REGULAR DISCLOSURE REQUIREMENTS AND DISCLO- SURE REQUIREMENTS TO BORROWERS HAVING DIFFICULTY MAKING PAYMENTS.—Paragraphs (1) and (2) of section 433(e) of the Higher Education Act of 1965 [20 U.S.C. 1083(e)(1), (2)], as amended by subsection (a), shall apply with respect to loans for which the first payment is due on or after July 1, 2009. ‘‘(2) DISCLOSURE REQUIREMENTS FOR BORROWERS WITH DELINQUENT LOANS.—Section 433(e)(3) of the Higher Edu- cation Act of 1965 [20 U.S.C. 1083(e)(3)], as amended by subsection (a), shall apply with respect to loans that become delinquent on or after July 1, 2009.’’ EFFECTIVE DATE OF 1998 AMENDMENT Amendment by Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see sec- tion 3 of Pub. L. 105–244, set out as a note under section 1001 of this title. EFFECTIVE DATE OF 1993 AMENDMENT Amendment by section 2(c)(53) of Pub. L. 103–208 ef- fective on and after 60 days after Dec. 20, 1993 and amendments by section 2(c)(54), (k)(4) of Pub. L. 103–208 effective, except as otherwise provided, as if included in the Higher Education Amendments of 1992, Pub. L. 102–325, see section 5(a), (b)(4) of Pub. L. 103–208, set out as a note under section 1051 of this title. EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100–50 effective as if enacted as part of the Higher Education Amendments of 1986, Pub. L. 99–498, see section 27 of Pub. L. 100–50, set out as a note under section 1001 of this title. EFFECTIVE DATE Section effective Oct. 17, 1986, with subsecs. (a), (b), and (d) of this section applicable only with respect to loans disbursed on or after Jan. 1, 1987, or made to cover the costs of instruction for periods of enrollment beginning on or after Jan. 1, 1987, see section 402(b) of Pub. L. 99–498, set out as a note under section 1071 of this title. § 1083a. Consumer education information (a) In general Each guaranty agency participating in a pro- gram under this part, working with the institu- Page 495 TITLE 20—EDUCATION § 1085 tions of higher education served by such guar- anty agency, shall develop and make available high-quality educational programs and mate- rials to provide training for students and fami- lies in budgeting and financial management, in- cluding debt management and other aspects of financial literacy, such as the cost of using high interest loans to pay for postsecondary edu- cation, particularly as budgeting and financial management relates to student loan programs authorized by this subchapter. Such programs and materials shall be in formats that are sim- ple and understandable to students and families, and shall be provided before, during, and after the students’ enrollment in an institution of higher education. The activities described in this section shall be considered default reduc- tion activities for the purposes of section 1072 of this title. (b) Rule of construction Nothing in this section shall be construed to prohibit— (1) a guaranty agency from using existing activities, programs, and materials in meeting the requirements of this section; (2) a guaranty agency from providing pro- grams or materials similar to the programs or materials described in subsection (a) to an in- stitution of higher education that provides loans exclusively through part D; or (3) a lender or loan servicer from providing outreach or financial aid literacy information in accordance with subsection (a). (Pub. L. 89–329, title IV, § 433A, as added Pub. L. 110–315, title IV, § 435, Aug. 14, 2008, 122 Stat. 3252.) Editorial Notes PRIOR PROVISIONS A prior section 1083a, Pub. L. 89–329, title IV, § 433A, as added Pub. L. 96–374, title IV, § 418, Oct. 3, 1980, 94 Stat. 1423; amended Pub. L. 97–301, § 13(a), Oct. 13, 1982, 96 Stat. 1404; Pub. L. 98–79, § 3(a), Aug. 15, 1983, 97 Stat. 476; Pub. L. 99–272, title XVI, § 16012(c), Apr. 7, 1986, 100 Stat. 340, related to student loan information to be pro- vided by eligible lenders, prior to the general revision of this part by Pub. L. 99–498. See section 1083 of this title. § 1084. Participation by Federal credit unions in Federal, State, and private student loan in- surance programs Notwithstanding any other provision of law, Federal credit unions shall, pursuant to regula- tions of the National Credit Union Administra- tion, have power to make insured loans to stu- dent members in accordance with the provisions of this part relating to federally insured loans, or in accordance with the provisions of any State or nonprofit private student loan insur- ance program which meets the requirements of section 1078(a)(1)(B) of this title. (Pub. L. 89–329, title IV, § 434, as added Pub. L. 99–498, title IV, § 402(a), Oct. 17, 1986, 100 Stat. 1408.) Editorial Notes PRIOR PROVISIONS A prior section 1084, Pub. L. 89–329, title IV, § 434, Nov. 8, 1965, 79 Stat. 1247; Pub. L. 90–575, title I, § 116(b)(4), Oct. 16, 1968, 82 Stat. 1024; Pub. L. 91–206, § 6, Mar. 10, 1970, 84 Stat. 51; Pub. L. 92–318, title I, § 132D(e), June 23, 1972, 86 Stat. 264; Pub. L. 94–482, title I, § 127(a), Oct. 12, 1976, 90 Stat. 2129; Pub. L. 95–630, title V, § 502(a), Nov. 10, 1978, 92 Stat. 3681, related to participation by Fed- eral credit unions in Federal, State, and private stu- dent loan insurance programs, prior to the general revi- sion of this part by Pub. L. 99–498. § 1085. Definitions for student loan insurance program As used in this part: (a) Eligible institution (1) In general Except as provided in paragraph (2), the term ‘‘eligible institution’’ means an institu- tion of higher education, as defined in section 1002 of this title, 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 sub- chapter and includes any institution ineligible for participation in any program under this part pursuant to paragraph (2) of this sub- section. (2) Ineligibility based on high default rates (A) An institution whose cohort default rate is equal to or greater than the threshold per- centage specified in subparagraph (B) for each of the three most recent fiscal years for which data are available shall not be eligible to par- ticipate 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 sat- isfaction of the Secretary that the Sec- retary’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 threshold percentage specified in subparagraph (B); (ii) there are exceptional mitigating cir- cumstances within the meaning of para- graph (5); or (iii) there are, in the judgment of the Sec- retary, other exceptional mitigating cir- cumstances that would make the application of this paragraph inequitable. During such appeal, the Secretary may permit the institution to continue to participate in a program under this part. If an institution con- tinues to participate in a program under this part, and the institution’s appeal of the loss of eligibility is unsuccessful, the institution shall be required to pay to the Secretary an amount equal to the amount of interest, spe- cial allowance, reinsurance, and any related payments made by the Secretary (or which the