20 U.S.C. § 1092a — Combined payment plan

Page 689 TITLE 20—EDUCATION § 1092a apply prepayments to loans with the highest interest rate to ensure consistency across servicers, unless oth- erwise instructed by borrowers. (b) Regular Review of Student Loan Performance and Borrower Trends. The Director of the Office of Manage- ment and Budget and the Secretary of Education shall convene quarterly an interagency task force consisting of the Department of the Treasury, Department of Edu- cation, Office of Management and Budget, and Domes- tic Policy Council to monitor trends in the student loan portfolio, budget costs, and borrower assistance ef- forts. No later than August 1, 2015, the task force shall review recommendations for the Department of Edu- cation from its members and the Consumer Financial Protection Bureau on best practices in performance- based contracting to better ensure that servicers help borrowers responsibly make affordable monthly pay- ments on their student loans. (c) Additional Protections for Student Loan Borrowers. By October 1, 2015, the Secretary of Education, in con- sultation with the Secretary of the Treasury and the Director of the Consumer Financial Protection Bureau, shall issue a report to the President, through the Direc- tor of the Domestic Policy Council and the Director of the Office of Management and Budget, on (i) whether statutory or regulatory changes are needed to current provisions that permit the Secretary of Education to specify acts or omissions at institutions of higher edu- cation that borrowers may assert as a defense to repay- ment of a direct loan; and (ii) after assessing the poten- tial applicability of consumer protections in the mort- gage and credit card markets to student loans, rec- ommendations for statutory or regulatory changes in this area, including, where appropriate, strong serv- icing standards, flexible repayment opportunities for all student loan borrowers, and changes to bankruptcy laws. (d) Higher Customer Service Standards in Income-Driven Repayment Plans. By October 1, 2015, the Secretary of Education and the Secretary of the Treasury shall re- port to the President, through the Director of the Do- mestic Policy Council and the Director of the Office of Management and Budget, on the feasibility of devel- oping a system to give borrowers the opportunity to authorize the Internal Revenue Service to release in- come information for multiple years for the purposes of automatically determining monthly payments under income-driven repayment plans. (e) Finding New and Better Ways to Communicate with Student Loan Borrowers. By January 1, 2016, the Sec- retary of Education shall report to the President, through the Director of the Domestic Policy Council, on the findings of a pilot program to test new methods for communicating with borrowers who have Federal Direct student loans on which they are at least 140 days delinquent but which have not entered default. By Jan- uary 1, 2017, the Secretary shall also, in consultation with the Director of the White House Office of Science and Technology Policy, develop and implement at least five behaviorally designed pilot programs to identify the most effective ways to communicate with bor- rowers to maximize successful borrower repayment and help reduce delinquency and default and report to the President, through the Director of the Domestic Policy Council, on the status and results of those pilot pro- grams. (f) Making it Easier for Federal Direct Student Loan Bor- rowers to Repay Their Student Loans. As soon as prac- ticable, the Secretary of Education shall establish a centralized point of access for all Federal student loan borrowers in repayment, including a central location for account information and payment processing for all Federal student loan servicing, regardless of the spe- cific servicer. SEC. 3. Fair Treatment for Struggling and Distressed Bor- rowers. (a) Raising Standards for Student Loan Debt Collectors. By July 1, 2015, the Secretary of Education shall imple- ment actions to ensure that the debt collection process for defaulted Federal student loans is fair, transparent, charges reasonable fees to defaulted borrowers, and ef- fectively assists borrowers in meeting their obligations and returning to good standing. By January 1, 2016, the Secretary of Education shall publish a quarterly per- formance report on the Department’s private debt col- lection agency contractors that includes the under- lying data, disaggregated by contractor. (b) Providing Clarity on the Rights of Borrowers in Bankruptcy. By July 1, 2015, the Secretary of Education shall issue information highlighting factors the courts have used in their determination of undue hardship, to assist parties who must determine whether to contest an undue hardship discharge in bankruptcy of a Federal student loan. (c) Protecting Social Security Benefits for Borrowers with Disabilities. By July 1, 2015, the Secretary of Education and the Director of the Office of Management and Budget, in consultation with the Commissioner of So- cial Security, shall develop a plan to identify Federal student loan borrowers who receive Social Security Disability Insurance (SSDI) and determine which bene- ficiaries qualify for a total and permanent disability discharge of their student loans under the Higher Edu- cation Act of 1965. The plan shall specify a process for the Secretary of Education to stop collection on quali- fied borrowers in order to ensure that SSDI benefits are not reduced to repay student loans that are eligible for discharge. In addition, the Secretary of Education and the Director of the Office of Management and Budget, in consultation with the Commissioner of Social Secu- rity, shall identify the best way to communicate with other SSDI recipients who hold student loans about their repayment options, including income-driven plans, and assist them in entering those plans. (d) Debt Collection Pilot Program. By July 1, 2016, the Secretary of the Treasury, in consultation with the Secretary of Education, shall report to the President, through the Director of the Domestic Policy Council and the Director of the Office of Management and Budget, on the initial findings of an ongoing pilot pro- gram that uses the Department of the Treasury’s Bu- reau of the Fiscal Service to collect on a sample of de- faulted Federal student loan debts to help determine how to improve the collection process for defaulted Federal student loans. SEC. 4. General Provisions. (a) Nothing in this memo- randum shall be construed to impair or otherwise af- fect: (i) the authority granted by law to an agency, or the head thereof; or (ii) the functions of the Director of the Office of Man- agement and Budget relating to budgetary, administra- tive, or legislative proposals. (b) This memorandum shall be implemented con- sistent with applicable law and subject to the avail- ability of appropriations. (c) This memorandum is not intended to, and does not, create any right or benefit, substantive or proce- dural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. (d) The Secretary of Education is hereby authorized and directed to publish this memorandum in the Fed- eral Register. BARACK OBAMA. § 1092a. Combined payment plan (a) Eligibility for plan Upon the request of the borrower, a lender de- scribed in subparagraph (A), (B), or (C) of sec- tion 1078–3(a)(1) of this title, or an eligible lend- er as defined in section 719 of the Public Health Service Act (42 U.S.C. 292o) 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 Page 690 TITLE 20—EDUCATION § 1092a 1 See References in Text note below. of this title) and loans guaranteed under part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.), 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 pe- riod 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 pro- visions of part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.) appli- cable 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 bor- rower which is selected for inclusion in a com- bined 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 bor- rower for incorporation into a combined pay- ment 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 ad- minister a combined payment plan for a bor- rower, 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 loan under part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.) se- lected 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 regula- tions; 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 707(e)(3) of the Public Health Service Act [42 U.S.C. 292f(e)(3)]) at the time the request for a combined payment plan is made. (f) Notes and insurance certificates (1) Each loan reissued under subsection (e) shall be evidenced by a note executed by the borrower. The Secretary of Health and Human Services shall insure such loan under a certifi- cate of comprehensive insurance with no insur- ance limit, but any such certificate shall only be issued to an authorized holder of loans insured under part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.) (including the Student Loan Marketing Association). Such cer- tificates 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 sec- tion 710 of the Public Health Service Act [42 U.S.C. 292i]. Notwithstanding the provisions of section 729(a) 1 of the Public Health Service Act, the reissued loan shall be made in an amount, including outstanding principal, capitalized in- terest, accrued unpaid interest not yet capital- ized, 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 re- payment period for a loan reissued under this section shall not exceed the remainder of the pe- riod which would have been permitted on the original loan. If the lender holds more than one loan insured under part A of title VII of the Pub- lic Health Service Act (42 U.S.C. 292 et seq.), the maximum repayment period for all such loans may extend to the latest date permitted for any individual loan. Any reissued loan may be con- solidated with any other Health Education As- sistance 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 ac- crues on such loans during that period. (g) Termination of borrower eligibility The status of an individual as an eligible com- bined 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 insur- ance 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 ad- minister a combined payment plan, the making of the consolidation loan or the reissuance of any Health Education Assistance Loans pursu- ant to subsection (e). (Pub. L. 89–329, title IV, § 485A, as added Pub. L. 99–498, title IV, § 407(a), Oct. 17, 1986, 100 Stat. Page 691 TITLE 20—EDUCATION § 1092b 1484; amended Pub. L. 100–50, § 15(12), June 3, 1987, 101 Stat. 357; Pub. L. 111–39, title IV, § 407(b)(6), July 1, 2009, 123 Stat. 1951.) Editorial Notes REFERENCES IN TEXT The Public Health Service Act, referred to in subsecs. (a), (b), (e), and (f), is act July 1, 1944, ch. 373, 58 Stat. 682, which is classified generally to chapter 6A (§ 201 et seq.) of Title 42, The Public Health and Welfare. Part A of title VII of the Act is classified generally to part A (§ 292 et seq.) of subchapter V of chapter 6A of Title 42. Section 729 of the Act was classified to section 294b of Title 42 and was omitted in the general revision of sub- chapter V of chapter 6A by Pub. L. 102–408, title I, § 102, Oct. 13, 1992, 106 Stat. 1994. For complete classification of this Act to the Code, see Short Title note set out under section 201 of Title 42 and Tables. AMENDMENTS 2009—Subsec. (a). Pub. L. 111–39, § 407(b)(6)(A), sub- stituted ‘‘or an eligible lender as defined in section 719 of the Public Health Service Act (42 U.S.C. 292o)’’ for ‘‘or defined in subpart I of part C of title VII of the Public Health Service Act’’ and ‘‘under part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.)’’ for ‘‘under subpart I of part C of title VII of the Public Health Service Act (known as Health Education Assistance Loans)’’. Subsec. (b). Pub. L. 111–39, § 407(b)(6)(B), substituted ‘‘part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.)’’ for ‘‘subpart I of part C of title VII of the Public Health Service Act’’. Subsec. (e). Pub. L. 111–39, § 407(b)(6)(C)(i), substituted ‘‘loan under part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.)’’ for ‘‘Health Edu- cation Assistance Loan’’ in introductory provisions. Subsec. (e)(2). Pub. L. 111–39, § 407(b)(6)(C)(ii), sub- stituted ‘‘707(e)(3)’’ for ‘‘733(e)(3)’’. Subsec. (f)(1). Pub. L. 111–39, § 407(b)(6)(D)(i), sub- stituted ‘‘part A of title VII of the Public Health Serv- ice Act (42 U.S.C. 292 et seq.)’’ for ‘‘subpart I of part C of title VII of the Public Health Service Act’’ and ‘‘710’’ for ‘‘728(a)’’. Subsec. (f)(2). Pub. L. 111–39, § 407(b)(6)(D)(ii), sub- stituted ‘‘part A of title VII of the Public Health Serv- ice Act (42 U.S.C. 292 et seq.)’’ for ‘‘subpart I of part C of title VII of the Public Health Service Act’’. 1987—Subsec. (a). Pub. L. 100–50 substituted ‘‘subpara- graph (A), (B), or (C)’’ for ‘‘clause (i), (ii), or (iii)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2009 AMENDMENT Amendment by Pub. L. 111–39 effective as if enacted on the date of enactment of Pub. L. 110–315 (Aug. 14, 2008), see section 3 of Pub. L. 111–39, set out as a note under section 1001 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. § 1092b. National Student Loan Data System (a) Development of System The Secretary shall consult with a representa- tive group of guaranty agencies, eligible lenders, and eligible institutions to develop a mutually agreeable proposal for the establishment of a National Student Loan Data System containing information regarding loans made, insured, or guaranteed under part B and loans made under parts D and E, and for allowing the electronic exchange of data between program participants and the system. In establishing such data sys- tem, the Secretary shall place a priority on pro- viding for the monitoring of enrollment, student status, information about current loan holders and servicers, and internship and residency in- formation. Such data system shall also permit borrowers to use the system to identify the cur- rent loan holders and servicers of such bor- rower’s loan not later than one year after Octo- ber 7, 1998. The information in the data system shall include (but is not limited to)— (1) the amount and type of each such loan made; (2) the names and social security numbers of the borrowers; (3) the guaranty agency responsible for the guarantee of the loan; (4) the institution of higher education or or- ganization responsible for loans made under parts D and E; (5) the exact amount of loans partially or to- tally canceled or in deferment for service under the Peace Corps Act (22 U.S.C. 2501 et seq.), for service under the Domestic Volun- teer Service Act of 1973 [42 U.S.C. 4950 et seq.], and for comparable full-time service as a vol- unteer for a tax-exempt organization of dem- onstrated effectiveness; (6) the eligible institution in which the stu- dent was enrolled or accepted for enrollment at the time the loan was made, and any addi- tional institutions attended by the borrower; (7) the total amount of loans made to any borrower and the remaining balance of the loans; (8) the lender, holder, and servicer of such loans; (9) information concerning the date of any default on the loan and the collection of the loan, including any information concerning the repayment status of any defaulted loan on which the Secretary has made a payment pur- suant to section 1080(a) of this title or the guaranty agency has made a payment to the previous holder of the loan; (10) information regarding any deferments or forbearance granted on such loans; and (11) the date of cancellation of the note upon completion of repayment by the borrower of the loan or payment by the Secretary pursu- ant to section 1087 of this title. (b) Additional information For the purposes of research and policy anal- ysis, the proposal shall also contain provisions for obtaining additional data concerning the characteristics of borrowers and the extent of student loan indebtedness on a statistically valid sample of borrowers under part B. Such data shall include— (1) information concerning the income level of the borrower and his family and the extent of the borrower’s need for student financial as- sistance, including loans; (2) information concerning the type of insti- tution attended by the borrower and the year of the program of education for which the loan was obtained; (3) information concerning other student fi- nancial assistance received by the borrower; and