20 U.S.C. § 1079 — Certificate of Federal loan insurance—ef-

Page 478 TITLE 20—EDUCATION § 1079 (3) Limitations (A) Student loan payment amount Student loan repayments made by the Sec- retary under this section shall be made sub- ject to such terms, limitations, or condi- tions as may be mutually agreed upon by the borrower and the Secretary in an agreement under paragraph (1), except that the amount paid by the Secretary under this section shall not exceed— (i) $6,000 for any borrower in any cal- endar year; or (ii) an aggregate total of $40,000 in the case of any borrower. (B) Beginning of payments Nothing in this section shall authorize the Secretary to pay any amount to reimburse a borrower for any repayments made by such borrower prior to the date on which the Sec- retary entered into an agreement with the borrower under this subsection. (e) Additional agreements (1) In general On completion of the required period of serv- ice under an agreement under subsection (d), the borrower and the Secretary may, subject to paragraph (2), enter into an additional agreement in accordance with subsection (d). (2) Term An agreement entered into under paragraph (1) may require the borrower to remain em- ployed as a civil legal assistance attorney for less than three years. (f) Award basis; priority (1) Award basis Subject to paragraph (2), the Secretary shall provide repayment benefits under this section on a first-come, first-served basis, and subject to the availability of appropriations. (2) Priority The Secretary shall give priority in pro- viding repayment benefits under this section in any fiscal year to a borrower who— (A) has practiced law for five years or less and, for not less than 90 percent of the time in such practice, has served as a civil legal assistance attorney; (B) received repayment benefits under this section during the preceding fiscal year; and (C) has completed less than three years of the first required period of service specified for the borrower in an agreement entered into under subsection (d). (g) Ineligibility for double benefits No borrower may, for the same service, receive a reduction of loan obligations under both this section and section 1078–11 or 1087e(m) of this title. (h) Regulations The Secretary is authorized to issue such reg- ulations as may be necessary to carry out this section. (i) Authorization of appropriations There are authorized to be appropriated to carry out this section $10,000,000 for fiscal year 2009 and such sums as may be necessary for each of the five succeeding fiscal years. (Pub. L. 89–329, title IV, § 428L, as added Pub. L. 110–315, title IV, § 431, Aug. 14, 2008, 122 Stat. 3242.) Editorial Notes REFERENCES IN TEXT The Developmental Disabilities Assistance and Bill of Rights Act of 2000, referred to in (b)(1)(A)(ii)(I), is Pub. L. 106–402, Oct. 30, 2000, 114 Stat. 1677. Subtitle C of title I of the Act is classified generally to part C (§ 15041 et seq.) of subchapter I of chapter 144 of Title 42, The Pub- lic Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 15001 of Title 42 and Tables. The Protection and Advocacy for Individuals with Mental Illness Act, referred to in subsec. (b)(1)(A)(ii)(III), is Pub. L. 99–319, May 23, 1986, 100 Stat. 478. Part A of title I of the Act is classified generally to part A (§ 10801 et seq.) of subchapter I of chapter 114 of Title 42, The Public Health and Welfare. For com- plete classification of this Act to the Code, see Short Title note set out under section 10801 of Title 42 and Tables. § 1079. Certificate of Federal loan insurance—ef- fective date of insurance (a) Loan-by-loan insurance (1) Authority to issue certificates on applica- tion If, upon application by an eligible lender, made upon such form, containing such infor- mation, and supported by such evidence as the Secretary may require, and otherwise in con- formity with this section, the Secretary finds that the applicant has made a loan to an eligi- ble student which is insurable under the provi- sions of this part, he may issue to the appli- cant a certificate of insurance covering the loan and setting forth the amount and terms of the insurance. (2) Effectiveness of certificate Insurance evidenced by a certificate of in- surance pursuant to subsection (a)(1) shall be- come effective upon the date of issuance of the certificate, except that the Secretary is au- thorized, in accordance with regulations, to issue commitments with respect to proposed loans, or with respect to lines (or proposed lines) of credit, submitted by eligible lenders, and in that event, upon compliance with sub- section (a)(1) by the lender, the certificate of insurance may be issued effective as of the date when any loan, or any payment by the lender pursuant to a line of credit, to be cov- ered by such insurance was made. Such insur- ance shall cease to be effective upon 60 days’ default by the lender in the payment of any installment of the premiums payable pursuant to subsection (c). (3) Contents of applications An application submitted pursuant to sub- section (a)(1) shall contain (A) an agreement by the applicant to pay, in accordance with regulations, the premiums fixed by the Sec- retary pursuant to subsection (c), and (B) an agreement by the applicant that if the loan is covered by insurance the applicant will submit Page 479 TITLE 20—EDUCATION § 1080 such supplementary reports and statement during the effective period of the loan agree- ment, upon such forms, at such times, and containing such information as the Secretary may prescribe by or pursuant to regulation. (b) Comprehensive insurance coverage certifi- cate (1) Establishment of system by regulation In lieu of requiring a separate insurance ap- plication and issuing a separate certificate of insurance for each student loan made by an el- igible lender as provided in subsection (a), the Secretary may, in accordance with regulations consistent with section 1074 of this title, issue to any eligible lender applying therefor a cer- tificate of comprehensive insurance coverage which shall, without further action by the Secretary, insure all insurable loans made by that lender, on or after the date of the certifi- cate and before a specified cutoff date, within the limits of an aggregate maximum amount stated in the certificate. Such regulations may provide for conditioning such insurance, with respect to any loan, upon compliance by the lender with such requirements (to be stat- ed or incorporated by reference in the certifi- cate) as in the Secretary’s judgment will best achieve the purpose of this subsection while protecting the United States from the risk of unreasonable loss and promoting the objec- tives of this part, including (but not limited to) provisions as to the reporting of such loans and information relevant thereto to the Sec- retary and as to the payment of initial and other premiums and the effect of default therein, and including provision for confirma- tion by the Secretary from time to time (through endorsement of the certificate) of the coverage of specific new loans by such certifi- cate, which confirmation shall be incontest- able by the Secretary in the absence of fraud or misrepresentation of fact or patent error. (2) Uncovered loans If the holder of a certificate of comprehen- sive insurance coverage issued under this sub- section grants to a student a line of credit ex- tending beyond the cutoff date specified in that certificate, loans or payments thereon made by the holder after that date pursuant to the line of credit shall not be deemed to be in- cluded in the coverage of that certificate ex- cept as may be specifically provided therein; but, subject to the limitations of section 1074 of this title, the Secretary may, in accordance with regulations, make commitments to in- sure such future loans or payments, and such commitments may be honored either as pro- vided in subsection (a) or by inclusion of such insurance on comprehensive coverage under the subsection for the period or periods in which such future loans or payments are made. (c) Charges for Federal insurance The Secretary shall, pursuant to regulations, charge for insurance on each loan under this part a premium in an amount not to exceed one- fourth of 1 percent per year of the unpaid prin- cipal amount of such loan (excluding interest added to principal), payable in advance, at such times and in such manner as may be prescribed by the Secretary. Such regulations may provide that such premium shall not be payable, or if paid shall be refundable, with respect to any pe- riod after default in the payment of principal or interest or after the borrower has died or be- comes totally and permanently disabled, if (1) notice of such default or other event has been duly given, and (2) requests for payment of the loss insured against has been made or the Sec- retary has made such payment on his own mo- tion pursuant to section 1080(a) of this title. (d) Assignability of insurance The rights of an eligible lender arising under insurance evidenced by a certificate of insurance issued to it under this section may be assigned as security by such lender only to another eligi- ble lender, and subject to regulation by the Sec- retary. (e) Consolidation not to affect insurance The consolidation of the obligations of two or more federally insured loans obtained by a stu- dent borrower in any fiscal year into a single ob- ligation evidenced by a single instrument of in- debtedness shall not affect the insurance by the United States. If the loans thus consolidated are covered by separate certificates of insurance issued under subsection (a), the Secretary may upon surrender of the original certificates issue a new certificate of insurance in accordance with that subsection upon the consolidated obli- gation; if they are covered by a single com- prehensive certificate issued under subsection (b), the Secretary may amend that certificate accordingly. (Pub. L. 89–329, title IV, § 429, as added Pub. L. 99–498, title IV, § 402(a), Oct. 17, 1986, 100 Stat. 1395.) Editorial Notes PRIOR PROVISIONS A prior section 1079, Pub. L. 89–329, title IV, § 429, Nov. 8, 1965, 79 Stat. 1243; Pub. L. 94–482, title I, § 127(a), Oct. 12, 1976, 90 Stat. 2123; Pub. L. 96–374, title XIII, § 1391(a)(1), (2), Oct. 3, 1980, 94 Stat. 1503, related to cer- tificates of Federal loan insurance, prior to the general revision of this part by Pub. L. 99–498. § 1080. Default of student under Federal loan in- surance program (a) Notice to Secretary and payment of loss Upon default by the student borrower on any loan covered by Federal loan insurance pursuant to this part, and prior to the commencement of suit or other enforcement proceedings upon se- curity for that loan, the insurance beneficiary shall promptly notify the Secretary, and the Secretary shall if requested (at that time or after further collection efforts) by the bene- ficiary, or may on the Secretary’s own motion, if the insurance is still in effect, pay to the ben- eficiary the amount of the loss sustained by the insured upon that loan as soon as that amount has been determined. The ‘‘amount of the loss’’ on any loan shall, for the purposes of this sub- section and subsection (b), be deemed to be an amount equal to the unpaid balance of the prin- cipal amount and accrued interest, including in-