20 U.S.C. § 1087c — Selection of institutions for participation and origination

submitted 40 years ago by Pub. L. 89-329 to r/title-20-EDUCATION · 618 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section governs selecting institutions for the Direct Loan program and approving institutions to originate loans. It requires applications, eligibility standards, and compliance safeguards, including for consortia.

(a) For academic years beginning on or after July 1, 1994, the Secretary must make participation agreements under section 1087d(a) with institutions of higher education and origination agreements under section 1087d(b) with institutions or consortia. The Secretary must provide alternative origination services, through contracts under section 1087f(b) or other means, for students at participating institutions that do not originate loans. For 1994–1995, the agreements were to be made, as feasible, by January 1, 1994. (b) (1) An institution seeking to participate must submit an application satisfactory to the Secretary with required information and assurances. (2) The Secretary must select institutions from applicants that meet the prescribed eligibility requirements and enter into section 1087d(a) agreements with them. (c) (1) The Secretary may make a supplemental origination agreement with an institution or consortium that has a subsection (a) agreement, wants to originate loans, and meets paragraph (2). (2) The Secretary may approve origination only if the institution is not on reimbursement payment for the listed Federal programs; is not late with required program or financial reports or audits; is not under an emergency action or listed limitation, suspension, or termination; in the Secretary’s view has not had severe performance deficiencies in the prior five calendar years; assures it has no delinquent Federal debt unless it is repaying under a satisfactory arrangement or the debt is not finally determined; and meets other criteria the Secretary sets to protect the United States’ financial interest and promote this part. (d) The Secretary may select an institution only if it is an eligible institution under section 1085(a). (e) Subject to Secretary-set requirements, eligible institutions with section 1087d(a) agreements may apply as a consortium to originate loans for their students. Each institution must meet subsection (c)’s origination requirements.

the actual law source: uscode.house.gov ↗public domain

(a) General authority

The Secretary shall enter into agreements pursuant to section 1087d(a) of this title with institutions of higher education to participate in the direct student loan program under this part, and agreements pursuant to section 1087d(b) of this title with institutions of higher education, or consortia thereof, to originate loans in such program, for academic years beginning on or after July 1, 1994. Alternative origination services, through which an entity other than the participating institution at which the student is in attendance originates the loan, shall be provided by the Secretary, through 1 or more contracts under section 1087f(b) of this title or such other means as the Secretary may provide, for students attending participating institutions that do not originate direct student loans under this part. Such agreements for the academic year 1994–1995 shall, to the extent feasible, be entered into not later than January 1, 1994.

(b) Selection criteria

(1) Application

Each institution of higher education desiring to participate in the direct student loan program under this part shall submit an application satisfactory to the Secretary containing such information and assurances as the Secretary may require.

(2) Selection procedure

The Secretary shall select institutions for participation in the direct student loan program under this part, and shall enter into agreements with such institutions under section 1087d(a) of this title, from among those institutions that submit the applications described in paragraph (1), and meet such other eligibility requirements as the Secretary shall prescribe.

(1) In general

The Secretary may enter into a supplemental agreement with an institution (or a consortium of such institutions) that—

(A)

has an agreement under subsection 1 1087d(a) of this title;

(B)

desires to originate loans under this part; and

(C)

meets the criteria described in paragraph (2).

(2) Selection criteria

The Secretary may approve an institution to originate loans only if such institution—

(A)

is not on the reimbursement system of payment for any of the programs under subpart 1 or 3 of part A, part C, or part E of this subchapter;

(B)

is not overdue on program or financial reports or audits required under this subchapter;

(C)

is not subject to an emergency action, or a limitation, suspension, or termination under section 1078(b)(1)(T), 1082(h), or 1094(c) of this title;

(D)

in the opinion of the Secretary, has not had severe performance deficiencies for any of the programs under this subchapter, including such deficiencies demonstrated by audits or program reviews submitted or conducted during the 5 calendar years immediately preceding the date of application;

(E)

provides an assurance that such institution has no delinquent outstanding debts to the Federal Government, unless such debts are being repaid under or in accordance with a repayment arrangement satisfactory to the Federal Government, or the Secretary in the Secretary’s discretion determines that the existence or amount of such debts has not been finally determined by the cognizant Federal agency; and

(F)

meets such other criteria as the Secretary may establish to protect the financial interest of the United States and to promote the purposes of this part.

(d) Eligible institutions

The Secretary may not select an institution of higher education for participation under this section unless such institution is an eligible institution under section 1085(a) of this title.

(e) Consortia

Subject to such requirements as the Secretary may prescribe, eligible institutions of higher education (as determined under subsection (d)) with agreements under section 1087d(a) of this title may apply to the Secretary as consortia to originate loans under this part for students in attendance at such institutions. Each such institution shall be required to meet the requirements of subsection (c) with respect to loan origination.

Source credit: (Pub. L. 89–329, title IV, § 453, as added Pub. L. 99–498, title IV, § 404, Oct. 17, 1986, 100 Stat. 1438; amended Pub. L. 102–325, title IV, § 451, July 23, 1992, 106 Stat. 569; Pub. L. 103–66, title IV, § 4021, Aug. 10, 1993, 107 Stat. 342; Pub. L. 103–208, § 2(e), Dec. 20, 1993, 107 Stat. 2470; Pub. L. 105–244, title IV, § 451, Oct. 7, 1998, 112 Stat. 1715; Pub. L. 111–39, title IV, § 404(b)(1), July 1, 2009, 123 Stat. 1946.)

history & why it existsrecord from the source credit

1986Enacted · Pub. L. 89-329 · 100 Stat. 1438
1992Amended · Pub. L. 102-325 · 106 Stat. 569
1993Amended · Pub. L. 103-66 · 107 Stat. 342
1993Amended · Pub. L. 103-208 · 107 Stat. 2470
1998Amended · Pub. L. 105-244 · 112 Stat. 1715
2009Amended · Pub. L. 111-39 · 123 Stat. 1946

A history note hasn’t been published yet. The record shows enactment by Pub. L. 89-329 on 1986-10-17.

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