20 U.S.C. § 1087b — Funds for origination of direct student loans

submitted 40 years ago by Pub. L. 89-329 to r/title-20-EDUCATION · 368 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section tells the Secretary how to deliver Direct Loan funds and states that institutions have no right to participate or originate loans. It also sets the delivery method for institutions outside the United States.

(a) Based on student and parent need and eligibility at each participating institution, the Secretary must provide loan funds either directly to an institution with both a participation agreement under section 1087d(a) and an origination agreement under section 1087d(b), or through a designated alternative originator for students and parents at an institution with only the participation agreement. (b) An institution has no right to participate, originate loans, or perform a program function under this part. This does not limit an eligible student at a participating institution, or the student’s eligible parent, from borrowing under this part. (c) The Secretary must pay and deliver loan funds to an institution before the Secretary’s payment period begins, in a way consistent with delivery of Federal Pell Grants. (d) Funds for students and parents attending an institution outside the United States must be disbursed through a United States financial institution designated as the institution’s agent. The foreign institution must arrange with that agent to receive funds.

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

(a) In general

The Secretary shall provide, on the basis of the need and the eligibility of students at each participating institution, and parents of such students, for such loans, funds for student and parent loans under this part—

(1)

directly to an institution of higher education that has an agreement with the Secretary under section 1087d(a) of this title to participate in the direct student loan programs under this part and that also has an agreement with the Secretary under section 1087d(b) of this title to originate loans under this part; or

(2)

through an alternative originator designated by the Secretary to students (and parents of students) attending institutions of higher education that have an agreement with the Secretary under section 1087d(a) of this title but that do not have an agreement with the Secretary under section 1087d(b) of this title.

(b) No entitlement to participate or originate

No institution of higher education shall have a right to participate in the programs authorized by this part, to originate loans, or to perform any program function under this part. Nothing in this subsection shall be construed so as to limit the entitlement of an eligible student attending a participating institution (or the eligible parent of such student) to borrow under this part.

Loan funds shall be paid and delivered to an institution by the Secretary prior to the beginning of the payment period established by the Secretary in a manner that is consistent with payment and delivery of Federal Pell Grants under subpart 1 of part A of this subchapter.

(d) Institutions outside the United States

Loan funds for students (and parents of students) attending institutions outside the United States shall be disbursed through a financial institution located or operating in the United States and designated by the Secretary to serve as the agent of such institutions with respect to the receipt of the disbursements of such loan funds and the transfer of such funds to such institutions. To be eligible to receive funds under this part, an institution outside the United States shall make arrangements with the agent designated by the Secretary under this subsection to receive funds under this part.

Source credit: (Pub. L. 89–329, title IV, § 452, as added Pub. L. 99–498, title IV, § 404, Oct. 17, 1986, 100 Stat. 1437; 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. 341; Pub. L. 105–33, title VI, § 6102, Aug. 5, 1997, 111 Stat. 652; Pub. L. 105–244, title IV, § 401(g)(5), Oct. 7, 1998, 112 Stat. 1652; Pub. L. 111–152, title II, § 2209(a), Mar. 30, 2010, 124 Stat. 1077.)

history & why it existsrecord from the source credit

1986Enacted · Pub. L. 89-329 · 100 Stat. 1437
1992Amended · Pub. L. 102-325 · 106 Stat. 569
1993Amended · Pub. L. 103-66 · 107 Stat. 341
1997Amended · Pub. L. 105-33 · 111 Stat. 652
1998Amended · Pub. L. 105-244 · 112 Stat. 1652
2010Amended · Pub. L. 111-152 · 124 Stat. 1077

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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