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

submitted 40 years ago by Pub. L. 89-329 to r/title-20-EDUCATION · 1,067 words · no verdicts yet

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This section lets an eligible lender offer one payment plan for certain education loans, subject to specified eligibility, insurance, repayment, and timing rules.

(a) At a borrower’s request, an eligible lender may offer one plan and one bill for repayment of a qualifying consolidation loan and covered Public Health Service Act loans. (b) The lender must follow the requirements applying to the consolidated loans and covered health loans, but may make a section 1078–3(b)(1)(A) consolidation loan if it holds any included outstanding loan. (c) The lender may offer the plan only if it holds an included loan, including one selected for consolidation, or the borrower certifies that the borrower sought and could not obtain a plan from the outstanding-loan holders. (d) If several lenders offer plans, the borrower chooses the administrator, including the consolidation part. (e) The chosen lender may reissue an included health loan it does not hold and pay the proceeds to its holder if it reasonably and prudently determines the loan is valid, was made and serviced lawfully, and has effective insurance, and if it was not in default when the request was made. (f) Each reissued loan requires the borrower’s note. The Secretary of Health and Human Services must insure it under a no-limit comprehensive certificate issued only to an authorized holder, with full principal-and-interest insurance and exclusion from the section 710 maximum. The loan amount may include principal, capitalized and unpaid accrued interest, and authorized late charges; paying the original holder discharges the borrower’s old obligation. Except as this section says, terms remain the same. The new repayment period cannot exceed the remaining original period, although if the lender holds several covered loans it may extend to the latest permitted date. A reissued loan may be consolidated with another Health Education Assistance Loan, and with the borrower’s agreement payments may be less than accruing interest during a period. (g) Eligibility ends when the borrower receives a plan. (h) No origination fee or insurance premium may be charged to the borrower or paid by the lender to the Secretary. (i) Repayment must begin within 60 days after the latest of acceptance of the offer, making the consolidation loan, or reissuing a covered health loan.

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

(a) Eligibility for plan

Upon the request of the borrower, a lender described in subparagraph (A), (B), or (C) of section 1078–3(a)(1) of this title, or an eligible lender 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 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 period 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 provisions of part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.) applicable 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 borrower which is selected for inclusion in a combined payment plan.

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 borrower for incorporation into a combined payment 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 administer a combined payment plan for a borrower, 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.) selected 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 regulations; 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 certificate of comprehensive insurance with no insurance 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 certificates 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 section 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 interest, accrued unpaid interest not yet capitalized, 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 repayment period for a loan reissued under this section shall not exceed the remainder of the period 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 Public 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 consolidated with any other Health Education Assistance 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 accrues on such loans during that period.

(g) Termination of borrower eligibility

The status of an individual as an eligible combined 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 insurance 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 administer a combined payment plan, the making of the consolidation loan or the reissuance of any Health Education Assistance Loans pursuant to subsection (e).

Source credit: (Pub. L. 89–329, title IV, § 485A, as added Pub. L. 99–498, title IV, § 407(a), Oct. 17, 1986, 100 Stat. 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.)

history & why it existsrecord from the source credit

1986Enacted · Pub. L. 89-329 · 100 Stat. 1484
1987Amended · Pub. L. 100-50 · 101 Stat. 357
2009Amended · Pub. L. 111-39 · 123 Stat. 1951

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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