PRIA, Government Policy, Made Personal

Summary

The Secretary must not give federal loan insurance certificates to lenders in a State when every eligible school in that State can reasonably get insurance from a State or private nonprofit student loan insurance program that has a federal agreement. The Secretary can still issue certificates in three cases: a loan to a student who cannot use the State or qualified private program because of where they live; for a lender whose borrowers live so spread out that no single State or nonprofit program would cover most of the loans; or when the State guaranty agency approves insurance for a loan to a borrower whose earlier certificate-covered loan is still unpaid.

Title 20, §1073

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(a)Federal insurance barred to lenders with access to State or private insurance

Except as provided in subsection (b), the Secretary shall not issue certificates of insurance under section 1079 of this title to lenders in a State if the Secretary determines that every eligible institution has reasonable access in that State to a State or private nonprofit student loan insurance program which is covered by an agreement under section 1078(b) of this title.

(b)Exceptions

The Secretary may issue certificates of insurance under section 1079 of this title to a lender in a State—

(1)for insurance of a loan made to a student borrower who does not, by reason of the borrower’s residence, have access to loan insurance under the loan insurance program of such State (or under any private nonprofit loan insurance program which has received an advance under section 1072 of this title for the benefit of students in such State);

(2)for insurance of all the loans made to student borrowers by a lender who satisfies the Secretary that, by reason of the residence of such borrowers, such lender will not have access to any single State or nonprofit private loan insurance program which will insure substantially all of the loans such lender intends to make to such student borrowers; or

(3)under such circumstances as may be approved by the guaranty agency in such State, for the insurance of a loan to a borrower for whom such lender previously was issued such a certificate if the loan covered by such certificate is not yet repaid.

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 1073, Pub. L. 89–329, title IV, § 423, Nov. 8, 1965, 79 Stat. 1237; Pub. L. 90–575, title I, § 119(a), Oct. 16, 1968, 82 Stat. 1026; Pub. L. 94–482, title I, § 127(a), Oct. 12, 1976, 90 Stat. 2103; Pub. L. 95–43, § 1(a)(14), June 15, 1977, 91 Stat. 214; Pub. L. 96–374, title XIII, § 1391(a)(1), Oct. 3, 1980, 94 Stat. 1503, limited participation in Federal loan insurance programs, prior to the general revision of this part by Pub. L. 99–498.

§1073 Effects of Adequate Non-federal Programs

Summary

Title 20, §1073

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

Citations & Metadata