Student Loan Default Prevention Act of 1989

Summary

Student Loan Default Prevention Act of 1989 - Amends the Higher Education Act of 1965 (the Act) to require delayed disbursement for first-year students at high default rate institutions of Federally-insured student loans (FISL) and guaranteed student loans (GSL) under the Robert T. Stafford Student Loan Program. Lowers the amount insured for any lender by the GSL program from 100 percent to 95 percent of the unpaid principal if one-third or more of the principal outstanding during any consecutive two-year period on the lender's loans consists of loans to students for attendance costs at a higher default rate institution. Defines "high default rate institutions" as ones with a default rate of 20 percent or more. Directs the Secretary of Education (the Secretary) to define "default rate" by regulation. Adds requirements with respect to disbursement and endorsement of student loans. Requires multiple disbursements, with minimum intervals. Sets forth other requirements for the initial disbursement, withholding of second disbursement, and aggregation of multiple loans, with specified exceptions. Prohibits an institution from being certified or recertified as eligible for the Stafford or other student assistance if it has lost its institutional accreditation during the preceding 24 months, unless such accreditation has been restored or the institution has demonstrated its academic integrity to the Secretary's satisfaction. Requires that officers or directors of the accrediting agency or association not be affiliated in any way with a vocational school seeking or obtaining eligibility for the student loan insurance program. Requires that testing of ability-to-benefit students be administered by an agency independent of, and at a location not owned or controlled by, the higher education institution concerned. Establishes a tuition refund policy. Directs eligible institutions to require borrowers to supply specified exit interview information. Sets forth restrictions on institutional promotional activities. Requires that an institution's graduation and placement statistics be audited by an independent public agency.

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2 official files

• Introduced in House (text)

  Introduced in House · EN

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• Introduced in House

  summary · EN · 2 May 1989

  Open at official source

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