Student Loan Default Reduction Act of 1989

Summary

Student Loan Default Reduction Act of 1989 - Amends the Higher Education Act of 1965 to require higher education institutions that have a default rate in excess of 25 percent to be considered in probationary status, and to implement default reduction plans, with respect to their eligibility for participation in the Stafford Student Loan and the Supplemental Loans for Students programs. Authorizes the Secretary of Education (the Secretary) to initiate limitation, suspension, or termination proceedings upon an institution's refusal or unreasonable delay with respect to plan implementation. Directs the Secretary to initiate such proceedings if, by the end of the plan's fourth year, the institution has not reduced its rate or has a rate in excess of 50 percent. Delays loan disbursement to borrowers at institutions operating under such plans. Revises various student loan programs with respect to: (1) credit checks and cosigners; (2) institutional certification of student eligibility; (3) ability to benefit; (4) consumer information; and (5) criminal penalties. Provides for: (1) guaranty agency participation in the tax refund offset program; (2) emergency actions and sanctions against lenders; (3) sharing of institutional eligibility information; (4) branch campus eligibility; (5) tuition refunds; and (6) a demonstration project requiring verification of eligibility information through the National Student Loan Data System.

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2 official files

• Introduced in Senate (text)

  Introduced in Senate · EN

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• Introduced in Senate

  summary · EN · 20 October 1989

  Open at official source

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